Jurisdiction Battle: How Do the Netherlands, UK, and Delaware Compare?
Choosing your startup HQ: A clear, founder-friendly comparison of NL, UK, and Delaware.
Choosing the right jurisdiction for your startup is one of those early decisions that can quietly shape your company's trajectory.
Perhaps you're drawn to the UK's extensive double-tax treaties, ideal for startups operating across Europe.
Or maybe Delaware’s straightforward corporate environment and VC-friendly culture resonate more with your vision?
And let's not forget the Netherlands! It’s appealing for its tax-efficient structures tailored to startups planning long-term European growth.
To help you navigate this choice with clarity (and maybe even a bit of confidence!), we've prepared
the ultimate cheat sheet: Netherlands vs. UK vs. Delaware.
the pros and cons of the Netherlands option (as this post is part of our Netherlands series)
Ready to unpack the differences and find the jurisdiction that's right for you?
Let's dive in!
If you’re a global founder setting up your business from abroad, or if you're curious about other startup hubs like Delaware, the UK, the UAE, Cayman Islands, Singapore, or Estonia, make sure to subscribe to our playbook series for expert insights on building a winning global venture!
Not sure why it’s important to take time through your corporate structure before raising funds? Read our post “Where to Incorporate Your Holding Company?”
The Ultimate Cheat Sheet : Netherlands vs. UK vs. Delaware
Jurisdiction Scorecard: A Simple Way to Rate and Compare Your Options
We know you don’t have time for this admin headaches… here’s a high-level summary, rated on a scale from 1️⃣ (weakest) to 5️⃣ (strongest).
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⚠️🚨⚠️ Keep in mind: Priorities shift between the early and late stages of your company. Early on, speed, minimal red tape and strong equity incentives matter more than low corporate taxes (you’re likely not even generating profits) or intra-group efficiencies.
Early vs. Growth Stage: How Jurisdictions Stack Up
Early-stage? Flexibility, incentives and fundraising options are key
🥇 Winner: Delaware 🇺🇸 – best for fast incorporation, efficient decision-making & strong tax benefits for founders, employees and investors
🥈 Joint Runners-Up:
- UK 🇬🇧: best in class employee equity incentive scheme and less red tape than in the NL
- NL 🇳🇱: strong tax benefits for founders, but comes with a heavier admin burden and no tax-advantaged employee incentive schemeGrowth-stage? Corporate tax efficiency becomes the priority
🥇 Winner: NL 🇳🇱 – ideal for late-stage companies managing a corporate group and optimizing for tax efficiency, especially across Europe
🥈 Runner-Up: UK 🇬🇧 – a strong alternative, but involves more friction if your operations are primarily European
🥉 Third Place: Delaware 🇺🇸 – still a solid option, though less tax-efficient for mature companiesShado verdict 🧑⚖️
The NL provides a strong corporate structure for later-stage companies with a corporate group across which IP is created and revenue is generated. However, added bureaucracy and the lack of a tax-efficient employee incentive scheme make it less suitable for early-stage startups.
The Pros and Cons 🇳🇱
To help you in making an informed decision, let’s dive deeper into the key advantages and potential drawbacks.
Pros 👍
#1: Tax-Efficient Group Structure
The Netherlands is one of the best places to set up a holding company, especially for Europe-focused groups. Thanks to the Participation Exemption and +100 tax treaties, it offers a powerful way to eliminate double taxation and reduce withholding taxes 🙌
How does it stack up against the UK and the US?
🇬🇧 UK — a strong choice with +130 tax treaties. Most dividends coming into the UK are tax-free, and profits from selling subsidiaries are usually exempt. But since Brexit, the UK lost access to EU tax rules, so withholding taxes on payments from EU subsidiaries now depend on individual treaties, which can change, creating uncertainty
🇺🇸 US — has +60 tax treaties, but the system is more complicated. Dividends coming into the US can be tax-free, but capital gains generated by subsidiaries are usually taxed, and payments going out of the US often face a 30% withholding tax unless reduced by a treaty. On top of that, US rules like GILTI and Subpart F make international structures harder to navigate - you'll need a good accountant 🤓 #2: Low Corporate Tax with the Innovation Box
Dutch corporate tax is 19–25%, but drops to 9% for R&D profits thanks to the Innovation Box program.
