Access to professional services & related infrastructures
The Netherlands have a broad access to high-quality financial services providers in all the specialist areas that are relevant for single family offices, including: tax, legal, accounting, finance, consultancy, (private) banking, deals, wealth, asset and investment management, impact investing, estate planning, corporate and private philanthropy, digital, (financial) technology, cyber and data (protection), real estate, start- and scale ups, insurance, risk and compliance, NextGen education and (family) governance.
Access to talent & skilled professionals
The Netherlands is home to a diverse, highly skilled, productive, flexible and multilingual workforce. The Netherlands’ cultural amenities and relatively low cost and high standard of living make it easy to attract skilled employees. The Netherlands ranks first out of 100 countries on the EF English Proficiency Index 2020. In addition to English a higher percentage of the Dutch population than their counterparts elsewhere also speak German and French. According to the OECD Skills Outlook 2019, the Netherlands is ahead in the digital transformation of the workplace, with most of its workers intensively using technology in their job and predominantly performing non-routine tasks. It also mentions the Netherlands as being amongst the countries with the highest share of individuals with well-rounded cognitive (literacy, numeracy and problem-solving) skills. Moreover, the Netherlands has been named as one of the world’s best countries for talent competitiveness.
Regulatory framework / Legal structures
The Dutch legal system is based on civil law. This means that its core principles are codified into a referable system which serves the primary source of law. Therefore, the judge's (court's) main role is to establish the facts of the case and to apply the provisions of the applicable code. Applicable EU law takes precedence over national law.
The ground rules and legal regime under which family offices must operate as well as the regulatory framework depend on the legal form of the single family office. There are several ways to operate a single family office in the Netherlands. A distinction can be made between entities with legal personality and entities without legal personality. The latter however are usually not used for single family office purposes. The legal entities usually used for single family offices are besloten vennootschappen ('bv'; equivalent private limited company) and stichtingen (equivalent to foundations).
The main difference between the two legal entities are that a bv's equity, unlinke stichtingen, is divided into shares that are owned by shareholders. They also hold ultimate power, but the company directors run the business on a day-to-day basis. A bv may appoint a supervisory board to monitor its board of directors (two-tier board), or the supervisors may be part of the board of directors (single-tier board). A foundation on the other hand has also a board and may appoint a supervisory board, but has no shareholders (or members). Thus, from a governance perspective a bv and a stichting are quite similar, but the main difference (in this respect) is that a foundation cannot make any dividend distributions.
In certain situations, depending on the services to be provided, a single family office can be considered a collective investment vehicle and should be licensed. Current European law distinguishes two types of collective investment vehicles: undertakings for collective investment in transferable securities (UCITS) and collective investment institutions that do not qualify as UCITS (alternative investment funds or AIFs). The UCITS Directive regulates (managers of one or more) UCITS. The AIFM Directive regulates managers of one or more AIFs. In both cases the AFM is the authorising authority.
In the Netherlands, worldwide income is divided into three different types of taxable income, and each income type is taxed separately under its own schedule, referred to as a 'box'. Each box has its own tax rate(s). An individual's taxable income is based on the aggregate income in these three boxes.
Box 1 refers to taxable income from work and home ownership and includes the following: (self) employment income, home ownership of a principal residence (deemed income), periodic receipts and payments, benefits relating to income provisions. Income deriving from box 1 is taxed with a progressive tax rate from 37.07% to 49.50% (2022).
Box 2 refers to taxable income from a substantial interest (i.e. shareholdings of 5% or more), for example shareholdings in a bv (private limited company). Box 2 income is taxed at a flat rate of 26.9% (2022)
Box 3 applies to taxable income from savings and (other) investment. Box 3 income is taxed at a flat rate of 31% (2022). What is exactly box 3 income is an actual topic.
The Netherlands do not levy stamp duties.
Corp Tax: a Dutch resident company is subject to CIT on its worldwide income. However, certain income can be exempt or excluded from the tax base. Non-resident entities only have a limited tax liability with regards to income from Dutch sources. The standard CIT rate stands at 25.8 per cent as of 1 January 2022 (25.8% in 2021). There are two taxable income brackets. A lower rate of 15 per cent applies to the first income bracket. This bracket has been extended, it consists of taxable income up to 395.000 euro (245.000 euro in 2021). The standard rate applies to the excess of the taxable income
Tax holidays: No
Tax benefits: participation exemption, accelerated depreciation, carry forward NOLs, innovation box regime, interest deduction, fiscal unity regime, tax credits and incentives for investments in energy-efficient assets and environmental assets, 30% allowance (tax exemption) for employees who were hired abroad to work in the Netherlands.
Other: There are no provincial or municipal corporate income taxes in the Netherlands, only federal or state tax.
Immigration rules / Investment and golden visa availability
As an internationally oriented country, the Netherlands is home to many foreign workers and offers a ‘Highly Skilled Migrant Visa’, which allows companies to bring highly qualified expats to their Dutch operations. According to the IBM Global Location Trends 2019 report the Netherlands is the top attractor of quality Foreign Direct Investment jobs worldwide.
All foreign nationals who intend to work and stay in the Netherlands are required to comply with the immigration regulations of the Netherlands. The Netherlands has a less restrictive admittance policy for highly skilled workers of multinational companies who meet specific (salary) criteria.
Cultural landscape, living standards and connectivity
A pro-business climate, its strategic location, a stable legislative system, a highly educated multilingual workforce and superior infrastructure are just some of the advantages of setting up a Single Family Office in the Netherlands.
The Netherlands offers an affordable cost of living and an exceptional quality of life. Ranked as the 6th happiest place on earth by the World Happiness Report 2020 and ranked first in the area of children’s well-being according to a survey by UNICEF, the Netherlands has a high standard of living. Also, according to the latest OECD better life index, the Netherlands is the country with the best work-life balance. Its very low rates of youth unemployment, high literacy levels, high levels of life satisfaction in childhood and the amount and quality of leisure time of Dutch employees are factors that contribute to the country’s top position in the better life index.
In the 2020 edition of DHL’s Global Connectedness Index the Netherlands tops the list being the world’s most globally connected country. Driven by world-class seaports and airports, an extensive network of roads and rail and a telecommunications network that ranks among the world’s best for quality, speed and reliability.
The Netherlands ranked 8th in the 2020 Corruption Perception Index (CPI), published by the Transparency International and 8th in the Financial Secrecy Index 2020.
The Netherlands ranked 4th in the Corporate Tax Haven Index 2021. The country is accountable for 5.7% of the world’s corporate tax abuse risks.
According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, published by the Organisation for Economic Co-operation and Development (OECD), Netherlands secured an overall rating of “Compliant” in round 1 and “Compliant” in round 2 in the implementation of the exchange of information on request (EOIR) standards.
Economic and Political stability
The Netherlands ranked 4th in the 2021 World Competitiveness Index. In the EMEA region, The Netherlands ranked 7th in 2021, retaining its position as of 2020.
The Netherlands ranked 7th in digital competitiveness and with regards to talent, the country ranked 9th. Innovation, digitalization, welfare benefits, and social cohesion are key to economic performance in the 2021 rankings.
Find out more about The Netherlands' Family Office Team
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