Economic cycles have a marked effect on the loan market. During periods of growth, increased confidence drives higher demand for loans, prompting lenders to relax credit standards and offer more attractive terms. In contrast, downturns or recessions see lenders tighten standards, raise interest rates, and focus on lower-risk borrowers, resulting in reduced loan origination and stricter eligibility. The COVID-19 pandemic exemplified this, causing a sharp decline in lending due to heightened uncertainty, followed by a rebound in loan demand – especially for mortgages and business loans – driven by low interest rates and government support as economies recovered.

The regulatory environment is equally influential. In response to past crises, regulators have imposed stricter capital requirements, improved risk management, and enhanced consumer protection. Recent years have brought greater scrutiny in areas such as AML, KYC, and responsible lending, leading to increased compliance investment and more conservative lending. The emergence of fintech and alternative lenders has also prompted regulatory updates to address new risks.

Global conflicts – including geopolitical tensions, wars, and trade disputes – have a significant and complex impact on the loan market, influencing it through multiple channels such as economic uncertainty, supply chain disruptions, inflation, and changing investor sentiment.

Heightened Economic Uncertainty and Risk Aversion

Conflicts increase economic uncertainty, prompting lenders to become more risk-averse. Banks and financial institutions typically respond by tightening credit standards, demanding more collateral, and focusing on lower-risk borrowers. This cautious approach often leads to a slowdown in loan origination, especially in sectors or regions seen as vulnerable to conflict-related risks.

Changes in Loan Terms and Pricing

Volatility in financial markets caused by conflicts can influence central bank policies and interest rates. For instance, if conflicts drive up inflation via higher energy or commodity prices, central banks may raise rates, increasing borrowing costs. Lenders may also shorten loan maturities and impose stricter covenants, making it harder for borrowers to secure long-term or flexible financing.

Sectoral and Regional Shifts in Lending

Certain sectors, such as energy, defence, and commodities, may experience increased lending due to higher demand or government support. In contrast, sectors dependent on international trade or exposed to affected regions may find credit less accessible. Lenders may shift their focus to safer sectors or regions, reallocating resources accordingly.

Impact on Credit Quality and Non-Performing Loans

Economic disruptions from conflicts can erode borrowers’ revenues and increase costs, leading to a deterioration in credit quality and a rise in non-performing loans (NPLs). Lenders may respond by enhancing risk management and increasing loan loss provisions.

Regulatory and Policy Responses

Governments and regulators may implement support measures such as loan guarantees, payment deferrals, or targeted lending programmes. There is also heightened scrutiny of cross-border lending, sanctions compliance, and anti-money laundering controls, especially when conflicts involve international sanctions.

Trends in Digital and Alternative Lending

Periods of conflict and uncertainty can accelerate the adoption of digital lending platforms and alternative financing, as traditional lenders become more cautious. Fintech firms may step in to offer flexible solutions, though they too may face increased regulatory oversight.

The high-yield market has significantly expanded access to capital for companies with sub-investment-grade ratings or operating in riskier sectors. This has enabled more firms to finance growth, acquisitions, or restructurings. The competitive nature of the high-yield market has led to more flexible financing terms, such as covenant-lite bonds and loans, longer maturities, and innovative features. The market is highly sensitive to investor sentiment: strong demand compresses spreads and lowers borrowing costs, while uncertainty widens spreads and restricts access. Trends from the high-yield market often influence the broader loan market, encouraging more borrower-friendly terms in leveraged loans. However, the increased flexibility and weaker covenants heighten credit and liquidity risks, requiring investors and lenders to strengthen risk assessment and monitoring as the credit cycle evolves.

Over the past decade, the Dutch loan market has seen significant growth in alternative credit providers, reflecting a broader European trend. While traditional banks remain the main players, non-bank lenders – such as private debt funds, direct lending platforms, and fintech companies – have steadily increased their presence, especially in the mid-market and SME sectors. The Netherlands’ open economy and robust legal framework have attracted international private debt funds and direct lenders, who now offer a wide array of products. Fintech and peer-to-peer platforms have also become more prominent, particularly for smaller businesses and consumers.

Alternative lenders are generally more flexible than banks, often providing higher leverage, longer maturities, and customised repayment schedules. Their competitive approach has led to more borrower-friendly terms, such as covenant-lite structures and innovative features like payment-in-kind interest and accordion facilities. These lenders can also deliver faster credit decisions and greater execution certainty, as they face fewer regulatory constraints.

The rise of alternative lenders has increased competition, pushing banks to improve their offerings and resulting in better terms for borrowers. However, this shift also spreads credit risk more widely and raises concerns about transparency, regulatory oversight, and potential systemic risks during market stress.

The banking and finance sector is rapidly transforming to address the evolving needs of investors and borrowers, shaped by regulatory changes, technological innovation, increased competition, and greater sophistication among market participants.

HoldCo Structures and Layered Capital

HoldCo (holding company) structures are now common in leveraged finance and private equity. By placing debt at the holding company level, sponsors gain flexibility in managing cash flows from multiple subsidiaries and isolating liabilities. HoldCo debt is structurally subordinated to OpCo (operating company) debt, enabling layered capital structures that appeal to both senior and subordinated investors. This also facilitates add-on acquisitions, as the holding company can raise capital without directly impacting operating entities.

Preferred Equity and Hybrid Instruments

Preferred equity is increasingly used as a flexible financing tool, especially when traditional leverage is constrained. It combines debt-like features (priority in payment, fixed returns) with equity-like characteristics (potential upside, no fixed maturity). Hybrid instruments, such as convertible notes and payment-in-kind (PIK) preferred shares, offer tailored solutions for investors seeking higher yields with moderate risk, and for borrowers, they provide growth capital without significant dilution or cash flow pressure.

