Nearly half of the children's image of child sexual abuse reported to the Internet Watch Foundation last year was hosted in the Netherlands, according to the organization.
It confirmed that in 2018 more than 105,000 web addresses were associated with illegal images, with 47% of the content being hosted in the Netherlands.
It warned that the country would become a "safe haven for child sexual abuse".
The Dutch government has recognized and committed to tackling an increasing number of reports of child abuse images.
This material should be "deleted from the Internet," it says in early 2018 in a report.
What was in the report?
The IMF is an independent organization that allows people to report illegal images of child abuse they find online.
The organization works with websites, social networks and law enforcement agencies to get the pictures taken and examined. Since 1996, more than one million reports have been evaluated.
In its annual report, the IMF said that by 2018, 105,047 web addresses will host images of child sexual abuse.
This is a significant increase compared to 2017. According to the IMF, improvements to its technology have allowed it to detect more illegal images.
Susan Hargreaves, IMF Chief Executive, said Britain has created a "hostile environment" for people who want to share illegal images.
Only 0.04% of the images reported in 2018 were hosted in the UK.
However, Mrs Hargreaves said that the Netherlands needed to "get up and do the right thing".
Much of the reported photos – 82% – were found in image hosting services, not on social networks or on private websites.
Some of these services are based in the Netherlands, where there are low costs for web hosting.
The IMF declined to name one of the image-sharing sites found to host child abuse images. She told the BBC that she works with companies to ensure content is removed.
She said she also offered her support to the Dutch organization, which is responsible for dealing with illegal imagery in the country.
The number of images hosted in the US is lower because US tech giants like Facebook are quickly removing them before reports reach the IMF.
Interior Minister Sajid Javid welcomed the IMF report. He said it was one of his "personal missions" to take pictures against sexual abuse of children.