An increasing number of Dutch entrepreneurs, director-shareholders (DGAs) and high-net-worth individuals are considering a move abroad. The tax burden in Box 2 has risen sharply in recent years, Box 3 continues to generate uncertainty, and for those who operate internationally, the fiscal arguments to remain in the Netherlands are becoming harder to sustain. At the same time, destinations such as the United Arab Emirates (UAE), Malta, Cyprus and Switzerland offer lower tax rates, flexible regimes and a growing community of international entrepreneurs and professionals.

But emigration is not a simple tax solution. Those who leave without thorough preparation risk a deferred exit tax assessment that remains outstanding for years, a holding structure that the Dutch tax authorities treat as artificial, or a foreign entity that is never recognised as genuinely established. Choosing the right country is only step one. Step two is building a structure that is legally, fiscally and operationally sustainable.

This article compares the four most popular emigration destinations for Dutch entrepreneurs: the UAE, Malta, Cyprus and Switzerland. We address when you are considered to have genuinely emigrated for Dutch tax purposes, how the exit tax works, what each country offers fiscally, and where the risks lie.

Table of contents

1. Why emigration is increasingly relevant for entrepreneurs

2. When have you genuinely emigrated from the Netherlands?

3. Exit tax and the protective tax assessment

4. UAE: 0% income tax and substance requirements

5. Malta: the refund mechanism and effective tax burden

6. Cyprus: the non-dom regime and low corporate tax

7. Switzerland: lump-sum taxation and cantonal differences

8. Common mistakes in emigration planning

9. What should you do now?

1. Why emigration is increasingly relevant for entrepreneurs

The Netherlands has become a fiscally demanding environment for entrepreneurs with accumulated wealth. In 2026, the Box 2 rate stands at 24.5% on the first €68,843 and 31% on the excess. For a director-shareholder with €5 million of retained earnings in a private company, a dividend distribution generates over €1.5 million in Box 2 tax, on top of the 25.8% corporate income tax already paid at company level. The combined effective burden on distributed profits can exceed 45%.

Box 3 adds further pressure. The wealth tax regime has been in flux for years, and the transition to a system based on actual returns introduces new uncertainty. For those holding wealth in shares, real estate or investment portfolios, the Dutch fiscal environment has become increasingly unpredictable.

At the same time, international mobility has made emigration practically viable. Remote businesses, e-commerce and digital services allow entrepreneurs to continue operating without being physically tied to the Netherlands. Where emigration was once the preserve of retirees, it is now a genuine option for active entrepreneurs in their thirties, forties and fifties.

The question is no longer whether emigration is possible, but whether it is fiscally and structurally sound, and which country best fits your specific situation.

2. When have you genuinely emigrated from the Netherlands?

Dutch tax law determines fiscal residence based on all facts and circumstances (Article 4 of the General Tax Act, AWR). There is no objective threshold such as a 183-day rule. The decisive question is whether the individual maintains a lasting personal tie with the Netherlands.

Under Dutch case law, the following circumstances are considered relevant in assessing whether a durable personal tie with the Netherlands exists. No single factor is decisive in isolation; all relevant facts and circumstances must be weighed in their mutual connection:

• whether a permanently furnished home is available in the Netherlands;
• the place of residence, work or school of the partner and family;
• the place where work is carried out;
• the place where cash withdrawals or credit card payments are made;
• gas, electricity and water consumption at a Dutch address;
• where bank accounts and investments are held;
• where insurance policies are taken out;
• where medical treatment is received, including by a GP, dentist or physiotherapist;
• membership of sports clubs, charities, religious organisations or similar associations;
• where subscriptions are held; and
• where the individual is registered in the municipal records.

Formal circumstances such as deregistration from the municipal population register and nationality are of subordinate importance under Dutch tax law. Unlike in civil law, registration in the population register does not in itself determine fiscal domicile.

The Netherlands does not apply an objective threshold such as a 183-day rule. Fiscal domicile is determined by a subjective assessment of all relevant facts and circumstances taken together. Dutch case law includes instances in which an individual was held to be a tax resident despite spending only 60 days in the Netherlands in the relevant year. The duration of physical presence is therefore only one element among many.

In practice, two risks recur most frequently. The first is dual residence: both the Netherlands and the destination country claim the individual as a tax resident. Tax treaties typically resolve this through tie-breaker rules, examining in which country a permanent home is available and where personal and economic ties lie most strongly. Tie-breakers only work where a treaty applies and where its outcome is in your favour.

