The Netherlands is one of the main import/export locations in Europe. With its exceptional infrastructure and major ports, such as those in Rotterdam and Amsterdam, this country is a great place to set up a trading business. Those companies who engage in international trade will have easy access to Europe and the rest of the world because of the Netherlands’ particular geographical and infrastructural advantages.

Trading companies in the Netherlands

Trading companies engage in a wide variety of business activities, including but not limited to importing and exporting; wholesaling; buying and selling; the intermediary sale or purchase of goods; and assisting and counselling other companies in sourcing their supplies.

Dutch trading companies do not have to limit themselves to importing or exporting just one type of item. They can easily diversify their business to suit market conditions anywhere in the world. Trading companies can also specialize in a specific type of product if they desire. Anything from food products to health and beauty items can be traded from a base in the Netherlands.

Trading companies in the Netherlands can also set up their offices in whichever Dutch location they feel would be best for them. They can take advantage of the opportunities in larger cities, like Amsterdam or The Hague. Or, they can set up a shop in one the Netherlands’ smaller cities. All locations will benefit from the same transportation and communication infrastructure that make the Netherlands such a great place to do business.

Setting up a trading company in the Netherlands

An investor who wants to set up a Dutch trading company can either open a branch of an existing international company or create a new legal business entity based in the Netherlands. Opening a branch is easier, but it does not offer as much flexibility as creating a new entity. In terms of potential liability, forming a Netherlands company is also a better option.

Like many other types of businesses, trading companies must also acquire special permits and license in order to operate legally in the Netherlands. There are also rules and regulations regarding the import and export of controlled goods that have been imposed by the Dutch government and must be followed carefully. We can assist you in acquiring all necessary licenses and permits so that your trading company can operate legally. We can also advise you about laws that may affect the types of goods you wish to trade and distribute, and tell you what you must do to follow them.

Our agents in the Netherlands can walk you through the entire process of forming a Dutch trading company. We can assist you in choosing a company name, preparing the necessary documents to form a company, and registering the new business with the Dutch Company Register.

Please contact our Dutch agents to find out how to open a trading company in the Netherlands. We are also happy to discuss with you general details about investments in the Netherlands.

The Dutch company register

Every company that does business in the Netherlands is listed on the Dutch Company Register, also known as ”Chamber of Commerce”, ”Dutch Trade Register” and ”Dutch Business Register”. The available information for each company includes the name and address of the business, telephone number, the number of employees, and details about the company’s representatives. You can also find out financial background such as any bankruptcies that may have occurred in the history of the company. Most of the information found on the Chamber of Commerce is free of charge, yet, financial statements, documents that have been filed on behalf of the company, history of the company, and corporate relationships are among the extras that can be purchased.

How to register in the Dutch trade register

The process of becoming registered can be fairly simple with the help of Intercompany Solutions. You must have the deed of incorporation, shareholder’s details, details about the company’s managers, bank references about the deposited share capital, and authorization for Intercompany Solutions to act on your behalf. Once all of this information is gathered and submitted you will be issued an access code. Only people with access codes are able to view the information contained in the Netherlands Trade Registry.

Before you can be registered with the Dutch Company Registry, however, you must complete the necessary forms to obtain approval for your company name. This will ensure that you are legally allowed the rights to the company name you wish to do business under. Intercompany Solutions can also help you submit your company name to the Dutch Company Registry for approval. Intercompany Solutions can assist you with registering at the Dutch trade register. Most commonly for a Dutch company registration would be a B.V. company, a BV needs to be registered at a Dutch Notary. The registration in the Chamber of Commerce finalizes the process of your Dutch business registration.

Netherlands company register online

Whether you are a natural-born citizen or a citizen of another country that is looking to open a business, the Netherlands can suit you well. Due to the bilingual capabilities of most residents, the Dutch Chamber of Commerce is also set up with a bilingual website. English and Dutch versions of the site are available to create ease of use by people even beyond the borders of the Netherlands. This adds to the user-friendly website that makes information easily accessible in both languages. Another key feature to the website is the ease of payment for any additional information you may want to obtain. Online payment is available by using your credit card or iDeal and you can also choose to use direct debit from your bank account.

Dutch Business Register Services

Intercompany Solutions can help with every step in the process of setting up your new business. We can help you with applying for local banking, company establishment, and local representative services if you are working out of the country. Once your business is up and running we can also be of service when it comes to bookkeeping and taxation. Leaving the heavy lifting up to us allows you to focus on the more important aspects of the business. Our full-service package consists of:

• Opening a Dutch BV company (1-2 working days)
• Opening a Dutch Company Bank account
• Assisting services in the first year
• Obtaining VAT number

Media

Are you looking for effective ways to expand your company internationally? And would you like to acquire a foothold in the European Union (EU) area? Setting up a Dutch company will provide you with all these opportunities and many more substantial benefits. Trading from the Netherlands is a near-guarantee for success due to the strategic position of the country and the presence of Schiphol airport and the port of Rotterdam. Import and export businesses are currently thriving due to digitalization and the constant increase in online shopping. If you would like to profit from these changes, setting up a Dutch trading company in current times is a very lucrative decision to make. But it’s not just trading that the Dutch excel at; the Netherlands brings opportunities in almost every sector imaginable, mainly due to the country’s fixation on constant innovation and progress. Thus, there is always demand for foreign investors and entrepreneurs because of the fresh perspective foreign individuals bring. Would you like to be a part of a thriving and vibrant business climate whilst simultaneously expanding your business within the EU? Then the Netherlands is one of your best bets.

On this page, we will explain:

• What a Dutch BV is and why this legal entity is so immensely popular
• Why the BV is a great choice for every entrepreneur
• What you need to set up a Dutch BV in just a few business days
• How to comply with Dutch laws and regulations
• How to turn your Dutch business into a success

The Dutch BV company explained

Foreign entrepreneurs and international companies starting new activities in the Netherlands set up a Dutch BV company in almost all cases (99%), due to the benefits this legal entity has to offer. Intercompany Solutions can assist you with the entire incorporation process of a Dutch BV from A to Z. The Dutch BV company is similar to the English Ltd. or the German GmbH company.  The private limited liability company is also the most common type of legal entity to establish a holding structure in the Netherlands, which can offer many (financial) benefits. The main advantage of a Dutch BV is the limited liability any director or shareholder enjoys. This means that you cannot be held personally accountable for any debts you might create with the company.

Some main characteristics of the Dutch BV:

• Only a minimum share capital of €1 is required to officially establish a Dutch BV
• The shareholders are only liable for the amount paid as share capital, not for any company debts
• The issuing or transferring of shares requires permission from the shareholder(s)
• The shareholders are registered in the Dutch company register
• A foreign company, local company or natural person may be the shareholder or director of the Dutch BV
• Amendments to Dutch Business Law have made it much simpler to incorporate a Netherlands BV, reducing the cost of company formation in Holland greatly

The Netherlands” Flex BV”

• Because of the popularity of private limited liability companies, the Dutch government in 2012 decided to simplify the regulations for the establishment of Dutch BVs. The current BV companies are known by law as so-called ‘Flex-BVs’, which is due to the higher amount of flexibility when incorporating a new BV. The flex BV has the same status and traits as the older regular BV company; however, it is easier to form a Flex BV. This is mainly due to the required deposit of share capital for the Flex BV, which is only €1. Before the regulations were reformed, the required capital was €18.000, which made it very difficult to establish a Dutch BV for many starting entrepreneurs.

