The Dutch private credit market has continued its structural growth trajectory in the past 12 months, with activity remaining resilient despite macroeconomic headwinds, geopolitical tensions, and the emergence of increased regulatory scrutiny. Business services, technology, healthcare and manufacturing remain dominant sectors for private credit deployment, while energy transition and structured finance are emerging areas of growing significance.

In the Netherlands, public debt markets have become more competitive with private credit. Sponsors are routinely running dual-track processes, and direct lenders have responded by compressing margins and adopting covenant structures. The flow of refinancing from private credit into public debt is present but relatively limited in scale for the Dutch mid-market; the more notable trend is private credit refinancing syndicated debt or direct lenders refinancing each other’s positions.

Private credit has been a preferred form of acquisition financing in the Netherlands, particularly for the mid-market sponsor-backed segment that forms the core of Dutch leveraged finance activity. However, the market is not one in which private credit wins by default. For larger transactions, dual-track processes are common. We noted competition between channels, with the outcome in any given transaction determined by the specific interplay of price, structure and execution requirements.

The Dutch private credit market faces challenges to its continued expansion. Regulatory scrutiny is intensifying, macroeconomic and geopolitical headwinds are suppressing deal flow and the public debt markets are providing meaningful competition for larger transactions.

Private credit providers in the Netherlands remain focused on private equity sponsors and their portfolio companies. However, the market has expanded meaningfully into founder-owned and family-owned businesses, a segment particularly well suited to the Dutch corporate landscape, and is increasingly active in providing capital to public companies through bespoke finance solutions.

The recurring revenue lending market in the Netherlands is established but less mature than its counterparts in the United Kingdom and the United States. Structural features of Dutch recurring revenue facilities broadly mirror pan-European market practice.

Typical private credit transaction sizes in the Netherlands range from EUR10 million at the lower end of the market to EUR300 million or more for the largest pan-European direct lending transactions, with the core mid-market segment (EUR50 million to EUR100 million) representing the most active deal space. Challenges in fundraising are not Dutch specific as most of the funds are operating internationally. Whilst aggregate fundraising figures for European private credit have remained strong, fundraising has become more differentiated and competitive.

Regulatory attention on the private credit sector in the Netherlands has increased over the past 12 months, driven by the sector’s rapid growth and its deepening interconnectedness with the broader financial system. The Dutch Financial Markets Authority (AFM) issued a statement in April 2026 regarding an “accumulation of risks” in the Dutch financial system, with specific attention directed at underwriting standards in private credit following stress at certain direct lenders. The Dutch Central Bank (DNB) has described the growth of private credit as broadly positive because it diversifies lending beyond traditional banks, but has also acknowledged that assessing the underlying risks is difficult because loan quality is often unclear and the sector is deeply interconnected with the rest of the financial system.

Private credit funds are regulated in the European Union under the Alternative Investment Fund Managers Directive (AIFMD). A significant development for credit funds in this regard is the entry into force of AIFMD II, which was published in the Official Journal of the European Union in April 2024, with member states required to transpose it into national law by 16 April 2026. AIFMD II introduces several provisions of relevance to private credit fund managers.

• Loan origination – AIFMD II establishes, for the first time, a harmonised EU framework for loan-originating AIFs. The new regime introduces requirements relating to, among other things, risk retention and concentration. In particular, an AIF must retain at least 5% of the notional value of loans that it originates and subsequently transfers to third parties. In addition, a 20% single-borrower concentration limit applies where the borrower is a financial undertaking, AIF or UCITS.
• Leverage limits – AIFMD II introduces leverage limits for loan-originating AIFs, set at 175% of NAV for open-ended funds and 300% for closed-ended funds. The 300% limit is particularly relevant to the European direct lending market, where closed-ended fund structures are predominant.
• Conflict of interest requirements – enhanced conflict of interest management requirements apply specifically to loan-originating funds, reflecting the potential for conflicts between the fund’s lending activity and other activities of the manager.
• Liquidity management – AIFMD II strengthens liquidity risk management requirements for open-ended AIFs. In particular, open-ended AIFs must make available at least two appropriate liquidity management tools from a prescribed list, including tools such as redemption gates and suspension of redemptions, subject to the applicable requirements.

The implementation of AIFMD II in the Netherlands represents one of the most significant regulatory developments for private credit fund managers operating in or into the Netherlands in 2026. The Dutch implementation framework closely reflects the requirements of the revised directive. The AFM plays a central role in supervising AIFMs and has published a series of AIFMD II updates addressing, among other matters, loan origination and liquidity management.

On 9 July 2024, the sixth EU Capital Requirements Directive (CRD VI) came into force. CRD VI introduces changes to the EU regulatory framework for cross-border lending by banks and credit institutions. The Dutch transposition of CRD VI will be completed by 11 January 2027. CRD VI does not directly apply to private credit lenders that lend using committed institutional capital rather than deposits. Its implications for the Dutch private credit market are probably indirect: the output floor and revised capital requirements will increase the regulatory cost of bank leveraged lending, accelerate bank disintermediation and expand the structural opportunity for private credit providers.

For corporate lending – the most common form of private credit in the Netherlands – lenders are generally not required to obtain a Dutch licence or regulatory approval merely to lend to a Dutch borrower or to take security over Dutch assets. However, lending to Dutch consumers (ie, natural persons acting outside the course of a business or profession) may trigger licensing obligations under the Dutch Act on Financial Supervision (AFS). Furthermore, lenders operating in the Netherlands or serving Dutch clients must comply with Dutch and/or EU Anti-Money Laundering (AML) and sanctions legislation where applicable.