Customisation, Innovation, and Broader Participation

There is a strong trend toward bespoke financing solutions – unitranche loans, revenue-based financing, and asset-based lending – designed to match unique borrower cash flows. Flexible covenant packages, including covenant-lite structures, are increasingly common. The rise of private debt funds, institutional investors, and non-bank lenders has diversified the investor base, increased competition, and expanded available products. Larger deals are often syndicated or structured as club deals, spreading risk and accessing deeper capital pools.

ESG and Digitalisation

Demand for ESG-linked financing is rising, with sustainability-linked loans and green bonds tying terms to ESG performance. Digitalisation and fintech integration are streamlining credit assessment and loan servicing, while advanced analytics enable more precise and tailored financing solutions.

The Netherlands is a leading market for ESG and sustainability-linked lending, with strong participation from banks, corporates, and regulators. The most active sectors include real estate, renewable energy, and agriculture, but the trend is spreading across the wider economy. The focus is on measurable impact, transparency, and alignment with both national and EU-level sustainability goals.

Dutch banks and corporates have been at the forefront of adopting SLLs, where loan terms (such as interest rates) are linked to the borrower’s achievement of pre-agreed sustainability performance targets. This trend has accelerated, with a growing number of large Dutch companies, including those in real estate, energy, and agriculture, entering into such arrangements.

The Dutch government and financial regulators have introduced various measures to encourage sustainable finance. The Dutch Central Bank (De Nederlandsche Bank) has been vocal about climate-related financial risks and has encouraged financial institutions to integrate ESG factors into their risk management frameworks.

There is a strong emphasis on transparency and standardisation in the Dutch market. Many Dutch lenders and borrowers adhere to international frameworks such as the Loan Market Association’s Sustainability Linked Loan Principles, and there is a push for clear, measurable, and ambitious sustainability targets.

The Netherlands is closely aligned with broader European Union initiatives, such as the EU Taxonomy for sustainable activities and the Sustainable Finance Disclosure Regulation (SFDR), which are shaping the way ESG factors are integrated into lending and investment decisions.

In the Netherlands, lending by banks and non-banks towards a non-consumer, such as companies, does not constitute a regulated activity and does not require a licence, provided that the lending activity is not combined with attracting deposits or other repayable funds from the public. Generally, a non-consumer is understood to be any party other than a natural person who is not acting in the course of its business or profession.

Like domestic lenders, foreign lenders are free to provide loans to businesses or institutions in the Netherlands. Offering loans to parties other than retail clients is not considered a regulated financial activity.

Providing security or guarantees to lenders does not constitute a regulated activity.

In the Netherlands, there are no restrictions or controls on exchanging or transferring foreign currency. At the EU level, however, the European Parliament and the Council have the authority to implement special measures concerning capital movements to or from non-EU countries, particularly where these involve direct investments (such as real estate), business establishment, financial services, or the listing of securities on capital markets. Additionally, the Dutch Act on Foreign Financial Relations 1994 (Wet financiële betrekkingen buitenland 1994) imposes limited reporting obligations for certain cross-border payments.

There are no regulatory restrictions on the borrower’s use of proceeds from loans or debt securities, other than customary restrictions like violation of public order.

However, certain agreed-upon restrictions may be in effect. For example, a facility agreement generally provides for strict rules regarding the purpose and use of the term loans. Usually, the relevant proceeds must be applied to finance the purchase price, fees and other costs related to the acquisition and financing thereof and the refinancing of the target’s existing indebtedness. A violation of these provisions usually constitutes an event of default. Further, under the finance documents usually a funds flow statement should be delivered as a condition precedent, setting out the application of the funds (including the relevant beneficiaries and related bank account details).

The concept of a “trust”, as it exists in common law jurisdictions, does not have a direct equivalent under Dutch law. While Dutch courts may recognise specific trust structures in accordance with the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and their Recognition, common law trust arrangements are generally seen as unsuitable when Dutch law-governed security is provided for the benefit of a lender group.

Instead, syndicated lending transactions under Dutch law typically rely on a structure known as a parallel debt arrangement. Under this mechanism, each obligor undertakes to pay the security agent an amount equal to the amounts it owes to the finance parties under the finance documents (commonly referred to as the “underlying liabilities”). The security granted then secures the parallel debt obligations, rather than the underlying liabilities directly.

In the event of enforcement, the security agent is contractually required to apply the proceeds towards repayment of the underlying liabilities, following the distribution order agreed upon by the finance parties. The parallel debt agreement provides that when an underlying liability is repaid (in whole or in part), the corresponding parallel debt is automatically considered repaid to the same extent – and vice versa.

In the Netherlands, the benefit of a loan can be transferred through assignment, contract takeover (contract transfer), or sub-participation.

Assignment involves the transfer of receivables or rights via a written agreement. If the assignment is undisclosed, it must either be executed by notarial deed or registered with the Dutch tax authorities. For disclosed assignments, notification to the debtor is required.

Contract takeover transfers both rights and obligations under a contract and requires a written agreement, along with the co-operation of the counterparty. This consent can be provided informally.

Sub-participation does not involve a transfer of legal rights or obligations. Instead, it allows a third party to share in the economic benefits of a loan through a private arrangement with the original lender. The sub-participant has no direct legal claim against the borrower.

Under Dutch law, security rights – such as mortgages and pledges – are accessory in nature, meaning they automatically follow the claims they secure upon transfer. In syndicated lending, security is commonly held by a security agent on behalf of all lenders. When a lender transfers its rights, the position of the security agent remains unaffected, and the transferee benefits from the agent’s duty to distribute any enforcement proceeds. If a new security agent is appointed, the related parallel debt claims must also be transferred to ensure that the corresponding security rights move with them.