Differences between a Dutch BV and NV

Next to the private limited liability company, another legal entity in Holland is the public limited liability company, also known as a Dutch NV. Even though these two types of companies seem similar in many ways, there are still some very significant differences between them. If you are contemplating starting one of these two types of companies, you should at the very least consider the following differences:

In general, the private limited company is somewhat more accessible for starting entrepreneurs and people who are looking to start a new company without investing large sums of money during the establishment stage. Not every entrepreneur has ample investment opportunities, making the BV a great choice for every type of business. If your company grows rapidly, and you would like to go public at some point, you are always able to convert your BV into an NV at a later stage.

What is involved in company formation in the Netherlands?

If you want to establish a BV in the Netherlands, you need at least one founder. This can be a Dutch or foreign entity or a natural person, depending on your preferences. Dutch business law allows the newly formed Netherlands BV to be formed with one or more directors, who may or may not be shareholders as well. If you are the only one who establishes the company, then you will be the director-shareholder (DGA in Dutch) once the company is incorporated. You will need to provide us with a valid form of identification to prove who you are. The main advantage of a Dutch BV company is the minimum share capital of €1. Most entrepreneurs, however, opt for a share capital of €100 consisting of 100 shares of €1. So, you will have to add the share capital to your start-up costs.

Next to that, you need a unique company name that reflects the type of business you want to establish. Please make sure that there are no other companies currently operating under the same name, since this might be considered copyright infringement. Also, make sure that your name and logo aren’t an almost exact copy of another brand, since this might get you into trouble as well. As we will discuss later on, we will also check the availability of your preferred name for you. Another main requirement to set up a Netherlands BV is to have a local business address. You can achieve this by renting an office space, or by acquiring a virtual business address with a third party. You won’t be able to establish a Dutch company without a legal registration address in the country.

The main steps to establish a Dutch BV

If you have a solid business idea and want to take action immediately, it’s important that you collect all the necessary documentation for us to handle your establishment request. If you are the only entrepreneur involved, you will thus only need to collect information about yourself. If other people are involved, you will all need to send us the required documents. These always include valid forms of identification for all people involved. A public notary will draft the articles of association (AoA) of your future company, together with the official deed of incorporation. The official documents in Dutch should contain information on the management board, shareholders, the company’s business activity, the share capital as well as the registration address. After drafting the articles of association and the formation deed, the procedure for registration will start. The main steps of this overall process include:

• Verifying the availability of the company name and reserving the preferred name
• Validating all identification documentation
• Collecting due diligence documentation to send to the incorporation agent
• Submitting the notarized statutory documents and deed of incorporation
• Registration in the trade register of the Dutch Chamber of Commerce
• Registering with the tax authorities to obtain a VAT number
• Opening a bank account to deposit the company’s share capital

After all these steps have been taken, you can finally start your business activities.

Opening a bank account for your Dutch BV

It is essential for every BV in the Netherlands to have a corporate bank account. The bank account can be set up immediately after the company is formed. Once the bank account is set up, the company’s share capital can be transferred. The bank account is necessary to perform day to day business activities and for the share capital deposit. It is recommended to set up a Netherlands BV company to obtain a Dutch bank account, since it might be very tricky to open an account without registering a business beforehand. In almost all cases, the company bank account can be opened remotely. Intercompany Solutions can assist you with this, amongst other extra services.

VAT Registration

It is highly recommended and also obligated for most businesses to perform a VAT registration. With an active VAT number, the company does not need to charge any VAT for transactions between Member States of the European Union. Next to that, you can claim back VAT that you paid for products and services that are related to your business or can be seen as business costs, such as rent, purchases of stock and inventory. You need to submit a quarterly report to the Dutch Chamber of Commerce to report the VAT that you paid and spent. Also note that the first financial year of the company may be an extended fiscal year. This is convenient when you start a business in the middle of the year, for example, on the 10^th of June 2022. In such cases, your first fiscal year is from the 10^th of June 2022 until the 31^st of December 2023. This does not necessarily have consequences for your quarterly VAT return, but it does influence your annual fiscal obligations, since you will file your first annual tax return after 1,5 years instead of 1 year. Please contact us for more information on the subject,

Do you need to apply for any Dutch business permits?

Certain company activities require permits or licenses granted by the government or supervising authority. In most cases, the licenses can be arranged easily. The most difficult licenses are connected to financial services or the payment industry, if you require assistance in obtaining such a permit, you can contact us for more information. Some sectors that require permits or special licenses are:

• Financial licenses for payment processing companies, investment firms or financial services
• Employment agencies need to be licensed with a branch organization
• Crypto platforms may or may not require licensing, depending on the exact business activity
• Import and export companies will require an EORI registration, which can be accomplished within 1-2 weeks
• All bars and hotels require a local municipality license to perform their business activities
• Certain types of shops are regulated, such as stores that are open during the night and sell alcohol, for example.
• Food and cosmetics businesses may be subject to licensing to comply with certain national and international health codes and consumer protection
• Transport companies often also require licenses
• If you work with toxic chemicals or other substances that might be hazardous to health and safety, you will probably need special permits as well

If you want to make sure whether you need a permit for your business activities, it is wise to consult the appropriate media to find out. The websites of the Dutch government can generally lead you in the right direction. From 2024 on, there will be only one website for permit applications, which will make the process substantially easier. The new Environmental Act will make it faster and easier for entrepreneurs and citizens to apply for a permit. Consider, for example, a building or felling permit. You submit only one application and receive only one decision. You should also be able to expect a decision more quickly—within 8 weeks instead of 26 weeks. The new Dutch law replaces 26 existing laws and will come into effect on January 1, 2024¹. Once the website is online, we will post this in a separate article.

The many advantages of a Dutch BV company

The Netherlands BV is a very flexible and competitive legal entity that basically suits almost every entrepreneur’s needs. As we already mentioned earlier, a staggering 99% of our clients choose to incorporate this specific legal entity, and for good reasons. It has many advantages and can be used for different purposes. The most popular and interesting benefits of establishing a Dutch BV are:

• Dutch BV companies are able to function as directors and shareholders of other companies, which can create the opportunity for some very lucrative investments
• The Dutch BV may also function as a subsidiary for a foreign company, since it is allowed to have a foreign company as a director. This means you can open a Dutch BV to function as your operational company overseas
• The BV company is very reputable in international trade and well-respected, which will undoubtedly boost your image as an entrepreneur
• The Dutch BV has one of the lowest tax rates in Western Europe and extremely low start-up capital that is needed for company establishment
• Owning a Dutch BV provides you with access to all markets within the EU due to the European Single Market
• Due to the strategic position of the Netherlands and the port of Rotterdam and airport of Schiphol being in proximity, a BV offers you an ample number of options to trade internationally
• A BV may be formed within just a few business days, with little to no restrictions
• A BV may be formed and operated by non-residents, including citizens from non-EU Member States
• A Dutch BV can be set up as a holding structure, which makes it even easier for you to manage liabilities and transfer profits in the form of dividends.

These are just a few examples of the benefits of owning a Dutch BV, but in practice, there are many more. If you would like to know more about the Dutch BV and what it can offer you, please feel free to contact Intercompany Solutions. We can discuss the personal opportunities this legal entity has to offer you and how it might benefit your potential for success.

Taxation of a Dutch BV

The Netherlands has established more than 100 international tax treaties. This is a much larger number compared to any other nation in the world. The Dutch BV is deemed a resident of the Netherlands by law, however, a local business address is always needed, as we briefly discussed above. Incorporated companies that are registered for taxation have to pay corporate income tax on the profits, the corporate tax rates range from 19% up to €200.000 profit and 25.8% for all amounts above this number. In the coming years, the Netherlands is planning to lower its corporate tax rates to appeal to more foreign companies. The VAT rates are 9% for the lower rate and 21% for the upper VAT rate. The rates depend on the activities for which VAT is charged. (9% VAT for the lower VAT rate is valid since January 1, 2019). Netherlands-based companies need to pay tax on their worldwide income, nonresident companies only need to pay tax on certain incomes. Also, note that there is a 0% VAT rate, for example, when you do business within EU member countries. Some specific activities are also exempt from VAT. If you want to hire staff or pay yourself a salary as the director-shareholder, you will also have to pay income taxes. The relevant percentages vary between 19.03%, 36.93% and 49.50%, depending on your current age and the amount of annual salary you pay yourself or your employees².