The Dutch regulatory landscape is overseen by DNB (prudential regulation, licensing, systemic risk) and AFM (conduct, marketing, investor protection). Both regulators operate within the EU framework set by the European Securities and Markets Authority (ESMA) and with the European Central Bank (ECB) playing a role where banking activities are involved. The AFM is the primary regulator with regards to the supervision of the Dutch rules pursuant to AIFMD II that may apply to credit funds active in the Netherlands.

The Dutch regulatory framework does not generally prohibit foreign investors from investing in Dutch private credit funds or such funds from accepting foreign capital. However, certain indirect restrictions and other regulatory considerations may apply, including the following (which is a non-exhaustive list).

• FDI Screening (Vifo Act) – the Dutch FDI screening regime applies where an investment results in the acquisition of control or significant influence over a company in a sensitive sector. Passive LP investments in private credit funds are generally not caught, but loan-to-own or distressed strategies that could result in control over sensitive Dutch businesses require careful assessment.
• AIFMD marketing restrictions – Dutch private credit funds may by default only be marketed to professional investors. Retail marketing is subject to significantly more onerous requirements. There are no specific restrictions on accepting capital from non-EU/EEA investors into a Dutch AIF.
• AML/KYC and sanctions – fund managers must conduct thorough KYC checks on all investors under the AFS. Enhanced due diligence applies to investors from high-risk jurisdictions and investors subject to EU or Dutch sanctions are prohibited from investing.

The lending activities of credit funds solely providing loans to businesses and not to consumers are as such not subject to specific compliance (other than KYC and sanctions, where applicable) and/or reporting requirements. Credit funds regulated under AIFMD II are subject to a comprehensive compliance and reporting framework. These funds must submit periodic reports to DNB covering the fund’s exposures, risk profiles, leverage and stress testing. Reporting frequency ranges from quarterly (above EUR1 billion AUM) to annual (sub-threshold). In addition, AIFMD II introduces enhanced reporting for loan-originating AIFs, including detailed data on loan volumes, borrower breakdown and defaults. Funds must also provide pre-investment disclosures (strategy, leverage, risks, fees) and produce audited annual reports within six months of the financial year end. AIFMD II adds further disclosure requirements for loan-originating, including on risk retention, diversification and non-performing loan policies.

Club lending arrangements involving private credit providers do not raise concerns in the Netherlands and are not a focus area for the national competition authority. However, such arrangements remain subject to EU and Dutch competition law. Participants must avoid using club lending structures as a means of engaging in competitively sensitive matters.

Dutch private credit transactions typically mirror broader European market conventions whilst incorporating Dutch-specific legal and regulatory aspects. The most prevalent structure in the Dutch market is probably the unitranche or senior direct lending facility. More traditional two-tranche structures are also in use. A senior facility sits above a mezzanine tranche, with an intercreditor agreement governing their relative rights and enforcement priorities.

Revolving credit facilities (RCFs) are offered by private credit providers in the Netherlands. RCFs in direct lending transactions are typically smaller in size relative to the term loan, used primarily for working capital and general corporate purposes. Super senior RCFs provided by a bank alongside a private credit unitranche are known in larger Dutch transactions. Delayed draw term loan facilities are also being granted, for example as acquisition financing, capex-facility or for enrolling build-and-buy strategies.

Dutch private credit transactions are typically documented based on LMA (Loan Market Association) precedents adapted for the bilateral or club nature of direct lending. The principal documents are a facility agreement, an intercreditor agreement (where applicable), security documents such as deeds of pledge over assets (eg, shares, receivables, bank accounts, intellectual property rights) and deeds of mortgage, a guarantee agreement (where applicable), fee letters as well as certain condition precedent documentation (eg, corporate authorisations, legal opinion, financial information and KYC-documentation).

First-out/last-out (FOLO) structures are in use in the Dutch market. FOLO arrangements are effected through an agreement among lenders but may also be (partly) reflected in a disclosed intercreditor agreement (eg, governing the relationship between the super senior RCF provider and the unitranche lenders).

Dutch private credit transactions are typically documented based on LMA formats. The LMA continues to update and publish new precedent documents reflecting market practice and Dutch private credit documentation tracks these developments.

Foreign lenders are not in any way restricted from providing private credit or taking security in the Netherlands, other than for reasons referred to in the other sections of this practice guide.

Dutch law does not impose a general statutory restriction on the use of loan proceeds by a corporate borrower. Under Dutch corporate law, several legal concepts exist that can restrict the way a borrower can use the proceeds of a loan (in addition to contractual restrictions included in the finance documents). For example, the loan must be applied in the corporate interest of the company and may not be used for unlawful distributions. Furthermore, for Dutch NV’s, statutory financial assistance restrictions apply.

There are no private-credit-specific local practical challenges for take privates and other acquisition financings. The challenges in case of private debt do not differ from the challenges that are relevant in Dutch acquisitions and financings generally.

Dutch law does not contain a specific statutory prohibition on debt buybacks by borrowers or their sponsors/affiliates in the context of private credit or leveraged finance. The question of whether a buyback is permitted and, if so on what terms, is primarily a contractual one.

The Dutch Act on the Abolition of Pledge Prohibitions (Wet Opheffing Verpandingsverboden) entered into force as of 1 July 2025. Pursuant to this Act, it will no longer be possible to agree on a ban on assignment and pledge with respect to receivables arising from the exercise of a profession or business. A clause between a creditor and a debtor which aims to exclude the assignability of such a receivable will be void, irrespective of whether the ban on assignment clause has contractual or in rem effect. Under the Act, a ban on assignment and pledge will however remain possible and valid for certain types of receivables, including bank account receivables and receivables arising under syndicated loans. The Act requires revision of finance documentation such as Dutch law security documents creating security rights over receivables as well as revision of the representations and warranties included in the finance documents with regards to the validity and enforceability of security over receivables.

