Opening a Subsidiary vs a Branch in the Netherlands

Quick answer: A subsidiary in the Netherlands is usually set up as a Dutch private limited company (BV) with its own legal identity, while a branch operates as part of the foreign parent company. A subsidiary generally limits the parent company’s liability, whereas the parent remains liable for the branch’s obligations. The correct choice depends on your business risks, tax position, and expansion plans.

Expanding into the Netherlands gives foreign companies access to the European market, but the way you establish your presence can affect how your business operates. Some companies prefer a branch to extend their existing operations, while others establish a subsidiary to build a separate Dutch business. This guide to opening a subsidiary vs a branch in the Netherlands explains the differences in registration, liability, taxation, costs, and reporting requirements to help you choose a structure that fits your business goals.

What Is the Difference Between a Subsidiary and a Branch in the Netherlands?

The core difference is legal status. A subsidiary has its own legal personality, while a branch has none.

• Subsidiary: A subsidiary in the Netherlands is a Dutch company owned by the parent, fully or partly. It’s usually set up as a private limited company (besloten vennootschap, or BV). It has its own directors, its own bookkeeping, and its own contracts, assets, and debts.
• Branch: A branch (filiaal in Dutch) is simply the parent company doing business in the Netherlands. It trades under the parent’s legal identity, so everything it does is legally the parent’s own act.

	Subsidiary (BV)	Branch
Legal personality	Yes, a separate Dutch entity	No, part of the foreign company
Liability of the parent	Generally limited	Full
Tax residence	Dutch tax resident	Not a Dutch tax resident
Setup	Notarial deed and KvK registration	KvK registration of the foreign company
Typical use	Long-term presence	Testing the market

What Are the Legal Requirements for a Subsidiary and Branch in the Netherlands?

The two routes ask for quite different things.

For a subsidiary (BV):

• A deed of incorporation signed in front of a Dutch civil-law notary
• Articles of association
• At least one director and one or more shareholders
• No minimum share capital
• Address for the business in the Netherlands
• Registration in the KvK Business Register, including the ultimate beneficial owners (UBOs)

For a branch:

• Registration of the foreign company’s Dutch establishment in the KvK Business Register. Dutch company law doesn’t require a branch to be a separate legal entity, as Business.gov.nl explains.
• Proof that the parent company is registered abroad, plus its corporate documents
• Details of the parent’s officials and of the person in charge of the branch
• An address in the Netherlands

Foreign documents have to be certified, and the KvK can ask for an apostille. Check the current rules in the KvK guide to foreign company registration.

One more rule to know about: if a foreign company mainly operates in the Netherlands rather than in its home country, the Dutch Formal Foreign Companies Act can add extra requirements. Ask an advisor if that might apply to you.

How Does Liability Differ Between a Dutch Subsidiary and a Branch?

Liability is usually the deciding factor.

• With a branch, there’s no legal line between the Dutch operation and the parent. If the branch signs a lease, hires staff, or takes on debt, the parent is responsible for all of it, and the parent’s assets elsewhere in the world can be reached by creditors.
• With a subsidiary, the BV is the one that carries its own debts. The parent’s exposure is generally limited to what it has invested in the BV. That protection isn’t absolute, though. Directors who act improperly or neglect legal duties, such as filing accounts on time, can still face personal liability.

If your Dutch activity carries real risk, such as employees, inventory, large contracts, or regulated services, this point alone often favors a subsidiary.

How Are Subsidiaries and Branches Taxed in the Netherlands?

Both structures pay Dutch corporate income tax. In 2026, the rate is 19% on the first €200,000 of taxable profit and 25.8% above that, according to the Belastingdienst. So choosing a branch doesn’t automatically mean a higher tax rate. The differences are in how the tax is applied:

• Scope: A BV is a Dutch tax resident and is taxed on its worldwide income. A branch is taxed only on the Dutch-source profit attributable to it.
• Treaties: A BV, as a Dutch resident, can use the Dutch tax treaty network. A branch isn’t treaty-entitled itself, so the parent relies on the treaties of its own country.
• Profit distributions: When a BV pays dividends to its shareholders, Dutch dividend withholding tax can apply. Exemptions exist in many cases, for example, for parents in the EU or in certain treaty countries.
• Home-country tax: How your own country taxes branch profits compared with dividends from a subsidiary varies widely. This often changes the final result more than Dutch rules do.

Because the outcome depends heavily on where your parent company is based, get tax advice for your specific situation before you decide.

What Are the Registration Costs and Procedures for Each Structure?

1. Subsidiary (BV)

1. Choose the shareholders, the director(s), and the company name.
2. Have the articles of association drafted.
3. Sign the deed of incorporation with a notary. If you can’t attend, a power of attorney can often be arranged, so ask the notary what they need.
4. Register the BV with the KvK and pay the registration fee, €85.15 in 2026. Register your UBOs as well.
5. Open a Dutch bank account. Our team can help with opening a business bank account in the Netherlands.

Besides the KvK fee, budget for the notary. Notary fees differ by firm and by how complex the structure is, so ask for a quote up front.

2. Branch

1. Gather proof of the parent’s foreign registration, issued recently, and its corporate documents.
2. Complete the KvK forms for the foreign company, its officials, and the person in charge of the branch.
3. Have the documents certified, translated, or apostilled where needed.
4. Finish the registration at a KvK appointment. You typically receive your KvK number within a few working days. The KvK notifies the Tax Administration for you.
5. Open a bank account and arrange any permits your activity needs.

A branch skips the notary, but it can involve extra costs for legalising and translating foreign documents. Check the current KvK fee for foreign company registration before you budget.

If you’d like help with either route, see our BV registration service or our branch registration service.

What Are the Accounting and Reporting Requirements for Subsidiaries and Branches?

1. Subsidiary: A BV keeps its own accounts and prepares annual financial statements. It must file them with the KvK within eight days of adoption and no later than 12 months after the end of the financial year. These statements are public. A BV also files its own corporate income tax return each year. Missing the filing deadlines can lead to penalties and, in serious cases, director liability.
2. Branch: A branch doesn’t draw up separate statutory accounts as its own legal entity. Its results form part of the parent company’s accounts, though it still needs records for Dutch tax purposes. For EU companies, no separate filing with the KvK is generally required. For a parent from outside the EU, the rule is different: if the parent has to publish annual accounts in its home country, it also has to file them in the Netherlands, in the same form, together with an extract from its foreign register. The KvK explains the details on its page about who has to file annual accounts.

In short, a subsidiary means more local paperwork, and a branch ties your Dutch reporting to the parent’s.

What Are the Advantages and Disadvantages of a Subsidiary vs a Branch?

Subsidiary

Advantages	Disadvantages
Limited liability for the parent	Notary involvement and higher setup effort
Direct access to Dutch treaties	Own accounting, annual filing, and tax return
Can raise funds and own assets independently	Dividend withholding tax can apply to distributions
Often seen as more credible by Dutch partners and banks	Winding down takes more steps than closing a branch

Branch

Advantages	Disadvantages
Faster and simpler to register	The parent is fully liable
No notary, no separate legal entity to run	No independent treaty access
Easy to scale down or close	Harder to attract outside investment or financing
Profits are taxed only on Dutch-source income	Parents’ own accounts and tax position are affected

Conclusion

When you’re deciding between opening a subsidiary vs a branch in the Netherlands, the answer comes down to risk, tax, and timing. A subsidiary protects your parent company and gives you room to grow, at the price of more formalities. A branch is quicker and lighter to set up, but your parent carries every obligation.

If you’re not sure which fits, the team at OnDemand International can compare both options for your situation and handle the registration for you. Contact our team.

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