Formation · 7 min read
UK, Ireland or the Netherlands for your European hub?
A plain comparison for overseas groups choosing between the UK, Ireland and the Netherlands for a European base: corporation tax (25% / 12.5% / 25.8%), dividend withholding, VAT and EU market access after Brexit, speed of set-up, resident-director rules, substance, talent and cost. When you need one, when you need two.
Key points
- Headline corporation tax: UK 25% (19% small profits), Ireland 12.5% on trading income, Netherlands 19% to €200,000 then 25.8%. Pillar Two applies a 15% minimum to groups over €750m everywhere.
- The UK is outside the EU single market: an EU hub still needs an EU entity for frictionless EU goods trade and some regulated services. For services and software sold into the UK, the UK entity is the one that matters.
- Set-up speed: UK 24 hours, no resident director; Ireland a week or two and an EEA-resident director or a €25,000 bond; Netherlands one to two weeks with a notary.
- Most groups selling into both the UK and the EU end up with two entities. The question is which comes first.
The comparison
| United Kingdom | Ireland | Netherlands | |
|---|---|---|---|
| Corporation tax | 25%; 19% below £50k (diluted by group size) | 12.5% trading; 25% passive | 19% to €200k; 25.8% above |
| Dividend withholding to parent | 0% | 25%, reduced to 0% for most treaty and EU parents | 15%, reduced to 0% for most treaty and EU parents |
| VAT | 20%; non-established businesses register from first sale | 23% | 21% |
| Set-up time | 24 hours | 1–2 weeks | 1–2 weeks, notarial deed |
| Resident director | Not required | EEA-resident director, or €25,000 bond | Not required, but substance expected |
| Minimum capital | £1 | €1 | €0.01 |
| Public accounts | Yes, all companies | Yes | Yes, filing at KvK |
| Audit threshold (standalone) | £15m turnover / £7.5m assets / 50 staff | €15m / €7.5m / 50 | €15m / €7.5m / 50 |
| Employer social charges | 15% NI above £5,000 | 11.15% PRSI | About 20–25% depending on sector and insurances |
| EU single market access | No (TCA: tariff-free goods with origin rules; services limited) | Yes | Yes |
| Language of business and filings | English | English | English widely accepted; filings in Dutch or English |
When the UK is the right first entity
When the customers are British. The UK is the largest English-speaking market in Europe, the second-largest economy, and the place where a US, Indian, Australian or Gulf company usually finds its first European customers. UK customers prefer to contract with a UK company with UK VAT on the invoice; UK public-sector and enterprise procurement often requires it. The UK company is formed in a day with no resident director, and there is no withholding on dividends home. Since Brexit it does not give you the EU single market, and it does not stop an EU customer’s procurement team asking for an EU entity.
When Ireland is
Ireland is the classic EU hub for US technology groups: 12.5% on trading profits, English-speaking, common-law, EU member, and a mature ecosystem of people who have done exactly this. The costs are substance — Revenue and the OECD expect real decision-makers in Ireland, not a brass plate — and the EEA-resident director rule (or a bond). Groups over €750m pay 15% under Pillar Two regardless. Ireland is the right first entity when the plan is to sell across the EU from one place and the UK is a later or smaller market.
When the Netherlands is
The Netherlands wins on logistics and on the treaty network. Rotterdam and Schiphol make it the natural EU entity for a group moving goods; the participation exemption and the innovation box (9%) make it attractive for holding and IP; Dutch is not needed to run a company. Corporation tax is higher than Ireland’s and the 30% ruling for expatriate staff has been trimmed. It suits distributors, manufacturers and groups whose EU business is goods-led.
Two entities, and in which order
A group that will sell into both the UK and the EU usually ends up with both a UK company and an EU company. If the first customers are British, form the UK company first, sell into the EU from it while volumes are small (services and software travel across the border without customs; goods do not), and add the EU entity when EU revenue or customs friction justifies it. If the first customers are in the EU, do the reverse. The mistake is forming both on day one and running two sets of filings for a business that only has customers in one place.
A UK company can own the EU subsidiary or sit alongside it under the parent. Sideways is usually simpler for withholding and for a later sale of either business.
Common questions
Can a UK company sell into the EU after Brexit?
Is Ireland cheaper than the UK on tax?
Do I need a resident director in any of the three?
Which is fastest to set up?
General information for overseas businesses considering the UK, correct to the best of our knowledge at the date shown. Not advice for your specific circumstances — rates and thresholds change, usually each April. Check with us or HMRC before acting on it.