In its judgment of 27 February 2025 (Lastre v Agora), the Court of Justice of the European Union (CJEU) ruled that asymmetric jurisdiction clauses in agreements are only valid under EU law, provided that certain conditions are met. An asymmetric jurisdiction clause is valid under Article 25 of the Brussels I Recast Regulation if it contains sufficiently specific and objective factors to identify the competent courts within the EU or the parties to the Lugano Convention. Such validity is limited to courts designated within EU member states and Lugano Convention countries, such as Iceland, Norway and Switzerland.

Private credit providers in the Netherlands deploy junior and hybrid capital through several common structures, including unitranche facilities with PIK toggle or PIK sleeve, first lien/second lien arrangements, mezzanine financing with combined cash-pay and PIK interest plus an equity kicker, HoldCo PIK facilities sitting above the operating group and preferred equity or vendor loans. Junior and hybrid documentation differs from senior secured deals in several key respects. Pricing is materially higher, interest is typically PIK or PIK-toggle rather than fully in cash. HoldCo deals are typically secured in the Netherlands though the collateral is sometimes limited. The customary Dutch security package comprises share pledges and rights of pledge over assets such as intercompany loans and other receivables including bank accounts (where possible).       

PIK mechanics are a well-embedded feature of the Dutch private credit market. Amortisation can be minimal as private credit providers are more flexible on this point than traditional lenders.

Private credit providers can expect call protection in the form of a hard non-call period or make-whole premium for the first one or two years, followed by a declining prepayment fee schedule for a further number of years thereafter.

The Netherlands does not levy a general withholding tax on interest payments. Accordingly, interest paid by a Dutch borrower to a private credit provider – whether domestic or foreign – is not subject to any deduction or withholding at source under Dutch domestic law. Similarly, repayments of principal are not subject to withholding tax. This makes the Netherlands a comparatively straightforward jurisdiction from a withholding tax perspective for private credit structures.

A targeted conditional withholding tax (CWHT) on interest was introduced with effect from 1 January 2021. Unlike a general interest withholding tax, the CWHT applies only in defined circumstances: specifically, where interest is paid to a related entity (broadly, an entity that has a qualifying interest in the Dutch borrower (ie, 50%+1 of the voting rights), or vice versa) that is resident in a jurisdiction included on the Dutch list of low-tax jurisdictions, or where the payment is made to a related entity in the context of an abusive structure (eg, hybrid entities). The CWHT rate equals the highest Dutch corporate income tax rate (currently 25.8%). In standard private credit transactions – where the lender is an unrelated third-party fund or credit provider – the CWHT will generally not be triggered, since the related-entity requirement will typically not be satisfied. Where a lender is part of a corporate group that also holds equity in the borrower, careful analysis is required.

Dividend withholding tax (at a rate of 15%) applies to distributions of profits by Dutch companies. In a private credit context, this is primarily relevant where a lender participates in the equity upside through warrant coverage or equity kickers, or where a debt instrument is reclassified as equity for Dutch tax purposes. Instruments structured as genuine debt with arm’s length terms are generally not at risk of reclassification, but hybrid instruments (particularly those with profit-participation features) require careful review.

Because the Netherlands does not impose a general interest withholding tax, the primary structuring concern for private credit providers is the CWHT and the potential reclassification of debt as equity. Common mitigation measures include ensuring that the lender is genuinely unrelated to the borrower’s equity holders, locating lending vehicles in non-listed jurisdictions, and structuring interest and return mechanics to clearly reflect arm’s length debt rather than profit participation.

Interest paid by a Dutch borrower on a private credit facility is in principle deductible for Dutch corporate income tax (CIT) purposes. However, Dutch CIT contains several interest deduction limitation rules that are of significant relevance to private credit lenders and borrowers alike. The most important of these is the earnings stripping rule (Article 15b of the Dutch Corporate Income Tax Act), which implements the EU Anti-Tax Avoidance Directive (ATAD1) and limits the deductibility of net interest expenses to the higher of 24.5% of EBITDA (taxable EBITDA) or EUR1 million. Disallowed interest can be carried forward indefinitely but may not be carried back. Private credit lenders should therefore consider the debt capacity of their borrowers carefully, as high leverage levels can give rise to a meaningful loss of interest deductibility at the borrower level.

Where a private credit transaction involves related parties, the arm’s length principle applies under Dutch transfer pricing rules and the OECD Transfer Pricing Guidelines. Interest rates, fees and other economic terms must reflect what independent parties would have agreed in comparable circumstances.

Real estate transfer tax (overdrachtsbelasting) is levied at a rate of 10.4% on the acquisition of Dutch real property (or an economic or legal interest therein). Real estate transfer tax is also levied on the acquisition of (<33% of the) shares in a company whose assets consist predominantly of Dutch real property. In a private credit context, this tax can be relevant in scenarios where enforcement of a mortgage over Dutch real estate or pledge over shares in a company whose assets consist predominantly of Dutch real property results in an acquisition of that property or those shares, or where a borrower group includes real estate entities. Certain exemptions and relief provisions may be available depending on the structure.