Legal obligations for owners of Dutch private limited liability companies

Once you are the proud owner of a Dutch BV, keep in mind that you are tied to several legal obligations to keep your business running correctly and consistently. For example, you are obligated to publish annual statements. Publication of the annual statements of the Dutch BV is subject to a few requirements. This includes, among other things, the notary deed of incorporation, the share capital and details on the directors and board members. The incorporation deed provides information on internal processes and decision-making within the company, such as the responsibilities of the directors and the rights and obligations of the shareholders. The shareholders may vote to appoint the director(s) of the company. Larger corporations may also have board members, this is generally the case above a specific amount of profit annually or when the total number of staff that work for your company exceeds 50. The majority shareholder(s) and directors are registered to be affiliated with the company in the Dutch Chamber of Commerce.

Annual reporting requirements for Dutch BV’s

The Dutch BV is obligated to prepare annual financial statements for its shareholders. The annual statements have to be prepared according to the rules and regulations written in the civil code of Dutch company law. Annually, the company is required to publish a limited balance sheet, which is usually executed by your accountant. Stricter auditing requirements are necessary for companies that have:

• Over 12,000,000 EUR turnover per year,
• a balance sheet of over 6,000,000 EUR, or
• more than 50 employees.

The publication of the annual statement needs to be made at the Company Register of the Dutch Chamber of Commerce. This publication needs to be made within 13 months after the end of the fiscal year. When you exceed this timeframe, the director(s) can be held liable in the event of a late publication. Every year, the shareholders should hold a general meeting. The purpose of the meeting is to discuss the annual report and review the management’s performance. These general meetings between privately owned companies are generally very informal events, as shareholders are quite familiar with each other and do not see a need to keep official notes of the meeting.

Contractual obligations

Furthermore, if your company also has employees, keep in mind that you will need to comply with all Dutch employment laws. This involves quite some requirements, such as being able to adhere to minimum wage requirements, drafting correct and proper employment contracts that are in line with the market you operate in, offering a healthy and normal work environment and following all legal regulations that are related to matters such as working hours, leave and termination of the contract. There are plenty of sources online to check on such matters, but we strongly advise hiring a lawyer or specialist in employment law. Next to contracts with employees, Dutch BVs also regularly enter into contractual agreements and therefore obligations with others, such as companies and clients. You need to ensure that you meet all obligations that are outlined in these contracts if you want the other contracted party to comply as well. Not meeting such obligations will seriously damage your professional image and might also expose you to legal issues with third parties. It is always best to avoid such scenarios.

Other noteworthy legal obligations

There are some other separate obligations you should familiarize yourself with. If you want to change something in the structure or management of your BV, then this should always be reported to the Dutch Chamber of Commerce, if the change is significant enough. This includes changes to the registration address of your company, changes in the board of directors, and any changes to the AoA. Next to that, you should also consider data protection under the General Data Protection Regulation (GDPR)³. If your company processes any data, which is almost always the case since you deal with personal details of clients and business partners, then you need to comply with this regulation. This mainly involves ensuring the security and privacy of personal data, including obtaining consent for the processing of this data and fulfilling all other GDPR requirements. You can read more about the GDPR in this article on our website. Furthermore, consider the possible need to comply with certain national and international environmental regulations. This largely depends on the nature of your business. Compliance could include obtaining certain permits, a specific way of dealing with raw materials and waste, and general adherence to legal guidelines in order to minimize the environmental impact of your business.

Assisting entrepreneurs with compliance

Intercompany Solutions can assist your company with compliance and adherence to all necessary laws and regulations. Besides filing all annual financial statements, ensuring compliance with financial regulations is crucial. This includes proper accounting practices, maintaining financial records, and compliance with any industry-specific financial regulations. If you do not comply, the consequences can be very severe. Intercompany Solutions is specialized in assisting and setting up Dutch companies for foreign entrepreneurs. Some possible services we offer that can help you navigate all obligations and stay compliant with Dutch law are, for example:

• Appointing a corporate secretary who manages activities such as acquiring a local bank account
• Applying for a VAT and EORI number
• Maintaining all company documents
• Assist you with all legal and financial inquiries
• Administrative and secretarial services

The director(s) and/or board of the company are responsible for fulfilling the tax obligations and maintaining proper accounting. The Netherlands BV company needs to file several different tax returns, either annually, quarterly or monthly. This generally depends on the size and scope of the company itself. Our advice is to hire a professional accountant if you have a large company or corporation, as this can save you an immense amount of time and effort. Plus, it will eliminate any risks regarding compliance beforehand. Next to that, all laws and regulations may change over time. In such cases, seeking professional advice ensures that you are always compliant with the latest requirements.

About Intercompany Solutions

Operating since 2017, our company has helped thousands of clients from 50+ countries set up their businesses in the Netherlands. Our clients range from small business owners opening their first company to multinationals opening a subsidiary or branch office in the Netherlands. Our experience with international entrepreneurs has allowed us to perfectly adjust our processes in order to ensure the rapid and successful establishment of your company. Customer satisfaction is guaranteed for all the services we offer.

Take a look at some of the services we offer:

You can choose which services you wish us to conduct. In some cases, multiple packages will be necessary, while in other cases, you might only need some advice or a single service. Please always feel free to contact us with any queries you might have, and we will do our best to answer your questions to your complete satisfaction.

Sources:

[1] https://www.kvk.nl/wetten-en-regels/nieuwe-wetten-en-regels-voor-ondernemers-vanaf-2024/#plek

[2] https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/prive/inkomstenbelasting/heffingskortingen_boxen_tarieven/boxen_en_tarieven/overzicht_tarieven_en_schijven/

[3] https://gdpr-info.eu/

BV Incorporation FAQ

Our Dutch incorporation agents can help you start a business in the Netherlands. 

Open a STAK Structure in the Netherlands

A STAK structure (Stichting Administratiekantoor in Dutch) is a type of Dutch Foundation available in the Netherlands. It is a voting trust foundation, but there are no shareholders or share capital, which makes the entity slightly different from other corporate structures.

To create a Dutch STAK foundation you must acquire a notarized deed written in the Dutch language. This deed will state the name of the foundation, the primary activity of the foundation, and the names of the directors, among other requirements. No government authority is involved in the creation of a STAK and it acquires full legal capacity solely through its creation.

Characteristics of the STAK Structure

A STAK foundation can be used to buy shares of other companies. The STAK must then issue exchangeable depositary receipts to the owner of the shares. The STAK thus enters into an agreement with the owner of the shares, transferring legal ownership of the shares to the STAK, while the original owner maintains economic ownership of the shares. In this way, the original owner of the shares (now the depositary receipt holder) will receive any dividends from the stock, even though he or she is no longer the legal owner of the shares.

The directors of a STAK are not usually liable for the debts of the foundation, though there are some exceptions to this rule. For instance, they can become liable if administrative procedures were not followed correctly.

A STAK structure can also acquire and manage assets in its own name. Then it can issue certificates to the directors attesting to the economic value of the foundation’s assets. These certificates are binding and enforced by contract.

The main regulatory document of a STAK structure is the trust conditions document. This establishes the legal relationship between the STAK and the depositary receipt holders. There is no one way to draft a trust conditions document since each STAK is formed for a different purpose. The only rule one must follow when drafting this document is that it must conform to Dutch contract law.

