TL;DR: What a 36% Unrealized Gains Tax Means For Dutch Bootstrapping Startups
The Netherlands plans to implement a 36% unrealized gains tax on investments like stocks and cryptocurrencies by 2028, though startups and real estate are exempt. This policy introduces uncertainty for investors, potentially shrinking funding sources and discouraging innovation, which could negatively impact the already fragile bootstrapping ecosystem.
• Investor shifts: Angel investors might reconsider involvement due to unpredictable rules.
• Scarce backing: With fewer wealthy supporters, bootstrapped founders face challenges securing non-VC capital.
• Perception issues: Europe is already seen as less appealing than the U.S. for startups, making it harder to compete.
To thrive amidst policy changes, founders should focus on self-sufficiency. AI tools, no-code platforms, and mastering organic growth are indispensable for growing without heavy reliance on external funding. For more resources, check out Top Platforms for Bootstrapping to accelerate your startup journey.
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You’ve probably heard the news: the Netherlands just approved a 36% tax on unrealized gains, effective January 2028. As a bootstrapped entrepreneur building a business in the Netherlands, you’re probably wondering: Should I be worried? Should I move? What does this actually mean for me?
Let’s cut through the noise and talk about what actually matters for bootstrapped founders.
The TL;DR for Bootstrappers
Good news first:
If you’re a founder who owns more than 5% of your company, you’re probably fine. You fall under Box 2 taxation (substantial interest), which means you only pay tax on actual dividends and when you sell. The unrealized gains tax doesn’t touch you.
The complicated part:
If you have personal investments outside your company (stocks, crypto, bonds), those will face the 36% unrealized gains tax starting in 2028. That’s where you need to pay attention.
The reality check:
This law will likely be changed before it fully kicks in. Even the politicians who voted for it want to replace it. But you should still plan for it.
What Actually Is This Tax?
Starting January 1, 2028, the Netherlands will tax investment gains in two different ways:
Track 1: Unrealized Gains Tax (the scary one)
- Applies to: Stocks, bonds, crypto, Bitcoin
- How it works: Every December 31st, they calculate how much your investments gained that year
- Tax rate: 36% on the paper gains
- The problem: You owe tax even if you didn’t sell anything
Track 2: Realized Gains Tax (the normal one)
- Applies to: Real estate and qualifying startup shares
- How it works: You pay tax only when you actually sell
- Tax rate: Still 36%, but only on real gains when you cash out
There’s a €1,800 tax-free allowance on annual returns, which is basically nothing if you have any meaningful investments.
The Founder Protection: Box 2
Here’s the most important thing to understand as a bootstrapped founder:
If you own 5% or more of your company, you’re in Box 2.
Box 2 rules:
- You pay 26.9% tax on dividends when you take them
- You pay 26.9% tax on capital gains when you sell your shares
- You pay ZERO tax on unrealized appreciation
This means:
- Your company grows from €1M to €10M valuation? No tax.
- You bootstrap to €5M annual profit and reinvest it? No tax.
- You build for 10 years and sell for €50M? Tax only when you sell (26.9%).
Box 2 is actually pretty founder-friendly. The unrealized gains tax problem is mainly for your personal investment portfolio, not your business.
Where Bootstrappers Actually Get Hit
The real impact is on your personal wealth outside the company:
Your Investment Portfolio
Let’s say you had a good exit from a previous company, or you’ve been taking dividends and investing them.
Example scenario:
- You have €500K in a diversified stock portfolio
- Market goes up 20% in 2028: Your portfolio is now worth €600K
- Unrealized gain: €100K
- Tax due: €36K
- Problem: You didn’t sell anything, but you owe €36K in cash
You’ll need to either:
- Sell investments to pay the tax (forcing liquidation)
- Pay from other cash sources
- Hold and deal with annual tax bills on paper gains
Your Side Investments
If you angel invest in other startups (owning less than 5%), the tax treatment depends on whether those startups qualify for exemptions.
Startup exemption criteria:
- Company is less than 5 years old
- Annual revenue under €30 million
- Not more than 25% owned by another company
- Structured as a Dutch BV or equivalent
If the startup qualifies: You pay tax only when you sell (Track 2).
If it doesn’t qualify (or ages out of exemption): You face annual unrealized gains tax.
Your Emergency Fund and Savings
Good news: Regular savings accounts and cash aren’t affected the same way. But returns on savings are still taxed (though at the same rates as before under Box 3).