The granting of loans and the provision of guarantees are generally exempt from Dutch VAT. As a consequence, private credit lenders providing loans or guarantees to Dutch entities do not charge or collect VAT on such services and cannot recover input VAT on related costs. In practice, the VAT treatment of ancillary services provided alongside the lending activity – such as arrangement fees or advisory components – requires careful analysis, as mixed activities can affect the recovery of input tax.

The Netherlands does not levy capital duty on the issuance of shares or the contribution of capital to Dutch companies, nor does it impose stamp duty on the execution of loan or security documentation. This is a notable advantage compared to certain other European jurisdictions and means that the execution of complex security packages – including multiple pledge agreements – does not attract documentary taxes.

The principal tax concern for foreign private credit lenders lending into the Netherlands is the risk of inadvertently creating a taxable presence – a permanent establishment (PE) – in the Netherlands. PE risk can arise where the lender’s personnel are actively involved in origination, negotiation or management of Dutch loans from within the Netherlands, or where a Dutch-based individual habitually exercises authority to conclude loan agreements on behalf of the foreign lender. To mitigate this risk, foreign lenders should ensure that key decisions regarding credit approval, pricing and documentation are taken outside the Netherlands.

Foreign lenders that are part of multinational groups must consider the Dutch anti-hybrid mismatch rules (implemented under ATAD2 with effect from 1 January 2020), which can deny interest deductions or require income inclusion where a payment produces a mismatch between jurisdictions. In addition, where a foreign lender routes its Dutch lending through an intermediate entity, that entity must demonstrate genuine economic substance to avoid challenge by the Dutch tax authorities, as back-to-back and conduit structures are targeted by both Dutch domestic anti-avoidance rules and the OECD Multilateral Instrument.

The Netherlands has an extensive network of over 90 bilateral double tax treaties, which can provide protection against double taxation. Treaty benefits are subject to the principal purpose test and, in some treaties, a limitation on benefits provision, meaning that structures principally motivated by tax considerations will not qualify. Foreign lenders should therefore confirm their treaty eligibility before relying on treaty protection in a Dutch private credit transaction.

The typical Dutch security package for a private credit transaction typically consists of rights of pledge, supplemented by a right of mortgage for real estate transactions. The security package typically consists of a rights of pledge over shares in group companies, over intra-group receivables, third-party receivables (including trade receivables) and/or material agreements, insurance receivables, bank accounts and movable assets (inventory and equipment) and in case of real estate transactions, a right of mortgage over real estate.

Real estate is secured by a notarial deed of mortgage registered with the Dutch Land Registry (Kadaster). Pledges over shares in a Dutch B.V. or N.V. must be created by notarial deed executed before a Dutch civil law notary. Although not a formal requirement, a right of pledge over the membership interests in a Dutch co-operative is typically also executed in notarial form. The right of pledge is registered in the company’s shareholders’ register (or in the case of a Dutch co-operative, its members’ register). Pledges over receivables and movables are usually established via a private deed and can be created either as a disclosed pledge (openbaar pandrecht) which requires notice to the debtor of the receivable or as an undisclosed pledge (stil pandrecht) which is perfected by registration of the deed with the Dutch tax authorities. Bank account pledges are always disclosed and require acknowledgement and consent of the account bank. IP pledges must be registered in the relevant IP registers to be effective against third parties. Failure to comply with the applicable formalities means the security right is either not validly created or cannot be invoked against third parties, in which case the lender ranks as an unsecured creditor.

Timing is generally short – pledges over receivables, movables and bank accounts are typically entered into on closing, to be perfected at closing or within a few business days. Disclosure of undisclosed pledges over receivables is generally only made on the occurrence of an event of default which is continuing or upon the occurrence of an enforcement event (typically when the secured loan is accelerated). Deeds of pledge over shares and deeds of mortgages are executed by a notary on closing, followed by registration of the right of mortgage with the Land Registry. Costs mainly consist of notarial fees and, for real estate, registration duties. For movables/receivables the tax registration fee is nominal.

Dutch law does not recognise a floating charge or a single universal security interest over all present and future assets of a company. Security must be created on an asset-class basis through the specific proprietary rights of pledge and mortgage described above.

A functional equivalent to a floating charge is achieved by combining pledges over each relevant asset category (shares, receivables, movables, bank accounts, IP) in a Dutch security agreement and by taking undisclosed pledges over future receivables and future movables through periodic supplemental deeds of pledge or registrations (verzamelpandaktes). Because Dutch security is inherently “fixed” in nature, the fixed/floating distinction familiar from common law systems does not translate directly. In practice, private credit providers routinely take the fullest available set of asset-specific pledges with subsequent supplemental deeds of pledge.

The security provider contractually retains the ability to use pledged movables and collect pledged receivables in the ordinary course of business until the occurrence of an event of default or enforcement event and disclosure of the pledge, which mitigates the operational impact for the security provider whilst preserving the lender’s proprietary position.

Dutch companies can in principle grant downstream, upstream and cross-stream guarantees and security. The principal limitations arise from the corporate benefit, the ultra vires rule whereby a transaction can be annulled if it falls outside the corporate objects and the counterparty knew or should have known this and, for Dutch N.V.’s, the statutory financial assistance prohibition in relation to the acquisition of their own shares (which does not apply to Dutch B.V.’s).

For upstream and cross-stream guarantees, the key issue is whether granting the guarantee is in the corporate interest of the guarantor and does not endanger its ability to satisfy its own creditors. Corporate benefit is typically evidenced by group-wide benefit analyses in the board resolutions and the availability of on-lending arrangements to the guarantor.