Benefits of the STAK Structure

The STAK structure was first created as a way to promote charitable or non-profit foundations. It has now become more well known as a legal form of asset protection. This is because the STAK structure separates legal and economic ownership of stock in other companies.

There are also tax benefits to forming a STAK. First, holding investments in a STAK is not considered a business activity, and a STAK is taken as transparent for country’s tax purposes. Therefore, it is not a subject to the Dutch corporate income tax. If the depositary receipt holders do not live or conduct business in the country, and their investment are not actually located in the country they would not be a subject of the Dutch tax liability on profits or capital gains.

The STAK structure limits disclosure of ownership since the STAK itself is the legal owner of shares. It can also function as an inheritance planning vehicle.

Media

Intercompany Solutions CEO Bjorn Wagemakers and client Brian Mckenzie are featured in a report for The National (CBC News) ‘Dutch Economy braces for the worst with Brexit’,  in a visit to our notary public on 12 February 2019.

Contact us

If you would like to receive more information about the STAK or it’s possibilities, please contact our Dutch agents. Our incorporation agents can assist you in selecting the correct foundation or STAK structure for your needs.

You can also check find our article on starting a Dutch foundation. For more information on the other types of the Dutch foundation.

Starting a Dutch Foundation

Thanks to the Netherlands’ loose government regulations and minimal taxation burdens, as well as their fair international codes, the Netherlands, provides entrepreneurs with a unique location to build a prosperous enterprise. If, however, one is unaware of the appropriate steps needed to found a Dutch foundation, they may easily breach the country’s guidelines and procedures. In this article, we will detail all necessary topics to know prior starting a foundation in the Netherlands.

What is a foundation?

A foundation is a private legal entity, not associated with the government, that has no members and in which the revenues are used for non-profit purposes, such as a charity fund.

Unlike other Dutch companies, foundations within the Netherlands do not have to follow the regulations of the Dutch Commercial Code. They belong to the Civil Code. The Civil Code provides foundations with the opportunity to be recognized as a separate, legal identity, distinct from its founder(s). When under the Civil Code, no shareholders can be acquired, and profits must be used for non-commercial purposes if registered as a Special Purpose Entity.

Read here on other company types in the Netherlands. 

Taxation on foundations

Dutch foundations are a peculiar organization when it comes to Dutch tax regulations. While they are an enterprise, they differ from businesses as their profits aren’t used to accumulate personal wealth, but rather to give back to the community in some way. This is the reason why the Netherlands provides foundations with options to choose how their taxes will be mandated. The options are broken down into two paths: special purpose entity or commercial registration.

The Dutch STAK foundation

The Dutch STAK is a legal entity that differs from a regular foundation. The STAK foundation is formed to hold the shares of a private company. By using the STAK to hold the shares, you are able to separate the economic ownership from the voting rights. This feature of the STAK could be useful for estate planning, where the heirs can receive economic benefits, without having voting power in the company.

If you would like to receive more information on Dutch Foundations, please contact our local incorporation agents.

There are several types of legal entities (rechtsvormen) that entrepreneurs can establish in the Netherlands. They can be classified into two groups: Incorporated (compulsory legal form) and unincorporated (legal form is not mandatory).

Our Netherlands-based company formation agents can assist you in selecting the correct company type for your business.

Incorporated business structures (Rechtvorm met rechtspersoonlijkheid)

Incorporated businesses must have a legal form (i.e. a corporate personality or legal entity) represented by a deed prepared by a notary. This form protects the owner from potential debts incurred by the company.

In the Netherlands there are five types of incorporated structures:

1. The Dutch Private Limited Company (BV)

Dutch: Besloten Vennootschap

Private limited liability companies are the most common form of companies within the Netherlands. It is similar to the German GmBH, the American LLC, or the English’s Ltd. Limited liability companies are businesses in which equity is divided by shares. The private limited company Dutch BV is commonly employed by entrepreneurs investing in the Netherlands. The Dutch company act is renewed, therefore a Dutch BV no longer requires a minimum capital deposit. One shareholder is the minimum requirement for a Dutch BV and the liability is limited to the capital deposited. The shares of the Dutch BV are transferable by notary deed.

2. The Dutch Public Company (NV)

Dutch: Naamloze Vennootschap

The Netherlands public company or NV is the most popular legal form for companies who may be listed in the public Stock Exchange. The capital requirement for the NV is 45,000 euro. Public companies are businesses in which a portion of the stock or share is available on the Dutch stock exchange for members of the general population. They can invest capital in order to garner shares in the business. The characteristic of the NV company is that shares are freely tradeable, as compared to the Dutch BV where the shares are privately tradeable and involve a notary deed. The current largest public Dutch company title belongs to the oil industry giant, Royal Dutch Shell.

The Dutch Private Foundations

Dutch: Stichting 

A Dutch foundation is a legal private entity with the sole intent to benefit a certain cause, whether for personal profit, social causes or charity. The process of incorporation is fairly straightforward and ideal for charities, small family businesses, and estate planning. The Dutch Stichting may be used to minimize tax. 

1. STAK Foundation

Dutch: Stichting Administratiekantoor

The Stak Foundation is commonly used for separating the economic ownership and the control of the company by certifying the shares. The certificates may be granted to an heir, while the board of the foundation is in charge of the management of the entity. This results in unique tax planning capabilities

2. Charitable Foundations

Dutch: ideële organisatie 

The Dutch law differentiates between two foundations with specific purposes, the ANBI and the SBBI. The ANBI is commonly used for general purpose charitable foundations and may be granted by the tax authorities to charitable foundations (this may result in significant tax advantages for the ANBI and the donators). The SBBI is a foundation with the purpose of unifying members in a certain goal, such as an orchestra.

3. The Dutch Associations and Cooperatives

Dutch: Vereniging en coöperatie 

Associations are usually established as non-profit entities. Most local sports associations use this type of entity, the members pay a contribution to fund the associations’ collective costs. Cooperatives are characterized as associations which pay directly to the members. A cooperative could be a group of small shops in the same neighborhood making a collective marketing effort.

Notary services

All legal entities established for the purpose of doing business are set up through a Latin notary (notaris). The notary prepares a deed and registers the entity at the Commercial Chamber (KvK). It should be noted that incorporated structures usually pay additional taxes. A notary can assist in making deeds for company incorporations. To change your current company type we recommend to seek the guidance of a professional corporate agent.

Liability of incorporated business forms

All incorporated businesses have a common defining aspect: when you set up a firm as a legal person or entity your private property cannot be seized to cover any debts of the business. In case of negligence, however, you may be considered personally accountable. You need to be fully aware of the responsibilities you are taking on by registering an incorporated entity. If you do not fulfill your tax and administrative obligations, you may be fined by the Tax Office (Belastingdienst).

Taxation of incorporated entities

In the Netherlands businesses having a registered legal entity are subject to different taxes in comparison to unincorporated structure or individuals.

Corporate tax A distinct requirement for all legal form businesses is the payment of corporate tax (venootschapsbelasting) which is a type of income tax levied on profits. In some cases, associations and foundations are not liable for corporate tax. The rate of corporate tax is lower than that of income tax. This is one of the major factors for entrepreneurs to set up incorporated businesses such as private limited companies. The administration, however, is rather complex and yearly costs may be higher. Usually, a significant turnover is necessary to compensate for these expenses. 

Corporate tax rates in the Netherlands  The corporate tax for taxable amounts up to or equal to 245 000 EUR is 15% and 25% for amounts higher than 245 000 EUR. 

