Treasury company

Cash pool models

There is a global trend toward centralization of treasury activities to optimize the capital structure of a company. Besides cash pooling, also factoring or in-house banking may for this purpose be considered. And like its holding, finance and licensing system, treasury functions via a Dutch entity may be beneficial from a regulatory, tax and/or practical perspective. Also, due to the existence of a highly developed financial infrastructure in the Netherlands.

The Netherlands is a very suitable location for a master account in a cash pool structure for the following reasons:

  • Highly developed financial infrastructure;
  • No withholding taxes on interest under Dutch law;
  • In some cash pool structures, withholding taxes at the level of the local countries might be reduced or mitigated entirely under treaties and/or the EU Interest & Royalty Directive.

Two possible cash pool structures are as follows (click to enlarge):

In case you are interested in the advantages of a Dutch cash pool structure for your business, please contact us.