Where appropriate, guarantee limitation language caps recovery at the higher of the amount on-lent to the guarantor and an amount that would not render the guarantor insolvent or unable to continue as an individual going concern. Corporate benefit and solvency are assessed at the time of granting the guarantee. Directors who approve a guarantee in the absence of demonstrable corporate benefit risk personal liability.

Where limitations are anticipated, transactions are often structured with direct funding into the Dutch obligor followed by intercompany on-lending, so that the Dutch entity is a genuine borrower with corresponding intercompany receivables, the guarantee is provided on arm’s length terms and to support the corporate benefit analysis.

Dutch B.V.s are not subject to a statutory financial assistance prohibition and can, in principle, guarantee and secure debt incurred to fund the acquisition of their own shares, subject to compliance with general corporate law principles (corporate benefit, distribution rules and, following a merger or debt push-down, the balance sheet and liquidity tests applicable to B.V.s). Dutch N.V.s remain subject to a statutory financial assistance prohibition in section 2:98c of the Dutch Civil Code: an N.V. may not, with a view to the acquisition of its shares by a third party, provide security, guarantee, or otherwise bind itself jointly and severally. The N.V. prohibition cannot be cured by a procedure under Dutch law. Guarantees or security granted by the target in breach of the financial assistance prohibition are null and void. This could be addressed by converting the target N.V. into a B.V. prior to or shortly after closing, or by post-closing merger and subsequent debt push-down structures once the financial assistance rules no longer apply.

Aside from the corporate benefit, financial assistance and formality requirements noted above, the following points are commonly relevant.

• Works council consent – under the Dutch Works Councils Act (WOR), a company with a works council must seek the works council’s advice, including but not limited to the following situations (i) borrowing a material credit, (ii) securing or guaranteeing significant credit of another entrepreneur within the group, and (iii) a (conditional) transfer of control over the enterprise as a part of the transaction – eg, as a result of enforcement of a right of pledge over shares. Non-compliance with the WOR does not affect the validity of the finance documents but exposes the borrower/guarantor to a proceeding before the Dutch Enterprise Chamber commenced by the works council which may result in an obligation to reverse or postpone the transaction.
• Hardening and avoidance risk – Dutch law has no formal “hardening period”, but transactions can be set aside on the basis of the actio pauliana (please see 7.5 Risk Areas for Lenders and 7.6 Transactions Voidable Upon Insolvency), with an elevated risk for transactions concluded within the year preceding insolvency on the basis of fraudulent preference.
• Retention of title – retention of title (eigendomsvoorbehoud) and extended retention of title clauses are recognised under Dutch law and can affect the pool of assets available to a pledgee (in particular in respect of inventory financed by trade creditors).
• Anti-assignment provisions – contractual anti-assignment and non-pledge clauses have historically been enforceable under Dutch law with proprietary effect. As of 1 July 2025, the Dutch Act on the Abolition of Pledge Prohibitions applies (please see 3.6 Recent Legal and Commercial Developments): contractual bans on assignment or pledge of receivables arising from a business or profession are now null and void, save for certain categories (in particular bank account receivables and receivables arising under syndicated loans). This significantly enlarges the pool of receivables available as collateral to private credit lenders.

Dutch security rights are accessory in nature: in case of an assignment of secured obligations they follow to the transferee and in case of termination they terminate together with the secured obligations. Upon full and irrevocable discharge of the secured liabilities, the security automatically ceases to exist, but in practice formal release documentation is executed for evidentiary purposes and for third-party registers as well as to terminate all contractual obligations in connection with the security interests. For clarity purposes, in case of a partial release under a security document with other security rights remaining in place and secured obligations not being fully terminated, a partial deed of release is entered into (for example in the event of the disposal of an asset in the ordinary course of business). A Dutch deed of release can be included in a global deed of release governed by the laws of another jurisdiction, as long as the security interest and contractual rights release provisions are governed by Dutch law.

Rights of pledge are typically released by a deed of release signed by the pledgee and pledgor, or by way of a release letter (if explicitly permitted under the security document) followed by an annotation in the shareholders’ register and with respect to a disclosed pledge over receivables, movables and bank accounts, a notice to the relevant debtor or account bank. IP pledges are released with corresponding deregistration in the IP registers. Mortgages are released by a deed of release with subsequent deregistration at the Land Registry on the basis of a deregistration power of attorney granted to the Dutch notary involved.

Dutch law permits multiple ranking security interests over the same asset. Priority as between rights of pledge and mortgage is determined by the moment of creation in chronological order: earlier-created security ranks higher than subsequent security. Parties may contractually agree a different priority between themselves (contractual subordination).

Subordination is generally implemented through a combination of contractual subordination in an intercreditor agreement (rank, payment and enforcement subordination), turnover provisions requiring the junior creditor to pay over any recoveries received in breach of the subordination to the senior creditor and where the parties wish to alter proprietary priority of the security interest, a variation of rank of the security itself. Contractual subordination arrangements are, in principle, respected by a Dutch bankruptcy trustee provided they have been validly entered into and are enforceable in bankruptcy against the subordinated creditor.

A number of statutory claims can rank ahead of, or effectively prime, a lender’s security under Dutch law. The most material are:

• certain claims of the Dutch tax authorities, which benefit from a general statutory preference over movable assets (bodemvoorrecht) and can prime an undisclosed pledge over movables located at the debtor’s premises;
• employee wage and pension claims to a limited extent; and
• he costs and remuneration of a bankruptcy trustee and estate costs, which are paid from the estate in priority to unsecured creditors and, in respect of assets sold by the trustee, from the proceeds of secured assets.