Tax on dividends Private and public limited companies are liable for dividend tax (or dividendbelasting in Dutch) at a rate of 15% on profits paid to the shareholders. Then the shareholders must pay 25% tax on the received amount.

Yearly financial statements Businesses with legal forms are obliged to prepare and submit yearly financial accounts and reports to the Tax Office and the Chamber of Commerce.

Unincorporated business structures (Rechtvorm zonder rechtspersoonlijkheid)

Unincorporated business structures are not required to have a legal form (e.g. notarial deed). The private assets of the owners, however, can be seized to cover outstanding debts of the business. Such businesses can be established at the Commercial Chamber without the participation of a Latin notary.

1. Taxation of unincorporated businesses

Businesses without a legal form need to pay VAT, income tax and payroll tax (if they have employees). Several tax incentives are available. In contrast to incorporated companies, businesses without a legal form do not owe corporate taxes.

2. Liability of unincorporated business owners

The main disadvantage of having a business without a legal form is the lack of distinction between business and private property. If the company has outstanding debts, the debtors can claim the owner’s personal assets. Therefore, in case of bankruptcy of the business, the owner goes personally bankrupt, if he/she does not have sufficient assets to cover the debts. The assets of the owner’s spouse can also be seized, if their marital property is common. In order to avoid this problem, spouses are advised to change their nuptial agreements.

Business structures without legal form

In the Netherlands there are four types of unincorporated business structures:

1. The Dutch Sole Proprietorship

Dutch: Eenmanszaak

The Dutch sole proprietorship is the business form most independent workers choose for. The tax filings for the one-man-company are the same filing as for natural persons. The business’ tax number is the social security number of the owner. If the company has any debts, the owner is personally liable, therefore many entrepreneurs prefer to establish a limited liability company to mitigate the entrepreneurial risk.

2. The Dutch Partnerships

Partnerships have two shareholders, or a group of investors equally liable and responsible for the actions or repercussions carried out by the enterprise. In the Netherlands, there are two categories of these partnerships, private and public. The partners of a general partnership can be jointly held responsible for the full liabilities of the partnership, while severally accountability may apply under normal circumstances regarding the company’s obligations and debts. The limited partnerships in the Netherlands consist of a general partner and a silent one.

The General Partnership (Dutch: Vennootschap onder firma) Private partnerships are when two or more individuals hold the same amount of equity stake in the corporation and therefore are equally liable for the actions, debt, and litigation accrued by the company.

The Professional Partnership (Dutch: Maatschap) The professional partnership includes two or more partners, each of which is responsible for his or her own claims. The professional partnership is suitable for dentists, lawyers, accountants, and other self-employed occupations.

The Limited Partnership (CV) (Dutch: Commanditaire vennootschap) The Dutch CV consists of 2 or more partners. One of the partners assumes the role of the general partner who will manage the company. The general partner is not limited in liability. The other partner(s) is referred to as a ”silent partner”. The silent partner is limited only to his capital contribution. The silent partner may not be involved in the management of the company.

Are you interested in establishing a business in the Netherlands? Our incorporation agents can guide you throughout the whole process!

VAT IN THE NETHERLANDS

 

The Netherlands uses a value-added tax system (VAT), which is named Belasting toegevoegde waarde (BTW) in Dutch. This system is very similar to the system that is used in other countries of the European Union. Not all transactions are subject to VAT, but in Holland, it is very common to charge this value-added tax. The regular tax rate is 21%, and this rate is charged on (almost) all goods and services by businesses within Holland.

If products are imported from outside the EU, this VAT rate may also apply. The Netherlands  also uses a special lower tax rate. This rate was 6% for many years, and it applies to specific goods and services, for instance, food products, medicine, art, antiques, books, entry to museums, zoos, theaters, and sports. This rate has been increased to 9% as of 2019.

The value-added tax (VAT) is a broadly based consumption tax that all EU countries use, including the Netherlands. As a consumption tax, the burden of paying it is placed on the final consumer of the goods or services. While all EU countries apply a VAT tax, each member country can make decisions about what to tax and on what rate levels. VAT in the Netherlands is considered an indirect tax because it is first paid to the seller of the goods or services. The seller then pays the tax to the revenue authorities.

More information about the Dutch VAT rate

The value-added tax rate in the Netherlands is rather straightforward. However, there are some exceptions that can make it harder to understand every little detail. If you want to be sure you are doing everything right, it would be best to hire a consultant who can guide you through the process. Intercompany Solutions for example. We can help to set up your business in the Netherlands. We provide corporate solutions for investors and companies worldwide, and serve international clients who are interested in company formations and corporate services. We help entrepreneurs with all aspects of their company setup. Read more on setting up a business in the Netherlands.

The different VAT rates in the Netherlands

The Netherlands has several VAT rates and a list of goods and services that are VAT-exempt. The main, general Dutch VAT rate is 21% and this has been so since 2012. This rate applies to most goods and services.

There is a special VAT rate of 9% that applies to a subsection of goods that are considered necessities. The goods include foods and drinks (but not alcohol), livestock meant for agricultural purposes, medical necessities (such as prescription medications), most reading materials, and seeds for use in agriculture and horticulture. Materials purchased for home renovations are also sometimes taxed at this rate, depending on the age of the home. There are a few services that are taxed at this lower 6% rate, as well. Among these are hairdressing services, vacation rental homes, public performances that are considered artistic (plays and musical performances), and most transportation services.

A zero VAT rate is applied to items that are not consumed in the Netherlands. If they are shipped to and consumed outside the EU, then no VAT will be applied. Likewise, if the goods are purchased by a legal business entity within another EU country, then that entity is responsible for charging VAT to the final consumer in the country in which it exists. However, if the goods are sent to a final consumer in another EU country, then you must charge VAT in the Netherlands.

VAT exemptions in the Netherlands

The Netherlands also has a number of exemptions; visible exports are amongst these. These are zero-rated. If VAT exemptions apply, you don’t have to pay the tax, and you also cannot deduct it. There is a list of services that are completely exempt from VAT in the Netherlands. By being exempt, the state does not charge any tax on them whatsoever. These exemptions include medical services provided by a doctor or nurse, banking services, insurance advice and services, childcare services, and educational services.

Journalistic services are also VAT exempt, but only if the service provided by the journalist is deemed to be intellectual property and is only that journalist’s original ideas. Determining what is and what is not VAT exempt can be tricky, and it is suggested that you always speak with a local advisor to ascertain your particular VAT status. It is not possible to claim a refund of the VAT that is charged over the costs and investments that are related to the goods and services that fall under the VAT exemptions. Goods and services that are exempted from VAT are: letting or selling immovable property (provided that the building is more than 2 years old), healthcare services, childcare, care services and home care and other similar topics.

Are there any other tax exemptions in the Netherlands?

These aren’t the only tax exemptions in the Netherlands. Other tax exemptions are sports organizations and sports clubs, services supplied by socio-cultural institutions, financial services and insurances, services supplied by composers, writers, and journalists, education, and fundraising activities. There is also an agricultural scheme in place, which applies to agricultural and livestock farmers, foresters, and market gardeners. All the goods and services that are provided by these entrepreneurs are also exempted from VAT. This scheme is called ‘Landbouwregeling’. All other tax exemptions in Holland can be requested from the Dutch tax office.

Tax-free shopping

A topic that needs some special attention is tax-free shopping. If you want to offer goods to customers who desire to shop tax-free, then you will need to take some extra measures and precautions. For example, you will need to check their ID or passport to make sure that these customers live outside the EU. Another requirement is that the goods you sell will leave the EU with the customer. In cases that you do charge VAT, you can return in to the customer at a later stage. You can achieve this by supplying your customer with an invoice, that also mentions the customer’s ID number. They will need to have this document signed by customs for export. Once the invoice is signed, they can send it back to you and you can refund the VAT they paid.

