By mr. Hans Eppink 02-01-2020

Dutch tax regime and real estate investments


The Dutch tax legislation has specific regimes for investment funds. Under conditions investments in real estate can also benefit from these regimes. These regimes can also be beneficial for foreign companies.

Transparent or non-transparent

Dutch investment funds are in many cases set up as a FGR (Fonds voor Gemene Rekening). It is possible to set up these FGR’s as a transparent fund or as a non-transparent fund. A non-transparent fund will be taxed with corporate tax (rate: 20% / 25% for profits up to € 200K). The non-transparent FGR is not a legal entity.

Both transparent and non-transparent

If a legal entity is desired a Dutch BV or NV (or a comparable foreign legal entity) can be used as investment fund. Both transparent and non-transparent funds can invest in real estate. The non-transparent fund can lead to a disadvantage for the investor/individual compared to a direct investment. To avoid this disadvantage the Dutch corporate tax offers two special regimes, the FBI and the VBI regime.

FBI regime

The FBI regime has nothing to do with the US investigation bureau. FBI is a abbreviation for this type of tax regime. The main aspects of the FBI are:

  • Open for investment in direct and indirect real estate;

  • 0% corporate tax;

  • Legal entity (NV or BV or comparable foreign entity) or FGR:

  • Obligation to distribute the profit (without reinvestment reserve) as dividend within 8 months of the year;

  • Withholding tax on inbound dividend can be offset against the tax on outbound dividends;

  • Shareholder requirements (e.g. individuals cannot participate as substantial shareholders);

  • Investments in real estate can only be financed with debt but the equity must be at least 40%;

  • It’s possible to, in a limited extent, for own account and risks, carry out real estate projects;

  • Resident for treaty purposes.

VBI regime

Although the Dutch FBI regime had its advantages the fund managers established their funds in many cases in different jurisdictions. In order to make the Dutch regime more interesting a second regime was introduced in 2007. This regime gives investment funds the opportunity to be exempted from corporate tax. This regime has the following aspects:

  • Exempted from corporate tax;

  • Exempted from dividend withholding tax;

  • Withholding tax on inbound dividends cannot be offset;

  • The fund must have an “open-end character”;

  • Legal entity (NV, FGR or comparable foreign entity);

  • A VBI can be a (tax free) split off from an active company;

  • Only investments in “financial instruments” are allowed.

  • This means that a direct investment is not possible, the regime is open for investment in indirect real estate;

  • No shareholder requirements;

  • No treaties protection.

It’s not possible to invest directly in real estate through a VBI. The VBI can however, through shares, invest in real estate indirectly. Although it was not intended to create a new regime for substantial shareholders, the new regime appeared to be very attractive for them. In case a second shareholder with a stake of at least 10% holds shares in the Dutch VBI it is possible to receive the special regime.

Both regimes compared

From a real estate point of view the main difference is that only the FBI regime allows direct investment in real estate.

  • The FBI must pay its annual profits to shareholders, this is not required for the VBI;
  • The VBI is not entitled to the settlement of Dutch or foreign withholding tax, the FBI can offset withholding taxes;
  • If an VBI pays dividends to its participants, the dividend is not subject to withholding tax;
  • The VBI does not have shareholder requirements.


The Dutch tax legislation offers a well-balanced system for investment funds. Double taxation can be avoided and the legislation is stable. If you need more detailed info regarding investments in the Netherlands please contact KroeseWevers.

Dutch tax regime and real estate investments
For actual advice please contact KroeseWevers
908 A3050 bewerkt
mr. Hans Eppink
Director of Tax Advice
Send an email +31 (0)5 70 21 93 46
More information? +31 (0)53 850 49 00
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