Common intercreditor terms for Dutch second-lien structures typically include payment and enforcement subordination, standstill periods, senior creditor control of enforcement, turnover of receipts, an obligation not to challenge senior security, permitted purchase (buy-out) rights for the second lien at par and release provisions ensuring the second-lien security is released automatically when the senior security is released upon a permitted enforcement or restructuring.

Cash pooling is a common cash-management feature for Dutch groups. In private credit transactions, the cash pool is typically operated by a commercial bank alongside the private credit facility. The cash pooling bank’s claims can be secured by a first-ranking pledge over the pool accounts and benefit from set-off rights under the pool documentation. In the intercreditor agreement, the cash pooling bank’s claims (together with any secured hedging and cash management claims) are commonly given super senior priority in the payment waterfall up to an agreed cap, ranking ahead of private credit on enforcement proceeds but subject to the private credit lenders retaining control of enforcement. Secured hedging obligations are typically treated in the same manner: the hedge counterparty accedes to the intercreditor arrangements as a super senior secured creditor up to an agreed hedging cap, with close-out amounts calculated on a customary basis and voting rights limited to matters directly affecting the hedge.

Dutch law does not recognise the common law concept of a security trustee holding proprietary security on trust for a fluctuating class of lenders. To enable a single security agent to hold Dutch security for a syndicate, market practice is to use a parallel debt structure: the borrower and each obligor covenant to pay to the security agent, as an independent and separate obligation (the parallel debt), an amount equal to the aggregate obligations owed to each of the finance parties under the finance documents. The Dutch security is granted to the security agent to secure the parallel debt and the security agent holds and enforces that security in its own name. The validity of the parallel debt structure is well established in Dutch market practice.

Since the security secures the parallel debt owed to the security agent, transfers of participations amongst finance parties do not require the Dutch security to be re-taken; the security continues to secure the parallel debt regardless of changes in the underlying lender group. Where a new lender accedes, it accedes as a finance party under the loan agreement and intercreditor agreement and its economic entitlement is captured through the intercreditor mechanics.

A secured lender can enforce its Dutch security following the occurrence of an event of default and, in most cases, service of a demand and notice of enforcement on the debtor. To become enforceable, a payment default is required under Dutch law. There is no statutory requirement for the secured creditor to be a bank or a regulated entity and the enforcement remedies available under Dutch law are equally available to private credit lenders.

The statutory method of enforcing a mortgage is public sale. As an alternative, the pledgee or mortgagee may apply to the competent Dutch district court for permission to sell the collateral by private sale or by purchasing the mortgaged asset by way of enforcement at a court-determined price. Pledges over receivables and bank accounts are enforced by giving notice to the debtor of the receivable or to the account bank and collecting the receivable or account balance directly. Enforcement of a Dutch share pledge is typically effected through a private sale after obtaining court approval or, where the pledge deed so permits and the pledgor agrees, on the basis of an agreed private sale procedure. In practice, share pledge enforcement is a commonly used tool in Dutch private credit restructurings as it enables a rapid transfer of the equity of the operating group to the lenders or a lender-controlled acquisition vehicle, thereby delivering effective control over the business and preserving going concern value.

A choice of foreign law as the governing law of a commercial contract will generally be upheld by the Dutch courts pursuant to the Rome I Regulation, subject to Dutch overriding mandatory rules and public policy. A submission to a foreign court will be recognised in accordance with the Brussels I Recast Regulation (for EU member states) or the Lugano Convention (for Iceland, Norway and Switzerland) and, in respect of exclusive choice of court agreements, the 2005 Hague Convention on Choice of Court Agreements. Following the Court of Justice of the European Union’s judgment of 27 February 2025 (Lastre v Agora), asymmetric jurisdiction clauses remain valid under Brussels I Recast provided they contain sufficiently specific and objective factors to identify the competent courts within the EU or the Lugano countries.

Submission to arbitration is recognised under Dutch arbitration law and the New York Convention. A waiver of sovereign immunity is generally enforceable in the Netherlands in commercial matters, subject to the customary limitations on execution against assets serving a public function.

Judgments rendered by the courts of another EU member state are recognised and enforceable in the Netherlands under the Brussels I Recast Regulation without a review of the merits. Judgments of courts in Iceland, Norway and Switzerland are enforceable under the Lugano Convention on comparable terms. Judgments of courts of states party to the 2005 Hague Convention on Choice of Court Agreements or the 2019 Hague Judgments Convention are enforceable in accordance with those instruments.

For judgments from other jurisdictions in the absence of a treaty, a Dutch court will not automatically recognise the foreign judgment but will in principle give effect to the judgment without a retrial on the merits, provided that the foreign court had jurisdiction on internationally acceptable grounds, the judgment was rendered following proper proceedings that satisfy the requirements of due process, recognition is not contrary to Dutch public policy and the judgment is not irreconcilable with a Dutch judgment or an earlier foreign judgment eligible for recognition in the Netherlands. Foreign arbitral awards are enforceable under the New York Convention 1958.

In addition to the general recognition and enforcement framework, foreign private credit lenders should have regard to (amongst other things):

• EU and Dutch sanctions and AML rules, which may restrict payments to or from certain counterparties;
• FDI screening under the Vifo Act on enforcement of share security in sensitive sectors;
• potential works council information or advice rights on a change of control; and
• the impact of a Dutch bankruptcy, suspension of payments or WHOA proceedings on enforcement rights (see 7. Bankruptcy and Insolvency).

There are no legal restrictions specifically on foreign private credit lenders enforcing loan or security rights against Dutch obligors.