Should You Actually Worry?
Let’s be honest about the real risk levels:
Low Risk: Active Founders (You’re Probably Fine)
If you’re currently building a bootstrapped company and you:
- Own more than 5% of your company
- Reinvest most profits back into the business
- Don’t have a massive personal investment portfolio
- Keep most of your net worth in the business
Verdict: Don’t panic. Your business equity is protected under Box 2. This tax mainly affects passive investors and people with large liquid investment portfolios.
Medium Risk: Serial Entrepreneurs with Investments
If you:
- Had a successful exit and invested the proceeds
- Have €200K+ in stocks, crypto, or bonds
- Angel invest in multiple startups
- Diversified outside your main business
Verdict: Pay attention. You’ll need tax planning to manage annual bills on unrealized gains. Consider portfolio restructuring or alternative holding strategies.
Higher Risk: Post-Exit Wealth Management
If you:
- Sold a company and are sitting on €1M+ in liquid investments
- Aren’t actively building another company
- Have significant crypto holdings
- Live off investment returns
Verdict: Talk to a tax advisor now. Annual unrealized gains taxes could be substantial. Jurisdictional planning might make sense.
What Should You Actually Do?
Here’s a practical action plan based on your situation:
If You’re Building a Bootstrapped Company (5%+ ownership)
Immediate (2026-2027):
- Confirm your ownership percentage
- Make sure you actually own 5% or more
- Check your cap table if you’ve taken any investment
- If you’re below 5%, consider restructuring to get above it
- Keep building
- Your company equity is protected
- Box 2 treatment is actually pretty good for founders
- Don’t make business decisions based on this tax law
- Manage personal investments strategically
- If you have significant personal investment portfolios, consider the tax impact
- Maybe hold more in the business, less in public stocks
- Talk to a tax advisor about portfolio structure
Medium-term (2027-2028):
- Plan dividend strategy
- If you’re taking dividends, factor in that you’ll pay 26.9% in Box 2
- Then additional tax if you invest proceeds in stocks/crypto
- Might make sense to leave more money in the company
- Document everything
- Keep clear records of business vs personal assets
- Track your ownership percentage
- Maintain good books for tax filing
If You Have Significant Personal Investments
Immediate (2026-2027):
- Calculate your exposure
- What’s your current investment portfolio value?
- What would a 20% gain look like? 50%?
- Can you afford 36% tax on paper gains annually?
- Talk to a tax advisor
- Get professional advice specific to your situation
- Understand your options for restructuring
- Consider holding companies or other structures
- Review asset allocation
- Maybe shift some stocks to real estate (Track 2 treatment)
- Consider whether crypto exposure makes sense with annual taxation
- Look at tax-efficient investment structures
Medium-term (2027-2028):
- Prepare for liquidity needs
- Set aside cash reserves for potential tax bills
- Don’t be 100% invested if you might need to pay taxes
- Plan for worst-case scenarios
- Monitor portfolio actively
- Track gains throughout the year
- Consider taking strategic losses to offset gains
- Be ready to rebalance if needed
If You’re Considering Moving
This is the big question everyone’s asking: Should I just leave?
Let’s be realistic about the math:
Reasons to stay in the Netherlands:
- Your business is here, your customers are here
- WBSO R&D tax credits (36-50% savings on R&D labor)
- Innovation Box (9% tax on IP profits)
- Good startup ecosystem, especially in Amsterdam, Rotterdam, Eindhoven
- EU market access
- Excellent infrastructure and quality of life
- Most of your wealth is likely in your company (protected by Box 2)
Reasons to consider alternatives:
- You have €1M+ in liquid investments facing annual taxes
- You’re between companies (not actively building)
- You’re more investor than operator at this point
- You want to diversify globally anyway
- You value tax optimization over other factors
Alternative jurisdictions to consider:
Portugal:
- Non-habitual resident (NHR) regime offers tax benefits
- 10-year tax holiday on foreign investment income
- Good weather, growing startup scene
- Lower cost of living than Netherlands
Belgium:
- Right next door, similar culture
- No wealth tax
- Capital gains often tax-free for individuals
- Easy to maintain Netherlands business connections
Switzerland:
- Very low capital gains taxation
- Wealth tax exists but much lower rates (0.3-1%)
- Expensive but stable
- Good for wealth management
UAE (Dubai/Abu Dhabi):
- Zero personal income tax
- No capital gains tax
- Growing startup ecosystem
- Far from Europe but increasingly connected
Portugal, Belgium, or Switzerland make the most sense if you want to stay close to the Netherlands market while optimizing taxes.
