The Dutch Central Bank has issued guidance clarifying that holding companies of international financial groups are exempt from the Dutch 20% bonus cap. The guidance makes the Netherlands a more attractive domicile for European holding companies of financial groups.
The exemption
Under Dutch law, a financial undertaking may not pay bonuses to its employees that exceed 20% of fixed remuneration. International holding companies based in the Netherlands are exempt from this 20% bonus cap and may apply a 100% bonus cap.
International holding company requirements
For the exemption to apply
- the holding company must be the top holding of the group in the European Economic Area, meaning that it may not have a parent in the EEA; and
- over a period of five calendar years, 75% of the international group's employees should be actually employed outside the Netherlands for more than 50% of their working hours during at least three years.
International holding companies can immediately start applying the exemption and do not have to be active in the Netherlands for any minimum period in order to become eligible for exemption.
The international holding company may be licensed – as a bank or investment firm, for example – but it does not have to be.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.