The second risk concerns emigration that the tax authorities do not consider genuine, because the factual situation has not materially changed. An individual who retains a Dutch home, returns to the Netherlands on a regular basis and continues to manage their company from Amsterdam has not, from a Dutch tax perspective, genuinely departed, regardless of formal deregistration from a Dutch municipality.

Genuine fiscal emigration requires demonstrable severance of ties with the Netherlands and the establishment of ties in the destination country. In practice, this typically involves:

• selling or renting out the Dutch property;
• relocating the family to the destination country;
• transferring bank accounts and insurance policies; and
• living and working in the destination country in a manner that can be substantiated with documentation.

3. Exit tax and the protective tax assessment

Any individual who holds a substantial interest in a Dutch company at the time of emigration is subject to the exit tax provisions of the Dutch Income Tax Act 2001. A substantial interest exists when you directly or indirectly hold 5% or more of the shares in a company. Upon emigration, a deemed disposal is triggered: your shares are treated as if sold at fair market value at the moment immediately before departure. Box 2 tax is levied on the resulting gain, and a protective tax assessment is issued.

In 2026, Box 2 rates are 24.5% on the first €68,843 and 31% on the excess. Fiscal partners may each apply the lower rate independently, allowing a couple to apply 24.5% on up to €137,686 combined. The assessment does not need to be paid immediately upon emigration.

Deferral conditions depend on the destination country. For emigration to an EU or EEA member state such as Cyprus or Malta, automatic and indefinite deferral is granted without any requirement for security. This follows from the free movement of persons and capital within the European Union. For emigration to a country outside the EU and EEA such as the UAE or Switzerland, deferral is only available subject to the provision of adequate security, typically in the form of a bank guarantee, a pledge over the shares, or a mortgage over a Dutch property.

The protective tax assessment on a substantial interest has no expiry date. The assessment remains outstanding indefinitely and is collected when a triggering event occurs: a sale or other disposal of the shares, a dividend distribution, or a repayment of paid-in capital. Dividends paid after emigration therefore trigger immediate collection of part of the outstanding assessment, making dividend policy one of the most critical planning considerations after departure.

Structuring dividend distributions through a foreign holding company established in the country of residence, rather than receiving them directly as an individual, forms a central element of post-emigration tax planning. This transition requires careful preparation and, in most cases, precedes the actual emigration.

4. UAE: 0% income tax and substance requirements

The UAE levies no personal income tax. There is no payroll tax, no wealth tax, no tax on dividends received by individuals, and no withholding tax on any outbound payments. For entrepreneurs seeking to extract wealth from a corporate structure, this is structurally attractive. A dividend of €1 million received by an individual from a UAE holding company is received entirely free of local tax.

Tax residency in the UAE arises after 183 days of presence within a 12-month period, or after 90 days of presence combined with a permanent place of residence and a valid UAE residence visa. A Tax Residency Certificate, issued by the Federal Tax Authority, is typically required to demonstrate to the Dutch tax authorities that the fiscal centre of gravity has genuinely shifted.

Since June 2023, the UAE levies a federal corporate income tax of 9% on taxable profits above AED 375,000. The first AED 375,000 is taxed at 0%. For Qualifying Free Zone Persons, a 0% rate may apply to qualifying income subject to substance requirements and activity conditions.

The critical consideration for Dutch nationals emigrating to the UAE is the tax treaty between the Netherlands and the UAE. This treaty contains a specific restriction: its tie-breaker provisions and other protections apply exclusively to UAE nationals. For Dutch nationals, the treaty offers no protection in a dual residence situation and does not limit Dutch taxing rights over the exit tax assessment. The Netherlands retains unrestricted taxing rights over the substantial interest for as long as the protective tax assessment remains outstanding.

This makes restructuring through a UAE holding company essential in most cases. By interposing a UAE entity between the shareholder personally and the Dutch operating company, dividends can be received at holding level rather than directly by the individual shareholder. Subject to sufficient substance and the anti-abuse conditions being met, this may bring the Dutch dividend withholding tax exemption into play.

Substance in the UAE is not a formality. A postal address or virtual office is insufficient. The Dutch tax authorities will require that the entity carries on genuine economic activities: its own staff, a physical office, and decision-making that actually takes place in the UAE. For those who live full-time in the UAE and genuinely manage their business from Dubai, this is achievable. For those using the UAE as a letterbox while remaining factually active elsewhere, the risk of reclassification is substantial.

5. Malta: the refund mechanism and effective tax burden

Malta operates a distinctive corporate tax system built around full imputation and tax accounts. The nominal corporate income tax rate is 35%, but non-resident shareholders can reclaim up to 6/7 of the tax paid by the Maltese company when profits are distributed from the Maltese Taxed Account. This reduces the effective tax burden to approximately 5%. The refund is paid directly by the Maltese tax authorities, typically within fourteen working days of the refund application.