Under Dutch law, borrowers or sponsors are not outright prohibited from engaging in debt buyback transactions. The terms of a credit agreement typically allow the involved parties to freely determine any restrictions on such buybacks as they see fit.

Generally, the standard LMA provisions on debt buybacks apply without any particular Dutch law-based deviations, under which buybacks are either restricted or made subject to certain restrictions that a borrower or its equity sponsor will not disrupt voting arrangements among the lending group by purchasing debt. That said, a buyback of loans is not as common in the Dutch market as buybacks of notes or equity securities.

Under Dutch public takeover regulations, a bidder must demonstrate – at the time the offer memorandum is submitted for approval to the competent authority – that it has sufficient funds available or has taken all necessary steps to ensure such funds will be available to meet the obligations under the offer. Once the funds are secured or the required arrangements are in place, the bidder must make a public announcement confirming this. If any portion of the offer consideration is financed through debt, the bidder can only satisfy this funding requirement if the debt is provided on a “certain funds” basis.

The “certain funds” rule is not generally applied in other transactions where not required, although it is not unusual for bidders to indicate in the term sheet how they intend to finance the transaction.       

While there is no legal obligation to have fully negotiated or signed financing documents in place, public acquisition financing is typically documented through comprehensive (long-form) agreements. There is also no requirement for such documentation to be made publicly available.       

Recent case law of the Court of Justice of the European Union has confirmed that an asymmetric jurisdiction clause, under which the parties agree to confer jurisdiction to a specific court for disputes arising between them while reserving for only one party the right to initiate proceedings before one or more alternative courts, is considered sufficiently precise and therefore valid provided that the asymmetric jurisdiction clause is limited to EU member states and states that are party to the Lugano Convention. The choice of jurisdiction provision in Dutch legal documentation has been amended accordingly.

Dutch law does not impose statutory usury limits or specific caps on the amount of interest that can be charged. However, the enforceability of interest provisions in finance documents is subject to the overarching principles of reasonableness and fairness, which may restrict enforcement if terms are deemed unacceptable. Courts may also consider the parties’ original intent when interpreting agreements, and contracts can be annulled if entered into under duress, fraud, undue influence, mistake, or if contrary to public morals or public order.

While there are no legal limits on debt financing, Dutch corporate income tax rules effectively constrain interest deductibility. From 2024, the general earnings stripping rule limits deductible interest to the higher of EUR1 million or 20% of EBITDA for tax purposes. Excessive debt may also trigger scrutiny regarding the arm’s length nature of loans, potentially resulting in further limitations on interest deductibility.

Disclosure of financial contracts is regulated by national and European laws, depending on the type of contract and the parties involved. Financial institutions and public companies are subject to strict disclosure requirements under the Financial Supervision Act (Wet op het financieel toezicht), which is overseen by the Dutch Central Bank (De Nederlandsche Bank) and the Authority for the Financial Markets (Autoriteit Financiële Markten). Examples of European regulations include the EMIR and the Prospectus Regulation.

In addition, companies are required to disclose certain financial obligations in their annual accounts under accounting and reporting standards.

In private contracts, disclosure is largely governed by contractual freedom and duty of good faith (goede trouw). However, in certain cases (eg, involvement of consumers), information duties are imposed.

In the Netherlands, arm’s length interest payments on genuine loans are generally not subject to withholding tax. However, if a loan is recharacterised for tax purposes – such as a profit participation loan with no fixed maturity (or over 50 years), where repayment is only possible in insolvency, interest is almost entirely profit-dependent, and the lender is subordinated – interest may be treated as a dividend and subject to 15% dividend withholding tax. Additionally, interest or quasi-dividend payments to related-party lenders in low-tax or non-cooperative jurisdictions may be subject to a conditional withholding tax of 25.8% (2025 rate). This tax applies to payments from Dutch entities or permanent establishments, and may also apply in cases of abuse or entity mismatches. A tax treaty may prevent this tax if the lender is not considered related under Dutch rules.

In the Netherlands, lenders are not subject to registration tax, stamp duty, or similar charges when making loans or taking security or guarantees from Dutch entities. The main exception is court fees, which may arise during enforcement proceedings. However, if enforcement of security (such as a pledge over shares or a mortgage) results in the lender acquiring ownership of real estate, a real estate transfer tax of 10.4% applies, except for owner-occupied residential property, which is taxed at 2%. This rate for non-owner-occupied residential property will decrease to 8% in 2026. Acquisition of shares in a “real property company” may also trigger this tax, based on the fair market value of the underlying Dutch real estate. In insolvency, Dutch tax authorities have a statutory priority right, ranking ahead of other creditors, and are generally considered preferred creditors.

There may be tax concerns where the foreign lender is considered to have been artificially interposed in the structure to avoid Dutch personal income tax from being imposed on a – direct or indirect – shareholder of the lender. In such a case, the foreign lender may end up being subject to Dutch corporate income tax in the Netherlands. This could be relevant to the borrower if the loan documentation requires indemnification by the borrower for such tax imposed outside the lender’s jurisdiction.

The assets typically available as collateral to lenders include registered property (registergoederen), movable assets (roerende zaken), receivables (vorderingen), and shares.

The formalities and perfection requirements depend on the specific type of security.

A mortgage must be executed as a notarial deed and must thereafter be registered with the relevant register of the Dutch public land registry.

