The first question is not "how much does it cost", but: what exactly does the Dutch holding do that a Romanian holding does not? In some cases the answer is "almost nothing" — at several times the cost. In others, it is precisely the reverse. The difference is not a matter of fashion, but of the facts of each structure.
An entrepreneur in Brașov has three operating companies — one in manufacturing, one in IT services, one in real estate — and a plan: in three or four years he will sell the IT arm to a strategic investor. The adviser recommended to him proposes a holding in the Netherlands.
In his specific case, the answer to "what does the Dutch holding do that a Romanian one does not?" was: almost nothing — at an annual cost several times higher and with a tax-residence risk no one had explained to him. In other cases, the answer is exactly the reverse. It is worth starting from what remains legal in international structures in 2026, not from a sales recommendation.
A holding is a company that holds participations in other companies and exercises shareholder functions: it allocates capital, appoints and removes directors, approves strategy, monitors performance, decides distributions and prepares exits.
The reasons for setting one up are, in order of practical importance: consolidating control over a group of companies, isolating risk between lines of business, accumulating profits at a higher level with no intermediate taxation, preparing an exit (selling one participation without touching the other assets) and succession planning. Whatever the structure, the declaration of the beneficial owner remains a separate obligation, which does not disappear by interposing a vehicle.
Note that tax appears only in third place. A holding set up exclusively for a tax advantage is exactly the type of arrangement the anti-abuse rules target.
Since 2014, Romania has had a holding regime whose essential features are rarely put on the table in discussions about exotic jurisdictions. Under Art. 23 of the Tax Code, the following are non-taxable income when computing the tax result:
Art. 23(a) — non-taxable, with no minimum participation or holding-period condition at the level of the receiving company.
Art. 23(b) — provided the Romanian company holds, at the date the income is recorded, at least 10% of the subsidiary's share capital for an uninterrupted period of at least one year.
Art. 23(c) — from a subsidiary located in a state with which Romania has a double-taxation treaty, with the same participation and holding-period conditions.
NOTE: Non-taxation at the level of the company receiving the dividend (Art. 23) and exemption from withholding tax at the level of the company paying it (Art. 43) are two distinct things, with their own conditions. Art. 43 of the Tax Code provides that a Romanian legal entity paying dividends to another Romanian legal entity withholds tax of 16% — a rate raised from 10% for dividends distributed from 1 January 2026, by Law no. 141/2025 — but the withholding does not apply if the beneficiary holds, at the date of payment, at least 10% of the participation titles for a one-year period completed up to and including the date of payment. In other words: a Romanian holding that does not meet the one-year seniority condition bears the withholding, even if the income is subsequently non-taxable to it. It is an error of timing, not of structure — but it costs 16%.
Gains from the sale of participations. Art. 23(i) of the Tax Code treats as non-taxable the income from the valuation/revaluation/sale/assignment of participation titles held in a Romanian legal entity or in a foreign legal entity located in a state with which Romania has a double-taxation treaty, if at that date the taxpayer holds, for an uninterrupted period of one year, at least 10% of the share capital of the entity in which it holds the titles.
This is, in practice, the most valuable provision for the entrepreneur planning an exit: the sale of the participation, the conditions being met, generates no corporate tax at the level of the Romanian holding. The Netherlands is not needed for this effect.
When the Romanian holding is the right choice. Concretely: when the operating companies are in Romania, when the founder is a Romanian tax resident, when the exit concerns a participation in a Romanian company, and the likely buyer is Romanian or European. In this scenario, the Romanian holding offers non-taxation of dividends, non-taxation of the exit gain, direct access to the EU directives and — no small element — zero risk of tax residence through the place of effective management, because it is managed from exactly where it is managed.
The core regime — the participation exemption (deelnemingsvrijstelling) — exempts from taxation the dividends and capital gains derived from a qualifying participation, the threshold being a holding of at least 5%, more permissive than the Romanian regime's 10%. The corporate tax rate in 2026 is 19% on the first EUR 200,000 of taxable profit and 25.8% above that level. The real advantages, however, are less tax and more legal: a very extensive treaty network, predictable company law, and a well-established practice for investors and funds. The trade-off: substance requirements and a corresponding administration cost.
Cyprus underwent a broad tax reform, adopted by Parliament on 22 December 2025 and published on 31 December 2025. From 1 January 2026, the corporate tax rate rises from 12.5% to 15%, a direct alignment with the global minimum standard. The reform removed the deemed dividend distribution mechanism for profits earned after 1 January 2026 and reduced the special defence contribution on dividends received by resident and domiciled individuals from 17% to 5%. Cyprus remains relevant, but the "12.5%" argument has gone.
It remains the reference jurisdiction for fund structures and intra-group financing, with a participation-exemption regime and a specialised legal infrastructure. It is not, as a rule, a solution for a mid-sized entrepreneurial group: the cost and complexity are not justified without institutional investors.
The full-imputation system with partial tax refund to shareholders can lead to a reduced effective tax burden at group level. It is, however, a mechanism that depends on refund flows, timing and strict compliance, and its treatment in other states — including in Romania, at the level of the resident shareholder — is not automatically favourable. To this is added a contextual uncertainty: Malta's position on the global minimum tax has changed several times in recent years, and specialist public sources remain contradictory on the state of application. For groups below the global minimum tax threshold — that is, for the vast majority of Romanian entrepreneurs — the refund mechanism continues to work; but any decision built on it should be checked against a primary Maltese source, at the date of the decision, not on a presentation document.