What further distinguishes Malta is the remittance basis available to non-domiciled residents. Individuals who are tax resident in Malta but not domiciled there are taxed on foreign-source income only to the extent it is remitted to Malta. Foreign income retained outside Malta is not taxable. Foreign-source capital gains are always exempt in Malta, regardless of remittance, meaning gains on the disposal of shares in non-Maltese companies are never subject to Maltese tax.

Tax residency in Malta is established by more than 183 days of presence per calendar year or by demonstrable intention of permanent settlement. Maltese tax law distinguishes between residence and domicile. Those who are resident but not domiciled fall under the remittance basis.

For Dutch director-shareholders optimising their holding structure through Malta, the combination of the low effective rate through the refund mechanism and the remittance basis offers significant advantages. Malta is an EU member state, meaning automatic and indefinite deferral of the protective tax assessment is available without security. The participation exemption applies to dividends from qualifying subsidiaries where a holding of at least 10% has been maintained for at least 183 days.

The complexity of Malta lies in the cash flow. To fully benefit from the remittance basis and prevent dividends from being treated as remitted to Malta, careful structuring of the payment flow is required, typically through a foreign intermediate holding company outside Malta through which dividends are received before any transfer to Malta is considered. This requires precise administrative setup and annual monitoring.

6. Cyprus: the non-dom regime and low corporate tax

For many Dutch director-shareholders, Cyprus is the most straightforward EU option. The system is clear, the costs are low and the benefits are substantial. At the heart of the regime is non-domiciled status: a non-domiciled resident of Cyprus is fully exempt from the Special Defence Contribution, the Cypriot levy on dividend and interest income. This means dividends received by a non-dom resident are entirely tax-free, regardless of whether they originate from a Cypriot or foreign company.

Non-dom status applies to individuals who have not been Cypriot tax residents for more than sixteen of the preceding twenty years. For new arrivals, non-dom status therefore applies automatically from the date of establishment, and lasts seventeen years. After this period, the non-dom status can be extended twice, each time for five years, against payment of €250,000 per extension, allowing the regime to last up to twenty-seven years in total.

Tax residency in Cyprus can be obtained through the 183-day rule or through the flexible 60-day rule. The 60-day rule requires a minimum of 60 days of presence in Cyprus, an available home (rented accommodation qualifies) and some economic activity or a directorship in a Cypriot company. From 1 January 2026, the condition that the individual must not be a tax resident in any other country has been removed, making the 60-day rule considerably more flexible for internationally mobile entrepreneurs.

The Cypriot corporate income tax rate is 15%. Cyprus has a broad participation exemption that exempts both dividends received from subsidiaries and capital gains on the disposal of shares from corporate income tax, provided no more than 50% of the subsidiary’s assets consist of passive investment assets. There is no withholding tax on dividends paid by Cypriot companies to non-residents. Capital gains on shares are fully exempt from tax in Cyprus, with the sole exception of gains on directly held Cypriot real estate.

A critical point concerns the interaction between the Netherlands-Cyprus tax treaty and an outstanding protective tax assessment. Contrary to what is sometimes assumed, the treaty does not limit Dutch taxation of dividends to the 15% withholding rate for as long as the exit tax assessment remains outstanding. The Netherlands retains, by virtue of the saving clause in the treaty, its full Box 2 taxing rights over dividend distributions attributable to the period of Dutch residence. This makes the strategic timing of dividend distributions after emigration to Cyprus particularly important.

Cyprus is an EU member state, so automatic and indefinite deferral of the protective tax assessment is available without any requirement for security.

7. Switzerland: lump-sum taxation and cantonal differences

Switzerland is the destination of choice for high-net-worth individuals who prioritise stability, privacy and quality of life, and who are prepared to accept a predictable, fixed tax burden in return. The Swiss tax system has three layers: federal, cantonal and municipal. The combination of these levels means that the actual tax burden varies considerably from one canton to another.

For foreign nationals without income from Swiss professional activity, Switzerland offers lump-sum taxation, known as Pauschalbesteuerung. The taxable base is the higher of two amounts: seven times the annual rental value or actual rent paid for the Swiss home, or the federal minimum of CHF 434,700 for 2026. The applicable cantonal and federal tax rates are then applied to this deemed base.

