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Note worthy: no Netherlands withholding tax on interest an royalty payments

Equity & Debt financing

When using NL companies take note of the following matters regarding equity and debt financing:

  • The public limited company (“NV”) has a minimum share capital of EUR 18,000.
  • The limited liability company ("BV") has no minimum share capital.
  • Capital contributions are not subject to a tax in The Netherlands.
  • It is possible to make capital contributions without issuing new shares.
  • Capital contributions may be in cash or in kind.
  • A certified valuation of a chartered accountant is not required in case of a equity contribution in kind in a BV.
  • Debt financing may be beneficial due to the absence of tax on payments of interest (“interest withholding tax”).
  • Netherlands tax law does include detailed rules restricting interest deductions.
  • Netherlands companies are amongst others used in holding structures and so-called “back-to-back financing” structures. In the latter case, the spread to be reported should be at arm’s length.
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