VAT rate for foreign entrepreneurs

If you are doing business in the Netherlands, but your business is established outside the Netherlands, then you will have to deal with the Dutch regulations. If the service or product you provide is supplied in the Netherlands, you usually have to pay value added tax here. However, in reality, the tax is often reverse-charged to the person who receives the service or product. If this is not a possibility, you have to pay the value added tax in the Netherlands. Reverse-charging VAT is possible if your client is an entrepreneur or a legal entity, established in the Netherlands. In that case, you can exclude the tax from your invoice and state ‘VAT reverse-charged’. You are allowed to deduct the tax charged over any costs related to this transaction.

VAT registration in the Netherlands

If your company provides any goods and services for consumption in the Netherlands or the EU, then it must register for VAT. Once you are registered, you are required to submit annual VAT returns and make regular payments to the revenue service of VAT you have received. These VAT submissions can now be made electronically. Payments can be made either monthly or quarterly. Some smaller companies that collect very little VAT may be able to make one annual VAT return and payment, instead of paying regularly throughout the year. You should consult with an advisor to determine if your VAT payments are low enough to qualify for a single, yearly payment.

Please contact our Dutch advisor for further details about VAT issues in the Netherlands. We can advise you on tax exemptions, and what you must do to qualify for them. We can also assist you with the submission of annual tax returns and help you register your company for VAT in the Netherlands.

The most popular legal entity in the Netherlands is by far the private limited liability company. Almost all our clients choose this company type, as it matches well with almost all business ideas and goals. In addition to the private limited liability company, you can also choose to incorporate a public limited liability company. Although these two legal entities overlap somewhat and have some similarities, there are many noteworthy differences that you should definitely take into account should you wish to establish one of these two types of companies. We will list all similarities and differences on this page to make it easier for you to make an informed decision about this matter. You can also read some interesting background information on limited liability companies in general, including some historical details. We will also inform you how we can set up your new Dutch business and what you will need for the incorporation procedure.  

General history of limited liability companies

The concept of limited liability companies has a long history worldwide. As it is, this concept has evolved over time in different parts of the world. The earliest forms of Limited Liability Companies (LLCs) emerged in the 19^th century, with a formalized structure that is akin to the modern LLC. In the United States (US), the first limited liability company statute was enacted in Wyoming in 1977. The German version of a limited liability company is a “Gesellschaft mit beschränkter Haftung” (GmbH) and was first established in 1982. In France, the limited liability company is known as the “Société à Responsabilité Limitée” (SARL), which saw the light of day for the first time in 1925. Subsequently, the entire concept of limited liability companies was established with the Limited Liability Act of 1855 in the United Kingdom (UK). However, private limited companies, as we understand them today, were established under the Companies Act 1980. In the Netherlands, the limited liability company has its roots in the legal system. The first Dutch company law that introduced the concept of limited liability was the Dutch Commercial Code of 1838. The "Besloten Vennootschap" (BV) is the Dutch equivalent of a private limited company. The BV structure was introduced in the Netherlands in 1971 through the Flex-BV legislation, making it more flexible and at the same time modernizing company law.

Public Limited Liability Companies (PLCs) are companies whose shares are traded on a public stock exchange, allowing the public to buy and sell shares in the company. The development of Public Limited Liability companies was somewhat parallel to the development of private limited liability companies. In the UK, the concept of a public limited company evolved with the Joint Stock Companies Act of 1844, which allowed companies to be incorporated with limited liability. The Companies Act of 1862 further refined the legal structure of several company types and paved the way for the establishment of public limited companies. In the US, publicly traded companies have a bit of a longer history. The first public companies already appeared in the 18^th century, but the legal framework for public companies wasn’t entirely defined until the 20^th century. In the Netherlands, public limited liability companies are known as "Naamloze Vennootschap" (NV). The legal framework for NVs has evolved over time, with regulations outlined in the Dutch Civil Code.

The establishment and regulation of public limited companies vary from country to country, and legal frameworks have evolved over time to adapt to changing economic and business environments. In many cases, the development of public limited companies is closely tied to the growth of stock exchanges and capital markets. It's also important to note that legislative changes over time have influenced the development of limited liability companies. The information provided here offers a general overview, and for more specific details, it's advisable to refer to the relevant legal and historical sources of every country involved. Since this page is solely focused on the establishment of a Dutch BV or NV, we will only outline Dutch laws and regulations.

The benefits of owning a Dutch company

The Netherlands is ranked as one of the most favorable locations for corporate ventures worldwide. The country currently holds the 4th position in the Global Competitiveness Index of the World Economic Forum (WEF), as well as multiple other top positions in well-known indexes throughout the world of business. This is definitely not without reason, as the Dutch offer a very lively and competitive market for business, as well as excellent secondary conditions such as a highly skilled and mostly bi- or trilingual workforce, a fantastic digital and physical infrastructure, a strategic position for international trade, and many beneficial treaties with other countries. The Netherlands is also an EU member state and is held in high regard by the rest of the EU member states. You will therefore benefit from a professional and trustworthy image when you establish a company in the Netherlands. You have direct access to the European Single Market as well as all other countries due to the great trade capabilities of the Dutch. Another advantage is the relatively low cost of company formation and the many interesting tax incentives and deductions, which make it profitable to even start multiple businesses here. Foreigners are especially welcomed, since the Netherlands holds innovation and diversity in high regard. As such, you can also apply for interesting subsidies that might provide your newly formed company with an extra financial boost.

Private or public limited liability company (BV or NV)?

That being said, while the Netherlands does provide unique advantages for a business to thrive, it is vital to find the right type of company to suit your needs. In this article, we will make a distinction between a private limited liability company and a public limited liability company in the Netherlands. These two legal entities are also known as a Dutch BV company and an NV company, respectively. We will also discuss which of these legal entities is best suited for your individual business. In the Netherlands, these are not the only legal entities available, by the way. When you establish a business, you need to choose a specific legal entity that fits your preferences and ambitions. There is a significant distinction between unincorporated business structures (“rechtsvormen zonder rechtspersoonlijkheid”) and incorporated business structures (“rechtsvormen met rechtspersoonlijkheid”). The main difference between these two is that there is no distinction between your private and business assets in an unincorporated business. You and your company are, in essence, the same entity. So, if you create debts with your business, you can personally be held accountable. If you choose an incorporated business, you separate private and business assets and thus enjoy protection from business debts in most cases since your business is seen as a separate entity.

There are four types of unincorporated business structures:

• Sole proprietorship (Eenmanszaak or ZZP)
• Limited partnership (Commanditaire vennootschap or CV)
• General partnership (Vennootschap onder firma or VOF)
• Professional partnership (Maatschap)

There are six types of incorporated business structures:

• Private limited liability company (Besloten vennootschap or BV)
• Public limited liability company (Naamloze vennootschap or NV)
• Cooperative (Coöperatie)
• Mutual insurance society (Onderlinge waarborgmaatschappij)
• Foundation (Stichting)
• Association (Vereniging)

Legal requirements differ between the business structures, and there are also quite extensive differences in general requirements for establishment, the way you pay taxes, and the structure of each legal entity. In general, the business structure that is most often chosen by foreigners is the Private limited liability company (Dutch BV) due to the several practical and tactical benefits of this legal entity. If you would like personal advice about the best legal entity for your (future) business, Intercompany Solutions is always ready to assist you with any query you might have.