The method of perfecting the rights of the pledge depends on the collateral that is purported to be pledged and whether this collateral is pledged by way of a disclosed or an undisclosed right of the pledge:

• A pledge over shares must be executed using a notarial deed.
• A pledge over movable assets can be perfected:
1. without bringing the movable asset under the pledgee's control:
1. by execution of an authentic (notarial) deed; or
2. by execution of a private deed that is thereafter registered with the Dutch tax authorities; or
2. by bringing the movable assets under the pledgee’s control.
• A pledge over receivables can be created by way of a disclosed or an undisclosed pledge:
1. Disclosed: The right of pledge should be perfected by notification thereof from the pledgor to the relevant debtor.
2. Undisclosed: The right of pledge should be perfected by execution of an authentic (notarial deed) or by execution of a private deed that is thereafter registered with the Dutch tax authorities.

A pledge over shares is registered in the shareholder’s register of the company whose shares are being pledged. Such registration is not a requirement for perfection of the right of pledge. The shareholder’s register is a hard copy of the register, which is kept by the company.

The creation of these security interests does not lead to liability for Dutch stamp duty or similar documentary charges.

Dutch law does not recognise the concepts of floating and fixed charges as known in common law jurisdictions. Instead, security interests are categorised as either collateral security (such as mortgages and pledges) or personal security (including joint and several debtorship, suretyship, and guarantees). Collateral security is established through a right of mortgage – applicable to registered property like real estate, land, aircraft, or ships – or a right of pledge, which covers all other types of collateral.

Pledges can be created in advance over future movable assets and receivables. When the pledgor acquires such assets or when receivables arise, these are automatically encumbered. However, for undisclosed pledges over future receivables, only those arising from existing legal relationships at the time of the pledge are covered; new relationships require new pledges.

To streamline the process, Dutch banks use a collective deed of pledge, allowing them to register undisclosed pledges over all (future) receivables without the debtor’s ongoing involvement. This system, which involves frequent registration with the Dutch tax authorities, is somewhat similar to an English floating charge but differs in that it requires repeated registrations and cannot cover registered property or shares, which must be pledged by separate notarial deeds. Other assets can be pledged through omnibus agreements, subject to certain limitations.

Whether or not restrictions apply to the provision of related company guarantees depends on the type of company providing the guarantee. Private companies with limited liability (BVs) are, in principle, not restricted in providing guarantees to related companies, as long as the granting of a guarantee is in the corporate interest of the grantor. Public companies limited by shares (NVs) are subject to Dutch regulations on financial assistance. Therefore, an NV and its subsidiaries may not grant security or guarantee the obligations of a related company if such security or guarantee is granted to subscribe for or acquire shares in its capital or depositary receipts for those shares.

Under Dutch law, there are no limitations on the ability of non-Dutch, related companies to provide guarantees.

Under Dutch law, strict financial assistance rules apply to NVs and their subsidiaries. NVs are prohibited from providing security, guarantees, or otherwise binding themselves (jointly or otherwise) to support the subscription or acquisition of their own shares or depositary receipts. Additionally, NVs and their subsidiaries face restrictions on granting loans to related companies for such purposes. These loans are only permitted if a board resolution is adopted and pre-approved by the general meeting of shareholders. Further conditions include: the loan must be on arm’s length terms; the company’s net assets, after the loan, must not fall below the statutory minimum; the creditworthiness of the borrower must be carefully assessed; and, if the loan is for acquiring shares, the acquisition price must be fair. Transactions in breach of these rules, especially if deemed fraudulent conveyances, can be nullified.

In contrast, BVs are not subject to specific financial assistance prohibitions. However, BV directors must ensure that any such transaction is in the company’s corporate interest, that the company can continue to meet its obligations, and that all potential conflicts of interest are disclosed. The works council and supervisory board, if present, should also be informed.

A Dutch company with 50 or more employees must establish a works council. If the company plans to grant security or guarantees for another entity’s significant debt, the works council must be consulted. For important board resolutions, the works council is entitled to give advice before the decision is adopted. If the board proceeds against the council’s advice, implementation must be suspended for one month, during which the council may appeal to the Netherlands Enterprise Court. Additionally, depending on the company’s articles of association, granting security or guarantees may require prior approval from the general meeting of shareholders and/or the supervisory board.

Dutch law also provides for the nullification of fraudulent transfers, both inside and outside bankruptcy. If a voluntary act harms creditors and the company (and, in some cases, the counterparty) knew this, the act can be voided. In bankruptcy, the trustee must prove the fraudulent nature, relying on statutory presumptions.

A Dutch law security right terminates by operation of law if all secured liabilities are satisfied or discharged in full.

A Dutch law security right can also be terminated by means of a waiver (afstand) by the security beneficiary, in the understanding that the same formalities apply to such waiver as to the creation of the relevant security right (meaning that for a waiver of a right of pledge over shares, a notarial deed is required).

If the relevant security deed includes such right, a Dutch law security right can also be terminated by means of cancellation (opzegging).

The priority of security interests depends on the time the relevant security interest is created.

However, secured creditors may agree on the application of enforcement proceeds among themselves. Such agreements are usually contained in the intercreditor agreement, requiring the security agent to enforce the transaction security and distribute the enforcement proceeds to the various secured creditors by their ranking.

Usually, senior and junior lenders share a single security package, and junior claims are subordinated on a contractual basis.

Although subordination agreements are enforceable in the case of insolvency of the debtor, “subordination” does not have a defined meaning under Dutch law. A subordination agreement will be interpreted following the intentions of the parties, and its meaning is primarily determined by referring to the terms of the agreement.

Under Dutch law, the most material security interests that arise by operation of law and can prime a lender’s security interest are statutory preferential rights (voorrecht) and retention of title (eigendomsvoorbehoud).

Statutory preferential rights include, for example, the tax authorities’ right of priority for unpaid taxes and employees’ rights for unpaid wages. These preferential rights can rank ahead of a lender’s security interest, particularly in insolvency scenarios.

To structure around these preferential rights, lenders could:

• require borrowers to provide evidence of tax and wage payments;
• use blocked accounts to control cash flows; and
• include covenants in loan agreements to ensure ongoing compliance with statutory obligations.

