International Practice

# India-Netherlands Cross-Border
Legal Advisory

Netherlands

## India-Netherlands Cross-Border Legal Advisory

The Netherlands is among the largest foreign direct investors in India and ranks consistently as the preferred European holding jurisdiction for Indian multinationals expanding globally. Bilateral trade between India and the Netherlands exceeds USD 12 billion annually, spanning technology, agriculture, logistics, energy, and financial services. The favourable Dutch legal and fiscal framework, coupled with deep treaty-based protections, makes the Netherlands an indispensable jurisdiction for Indian businesses seeking structured access to European and global markets.

ESB Global Law Advisory, based in Mumbai, provides end-to-end legal counsel for Indian enterprises establishing Dutch operations, structuring European holdings, and navigating the regulatory landscape of the Netherlands. Our cross-border practice combines deep knowledge of Indian foreign exchange and corporate law with practical expertise in Dutch commercial, tax, and investment treaty matters.

### Corporate Structuring & Holdings

The Dutch BV (besloten vennootschap) is the most widely used entity for Indian companies entering the Netherlands, offering flexible governance, no minimum capital requirement, and compatibility with international holding structures. For larger enterprises, the NV (naamloze vennootschap) provides a publicly tradeable corporate form suitable for listings on Euronext Amsterdam. We advise on the full spectrum of Dutch entity formation, including cooperative structures (cooperatieve U.A.) that are frequently used for private equity fund vehicles and joint ventures. Our guidance covers articles of association, shareholder agreements, board composition, and substance requirements to ensure the Dutch entity satisfies both local and international tax standards.

For Indian conglomerates, we design multi-layered European holding arrangements that leverage the Netherlands as a regional headquarters. This includes structuring intermediate holding vehicles for acquisitions in Germany, France, the United Kingdom, and other EU member states, while ensuring compliance with the Reserve Bank of India's Overseas Direct Investment regulations and FEMA guidelines.

### Bilateral Investment Treaties

India and the Netherlands have maintained a bilateral investment treaty framework that historically provided robust investor protections, including fair and equitable treatment standards, protections against unlawful expropriation, and mechanisms for investor-state dispute resolution. Although India issued termination notices for several older-generation BITs in the course of adopting its 2016 Model BIT, investments structured through the Netherlands may continue to benefit from residual protections under sunset clauses. We advise Indian investors on structuring cross-border investments to maximise available treaty-based protections and on navigating investor-state arbitration proceedings where treaty rights are at stake.

### Tax & Transfer Pricing

The Dutch fiscal regime is one of the most competitive in Europe for holding and IP-intensive businesses. The participation exemption fully eliminates corporate tax on qualifying dividends received and capital gains realised by a Dutch holding company on its subsidiaries, making the Netherlands ideal for consolidating global investment returns. The innovation box regime subjects qualifying IP income to an effective tax rate of 9%, providing meaningful savings for technology and R&D-driven Indian companies.

The Netherlands maintains over 90 double tax treaties, including a comprehensive treaty with India that reduces withholding tax rates on cross-border dividends, interest, and royalties. We advise on advance tax ruling requests to provide certainty on the Dutch tax treatment of complex structures, and on transfer pricing documentation and compliance for intercompany transactions between Indian parent companies and Dutch subsidiaries, ensuring adherence to both OECD Transfer Pricing Guidelines and Indian transfer pricing regulations under the Income Tax Act.

### EU Market Access

The Netherlands serves as the primary gateway to the European single market for Indian businesses. The Port of Rotterdam, the largest port in Europe, handles over 450 million tonnes of cargo annually and provides unparalleled logistics connectivity to EU consumer and industrial markets. Schiphol Airport in Amsterdam is among Europe's busiest cargo and passenger hubs. We assist Indian companies in leveraging Dutch logistics infrastructure, customs facilitation mechanisms, and EU regulatory frameworks for pan-European distribution. Our advisory covers EU product compliance, CE marking, REACH chemical regulations, and sector-specific licensing requirements for goods and services entering the single market through the Netherlands.

### Employment & Immigration

Dutch employment law governs matters including employment contracts, working conditions, dismissal protection, and works council requirements. We advise Indian companies on hiring local talent, seconding Indian employees to Dutch operations, and complying with the Dutch highly skilled migrant programme (kennismigrantenregeling) that provides a streamlined immigration pathway for qualified Indian professionals. Our guidance extends to Dutch social security obligations, pension contributions, and the 30% ruling that offers significant income tax benefits to qualifying expatriate employees.