Your personal ambitions and preferences matter

If you want to make the best choice available, it’s important to consider what you want to do with the company. As we have already mentioned multiple times, the Dutch BV far outweighs all other legal entities in terms of practicality, workability and tax/financial benefits. For example, you can establish a holding structure with a BV, which makes it possible to incorporate multiple subsidiaries under one umbrella company. One of the main benefits of this type of structure is asset protection. You can transfer funds from your subsidiaries to your holding BV, which will keep these assets safe in case your subsidiary is not doing so well. Another benefit of this practice is, that you can fund the establishment of new companies with paying little to no taxes. If you are serious about becoming a successful entrepreneur, the holding structure is definitely the most promising solution for you. There are some benefits to a public limited liability company as well, but you should note that, amongst other things, the start-up costs and initial share capital deposit are much higher. We will outline all the similarities and differences of both company types below.

The private limited liability company (Dutch BV)

A private liability company differs from a public liability company in the way that a private company does not have its stock available for public purchase on the stock exchange. However, a private Dutch company is still considered a legal entity separate from its shareholders and has its own identity in the eyes of the law for litigation or taxation purposes. Additionally, private liability companies must also register in the Dutch Trade Register in order to engage in commercial activity. One of the main benefits of a private limited liability company is the limited liability for directors and shareholders. Only when you can be seen as accountable for certain debts is there a chance that you can be held personally accountable financially. This is also the main reason most entrepreneurs choose the Dutch BV as their company type.

Characteristics of the Dutch NV

The BV is a privately held Dutch legal entity comparable to a ‘private limited liability company’. There are some main characteristics that explain how a BV works and how it differs from other legal entities, which we will list below.

• Practically no initial investment is needed, as only a minimum share capital of €1 is required to officially establish a Dutch BV
• The issuing or transferring of shares requires permission from the shareholder(s)
• The shareholders are all registered in the Dutch company register
• A foreign company, local company or natural person may be the shareholder or director of the Dutch BV, so if you own a foreign company, you can open a Dutch subsidiary under the umbrella of your already existing company
• The issued and required paid-up capital is determined by the founders, and this is registered in the articles of association when the deed of incorporation is drawn up
• Different types of shares allow varying voting and dividend rights, which means there can also be non-voting shares and non-profit shares
• Particular class shares may limit profit sharing entitlement; however, such shares must always have voting rights
• Transfer restrictions are sometimes allowed
• Shares are not admitted to the stock exchange and are thus only privately held by directors and/or shareholders
• The shareholders are only liable for the amount paid as share capital, not for any company debts, unless there is concrete proof of faulty management
• Amendments to Dutch Business Law have made it much simpler to incorporate a Dutch BV, reducing the cost of company formation in Holland greatly.

Benefits of the Dutch BV

The Dutch BV offers several interesting benefits for entrepreneurs, which is exactly why this legal entity is chosen so often when establishing a business. First and foremost, the limited liability every shareholder and director profits from is a massive plus, since this will keep your personal financial situation relatively safe, even if you create debts with the company. Please note that it’s important that you cannot foresee certain situations when making decisions, as you only benefit from limited liability when you cannot actually be held liable for the situation. This entails, for example, improper management and fraud. Next to the limited liability, you can divide your property and financial risks among several BVs via a holding company structure, which enables you to create a company structure that is entirely tailored to your preferences. If you want to start several companies, the holding structure is the most interesting way to realize this. This also enables you to keep your assets safe since the holding company is also exempt from liability when one of the subsidiaries gets into ‘trouble’.

By the way, not only are your assets safe in the holding company, but using the holding structure enables you to invest money in a fiscally very attractive way. In some cases, you don’t even have to pay tax at all under the participation exemption, so you are able to reinvest the profits you made tax-free. The current corporate tax that you have to pay with your BV is 19% for sums up to 200,000 euros and 25.8% for all sums above that amount. The share capital you need to deposit is only 1 euro, whereas it used to be 18,000 euros. This changed in 2012, when the Flex-BV was introduced. This makes the Dutch private limited liability company available to a much larger audience, including foreign investors. Furthermore, a Dutch BV simplifies business succession, making it less complicated to instate your children, for example. Partially selling your company is also fiscally attractive compared to other legal entities. The issuance of shares is also a very lucrative way to attract investors, since you can offer them something tangible. And last but certainly not least, a Dutch BV helps you to solidify your professional image, as this legal entity is held in high esteem throughout the world. All in all, the BV is categorized as a well-defined legal organization that makes it relatively easy to save up assets, for example, for your pension.

Structure of a Dutch BV

A Dutch BV generally comprises either a director-shareholder or a board of directors (board). There are also often multiple shareholders who form the general meeting (GM) of shareholders. The optimal tax-legal structure of a Dutch BV consists of at least two BVs that are "connected to each other". The founder or entrepreneur does not own the shares in the actual company, the operating BV (or subsidiary), directly but through a holding company, which is sometimes also named a management BV. It is a structure in which there is one BV in which you are a full shareholder. This is the holding company. You own the shares of this holding company. That holding company actually does nothing more or less than hold the shares in another BV that is, as it were, "underneath" it. In this structure, you are a 100 percent shareholder in your own holding company, which is then a 100 percent shareholder in the operating company, BV. In the operating company, your business activities are really carried out at your expense and risk. This is the legal entity that enters into agreements, provides services, and makes or supplies products. When there are multiple directors, you can expand the construction to multiple BVs. It is possible to have a one-tier board as well as a two-tier board. A supervisory board (or non-executive directors on the board) is optional, but not obligatory. Furthermore, the articles of association can contain regulations granting shareholders limited opportunities to give general instructions to the management board. The director or board ultimately decides about profit distribution.

The public limited liability company (Dutch NV)

There are many steps to forming a public limited liability company, but with the right guidance, these actions are quick and simple. Furthermore, as a public limited liability company, a portion of your shares will be available for purchase on the stock exchange. Be diligent about how many shares are available on the international stock exchange, as, although rare, some companies have been bought out by random members of the public. This is often achieved via mergers or acquisitions, with an acquisition sometimes being hostile. In some cases, for example, when nearing bankruptcy, this can be positive, but in general, it’s wise to handle your assets with diligence. The Dutch NV is also a legal entity and is therefore seen as independent of you by Dutch law. There are by far more BVs than NVs in the Netherlands, since generally only very large corporations choose to establish an NV. Chances are that the BV is the best choice for your company. Nonetheless, we will still outline all the basic information regarding the Dutch NV.

Characteristics of the Dutch NV

Shares

The NV is a public Dutch legal entity comparable to a ‘public limited liability company’. There are some main characteristics that explain how an NV works and how it differs from other legal entities, which we will list below.

• On the contrary to a Dutch BV, the minimum capital to deposit when incorporating an NV is €45,000; only then can the company be publicly listed
• Different types of shares are allowed (such as bearer shares)
• All shareholders receive voting rights as well as profit rights
• Transfer restrictions are sometimes allowed
• Shares are admitted on the public stock exchange, providing liquidity and allowing shareholders to buy and sell shares freely
• A Dutch NV needs to be formed by notary deed, similar to the Dutch BV
• The NV is also limited in its liability if all formation responsibilities are fulfilled
• This company type is also led by a board of directors
• It may require a committee of commissars to supervise the board of directors
• Specific accounting requirements apply to publicly traded companies, which are more complicated than the requirements for a BV
• Shareholders are not listed in the Dutch company register
• Public limited companies can have numerous shareholders, and ownership is often dispersed amongst them
• Public companies are subject to rigorous disclosure and reporting requirements to provide transparency to investors and the public
• Due to their size and public nature, NVs often have sophisticated corporate governance structures to ensure accountability and protect the interests of shareholders.
• Public companies are subject to specific regulatory requirements imposed by the relevant securities exchanges and regulatory bodies

Benefits of the Dutch NV

There are also benefits to owning a Dutch NV, but typically only under certain circumstances do these outweigh the benefits of owning a BV. Just like a BV, an NV can have one or multiple directors. So, if you wish to start a company alone or with others, both are possible. Since the shares in an NV are not personal, they can be transferred freely. The NV also offers personal financial protection due to its limited liability, but in the event of improper management, you can still be held accountable. Next to that, there are several possibilities for tax deduction, such as via investment deduction, through arbitrary depreciation under certain conditions, and via Research & Development deduction. In general, the NV is only the best choice if you aim for a large public corporation.

