BV or holding?

Almost every investor setting up a company in the Netherlands asks the same question in the first conversation: “Should I form a single BV, or a holding structure?” There is no single right answer: it depends on what you plan to do, how many activities you have and your long-term goals for the company.

This article explains what a holding structure is, when a single BV is sufficient and when a holding + operating BV structure makes sense, and ends with how we make this decision in the structure analysis report.

What is a holding structure?

In its most common form a holding structure consists of two companies. At the top sits a holding BV whose shares are owned by you (or by your company in Türkiye). Below it sits the operating BV, which carries out the actual business; its shares are owned by the holding.

The holding BV itself usually does not trade: it holds shares, receives dividends from the operating company and sometimes owns assets such as real estate or intellectual property. As the DGA you typically receive your salary through the holding and provide management services to the operating company.

Under a mechanism in Dutch tax law known as the participation exemption (deelnemingsvrijstelling), profit distributed by the operating BV to the holding is, in general terms, not taxed again with corporate income tax at holding level. This is one of the main reasons the holding structure is so common in the Netherlands.

When is a single BV enough?

Not every investor needs a holding. A single BV is usually sufficient when:

• You have one activity and no second line of business planned in the near future.
• You intend to run the company for many years rather than sell it.
• You plan to withdraw profit regularly instead of accumulating it in the company.
• The liability risk of the activity is limited: no large contracts, staff or stock.
• You want to keep the structure as simple and inexpensive as possible.

Starting with a single BV has a further advantage: a later move to a holding structure is usually possible. That transition can have tax consequences and costs of its own, so if you already have a holding in mind, planning it from the start is often more economical.

When does a holding + operating BV help?

A holding structure becomes worthwhile when one or more of these apply:

• Several activities: Each line of business can sit in its own operating BV, all grouped under one holding. A problem in one activity does not directly affect the others.
• Real estate: Keeping the property the business uses in the holding (or in a separate BV) separates the asset from commercial risk.
• A future share sale: When you decide to sell the operating BV, the holding is the seller. Thanks to the participation exemption the sale proceeds generally remain in the holding and can be reinvested.
• Retaining profits in the holding: Moving the operating BV’s profit up to the holding and accumulating it there keeps those reserves away from day-to-day trading risk.
• Risk separation: Staff, contracts and supplier obligations stay in the operating BV; the value built up in the holding is better protected from them.

In structures linked to a parent company in Türkiye, the holding BV can also act as the layer that organises the relationship between the two countries; its tax side always requires a tailored assessment.

Cost, complexity and the structure analysis report

The price of a holding structure is two companies: two notarial deeds, two KVK registrations, two sets of books and two sets of annual accounts. It also brings extra decisions: a management agreement between holding and operating company, intercompany invoicing and which company pays the DGA salary. Recurring cost and administrative load are clearly higher than with a single BV.

That is why we decide with a written comparison rather than intuition. The structure analysis report looks at the number and type of activities you plan, the relationship with your existing company in Türkiye, where you want to keep the profit, plans to sell or bring in partners, your liability exposure, and the one-off and recurring cost of both options. It ends with both options side by side, compared on concrete grounds.

Conclusion

A single BV is a simple, low-cost start; a holding + operating BV structure offers extra flexibility for investors with several activities, real estate, a future share sale or a plan to accumulate profit in a protected way. Which one fits you is settled by a structure analysis report that weighs your goals against the costs; we are glad to listen to your situation in a free intro call.