Right of retention is a right of a creditor who has possession of a debtor’s asset and can retain it until payment of a claim relating to that asset is made. For example, a repairer of machinery may retain the machinery until it is paid for the repairs.

To structure around retention of title under Dutch law, lenders could take, among other things, the following measures:

• carefully review all contracts to identify any retention of title clauses; and
• include covenants in the finance documents obliging the borrower not to acquire goods under retention of title, or to notify the lender immediately if such goods are acquired; in such event, the borrower could be under an obligation to obtain a waiver from such party.

A security interest under Dutch law, such as a right of mortgage or a right of pledge, may only be enforced upon the occurrence of a default (verzuim) in respect of the secured payment obligation. The enforcement process is governed by the Dutch Civil Code and the Dutch Code of Civil Procedure, with the specific route depending on the type of security and specific arrangements as agreed between the parties.

Mortgage Over Registered Assets

The standard enforcement of a mortgage over registered assets is through a public auction, following statutory procedures. Alternatively, a court-approved private sale may be requested if more efficient. Sale proceeds are used to repay the outstanding mortgage debt, accrued interest, and enforcement costs, with any surplus returned to the borrower or other entitled parties.

Pledge Over Registered Shares

Dutch law provides two main methods for enforcing a pledge over registered shares:

• Public Sale (Auction):
1. The default method is a public sale (veiling) of the pledged shares.
2. The sale must be announced in accordance with statutory requirements, typically through a public notice.
3. The sale is usually conducted by a civil law notary.
4. The proceeds are used to satisfy the secured obligations, with any surplus returned to the pledgor.
• Private Sale (Negotiated Sale):
1. A private sale is possible if the court grants permission or if all interested parties (including the pledgor and any other secured creditors) consent.
2. This method is often preferred for practical reasons, as it may achieve a better price and is less cumbersome than a public auction.

The transfer of shares must comply with the articles of association of the company and any applicable regulatory requirements. Restrictions on enforcement are typically removed before the pledge is granted.

Pledge Over Movable Assets

Generally, enforcement follows the same procedures as described above under a pledge over registered shares.

Pledge Over Receivables

Enforcement is typically by collection of the receivables, with the proceeds used to satisfy the secured debt. For a disclosed pledge, the debtor must be notified of the default and/or enforcement. For an undisclosed pledge, the existence of the pledge must first be notified to the debtor before enforcement. Once notified, the debtor can only discharge the receivables by paying the pledgee. Generally, enforcement follows the same procedures as described above under a pledge over registered shares.

Pledge Over Intellectual Property Rights

Generally, enforcement follows the same procedures as described above under a pledge over registered shares. However, certain intellectual property rights may be subject to specific statutory rules regarding enforcement, such as the Patents Act 1995 (Rijksoctrooiwet 1995).

Security Over Financial Collateral

The Collateral Directive (2002/47/EC) has been transposed into Dutch law, allowing security interests over securities (effecten), cash in bank accounts, and credit claims to be created through either a title transfer or a security financial collateral arrangement. There are no formalities required for establishing such security, except that the arrangement must be evidenced in writing (or an equivalent form) and the collateral must be delivered, transferred, held, registered, or otherwise designated so that it is under the possession or control of the party taking the security.

Choice of a Foreign Law as the Governing Law of the Contract

Dutch courts recognise the choice of foreign law to govern transaction agreements on the basis of Regulation (EC) No 593/2008 of the European Parliament and the Council of 7 June 2001 on the law applicable to contractual obligations (Rome I). Rome I enables parties to agree that a contract may be governed by the law chosen by the parties to that contract, irrespective of whether the chosen law is the law of an EU member state. The freedom to elect the governing law does not apply to collateral agreements creating security over, inter alia, shares in Dutch companies or partnership interests in Dutch partnerships or real estate situated in the Netherlands, as these must be governed by Dutch law. Collateral arrangements over Dutch law receivables are mostly governed by Dutch law, although, in a cross-border context, possibilities exist for other laws to govern these collateral arrangements.

Submission to a Foreign Jurisdiction

Provided certain conditions are met, Dutch courts will typically recognise and enforce a valid contractual agreement to submit disputes to the jurisdiction of a foreign court.

Waiver of Immunity

Under Dutch law, a Dutch legal entity cannot claim immunity from legal proceedings, enforcement, attachment, or similar legal measures – either for itself or its assets. However, assets designated for public use (goederen bestemd voor de openbare dienst) are, by law, not subject to attachment.

Dutch courts recognise and enforce civil and commercial judgments from other EU member states in accordance with Regulation (EU) No 1215/2012 (Brussels I) and, in the case of uncontested claims, the European Enforcement Order Regulation. For certain non-EU countries – such as Switzerland, Norway, Iceland, Mexico, Singapore, and Montenegro – judgments may be recognised if the relevant treaty conditions are fulfilled.

For judgments from countries without an applicable treaty, enforcement in the Netherlands generally requires re-litigation. However, Dutch courts may, under specific circumstances, issue a judgment that mirrors the foreign ruling. The extent to which this applies to default judgments remains unclear.

Arbitral awards are enforceable in the Netherlands if the award originates from a country that is a party to the 1958 New York Convention. Enforcement is subject to the Convention’s provisions and the relevant rules in the Dutch Code of Civil Procedure.

Foreign lenders are entitled to the same rights and remedies as domestic lenders when enforcing loan or security agreements.

When a Dutch insolvency process is commenced – such as bankruptcy (faillissement), suspension of payments (surseance van betaling), or a Dutch scheme (Wet Homologatie Onderhands Akkoord, WHOA) – the rights of lenders to enforce loans, security, or guarantees governed by Dutch law are significantly affected.