But here’s the reality: Moving countries is a huge life decision. Don’t let a tax law that might get repealed make you uproot your life unless the numbers really justify it.
The 2028 Replacement Possibility
Here’s something important: This law might not last.
Political reality:
- The government itself calls this “an intermediate step”
- Parliamentary majority wants a realized-gains-only system by 2028
- Coalition agreement commits to replacing it
- Even politicians who voted yes want it changed
Timeline:
- Law takes effect: January 1, 2028
- First tax year: 2028
- Government must present alternative: September 2028 (Budget Day)
- Possible replacement: Late 2028 or early 2029
There’s a real chance this gets replaced before you ever file taxes under it.
That said, don’t bet your financial future on political promises. Plan as if it’s happening, but stay flexible.
Practical Scenarios: What Would You Actually Pay?
Let’s run some real numbers to see if you should actually worry:
Scenario 1: Pure Bootstrapper
- Own 100% of your company
- Company worth €2M (theoretical valuation)
- Personal savings: €50K in bank account
- Small stock portfolio: €20K
- Crypto holdings: €10K
2028 Tax impact:
- Company appreciation: €0 tax (Box 2 protection)
- Bank savings: Minimal, within €1,800 allowance
- Stock portfolio gains (assume 20% = €4K gain): €1,440 tax
- Crypto gains (assume 50% = €5K gain): €1,800 tax
Total annual tax: ~€3,200
Verdict: Annoying but not devastating. You can handle this from business income.
Scenario 2: Successful Founder with Investments
- Own 60% of your company
- Company worth €5M (your stake: €3M)
- Previous exit proceeds invested: €500K in diversified portfolio
- Real estate investment property: €300K
- Emergency fund: €50K cash
2028 Tax impact:
- Company appreciation: €0 tax (Box 2 protection)
- Investment portfolio gains (assume 15% = €75K gain): €27K tax
- Real estate: €0 annual tax (Track 2, only on sale)
- Cash: Minimal
Total annual tax: ~€27K
Verdict: Significant. You’ll need to plan for this, possibly by selling some investments or taking larger dividends to cover it.
Scenario 3: Post-Exit Wealth Manager
- Sold previous company, now building new one
- Own 40% of new company (worth €1M)
- Investment portfolio from exit: €2M
- Crypto holdings: €300K
- Real estate: €500K
2028 Tax impact:
- New company appreciation: €0 tax (Box 2 protection)
- Investment portfolio gains (15% = €300K gain): €108K tax
- Crypto gains (30% = €90K gain): €32.4K tax
- Real estate: €0 annual tax (Track 2)
Total annual tax: ~€140K
Verdict: This is brutal. At this wealth level, serious tax planning or relocation makes financial sense.
Strategic Moves for Bootstrappers
Here are some tactical things you can actually do:
1. Optimize Your Cap Table
If you’re close to the 5% threshold:
- Avoid dilution that pushes you below 5%
- Consider buying back shares from early employees who left
- Structure new fundraising to maintain 5%+ ownership
The 5% Box 2 threshold is your best protection.
2. Dividend Timing Strategy
If you’re taking dividends from your company:
- Understand you pay 26.9% in Box 2 when you take them
- Then 36% unrealized gains tax if you invest in stocks/crypto
- Total effective tax rate: ~52% (compounded)
Alternative approach:
- Leave more money in the company
- Grow company value instead of taking dividends
- Pay 26.9% only when you eventually sell (Box 2 capital gains)
3. Real Estate Rebalancing
Real estate gets Track 2 treatment (tax only on sale):
- Consider shifting some liquid investments to real estate
- Investment properties could make sense
- REITs won’t help (they’re still Track 1)
- Physical real estate is the key
4. Company Investment Vehicle
Advanced move: Create a holding company structure:
- Your holding company (which you own >5% of) invests in other assets
- Holding company itself is in Box 2 for you
- Might create tax efficiency
Warning: This is complex. Get professional tax advice. The authorities might challenge aggressive structures.
