Best Country for Holding Companies (2026)

What a holding company needs to do

A holding company: 1. Receives dividends from subsidiaries → needs exemption from tax on these 2. May sell subsidiaries → needs capital gains exemption 3. May hold IP → needs IP Box or similar 4. Routes income through treaty network → needs bilateral treaties 5. Eventually distributes to the ultimate shareholder → needs efficient exit

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Top holding jurisdictions ranked

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The Netherlands participation exemption in detail

• Qualifying conditions (must ALL be met for the participation exemption):
• Shareholding of at least 5% (not 10% or 25% — just 5%)
• The subsidiary is not a "low-taxed portfolio investment" (subject to reasonable tax in its country)
• The shareholding is not primarily held as a portfolio investment (you must have a genuine commercial relationship with the subsidiary)

• When the exemption applies:
• Dividends received from the subsidiary: 100% exempt from Dutch CT
• Capital gain on sale of the subsidiary: 100% exempt from Dutch CT

This is why virtually every major international group has a Dutch holding company.

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For smaller groups: Cyprus

Netherlands is ideal for large groups but Dutch professional services costs (notary, lawyers, accountants) are higher than Cyprus. For a group with 2–3 subsidiaries and <€5M profit, Cyprus's 12.5% (with similar participation exemption mechanics) at lower professional services cost may be more economical.

Cyprus participation exemption: Dividends received from subsidiaries are generally exempt from Cyprus CT and SDC (subject to anti-avoidance for companies in low-tax jurisdictions paying less than 5% tax on underlying profits).