Bankruptcy (Faillissement)

• Automatic Stay: Upon the declaration of bankruptcy, an automatic stay (moratorium) is imposed. This means that individual creditors, including secured lenders, are generally prohibited from enforcing their claims or security rights outside the bankruptcy process.
• Secured Creditors: Secured creditors (those with rights of pledge or mortgage) retain a degree of protection. They are, in principle, entitled to enforce their security rights as if bankruptcy had not occurred. However, the bankruptcy trustee (curator) may impose a reasonable waiting period (afkoelingsperiode) of up to two months (extendable), during which even secured creditors cannot enforce their security.
• Unsecured Creditors: Unsecured lenders must submit their claims in the bankruptcy estate and will be paid in accordance with the statutory order of priority, often receiving only a fraction of their claim.
• Guarantees: The enforcement of Dutch law-governed guarantees is also subject to the stay. The guarantee claim must be submitted in the bankruptcy, and enforcement outside the process is generally not permitted.

Suspension of Payments (Surseance van Betaling)

• Moratorium: A suspension of payments grants the debtor temporary relief from payment obligations. Creditors cannot enforce claims or security during this period.
• Secured Creditors: Secured creditors are generally not affected by the moratorium and may enforce their security, unless the court orders a cooling-off period (afkoelingsperiode), which can temporarily restrict enforcement.
• Unsecured Creditors: Unsecured lenders are subject to the moratorium and cannot enforce their claims during the suspension.

Dutch Scheme (WHOA)

• Restructuring Plan: The court may grant a stay (afkoelingsperiode) of up to four months (extendable to eight months), during which creditors cannot enforce security or commence insolvency proceedings.
• Secured Creditors: The stay can restrict enforcement of security, but secured creditors are generally entitled to at least the value they would receive in bankruptcy.
• Guarantees: Enforcement of guarantees may also be restricted during the stay.

Secured creditors are generally unaffected by bankruptcy and a secured claim is paid out of the enforcement proceeds of the security right (ie, not out of the bankruptcy estate).

A bankruptcy trustee will first pay “estate claims” and thereafter the pre-insolvency claims, being preferential claims (the majority of which tend to be held by the tax authorities and social security board) and unsecured claims.

Pre-insolvency creditors must submit their claims to the bankruptcy trustee. Payments to pre-insolvency creditors can only take place on a pro rata basis.

Estate claims are generally claims incurred by the bankruptcy trustee in performing their duties, which, just like insolvency costs, have priority over the unsecured (ordinary) and preferred claims against the debtor.

In principle, the bankruptcy trustee may make payments to estate creditors and critical vendors. Critical vendors, in the context of a bankruptcy, are creditors that have a strong position because the estate requires their services (for example, a supplier whose products or services are essential to continue the business).

In the Netherlands, the main insolvency procedures are bankruptcy (faillissement), suspension of payments (surseance van betaling), and the Dutch scheme (WHOA). The duration of these processes can vary significantly depending on the complexity of the case, the size of the company, the nature of its assets, and the level of co-operation from stakeholders.

• Bankruptcy (Faillissement): This is the most common insolvency procedure. For straightforward cases, bankruptcy can be completed within approximately a year, especially if the company has few assets and creditors. However, for more complex cases involving significant assets, litigation, or disputes, the process can take several years – sometimes up to five years or more.
• Suspension of Payments (Surseance van Betaling): This process is designed to give companies temporary relief from creditors to reorganise. If successful, it may last several months to a couple of years. If unsuccessful, it often leads to bankruptcy.
• Dutch Scheme (WHOA): Introduced in 2021, the WHOA allows for restructuring outside formal bankruptcy. The process is designed to be swift, often taking a few months from initiation to court approval, provided there is sufficient agreement among the creditors.

In the Netherlands, there are several mechanisms available for companies facing financial distress that allow for rescue or reorganisation outside of formal insolvency proceedings. These procedures are designed to help companies restructure their debts, operations, or corporate structure without the stigma and consequences of formal bankruptcy (faillissement) or suspension of payments (surseance van betaling).

WHOA (Wet Homologatie Onderhands Akkoord) – The Dutch Scheme

The most significant development in recent years is the introduction of the WHOA, which came into effect on 1 January 2021. The WHOA provides a legal framework for companies to restructure their debts through a court-sanctioned private composition (agreement) with creditors and shareholders, without entering into formal insolvency proceedings.

• Key Features:
1. The debtor remains in control of the business (debtor-in-possession).
2. The procedure can be initiated by the company or, in some cases, by creditors.
3. The company can propose a restructuring plan to (some or all) creditors and shareholders.
4. The plan can be made binding on dissenting creditors and shareholders if approved by the court (cram-down).
5. The process is flexible and can be conducted publicly or privately.
6. The company can request a temporary stay of enforcement actions (moratorium) during negotiations.

Out-of-Court Workouts

Before the introduction of the WHOA, and still commonly used, are informal out-of-court workouts. These are private negotiations between the company and its creditors to restructure debts or agree on new payment terms.

• Key Features:
1. No formal legal framework; based on voluntary agreement.
2. Typically used for smaller companies or where there are only a few creditors.
3. No court involvement, so no ability to bind dissenting creditors.
4. Often facilitated by financial advisers or mediators.

When a Dutch borrower, security provider, or guarantor becomes insolvent, several risk areas arise for lenders. These risks stem from Dutch insolvency law, the practicalities of enforcement, and the potential for challenges to security interests or guarantees. Below is a detailed overview of the key risk areas:

Risk of Claw-Back (Actio Pauliana)

Dutch insolvency law allows an insolvency administrator (curator) to challenge and potentially unwind transactions that were prejudicial to creditors. This includes the granting of security or guarantees shortly before insolvency, especially if the lender was aware of the debtor’s financial difficulties. Transactions can be set aside if they were not at arm’s length or if they unfairly favoured one creditor over others.