The effective tax burden on the lump-sum base varies significantly by canton. In the most favourable cantons, Zug, Schwyz and Nidwalden, the effective rate ranges from approximately 18% to 22%. In more expensive cantons such as Geneva or Vaud, the rate can reach 40% or above. The lump-sum regime is no longer available in the cantons of Zurich, Basel-Stadt, Basel-Landschaft, Schaffhausen and Appenzell Ausserrhoden, where it was abolished by referendum.

Under the lump-sum regime, all income, including foreign dividends and interest, is treated as covered by the deemed base. No separate tax is levied on dividends or capital gains received. Private capital gains on shares are fully exempt from Swiss tax, both within and outside the lump-sum regime.

One point requiring attention is the Swiss Verrechnungssteuer of 35%, which is withheld on income from Swiss sources, specifically dividends from Swiss companies and interest on Swiss bank deposits. For Swiss residents, this withholding is fully creditable against Swiss tax.

Switzerland is not an EU or EEA member state. Emigration to Switzerland therefore requires security to be provided for deferral of the protective tax assessment. The Dutch anti-abuse rules apply in full: a Swiss holding company without genuine activity and with decision-making that factually takes place elsewhere will not be recognised as a legitimate intermediate holding vehicle.

8. Common mistakes in emigration planning

Most problems in emigration cases do not arise from a breach of the law, but from a structure that does not match the actual situation. In practice, a number of mistakes recur consistently.

The most common mistake is leaving too early, without adequate preparation. Someone whose shares are worth €3 million at the time of emigration will receive a protective tax assessment of over €900,000. A well-structured emigration requires at least twelve to eighteen months of preparation.

A second frequent mistake is incorrect assumptions about what zero percent tax actually means in practice. The UAE levies no income tax, but the Dutch treaty does not protect Dutch nationals: the Netherlands retains taxing rights over substantial interest dividends for as long as the protective tax assessment remains outstanding. Cyprus has a non-dom regime, but the interaction with the Dutch exit tax means dividends paid during the deferral period may still be taxed in the Netherlands. The headline numbers presented in promotional material rarely reflect the full picture for a Dutch emigrant.

A third mistake is establishing a foreign company without genuine substance. The Dutch tax authorities will assess whether a foreign holding company is artificial: is there local staff, a physical office, and are decisions genuinely made in the destination country? A postal address in Dubai or Nicosia is not sufficient. Those unwilling to transfer real activities abroad should not pursue an offshore holding structure.

A fourth mistake is underestimating the emigration tax return, the M-biljet, and the ongoing obligations that follow. The valuation of the shares included in the emigration return directly determines the size of the protective tax assessment. A valuation that is too low attracts scrutiny; one that is too high costs unnecessary money. Both require careful substantiation.

Finally, we regularly encounter situations where an entrepreneur has relocated abroad while the Dutch company continues to function exactly as before. The director lives in Dubai but calls in daily, makes all decisions and is the only person who genuinely understands what happens inside the company. The Dutch tax authorities can argue that the company’s effective management rests with the director and therefore lies outside the Netherlands, triggering an exit charge at corporate level, or that the director should have been receiving a market-rate management fee that is taxable in the Netherlands.

9. What should you do now?

Emigration as a tax strategy works, but only when the preparation is thorough, the structure is sustainable and the factual situation corresponds with the legal framework. Each of the four countries discussed in this article offers material advantages over the Netherlands, but each comes with different conditions, different risks and a different ideal profile.

Cyprus is the most accessible EU option for director-shareholders with a substantial interest: automatic deferral of the exit tax, non-dom status from arrival, 0% tax on dividends for non-domiciled residents and a minimum presence requirement of 60 days. Malta offers comparable EU advantages but requires more structural complexity to fully benefit from the remittance basis. The UAE offers maximum fiscal freedom but demands a robust holding structure, genuine substance and a complete severance of Dutch ties to realise those benefits. Switzerland is the choice for those who place stability, privacy and quality of life above achieving the lowest possible effective tax rate.

The steps we recommend:

• Have the current value of your substantial interest assessed and calculate the potential exit tax exposure.
• Determine which country best aligns with your personal circumstances, business activities and preferred lifestyle.
• Design the optimal holding structure for the destination country, including a substance plan and dividend strategy.
• Plan the emigration at least twelve months in advance and document every step, from deregistration in the Netherlands to genuine establishment abroad.
• Work with advisers who have hands-on experience in both Dutch and foreign taxation.

Emigration is not a one-time transaction; it is an ongoing process that requires annual monitoring and active management.

Taxboutiq specialises in international tax structuring for entrepreneurs, director-shareholders and high-net-worth individuals. We advise on the full emigration process: from the initial assessment and exit tax calculation through to the design of the foreign structure, the build-up of substance, and the ongoing fiscal compliance in the destination country.