How does it compare?
🇬🇧 UK — the standard corporate tax rate is 25%, but can effectively be as low as 19% depending on your company’s size and marginal relief. Profits from patented innovations can benefit from a reduced 10% tax rate under the Patent Box
🇺🇸 US — federal corporate tax is 21%, plus state taxes (typically 3–10% depending on location). There is no federal equivalent to the Innovation Box or Patent Box#3: R&D Tax Benefits
The WSBO program and 30% Ruling can seriously cut your wage bill.
How does it compare?
🇬🇧 UK — Europe's biggest R&D tax credit pool (£7.6B in 2022). Loss-making startups can get up to 33% of R&D expenses back as cash - a real lifeline for many UK companies
🇺🇸 US - less friendly for startups. Federal R&D relief generally only available to profitable companies, but small startups can offset up to $500K of payroll taxes, even if pre-revenue — though the rules can get tricky💰 💰 💰 Bonus: Tax-Efficient Exit for Dutch Founders
The Netherlands offers a standout advantage — the Participation Exemption lets founders defer tax.
How does it compare?
🇺🇸 US — The Qualified Small Business Stock (QSBS) exemption allows founders to pay zero tax on the first $10M of gains — if certain conditions are met
🇬🇧 UK — Less generous. Under Business Asset Disposal Relief, founders pay a reduced 10% tax on the first £1M of gainsCons 👎
#1: Lack of Tax-Efficient Incentivization Scheme
Dutch startups grant equity to employees in two main ways:
Buying shares 💰: employees buy shares at around a 30% discount, but still get hit with income tax (24.5%–31%) on day one
Phantom options 👻: no upfront payment, but employees pay up to 49.5% income tax on any gains when the company does well — without actually owning shares.
Most companies let employees choose: pay upfront and lower your tax later or pay nothing now and face a big tax bill if things go well.
How does it stack up against the US and the UK?
🇬🇧 UK - the EMI scheme is the gold standard. Super tax-efficient for employees, but only available to smaller companies (< £30m assets, < 250 employees)
🇺🇸 US - Also good. Gives employees long-term capital gains treatment (lower taxes) if they hold shares for 2+ years, but there's a catch: only the first $100K worth of options per year qualify#2: More red tape
In the Netherlands, even route company decisions often require a notary, which ads costs and slows things - but ensures everything is legally airtight. On top of that, companies must show they have real operations (office, employees, local activity) to access tax benefits.
How does it compare?
🇺🇸 US - founders get maximum flexibility, especially early on. You can design your governance however you like and run your startup from abroad (see our Delaware playbook). Just be aware: cross-border tax challenges can show up once revenue starts flowing
🇬🇧 - more flexible than the Netherlands. While there are some legal formalities, it's generally easy to run your company remotely without relying heavily on lawyers#3: Limited standardization & self help tools
The Netherlands lacks a set of standard form investment documents — each law firm tends to use its own versions. The notary requirement also makes it hard to handle basic steps yourself, increasing reliance on legal advisors from the outset.
How does it compare to the US and the UK?
🇺🇸 US - Delaware sets a high bar. The NVCA model documents (introduced in 2003) are the go-to for venture financings. Tools like Stripe Atlas and CooleyGo allow you to incorporate in a day and close a SAFE round for under $1K
🇬🇧 UK - the UK has followed a similar path. The BVCA model documents (introduced in 2007) are now well established. Combined with platforms like SeedLegals and CooleyGo, UK founders can incorporate and fundraise quickly and affordablyThanks for reading!
Ready to incorporate your Dutch BV? Read step by step guide.
Ready to incorporate your Delaware holding? Read step by step guide.
Ready to incorporate your UK holding ? Read step by step guide.
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Disclaimer: nothing in this blog post should constitute legal or tax advices, use it to educate yourself and hire experts.