Moratorium on Enforcement

Upon the opening of insolvency proceedings (faillissement), a general stay is imposed on enforcement actions. Lenders may be prevented from enforcing their security or guarantees, except in limited circumstances (eg, certain financial collateral arrangements). This can delay or reduce recoveries.

Ranking and Priority Issues

Secured creditors generally have priority over unsecured creditors, but certain claims (such as preferential claims for employee wages or tax authorities) may rank ahead of or pari passu with secured claims. The value of the secured assets may also be insufficient to cover the outstanding debt, especially after costs of the insolvency estate are deducted.

Limitations on Guarantees and Security

Guarantees and security provided by Dutch entities may be subject to limitations, such as corporate benefit, financial assistance, and ultra vires rules. If a guarantee or security is found to be outside the corporate purpose or not in the best interest of the company, it may be invalidated or limited in scope.

Set-off Restrictions

Set-off rights may be restricted in insolvency. While Dutch law generally allows set-off, there are exceptions, particularly if the claim and counterclaim did not exist before the insolvency or if the set-off would prejudice other creditors.

Practical Enforcement Challenges and Cross-Border Complications

Enforcing security over certain assets (such as shares, intellectual property, or receivables) can be complex and time-consuming in Dutch insolvency. If the borrower, security provider, or guarantor has assets or operations outside the Netherlands, cross-border insolvency issues may arise, potentially complicating enforcement and recovery.

Over the past year, the Netherlands has continued to demonstrate robust activity in the project finance sector, maintaining its reputation as a leading European hub for innovative and large-scale infrastructure and energy projects. The Dutch market has been characterised by a strong pipeline of projects, underpinned by the country’s commitment to sustainability, energy transition, and modernisation of infrastructure.

The renewable energy sector continues to lead the way, fuelled by government targets for reducing carbon emissions and increasing clean energy production. There is also rising interest in green hydrogen and energy storage projects, which are becoming more prominent as part of the broader energy transition.

There are no specific regulations applicable to the project finance industry in the Netherlands. However, depending on the type of project, numerous specific laws and regulations may be applicable, including relating to the environment, mining and energy.

Overview

Public-private partnerships (PPPs) are a well-established and integral mechanism for delivering public infrastructure and services in the Netherlands. By leveraging private sector expertise, efficiency, and financing, PPPs have played a central role in the development of transport infrastructure (including roads, railways, bridges, and tunnels), social infrastructure (such as government and public buildings), and, increasingly, energy projects. The Dutch PPP market is mature, with a strong tradition of collaboration between public authorities and private contractors.

Shift From Traditional to Innovative PPP Models

In recent years, the Dutch PPP landscape has undergone a significant transformation. While traditional models such as DBFMO (Design, Build, Finance, Maintain, Operate) contracts have long been the standard, there is now a clear shift towards more flexible and collaborative partnership models. This evolution is driven by several factors, including the need to address the vast task of replacing and renovating ageing infrastructure, a high volume of available work, and acute labour shortages in the construction sector.

Three innovative models have emerged at the forefront of this transition:

• Serial Contracting (Seriematig Werken): Serial contracting is increasingly used to address the large-scale replacement and renovation of Dutch infrastructure with a value of EUR2.4 billion per year until 2030, up to EUR3.7 billion per year until 2080. Rather than tendering each project separately, public authorities and contractors enter into long-term relationships to deliver a series of similar projects – such as multiple bridges, locks, or overpasses – under a single framework. This approach enables standardisation, efficiency gains, and a joint, reduced risk profile. Both parties benefit from a more collaborative working relationship, learning and improving over the course of the series.
• Two-Phase Contract (Twee-Fasen Contract): The two-phase contract divides the project into a preparatory phase and an execution phase. In the first phase, the client and contractor work together in an open-book, collaborative environment to develop the design, clarify the project scope, and identify and assess risks. This allows for joint exploration of solutions and the establishment of a realistic budget based on actual insights. Only after sufficient clarity is achieved do the parties proceed to the second phase, where the contractor executes the works under a more traditional contract structure. This model reduces the likelihood of disputes and unforeseen cost overruns, as uncertainties are addressed early and collaboratively.
• Cost-Plus Contract (Kost+ Contract): In a cost-plus contract, the contractor is reimbursed for actual costs incurred, plus an agreed-upon fee or margin. Unlike fixed-price contracts, this model reduces the contractor’s exposure to unforeseen risks and cost overruns. It requires a high degree of transparency and trust between the parties to jointly manage costs and project risks. Cost-plus contracts are particularly suitable for very large and high-risk projects that might otherwise be unattractive to market participants. A notable example is the renovation and partial replacement of the Van Brienenoord Bridge, with a project value of EUR1.5 to 2 billion.

Drivers of Change and Market Dynamics

The move towards these new PPP models is largely a response to current market conditions. With a high volume of available work and significant labour shortages, contractors are in a strong position to be selective about the projects they undertake. They increasingly prefer projects with a lower risk profile and avoid the extensive and rigid risk allocation typical of traditional DBFMO contracts. The new models deliberately shift towards a different or later allocation of risks, with risks more often shared between public and private parties or even assumed by the public authority. This collaborative approach to risk management is designed to make projects more attractive to contractors in a competitive labour market.

A key feature of these models is deferred price formation: rather than fixing the price at the tender stage, the final price is determined later in the process, once more information is available and risks are better understood. This has significant implications for project financing. Financiers tend to provide full funding only after project design, pricing, and risk allocation are clarified, often offering limited support in the early phase. They may require additional guarantees or higher interest rates due to early uncertainties, with governments sometimes stepping in to facilitate early financing. As a result, financiers join projects later and more cautiously, while the government’s role in enabling early financing increases.

