Download Holding Company Comparison Chart: Netherlands, Luxembourg

CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdictional comparison
The Netherlands – Luxembourg – Cyprus
Holding companies
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Netherlands
Luxembourg
Cyprus
CORPORATE/LEGAL
Incorporation time and costs
Possible in 3 days
app. EUR 2,500
Less than a week
app. EUR 4,000
Up to 2 weeks
app. EUR 2,000
Share capital
BV (Besloten vennootschap met
beperkte aansprakelijkheid Dutch private limited liability
company): no minimum share
capital, no authorized capital in
the articles of association, capital
may be denominated in a
currency other than Euro,
nominal value of shares may be
expressed in more than two digits
behind the decimal point.
Sarl (Société à responsabilité
limitée - Luxembourg private
limited liability company): EUR
12,500 minimum share capital,
denomination of the shares is
free.
Ltd. (a Cyprus limited liability
company): no minimum share
capital, denomination of the
shares is free.
NV (Naamloze vennootschap –
Dutch public limited liability
company): minimum share capital
of EUR 45,000.
Coop (Coöperatie met uitgesloten
aansprakelijkheid – a Dutch
cooperative ): no minimum
contribution.
Registered office
Must be maintained in the
Netherlands .
SA (Société Anonyme Luxembourg public limited
liability company): EUR 31,000
minimum share capital,
denomination of the shares is
free.
SCA (Société en Commandite par
Actions – Luxembourg partnership
limited by shares): EUR 31,000
minimum share capital,
denomination of the shares is
free.
Must be maintained in
Luxembourg .
Must be maintained in Cyprus.
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Jurisdiction
Netherlands
Luxembourg
Cyprus
Shareholders/directors
BV/NV: Minimum 1
shareholder/1director.
Sarl: minimum 1 shareholder/1
manager.
Minimum 1 shareholder/1
director plus company secretary.
Coop: minimum 2 members/1
director.
SCA: minimum 2 limited
partners/1 general partner.
SA: minimum 1 shareholder/3
directors.
Shareholders liability
Limited to contribution.
Sarl/SA: Limited to contribution.
Limited to contribution.
SCA: limited partners – limited to
contribution, general partner –
unlimited.
Reporting
Mandatory filing of annual
accounts including financial
statements and a management
board report.
Mandatory filing of annual
accounts.
Annual accounts and annual
return must be filed with
Registrar of Companies.
Accounting requirements
No mandatory audit, unless 2 of
the following 3 criteria are
fulfilled by the company during 2
successive years:
- total assets exceeding EUR 4.4
million;
- turnover exceeding EUR 8.8
million;
- a workforce of more than 50
employees.
No mandatory independent
auditor, unless 2 of the following
3 criteria are fulfilled by the
company during 2 successive
years:
- total balance sheet exceeding
EUR 3.125 million;
- net turnover: exceeding EUR
6.25 million;
- average number of full-time
Mandatory audit annual accounts.
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Jurisdiction
Netherlands
Luxembourg
Cyprus
employees: 50.
Confidentiality
The companies register (reveals
information concerning the
directors, sole shareholder,
registered address, incorporation
date) and articles of association
are publically accessible.
The companies register (reveals
information concerning the
directors, shareholders and
classes and amounts of shares
held, registered address,
incorporation date), articles of
association are publically
accessible.
The companies register (reveals
information concerning the
directors, shareholders,
registered address, incorporation
date, charges and mortgages
registered on company assets) is
publically accessible.
Meetings of shareholders
May be held outside the
Netherlands if the articles of
association so provide or
anywhere else if all shareholders
agree and the
managing/supervisory directors
have been given the opportunity
to advise on the proposed
resolutions beforehand.
May be held outside Luxembourg.
May be held outside Cyprus.
Decisions can be also taken
outside a physical meeting by way
of a written resolutions of
shareholders.
Decisions can be also taken
outside a physical meeting by way
of a written resolutions of
shareholders/members.
TAX
Tax on capital contributions
None.
None.
EUR 102 registration fee plus
capital duty of 0.6% of the
authorized capital and of any
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Netherlands
Luxembourg
Cyprus
subsequent increases in
authorized capital (contributions
with regards to merger or
reorganization are exempt).
Corporate Income tax rate
25% (20% for the first EUR
200,000 of profits).
Participation exemption regime
Provides full exemption for both
dividends and capital gains.