The timing of enforcement depends significantly on the type of collateral and the level of co-operation of the debtor. Enforcement of a pledge over bank accounts or receivables can be effected within days by written notice. Enforcement of a share pledge through a court-approved or agreed private sale typically takes between four and 12 weeks, depending on the availability of a purchaser and any need for court proceedings, valuation reports or works council advice. Enforcement of a mortgage over real estate through public auction generally takes several months. Contested enforcement, or enforcement combined with WHOA or bankruptcy proceedings, can extend timelines significantly (eg, as a result of cooling-off periods).

Enforcement can be expedited by using contractually agreed private sale mechanics or pre-agreed sale processes for share pledges, preparing a credit-bid or lender-controlled acquisition vehicle in advance and obtaining WHOA pre-approval for a restructuring or sale where appropriate.

Typical costs include notarial and bailiff fees, court fees, external valuation costs, legal fees and, where applicable, financial adviser and restructuring adviser costs. Costs can be minimised through early engagement with the debtor, use of consensual private sale procedures, and by including cost recovery undertakings in the finance and security documents.

Beyond legal formalities, practical considerations often shape enforcement strategy. These include:

• reputational considerations, particularly for lenders active in the Dutch mid-market;
• preserving the going-concern value of the business, which typically requires maintaining continuity of management, customers, suppliers and licences through enforcement;
• the risk of value leakage during a contested process (loss of key employees, customer attrition, supplier withdrawal);
• the availability and cost of new money to fund the enforcement process or rescue financing; and
• tax and regulatory consequences of taking equity through enforcement, including FDI implications.

Private credit lenders typically address these considerations by engaging early with the borrower and sponsor to explore consensual solutions before resorting to enforcement, preparing the enforcement toolkit (share pledge enforcement, WHOA, credit bid vehicle) in parallel with negotiations to preserve optionality, co-ordinating with any (super) senior creditors and hedge counterparties through the intercreditor arrangements, obtaining independent valuations to support the enforcement price and reduce challenge risk and structuring the post-enforcement holding vehicle in a manner compatible with the lender’s fund constraints.

Dutch law offers three principal in-court insolvency and restructuring procedures. Faillissement (bankruptcy) is the primary liquidation procedure, commenced by court order and resulting in the debtor being displaced by a court-appointed curator (trustee) who takes over management of the estate. Surséance van betaling (suspension of payments) is a moratorium procedure in which the debtor retains management subject to the consent of a court-appointed bewindvoerder (administrator), though it is largely limited in utility as it frequently converts into faillissement. Most significantly for restructuring purposes, the Dutch scheme of “WHOA” introduced in 2021 allows a financially distressed debtor to propose a court-sanctioned restructuring plan, including cross-class cram-down, whilst retaining full debtor-in-possession control, with the court able to appoint a herstructureringsdeskundige (restructuring expert) or observator (observer) if required.

As regards the impact on lenders’ enforcement rights, the position differs materially across procedures. In faillissement and surséance, unsecured creditors face an automatic stay on enforcement, but secured creditors enjoy the so-called separatistenpositie under Article 57 of the Faillissementswet, entitling them to enforce their pledge or mortgage as if no insolvency had occurred, subject only to a court-ordered afkoelingsperiode (cooling-off period) of up to four months. The WHOA represents the most significant development for secured lenders: upon request, the court may impose a moratorium of up to eight months that can extend to secured creditors, temporarily staying enforcement of security. Cross-class cram-down under the WHOA also means that a dissenting class of secured lenders can, in principle, be bound by a sanctioned plan, making robust security perfection and careful loan documentation essential for any private credit lender active in the Dutch market.

In a Dutch bankruptcy, creditors are in essence paid in the following broad order.

• Secured creditors enforce their pledge or mortgage directly against their collateral outside the general estate.
• Estate creditors (boedelschuldeisers), being post-bankruptcy obligations of the estate such as the curator's fees and ongoing operational costs incurred with co-operation of the trustee, are paid from the general estate.
• Preferential creditors, most notably the Dutch tax authority and the Dutch Employee Insurance Agency (insofar as it paid wages directly to employees and then steps into their position), are paid ahead of ordinary creditors.
• Ordinary unsecured creditors rank pari passu and in practice receive little to no recovery in the majority of Dutch insolvencies.
• Subordinated creditors and shareholders rank last, with recovery being virtually nil.

Creditors with valid retention of title can reclaim their goods directly and are frequently paid (either in part or in full) in going concern sale scenarios. Critical trade creditors are also often paid by the trustee as estate creditors or as a commercial necessity to preserve value in going concern insolvency transactions. This means that, notwithstanding their formal ranking, such creditor groups tend to fare considerably better in practice than their position in the waterfall might suggest.

Dutch insolvency proceedings vary significantly in duration and efficacy depending on the procedure used. A straightforward bankruptcy typically takes six to 18 months to complete, whilst complex cases involving litigation or cross-border elements can extend to five to ten years or more. A Dutch WHOA can be completed in as little as three to six months for well-prepared cases, with a practical outer limit of around 12 months. In terms of value preservation and creditor recovery, the picture is mixed: secured creditors with properly perfected security rights generally achieve the strongest recoveries by enforcing directly against collateral, though estate cost deductions and potential cooling-off periods can reduce net proceeds. Unsecured creditors, by contrast, face consistently poor recoveries in Dutch insolvency procedures.