In summary, the Dutch PPP market is evolving away from traditional, rigid models towards more flexible, collaborative, and risk-sharing partnership structures. This evolution is driven by ample work opportunities, labour shortages, and the need for more attractive risk profiles for contractors. The new models are characterised by shared risk, greater transparency, and deferred pricing mechanisms, which together foster a more sustainable and efficient approach to public infrastructure delivery.

In practice, most project documents are governed by Dutch law. For electricity, and the exploration and mining of minerals, specific statutory provisions apply.

Electricity

Contracts pertaining to the supply or transport of electricity (eg, PPAs/supply agreements and connection and transport agreements) must be governed by Dutch law pursuant to the Electricity Act 1998 (Elektriciteitswet 1998). The Dutch courts have exclusive jurisdiction to settle any disputes under these agreements. Any provision that stipulates otherwise is null and void.

Exploration Agreement

Unless the Minister of Climate and Green Growth determines otherwise, pursuant to the Mining Act (Mijnbouwwet) the holders of an exploration permit (opsporingsvergunning) and/or mining permit (winningsvergunning) are required to enter into an exploration agreement (winningsovereenkomst) and mining agreement (mijnbouwovereenkomst) respectively. The Mining Act stipulates that these agreements must be governed by Dutch law.

Under Dutch law, there are no restrictions on the ability of foreign entities to own or otherwise have real property or water rights relating to the project or of foreign lenders to hold or exercise remedial rights on liens on any such property.

When structuring a project company in the Netherlands, the choice of legal entity – most commonly a private limited liability company (BV) – is key, as it affects liability, governance, tax, and regulatory obligations. Dutch corporate law, especially the Civil Code, governs these entities. While foreign investment is generally unrestricted, both domestic and foreign investors may face specific regulatory requirements under laws such as the Investment, Mergers and Acquisitions Security Screening Act (Wet Vifo), the Electricity Act, the Gas Act (to be replaced by the Energy Act in 2026), and the Telecommunications Act. These frameworks require security screenings for investments involving control over vital providers or sensitive technology. The Energy Act also imposes notification requirements for certain energy-related acquisitions. From November 2025, the Security Screening Defence-Related Industry Act will add further checks for defence-related investments. Additionally, state aid rules and the EU Foreign Subsidies Regulation may apply, requiring notification of certain transactions.

Project financings in the Netherlands draw on a variety of funding sources:

• Large Projects: These are typically funded by Dutch and international banks (syndicated loans), sometimes with support from export credit agencies or institutional investors (such as pension funds) through project bonds.
• Small Projects: These are more likely to rely on local banks, private equity, or alternative lenders.

The Dutch market sees banks as the main source, but institutional and alternative investors are increasingly active, especially for larger or renewable energy projects. The choice of financing depends on project size and sector.

A typical Dutch project finance structure involves senior debt, subordinated or mezzanine debt and sponsor equity. The financing is usually arranged through a special purpose vehicle (SPV), which owns the project assets and enters into all relevant project agreements. Security is taken over the SPV’s shares, assets, and project contracts, and cash flows are ring-fenced to service the debt.

The Netherlands ranks among Europe’s leading producers and exporters of natural gas, with the Groningen field recognised as one of the world’s largest onshore gas reserves. In 2018, the Dutch government announced that all natural gas extraction from the Groningen field would be phased out in the coming years. This decision was prompted by the adverse effects of gas extraction in the Groningen province, particularly the occurrence of earthquakes and the resulting damage to buildings.

To engage in the exploration or production of minerals, it is necessary to obtain an exploration or mining permits.

Applicable Environmental Legislation and Key Considerations for Projects

In the Netherlands, the Environment and Planning Act (Omgevingswet) is the central framework governing environmental, health, and safety regulations for projects. This act regulates permits and procedures for activities affecting the physical environment, including construction, demolition, spatial planning, and environmental impacts such as noise, air, and soil pollution.

Environmental Plans and Permits

Each municipality maintains an environmental plan that sets out rules for land use, construction, and environmental quality (eg, soil standards). Projects must comply with these plans, and any deviation requires a permit, which is assessed by the competent authority – typically the municipality.

Construction and Technical Requirements

Most construction projects require an environmental permit. Technical standards for buildings are detailed in the Structures Decree (Besluit bouwwerken leefomgeving), covering fire safety, health, and sustainability. There is a general obligation for building owners and users to implement energy-saving measures with a payback period of up to five years. For certain large or special-use buildings, notification to the municipality is required for fire safety compliance.

Construction Site Safety

Worksite safety is governed by occupational health and safety legislation (Arbowetgeving), comprising the Working Conditions Act, Decree, and Regulation. The Dutch Labour Inspectorate monitors compliance, with powers to impose fines or halt unsafe work.

Nature Conservation and Protected Areas

Projects impacting protected areas (Natura 2000-gebieden) require specific permits, especially regarding nitrogen emissions, which are assessed using the AERIUS model. Both construction and operational phases can contribute to nitrogen deposition. If protected species are present, ecological protocols may restrict construction during sensitive periods.

Soil and Groundwater Quality

The Environment and Planning Act includes provisions to prevent and remediate soil contamination. Remediation may be required if contamination poses risks to health or nature.

Supervisory Authorities

Permitting and enforcement are usually municipal responsibilities, but for nature conservation, the province or a minister may be the competent authority.

Community Consultation

The Environment and Planning Act mandates procedures for community participation in project decision-making, though it does not prescribe specific methods. For projects like solar or wind parks, additional rules may encourage local ownership to boost acceptance.