### Dispute Resolution

The Netherlands is a globally recognised seat for international commercial arbitration, anchored by the Netherlands Arbitration Institute (NAI) in Rotterdam and The Hague. The Dutch Arbitration Act, based on the UNCITRAL Model Law, provides a modern and efficient framework for resolving cross-border disputes. The Hague is also home to the Permanent Court of Arbitration and the International Court of Justice, underscoring the Netherlands' stature in international dispute resolution. We represent Indian clients in NAI and ICC arbitration proceedings, as well as in commercial litigation before Dutch courts involving India-Netherlands business disputes. The Netherlands' ratification of the New York Convention ensures that arbitral awards obtained in Dutch-seated proceedings are enforceable in India and over 170 other jurisdictions.

### Our India-Netherlands Services Include

- Dutch BV, NV, and cooperative formation and structuring
- European holding company design and implementation
- Bilateral investment treaty advisory and investor-state arbitration
- Transfer pricing documentation, compliance, and APA support
- Participation exemption and innovation box structuring
- EU market access strategy and regulatory compliance
- Commercial contract drafting under Dutch law
- Employment law, expatriate arrangements, and the 30% ruling
- Intellectual property strategy and licensing
- Dispute resolution through NAI, ICC, and Dutch courts
- M&A due diligence and cross-border transaction support
- FEMA and RBI compliance for outbound Indian investment

FAQ

## Frequently Asked Questions

Why do Indian companies choose the Netherlands for a holding structure?

The Netherlands offers a highly favourable holding regime anchored by the participation exemption, which provides a full exemption from corporate tax on qualifying dividends and capital gains from subsidiaries. Combined with an extensive double tax treaty network spanning over 90 countries, a stable legal system based on civil law, and strong investor protection provisions, the Netherlands is the preferred European jurisdiction for Indian multinationals seeking to structure outbound investments, consolidate regional operations, and route capital efficiently across the EU.

What is the India-Netherlands Bilateral Investment Treaty?

India and the Netherlands have maintained a bilateral investment treaty framework that provides protections including fair and equitable treatment, protection against expropriation without compensation, and free transfer of investment-related funds. While India terminated several older-generation BITs and introduced its Model BIT in 2016, investments structured through the Netherlands may still benefit from residual treaty protections and sunset clauses. Our firm advises on structuring investments to maximise available treaty-based protections under current and evolving bilateral frameworks.

How can an Indian company set up a Dutch BV?

Establishing a Dutch BV involves drafting articles of association before a Dutch civil-law notary, registering with the Dutch Chamber of Commerce (KvK), obtaining a corporate tax identification number, and fulfilling substance requirements including local directorship and a registered office. Indian companies must also comply with RBI regulations under the Overseas Direct Investment framework for outbound capital remittance. ESB Global coordinates the entire process from Indian regulatory approvals through Dutch incorporation and post-formation compliance.

What are the key tax benefits of operating through the Netherlands?

The Dutch tax system offers several advantages for Indian businesses: the participation exemption eliminates corporate tax on qualifying dividends and capital gains; the innovation box regime taxes qualifying IP income at an effective rate of 9%; an extensive treaty network of over 90 double tax treaties reduces withholding taxes; advance tax rulings provide certainty on the tax treatment of cross-border transactions; and there is no withholding tax on outbound royalty and interest payments in many circumstances. The India-Netherlands tax treaty provides reduced withholding rates on dividends, interest, and royalties.

How are India-Netherlands commercial disputes typically resolved?

India-Netherlands commercial disputes are commonly resolved through international arbitration. The Netherlands Arbitration Institute (NAI) in Rotterdam and The Hague is one of the leading European arbitral institutions. Parties also frequently choose ICC arbitration with a Dutch seat. The Netherlands is a signatory to the New York Convention, ensuring enforceability of arbitral awards in India and over 170 other jurisdictions. For investor-state disputes, claims may be brought under bilateral or multilateral investment treaties. Our firm represents clients across NAI, ICC, and UNCITRAL proceedings involving cross-border India-Netherlands matters.

International Practice

## Other International Jurisdictions

ESB Global provides cross-border legal services across major European markets. Explore our practice in other jurisdictions:

- United Kingdom — Company incorporation, English law contracts, LCIA arbitration, and post-Brexit trade advisory
- Germany — GmbH formation, employment law, EU regulatory compliance, and IP protection
- France — SAS and SARL formation, joint ventures, ICC arbitration, and technology transfer
- Switzerland — Swiss corporate structuring, banking regulation, and international arbitration
- Italy — S.r.l. formation, commercial contracts, and trade compliance advisory
- Spain — S.L. company formation, real estate investment, and EU market access
- Ireland — Irish corporate structuring, technology sector advisory, and EU regulatory compliance

Dutch Operations?

## Expert India-Netherlands
Legal Counsel

Leverage the Netherlands as your European gateway. Strategic cross-border counsel from Mumbai for Indian businesses entering the Dutch market.

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