Out-of-court rescue and reorganisation in the Netherlands operates entirely within the framework of Dutch contract law and corporate law, without any specific statutory regime governing informal workouts. In practice, distressed Dutch companies most commonly seek to restructure through negotiated standstill agreements and creditor workouts with the applicable intercreditor and facility agreements governing the mechanics of creditor consent and amendment. The most significant recent development is that the introduction of the WHOA in 2021 has substantially transformed out-of-court practice by giving debtors a credible cram-down threat, meaning that many restructurings are now resolved consensually out of court precisely because creditors are incentivised to agree reasonable terms rather than risk a court-sanctioned plan being imposed upon them via the WHOA.

In addition to a loss of control, insolvency risks for lenders in the Netherlands arise across several interconnected areas. A significant risk is the clawback regime (actio pauliana) which empowers the trustee to set aside transactions, including the grant of security, repayments of existing debt and amendments that improve a lender’s position, entered into prior to bankruptcy where prejudice to creditors can be demonstrated and knowledge of that prejudice existed. Lenders are also exposed to security perfection risk with any defect reducing the lender to an unsecured creditor. Even validly perfected security is subject to limitations. Most notably, a cooling-off period can erode collateral value in volatile or time-sensitive asset classes. The WHOA cram-down risk is a further material risk, as a dissenting class of secured lenders can under certain conditions be bound by a court-sanctioned restructuring plan provided the absolute priority rule and the best interest of creditors test are satisfied.

Via the Dutch actio pauliana the trustee can set aside pre-bankruptcy transactions that prejudiced creditors. Voluntary legal acts can be avoided where both parties knew or ought to have known that prejudice to creditors would result with knowledge assessed objectively and no fixed hardening period limiting the curator’s look-back. Obligatory legal acts attract a higher threshold requiring actual knowledge of a filed bankruptcy petition or deliberate consultation aimed at preferring one creditor over others. The Dutch bankruptcy code strengthens the trustee’s position by establishing statutory presumptions of knowledge in respect of certain voluntary transactions entered into within one year prior to the bankruptcy declaration, meaning that in specified circumstances, including transactions with related parties such as group companies and directors, the knowledge of prejudice to creditors is presumed without the trustee needing to prove it. This materially shifts the burden of proof onto the counterparty to rebut the presumption, making transactions significantly easier for the trustee to avoid.

Under Dutch law, set-off in insolvency is expressly recognised. The Dutch Bankruptcy Code permits a creditor of the insolvent estate to set off a debt owed to the estate against a claim on the estate, provided that both the debt and the claim arose prior to bankruptcy or arise from transactions entered into with the debtor before the declaration of bankruptcy. The right to set-off in insolvency is broader than the general civil law right of set-off, in that it does not require the claims to be presently due and payable at the time of the insolvency. A set-off can be contested by the trustee where the creditor acquired the claim or debt from a third party after the declaration of bankruptcy knowing of the debtor’s insolvent state. In such case, set-off will not be permitted.

A typical out-of-court restructuring in the Netherlands involves direct negotiations between the distressed borrower and its lenders, usually commencing with a standstill or forbearance agreement suspending enforcement rights whilst the parties negotiate a restructuring term sheet. Co-operation from existing equity holders is frequently required, particularly where the restructuring involves a debt-for-equity swap, share issuances or asset disposals requiring shareholder approval. The process relies entirely on contractual consent, meaning any holdout creditor or dissenting equity holder can block the restructuring unless sufficient commercial pressure can be applied or pre-agreed majority override mechanisms exist in the relevant documentation. The WHOA directly addresses potential holdout problems by allowing a confirmed restructuring plan to bind all creditors and shareholders within affected classes, including dissenters, provided at least one impaired class votes in favour and the best-interest-of-creditors test is satisfied. Key advantages over a purely out-of-court process include a cram-down of dissenting classes, restructuring or termination of onerous contracts, an automatic or court-ordered moratorium suspending individual enforcement actions, the ability to acquire assets free and clear of certain liabilities, providing certainty for distressed asset purchasers and cross-border recognition under the EU Restructuring Directive. The WHOA is available on a pre-insolvency basis requiring only that the debtor foresees an inability to continue paying its debts, thereby preserving going concern value.       

Out-of-court restructurings cannot bind dissenting lenders without their consent, making the WHOA the primary tool for non-consensual restructurings. Under the WHOA, dissenting creditors within a class and even entire dissenting classes can be crammed down, provided at least one impaired class votes in favour (by two-thirds in value) and the court confirms the plan. Dissenting lenders are in principle protected by the best-interest-of-creditors test, ensuring no dissenting creditor receives less than it would in a liquidation, the absolute priority rule preventing a dissenting class from being crammed down if a junior class retains value unless the dissenting class is paid in full (limited court-sanctioned deviations are permitted) and the right to challenge homologation on grounds of bad faith or procedural non-compliance.

Dutch law accommodates pre-arranged and pre-packaged restructurings primarily through the WHOA. A pre-arranged WHOA involves negotiating the restructuring plan with key creditor groups before formally commencing court proceedings, significantly compressing the timeline. For purely balance sheet restructurings where operational issues are absent the WHOA is particularly well-suited as it allows debt to be written down, converted to equity or rescheduled without disturbing trading relationships or triggering operational disruption. Consents required depend on the class structure, but two-thirds in value within each voting class is the statutory threshold. Dutch courts will generally enforce restructuring support agreements and lock-up agreements as binding contractual arrangements. A pre-packaged approach in combination with bankruptcy proceedings, whereby a business sale is negotiated and agreed prior to bankruptcy and executed immediately upon appointment of a trustee, is currently not or very limited in use in the Netherlands due to TUPE risks that arise following rulings by the European Court of Justice in several cases.