Minimum participation of at least
5% and one of the following three
tests is met:
(i) The objective with respect to
the participation is to obtain
a return that is higher than a
return that may be expected
from regular asset
management (“Purpose
Test”);
(ii) The direct and indirect assets
of the subsidiary consist for
Effective combined rate of
29.22%. An annual minimum flat
tax of EUR 3,210 is levied on
holding companies of which the
assets consist for more than 90%
of ‘financial assets’. Such tax is
creditable against a future tax
liability.
Provides full exemption for
both dividends and capital
gains. 1-year holding period
and minimum participation
requirements apply. Minimum
participation of at least 10% (or
acquisition price of EUR 1.2
million for dividends and EUR 6
million for capital gains),
participation is sufficiently
taxed (i.e. a tax rate of 10.5%
and a comparable tax base) and
a minimum holding period of
12months applies.
10% (interest received other than
in, or closely related to the
ordinary course of business is
subject to 15% special defense
contribution (“SDC”) tax.
All dividends derived from a
foreign participation are full
exempt. No minimum
participation or holding period
requirements apply.
SDC tax of 20% applies on
dividends derived from a nonresident subsidiary that engages
directly or indirectly for more
than 50% in activities which lead
to investment income and the
foreign tax is significantly lower
than the tax rate payable in
Cyprus (“passive dividends”).
Capital gains realized from the
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Netherlands
Luxembourg
less than 50% of so-called
low-taxed free passive assets
(“Asset Test”). Generally this
Test is easily met by
operating companies with an
‘active business enterprise’;
disposal of securities are exempt.
Gains from sale of shares of
unlisted companies owning
immovable property in Cyprus are
subject to 20% tax capital gains
tax to the extent the gains are
derived from such property.
(iii) The subsidiary is subject to a
genuine tax determined on
Dutch tax standards (i.e. an
effective tax of at least 10%
according to Dutch tax
standards) (“Subject-to-tax
Test”).
CFC, anti-abuse and interest
deduction limitations
Cyprus
Light CFC rules and certain
limitations on the deduction of
interest may apply (i.e. specially
on the deduction of interest
expenses on debt related to the
acquisition of a participation).
No CFC rules, but certain antiabuse provisions and limitations
on interest deductibility may
apply.
No CFC rules, general antiavoidance provisions including
the disregarding of artificial or
factious transactions may apply.
15%. Subject to certain anti-abuse
provision, the Dutch cooperative
is fully exempt from withholding
tax on distributions and is thus
very efficient when dividend
distributions are expected.
15%.
0%.
Dividend withholding tax
(“WHT”) on outbound dividends
(i) Domestic rate
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Netherlands
Luxembourg
Cyprus
(ii) WHT on distributions made to
EU corporate shareholders
qualifying under the local
implementation of the EU
Parent/Subsidiary Directive
0% if a participation of at least 5%
is held in the holding company.
0% if a participation of at least
10% (or EUR 1.2 million
acquisition price) is held in the
holding company for an
uninterrupted period of at least
12 months.
0%.
15%, which may be reduced to 0%
by means of an applicable tax
treaty. In addition, profit
participating loans (i.e. CPECS)
and partial redemption of shares
are commonly used and taxefficient techniques to avoid
withholding tax on distributions.
No dividend withholding tax on
overseas distributions to nonresidents.
(iii) WHT on distributions made
to corporate shareholders
abroad the EU
15%, which may be reduced to
0% by means of an applicable
tax treaty. Subject to certain
anti-abuse provisions, the
Dutch cooperative is fully
exempt from withholding tax
on distributions.
Withholding tax on interest
payments
0%.
0% (an exception may apply for
individuals by virtue of the EC
Savings Directive).
0% on interest paid to nonresident recipients.
Withholding tax on royalty
payments
None.
None.
None, unless the rights are used
in Cyprus (subject to 10%
withholding tax).
Taxation of non-resident
shareholders
Capital gains and dividends may
trigger Dutch taxes at the level of
non-resident shareholders if a
substantial interest is held in the
holding company (i.e.