5. Emergency Fund Strategy
If you might face annual tax bills:
- Keep 6-12 months of potential tax liability in cash
- Don’t be 100% invested in illiquid assets
- Build liquidity buffers into your financial planning
The Bootstrapper’s Mindset
Here’s what really matters:
Good businesses survive tax changes. If your bootstrapped company is creating real value, solving real problems, and generating real cash flow, a change in investment taxation won’t kill it.
Focus on what you control:
- Build a better product
- Serve your customers better
- Grow your revenue
- Improve your margins
- Create real economic value
Don’t let tax policy dictate business strategy. Yes, be tax-smart. Yes, optimize where you can. But don’t abandon a great business opportunity because of a tax law that might change in two years.
The best tax optimization is building a valuable company. Box 2 protects founder equity. That’s your main wealth-building vehicle anyway.
What About Your Employees?
If you have employees with stock options, this affects them too:
The situation:
- Options are taxed as wage income when they vest/exercise (Box 1)
- New 2027 reform: Taxable base reduced to 65% for qualifying startups
- Still not great compared to capital gains treatment in other countries
What you can do:
- Explain the tax implications clearly when granting options
- Consider longer vesting schedules (4-5 years)
- Look into RSUs vs options (different tax timing)
- Be transparent about what employees will actually take home
The hard truth: Dutch stock option taxation still isn’t competitive with UK, France, or US. If you’re competing for international talent, it’s a disadvantage.
The Competitive Landscape
Let’s be real about how this affects your competitive position:
If you’re building for the Dutch market:
- No change. Keep building.
- Your competitors face the same environment.
- Focus on execution.
If you’re building for European/global markets:
- UK, Germany, France have more favorable tax treatment for investors
- That might mean easier fundraising for competitors there
- But Netherlands still has WBSO, Innovation Box, good talent
- It’s a factor, not a death sentence
If you’re competing for investor capital:
- Dutch angel investors might be more cautious
- International investors won’t care (they have their own tax situations)
- Focus on building something worth investing in regardless
Final Thoughts: Should You Panic?
No.
Here’s why:
- As a founder with 5%+ ownership, you’re protected. Box 2 shields your company equity from unrealized gains tax.
- This law will probably change. Even its supporters want to replace it. Plan for it, but don’t bet your life on it lasting forever.
- The impact depends on your specific situation. Pure bootstrappers with minimal outside investments? Not a big deal. Post-exit wealth managers? Significant issue.
- Moving countries is a huge decision. Don’t let a tax law drive it unless the numbers are truly massive.
- Good businesses succeed despite tax headwinds. Focus on building value, not optimizing taxes.
Take these concrete actions:
- This week: Calculate your actual exposure. What would you owe?
- This month: Talk to a tax advisor if your exposure is significant (€10K+ annual)
- This quarter: Decide if you need to restructure anything
- This year: Monitor the political situation. Watch for the 2028 Budget Day announcement.
Most importantly: Don’t let this distract you from building your business. Tax optimization is important, but it’s not your core business. Keep shipping product, serving customers, and growing revenue.
The best response to unfavorable tax policy is building something so valuable that the taxes don’t matter.
Keep building.
People Also Ask:
What is the 30% tax rule in the Netherlands?
The 30% tax rule, or the "30% ruling," is a tax break in the Netherlands intended for employees recruited from abroad. It allows eligible expats to receive 30% of their gross salary tax-free, making it easier for overseas professionals to live and work in the Netherlands.
What is the loophole for unrealized gains tax?
Unrealized gains are typically not taxed until the asset is sold, which allows for tax deferral. One example is the "stepped-up basis at death," where heirs inherit assets at their current market value, eliminating the original owner's unrealized capital gains tax liability. Strategies like "Buy, Borrow, Die" also exploit this system.
How does the 30% ruling affect the Dutch economy?
The 30% ruling helps attract highly skilled international workers by reducing their tax burden. This tax break supports the Dutch economy by making the country more competitive and improving its talent pool for industries requiring advanced skills.
What is the 30% rule in NL 2025?
In 2025, under the updated rules, the 30% ruling will be capped at €246,000 of an expatriate's annual salary. This adjustment ensures that tax benefits remain targeted and economically manageable.
Why is the Dutch unrealized gains tax controversial?
The tax on unrealized gains has sparked debate because it taxes profits from assets that have increased in value but haven’t been sold. Critics argue that it could penalize investors and startups, potentially stifling innovation and growth in the Dutch economy.
