When should you add a holding company?

A 'holding company' is a BV that owns the shares of your operating BV (werk-BV). So you incorporate two BVs: the operating BV that houses your activities, and the holding company above it that holds the operating BV's shares. For founders who want to distribute profit in the long run, foresee an exit or want to protect assets, this is almost always the right structure.

What a holding company does for you

• Tax deferral: profit from the operating BV can move to the holding company tax-free (participation exemption, deelnemingsvrijstelling)
• Protection: assets held in the holding company are separate from the operating BV's business risk
• Exit flexibility: when you sell the operating BV, the gain can move to the holding company tax-free
• Pension & investments: assets in the holding company can be used for pension, real estate or new ventures

When to set it up now

If you expect to make substantial profit within 3–5 years, or if you have an exit path in mind, it is smarter to incorporate the holding company right away. Adding a holding company afterwards is possible through a share-for-share exchange, but that is a separate notarial act and costs extra money and time.

When you can still wait

With a lifestyle business with limited scaling plans, or if you're not yet sure the business will take off, you can start with just an operating BV and add the holding company later. The cost of maintaining two BVs (extra annual accounts, KvK fees, accountancy costs) may then not outweigh the benefit.