AETHERION Worldwide is the fundraising and landing practice of AETHERION Capital.
Should a foreign company open a branch or a subsidiary in the Netherlands?
A branch is the same legal entity as the parent, registered as its Dutch establishment. A subsidiary is a separate Dutch company, usually a BV, owned by the parent. The difference shows up in who carries the liability, whose accounts become public, and what an investor can hold shares in later.
This is usually presented as a cost question, and it is not. Both forms are registered in the same register, both can employ people, and the fee is the same. What separates them is who is exposed when something goes wrong, whose figures become public, and what an investor can actually buy when you raise in Europe.
The table below sets the two side by side on the points that differ, and each row is sourced further down. It describes the rules rather than recommending one: ask a tax adviser to look at your own group before you sign anything.
| What differs | Branch of the foreign company | Subsidiary, normally a BV |
|---|---|---|
| Legal status | Not a legal entity of its own. Fully dependent on the head office | A legal entity in its own right, with the duties of an independent Dutch company |
| Who carries the liability | The parent, for everything that happens in the Netherlands | The BV itself. Directors are privately liable only in exceptional cases |
| How it is created | Registration forms at KVK. No civil-law notary | A deed before a Dutch civil-law notary, then registration |
| Minimum capital of its own | None | EUR 0.01 |
| What registration needs | Proof of home registration no older than one month, certified copies of the memorandum and articles, a document naming the directors, in Dutch, English, German or French | The notary assembles and files it, so nobody attends a counter |
| Registration fee | EUR 85.15, one-off | EUR 85.15, one-off |
| Corporate income tax | Due where the branch counts as a permanent establishment | Always due. A company incorporated under Dutch law is deemed established here |
| Financial statements at KVK | The branch files none of its own. A parent based outside the EU files its own statements if it has to file them at home too | The BV files its own statements every year |
| Profit sent up to the parent | Not a dividend, so no Dutch dividend tax on the transfer | 15% dividend tax on a dividend, unless an exemption or a treaty applies |
| What an investor can hold | Shares in the parent, wherever it sits | Shares in the Dutch company |
Sources:
Business.gov.nl, Setting up a Dutch branch office or subsidiary
Business.gov.nl, Foreign business structures in the Netherlands
KVK, Inschrijven buitenlandse rechtspersoon of vennootschap
KVK, Registration fee
Belastingdienst, Dividendbelasting als u dividend uitkeert
Wet op de vennootschapsbelasting 1969, article 2, paragraph 5
What a branch is, in Dutch terms
A branch is your own company, operating in the Netherlands under its own name. Business.gov.nl describes it as not a legal entity in itself and fully dependent on the head office. It can be a sales office, a production site or a representative office, and it has to be entered in the Dutch Business Register.
Registration is a paper exercise rather than a legal act. KVK asks for official proof that the company is registered in the country where it was founded, no more than one month old, together with certified copies of the memorandum and articles of association and a document showing who the directors are. Those may be in Dutch, English, German or French, and the KVK forms themselves are signed in Dutch.
Sources:
Business.gov.nl, Foreign business structures in the Netherlands
KVK, Inschrijven buitenlandse rechtspersoon of vennootschap
What a subsidiary is
A new Dutch company that your company owns. Business.gov.nl calls a subsidiary a legal entity in its own right, with all the liabilities and duties of an independent company in the Netherlands. In practice that is nearly always a BV, the Dutch private limited company, created by a deed before a civil-law notary and paid up with a minimum of EUR 0.01.
The practical difference at set-up is who does the work. For a branch you assemble a file and send forms. For a BV the notary does both the deed and the registration of the company and its ultimate beneficial owners, which is why founders abroad often find the BV route the shorter one despite the extra step. The sequence is in how to set up a Dutch BV from abroad.
Sources:
Business.gov.nl, Setting up a Dutch branch office or subsidiary
Business.gov.nl, Private limited company (bv)
Who is exposed
This is the row that changes the answer for most companies. With a branch there is no Dutch wall: a claim against the Dutch operation is a claim against the company that owns it, wherever that company sits. Business.gov.nl puts it in terms of responsibility, with the foreign director responsible for everything that happens in the Netherlands, while a subsidiary's local director watches local affairs, including liability.
With a BV, the company is usually liable rather than its managing directors. The exceptions are real and worth knowing: directors who fail in their duties, a business that was never registered, or a director who personally co-signed a loan.
Sources:
Business.gov.nl, Setting up a Dutch branch office or subsidiary
Business.gov.nl, Private limited company (bv)
What becomes public, and what gets taxed
Two rows that founders from outside Europe rarely see coming.
On publication, the usual summary is that a branch avoids filing accounts. That is only half right. The branch files no statements of its own, but Business.gov.nl states that a business located outside the EU with a branch in the Netherlands has to file its financial statements with KVK, provided it has to file financial statements in its home country as well. For a company in Korea, Japan, Taiwan, Singapore, Türkiye, India or the United States that is the row to read twice: the branch can pull the parent's own figures into a public Dutch register. A BV files only its own.
On tax, a branch is taxed in the Netherlands where it is a permanent establishment, and what counts as one differs per tax treaty. A BV needs no such test: Dutch corporate income tax law deems a body incorporated under Dutch law to be established in the Netherlands. When the Dutch profit goes up to the parent, the routes differ too. A branch transfers profit inside one legal entity, so there is no dividend and no Dutch dividend tax on the movement. A BV paying a dividend withholds 15%, unless an exemption or a tax treaty reduces it. When a permanent establishment arises is set out in when a foreign company has a permanent establishment in the Netherlands.
Sources:
Business.gov.nl, Foreign business structures in the Netherlands
Business.gov.nl, Setting up a Dutch branch office or subsidiary
Belastingdienst, Dividendbelasting als u dividend uitkeert
Wet op de vennootschapsbelasting 1969, article 2, paragraph 5
What changes when a European round is on the horizon
A branch has no shares. An investor who wants to put money into your European operation can only buy into the parent, under the parent's law, with the parent's governance. That is a conversation founders from outside Europe often have later than they should, and it is the reason many groups that start with a branch end up incorporating a BV anyway.
Whether an EU entity is actually required to raise in Europe is a separate question, answered in do you need an EU company to raise money from European investors. What sits above the operating company, and why founders put a holding company there, is in what a Dutch holding BV is.
Sources
- Business.gov.nl, Setting up a Dutch branch office or subsidiary, checked 22 September 2026
- Business.gov.nl, Foreign business structures in the Netherlands, checked 22 September 2026
- Business.gov.nl, Private limited company (bv) in the Netherlands, checked 22 September 2026
- KVK, Inschrijven buitenlandse rechtspersoon of vennootschap (in Dutch), checked 22 September 2026
- KVK, Registration fee, checked 22 September 2026
- Belastingdienst, Dividendbelasting als u dividend uitkeert (in Dutch), checked 22 September 2026
- Wet op de vennootschapsbelasting 1969, version of 1 January 2026 (wetten.overheid.nl, in Dutch), checked 22 September 2026
Checked on 22 September 2026. This page is general information, not legal, tax or investment advice. Rules change: check the official source, or ask an adviser, before you act on it.
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