The holding follows the business, not the reverse. A group with 100% of its activity in Romania has, as a rule, no business reason for a foreign holding.
If you remain a Romanian tax resident, the dividends you receive from the holding, wherever it is, are taxable in Romania. A foreign holding at most defers the moment — it does not eliminate it.
If the expansion genuinely targets a market, a company there makes sense independently of tax.
Investment funds have firm jurisdiction preferences and, at times, only theoretically negotiable ones. If the investor requires a Dutch or Luxembourg vehicle, that is a genuine business reason.
Who buys, what they buy (shares or assets), in which jurisdiction it is signed, what warranties are required. The capital-gains regime is analysed at the planning stage, not in the week of signing.
Not just incorporation: local accounting, audit where mandatory, directors with real competence, an office, tax advice in two jurisdictions, transfer-pricing documentation. The recurring cost is what decides, not the initial fee.
Directive 2011/96/EU eliminates the double taxation of dividends between parent companies and subsidiaries in different Member States. In Romanian law it is transposed, on the payment side, in Art. 229(1)(c) of the Tax Code: dividends paid by a Romanian company to a legal entity resident in a Member State are exempt from withholding tax if the beneficiary has one of the prescribed forms of organisation, is a corporate-tax payer in its own state and holds at least 10% of the Romanian company's capital for an uninterrupted period of at least one year completed at the date of payment.
The limit is the anti-abuse clause in the directive itself: Member States do not grant the benefits for an arrangement or a series of arrangements that, having regard to all relevant facts, are not "genuine" — meaning not put in place for valid commercial reasons reflecting economic reality — and were put in place with the main purpose of obtaining a tax advantage that defeats the object of the directive. The Court of Justice of the European Union confirmed, in the judgments of 26 February 2019 (the "Danish cases"), that the benefit of the directive is denied to a conduit company that is not the beneficial owner, even in the absence of an express national rule. Conversely, dividends paid to a third state follow the applicable treaty and require a tax residence certificate presented to the Romanian payer at the time of payment; in its absence, the domestic rate applies.
Withholding tax on dividends leaving Romania. The mechanism is worth remembering, because it decides whether a foreign holding "wins" or "loses" against a Romanian one. The dividend paid by the Romanian company goes up to the holding under one of three possible regimes:
If the holding is resident in a Member State and meets the conditions of Art. 229(1)(c) — eligible form of organisation, status as a corporate-tax payer, 10% held for one uninterrupted year. This is the same result a Romanian holding obtains through Art. 43.
If the holding is in a treaty third state and presents the Romanian payer with the tax residence certificate at the time of payment.
In all other situations — including where the certificate is missing or the seniority condition is not met.
The practical observation: for a group with exclusively Romanian operations, the Dutch holding does not, on this point, produce a better result than the Romanian one. Both reach exemption. The difference appears only higher up the structure — in what happens to the money once it reaches the holding — and there, inevitably, the founder's tax residence comes into play.
This is the error that appears in most files. A Dutch or Cypriot holding whose decisions are, in fact, taken from the founder's office in Romania is — under Art. 7(37) of the Tax Code — a company with its place of effective management in Romania, and therefore a Romanian tax resident. The consequence: the obligation to register in Romania, corporate tax on the worldwide result, retroactive reporting obligations and, in serious cases, the complete loss of the economic rationale of the structure.
The substance needed to avoid this classification is not symbolic: directors who actually decide in the jurisdiction, with the necessary competence and information; meetings held there, with minutes that reflect real deliberations; own premises; bank accounts operated locally; operating costs consistent with the function. A holding has, by its nature, limited functions — but those functions must be exercised where it is registered, not in Romania.
As a rule, no. Art. 23(i) of the Tax Code treats the gain from the sale of participation titles held by a Romanian holding as non-taxable, if at the date of disposal the holding is at least 10% for an uninterrupted period of one year. The difference between the Dutch threshold (5%) and the Romanian one (10%) matters only for minority holdings. Before anything else, check the holding timeline — that is what, in practice, blocks the exemption.
From the moment the holding acquires the titles. The transfer itself must be analysed separately: the contribution or sale of participations to the holding may generate tax effects at your level as an individual, and a group restructuring may trigger exit tax. This is exactly why restructurings are planned years before an exit, not months.
It depends on what you do with it. As a pure holding vehicle, the advantage over Romania has narrowed significantly from 2026 — especially since the Romanian regime already offers non-taxation of dividends and capital gains under Art. 23. As a vehicle with real operations in Cyprus, with a team and decision-making there, the discussion is different and must be had on your numbers.
It does not mean you owe nothing in Romania. If the conditions in Art. 40^5 of the Tax Code on controlled foreign companies are met, certain undistributed income of the controlled entity may be taxed directly at your level, independently of distribution. And if the holding is managed from Romania, it is a Romanian tax resident anyway.
This article is strictly informational and does not constitute legal or tax advice. Individual situations must be analysed case by case. Legislative position reflected: 18 July 2026.
Deadlines run from the moment of communication. An initial discussion clarifies what is being alleged, what you need to justify and how the defence is built — before an estimate becomes a tax assessment.