Capital gains are only taxed in
Luxembourg in case of the
alienation of a substantial interest
in the holding company (i.e.
interest of more than 10%) and
Capital gains and dividends
derived by non-resident
shareholders on the participation
in the holding company are fully
exempt from Cyprus tax at the
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Tax rulings
Netherlands
Luxembourg
Cyprus
participation of at least 5%). Such
taxation would not apply if the
participation is attributable to a
business enterprise at the level of
the non-resident shareholder or
such interest is not held with one
of the main purposes to avoid
Dutch personal income tax and/or
Dutch dividend withholding tax
liability at the level of another
person. In practice, it is not
difficult to show the presence of
an enterprise at the level of nonresident shareholders.
such gain is realized within a
period of 6 months following the
acquisition of the shares in the
holding company. Dividends are
not subject to Luxembourg taxes
at the level of the non-resident
shareholder.
level of such shareholders.
Advance tax rulings are granted
confirming residency of the
holding company and in relation
to the participation exemption
regime and the position of nonresident shareholders.
Tax rulings are standard practice
in Luxembourg and tax authorities
are willing to issue tax rulings
confirming the taxation of all
matters that are of importance
for a holding company (e.g.
participation exemption regime,
exemption of distributions – in
particular alphabetic shares and
CPECS – and also debt-financing
activities).
Although it is not standard
practice, advance clearances are
issued by the Cyprus tax
authorities and are available upon
request.
96.
64.
45.
Double Tax Treaty Network
(i) Number of treaties in
operation
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Netherlands
Luxembourg
Cyprus
(ii) Do any of the treaties include
“anti-treaties hopping”
provisions and/or detailed
“beneficial ownership” tests?
Yes, amongst others: NL-Portugal,
NL-US, NL-Malta.
Yes, amongst others, LUX-US.
Yes, The Cyprus-US double tax
treaty contains ‘limitation of
benefits’ provisions.
(i) Dividends
5%: if the beneficial owner is a
company – other than a
partnership) which holds 25% of
the capital of the company paying
the dividends and has invested at
least EUR 75,000 (or the
equivalent in other national
currency). 15%: in all other cases.
10% (to be reduced to 5% under
the New Protocol to the Treaty as
per 2014): if the beneficial owner
holds directly at least 20% of the
company paying the dividends
and has invested at least EUR
75,000 (or the equivalent in other
national currency). 15%: in all
other cases.
5%: if the beneficial owner has
invested at least EUR 100,000 (or
the equivalent in other national
currency). 10%: in all other cases.
(ii) Interest
0%.
0%.
0%.
(iii) Royalties
0%.
0%.
0%.
No Russian local taxation
(depending on local legislation
this may be different for
subsidiaries investing in
No Russian local taxation
(depending on local legislation
this may be different for
subsidiaries investing in
No Russian local taxation, unless
the local Russian subsidiary
derives more than 50% of its
value from immovable property
Key items included in the tax
treaty concluded with Russia
Withholding tax rates
Local taxation of capital gains on
shares
(i) Local taxation of capital gains
on shares
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
Jurisdiction
Netherlands
Luxembourg
Cyprus
immovable property).
immovable property).
located in Russia).
FEES
Annual corporate fees of trust
companies for management,
administration and domiciliation
service
app. EUR 6,000 – 8,000.
app. EUR 7,000 – 10,000.
app. EUR 4.000 – 6.000.
Governmental fees
None.
Annual fee of app. EUR 135 .
Annual company maintenance fee
EUR 350 payable to Registrar of
Companies.
DISCLAIMER
No individual who is a member, partner, shareholder, employee or consultant of, in or to any constituent part of Van Campen Liem (whether or not such individual is described
as a “partner”) accepts or assumes responsibility, or has any liability, to any person in respect of this document.
This document contains information confidential to Van Campen Liem. Copyright in the materials is owned by Van Campen Liem and the materials should not be copied or
disclosed to any other person without the express authorisation of Van Campen Liem.
This document is not intended to give legal advice and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and
practice in this area. Readers must take specific legal advice on any particular matter which concerns them. If you require any advice or information, please speak to your usual
contact at Van Campen Liem.
CLIENT – ATTORNEY PRIVILEGED WORK PRODUCT
CONTACT
Marcello Distaso
Yana Levin
Netherlands
J.J. Viottastraat 52
1071 JT Amsterdam
The Netherlands
T: +31 20 7601 603
E: [email protected]
[email protected]
Van Campen Liem is the joint trade name of Liem & Partners N.V. and Van Campen & Partners N.V. Liem & Partners N.V. has its statutory seat at Amsterdam, the Netherlands,
and is registered with the Trade Register under number 54787882. Van Campen & Partners N.V. has its statutory seat at Amsterdam, the Netherlands, and is registered with the Trade Register under
number 54033500.