What does the 36% unrealized gains tax mean for startups?
This tax could affect startups by potentially discouraging investment, as it taxes appreciation in asset value annually, even if the gains are not realized. However, certain exemptions may apply to eligible startups to lessen this impact.
When will the 36% unrealized gains tax take effect in the Netherlands?
The 36% tax on unrealized capital gains is set to begin in January 2028. It will apply to assets like stocks, bonds, and cryptocurrencies. Certain conditions and exemptions may determine its scope.
How do other countries approach unrealized gains taxes?
Some countries do not tax unrealized gains at all, while others implement mechanisms to capture this value. Like the Dutch system, debates about fairness and economic impact are common worldwide when considering similar taxation models.
What role does the Netherlands' 30% ruling play in hiring expats?
The 30% ruling lowers the effective tax rate for expats, making the Netherlands more attractive for professionals hired overseas. This incentive enables companies to recruit top-tier talent from different countries without burdening employees with excessive taxes.
How does the "Buy, Borrow, Die" strategy work for tax purposes?
This approach involves wealthy individuals borrowing money against appreciating assets instead of selling them. By avoiding sales, they defer or eliminate capital gains taxes. At death, their heirs inherit assets with a stepped-up basis, thereby bypassing significant tax liabilities.
FAQ on the 36% Unrealized Gains Tax and Dutch Startups
How does the 36% unrealized gains tax affect angel investors in the Netherlands?
Angel investors managing diversified portfolios may rethink their involvement in Dutch startups. Even though startup shares are exempt, the fear that exemptions may vanish impacts risk appetite. This shift could reduce available funding for founders reliant on angel capital. Explore how bootstrapping startups thrive in high-tax settings.
What proactive steps can bootstrapping founders take to mitigate tax challenges?
Founders can focus on cost-efficient tools like no-code platforms, AI solutions, and lean growth strategies such as organic SEO. For funding, founders should explore non-dilutive options like grants to remain resilient. Check out resources for startups looking to bootstrap successfully.
Why is the Netherlands losing its appeal for investors?
Policies like this tax create uncertainty, which damages confidence among investors. The risk of sudden regulatory changes is pushing some investors to relocate to jurisdictions like Estonia or Malta, which are perceived as more founder- and investor-friendly. Read insights on building resilient startups in Europe.
How can no-code platforms benefit bootstrapped startups in Europe?
No-code tools such as Bubble and Webflow enable founders to build Minimum Viable Products quickly and affordably, streamlining processes and reducing upfront costs. These resources are key for startups trying to maximize limited budgets. Expand your toolset using these top no-code platforms for startups.
What are the long-term implications of such tax policies on Europe’s startup ecosystem?
The 36% tax highlights regulatory instability, which may widen the gap between Europe and markets like the U.S. It erodes trust and makes the ecosystem less competitive, forcing many founders to consider alternative markets for growth. Read perspectives from European founders tackling ecosystem challenges.
Can AI tools help Dutch startups scale despite funding challenges?
Yes, AI significantly reduces resource dependency. Tools like ChatGPT can automate lead generation, customer support, and market research, making it easier for bootstrapped startups to scale effectively without major investments. Learn how AI tools boost startup efficiency.
How can founders use grants to overcome funding gaps?
Grants, though involving tricky paperwork, offer non-dilutive capital. European funding programs can particularly support innovation while retaining company equity, helping startups navigate reduced angel investments. Discover funding strategies for European startups.
What role does organic SEO play in cost-efficient growth?
Organic SEO helps bootstrapped startups build visibility online without relying on paid campaigns. A smart, keyword-driven content strategy allows startups to attract high-quality traffic and achieve sustainable growth. Explore strategies to boost organic growth for startups.
Are startup founders considering relocation due to this tax?
Yes, some founders are exploring moving their operations to countries like Estonia or Malta, seeking favorable tax environments and predictable regulations to maintain their business’s financial health. Read perspectives on repositioning startups in Europe.
How does this tax differ from a realized gains tax model?
The unrealized gains tax applies to on-paper profits that aren't liquid, unlike realized gains tax which is imposed only when profits are actualized (e.g., through asset sales). This structure creates liquidity challenges for investors. Gain insights into alternative tax systems.
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the “gamepreneurship” methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the point of view of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