Structure of a Dutch NV

A Dutch NV also has a board of directors as well as a general meeting of shareholders, with or without voting rights. In this case, a one-tier and two-tier board are both options. The management of an NV can freely hire staff. In some cases, a committee of commissars is also required by law to be present. A supervisory board (or non-executive directors on the board) is generally optional, just like a BV. The articles of association can contain regulations granting shareholders the right to give specific instructions to the management board. The General Meeting of Shareholders is the body that makes all decisions regarding profit distribution. If a certain contribution might threaten the continuity of the company, the management board may refuse approval for the distribution of profit, dependent on the outcome of a liquidity test. Interim dividends are a possibility.

Differences and similarities between the BV and NV

As you can see, there are some factors that are similar within both legal entities, whereas there are also substantial differences. The public limited liability company is a legal form that is not very common in the Netherlands. There are approximately 2,500 companies that use the Dutch NV company as a legal form, and these are mainly large companies. This is because it is easier to raise capital (by issuing new shares) as a public limited liability company than as a private limited liability company. With an NV, just like with a BV, the capital is raised by shareholders. The NV is a so-called capital company (as opposed to a partnership). The big difference with a BV, however, is that with an NV, the shares do not have to be registered (although it is possible), hence the term “Naamloze Vennootschap” which translates in English to ‘Nameless company’. This means that shares are easily transferable. The person who can show a share (although this no longer happens physically nowadays) is a shareholder, shares in the profits, and has a vote. So, in principle, the NV does not always know who its shareholders are. The articles of association determine a large part of the rules regarding the possibility of transferring shares freely in a BV.

Oftentimes, there are certain transfer restrictions that limit some (or all) shareholders. In such cases, the other shareholders need to give their consent when a shareholder wants to transfer shares. Also, the other shareholders have a preemptive right to buy shares from a selling shareholder. This is not the case in an NV, where shares can be transferred freely. Another noteworthy difference is, of course, the minimum share capital required during the incorporation of both company types. The minimum amount for a BV is only one euro, while the NV requires 45,000 euros. This can make the NV unattainable for many entrepreneurs. Another main difference is the public vs. private part. The NV can be listed on a public stock exchange, but a BV company only issues private shares. Furthermore, the Dutch NV is obligated to have a board of directors and has more strict requirements, while the BV only needs a director and a shareholder. All in all, the Dutch NV is usually only formed by (already) public companies and not starting entrepreneurs. The BV is much more accessible for a wide variety of entrepreneurs without having to invest large amounts of money, and without the strict regulations that accompany the establishment of an NV. However, if your company starts growing rapidly, and you would like to go public at some point, you are always able to convert your BV into an NV during a later stage of entrepreneurship.

The Dutch Trade Register

Both the Dutch BV company and the Dutch NV company need to be registered in the Trade Register in the Netherlands, since registering your business is mandatory for almost all legal business practices. The Dutch Trade Register serves to provide a legal framework that enables a corporation to act as its own entity in terms of liability and taxation. Moreover, the Dutch Trade Register provides an authenticity for companies when dealing with customers and interacting with other businesses. The business register includes the following information:

• Legal name
• Address
• Phone number
• Fax (if applicable)
• E-mail contact
• URL (if applicable)
• Description of the business, including services, products, the number of current employees, branches, etc.
• A liable correspondent of business

If you own a Dutch company, the Trade Register can immensely help you with finding solid business partners. Look for information about competition and general queries related to due diligence, for example. As every BV and NV have to provide annual statements. If you want to know for sure whether a company has a good reputation, the Dutch Trade Register is your ally. We discuss this topic in depth in this article.

What is the best choice for you as a foreign entrepreneur?

First, we should make one thing clear: there is no clear answer to this question. As a business evolves throughout its lifecycle, its priorities change, and its benefactors, either public or private, may alter. Thankfully, if this occurs, a private company may change its listing to a public listing and start selling on the stock exchange. This change is known aptly as ‘going public.’ Nevertheless, private limited liability companies are usually suited for businesses that would rather gain strategic investors in exchange for greater portions of equity or those who simply do not meet the 45,000-euro minimum requirement. Moreover, public companies are able to gather large amounts of revenue fairly quickly in exchange for their stock. It depends largely on your personal preferences and the nature of your company, as well as the possibilities that are realistically within your reach.

If you would like to receive more information on starting a company in the Netherlands, please contact our experienced business advisors. We will gladly offer you the personal advice you need, which will assist you in making the perfect choice for your Dutch business.

Establishing a Dutch company with Intercompany Solutions

Our incorporation procedure is relatively straightforward, both for the establishment of the Dutch BV and NV. There are a few steps we always follow, which makes the procedure easy to understand. The first thing we will need from you are some documents and a bit of information. A valid form of identification is always necessary, as are the names and details of all future shareholders involved. You will also need to let us know who will be appointed as a director and who will only be a shareholder. Next to this information, we will also need the preferred company name. We will check this name for you, since you cannot use a name that is already in use by another company. Make sure the name fits the company well and is original, for this will greatly speed up the process. If you can acquire all the necessary information and send it to us in a timely manner, the incorporation process should take no longer than 3 to 5 business days. Once we have all the documents, we check and validate them for you before we send them to the notary public.

In general, we will already send the information to the Dutch Chamber of Commerce to pre-register your company. At this point, the company is known as ‘in formation’ (BV i.o.), which is necessary to apply for a Dutch bank account. Especially when you want to establish a Dutch NV, since you will need the bank account to deposit the minimum share capital. We therefore also go to the notary public, who will draft the deed of incorporation and the articles of association. Once this is done, the share capital can be deposited, and the company can be fully registered in the Dutch Trade Register. You will then also receive a VAT number. We can also take care of extra services for you, such as applying for an EORI number, secretarial services, applying for visas or permits, financial and legal services, and any type of advice you might need for your business. Intercompany Solutions has many years of experience in the field of business incorporation in the Netherlands. Thus, we can assist you from every angle and make sure your Dutch business runs smoothly.

The Netherlands is a country that has always implemented eco-friendly laws and practices, largely due to the environmentally-conscious government. As an effect of the ‘green’ technologies that have been implemented in the country, statistics have shown that The Netherlands has experienced a great surge of financial success.

Our company formation specialists are able to give you more information on how to get your company to go green!

Green Growth vs Carbon Tax

The Organization for the Economic Co-operation and Development (OECD) defines green growth as a set of 6 environmental and economic factors. They are environmental efficiency, raw material efficiency, natural resources, environmental quality, green policy instruments, and economic opportunities.

The latest data presented by Statistics Netherlands showed that there have been significant improvements in these 6 factors from the period of 2000 to 2016.

A global carbon tax has been proposed for many years. Thus increasing the cost of pollution on the enviroment for big corporations. Will this actually lead to more energy concious decisions? Or will the combination of stimulation, and crafty tricks by big corporations mean this is yet another tax that can be avoided. A carbon tax will lead to big corporations ''buying and selling carbon certificates'' to compensate for carbon emissions.

The Carbontax organisation in UK promoted the idea of introducing a carbon tax. A carbon tax will not save our enviroment single-handedly. But it could price-in the enviromental effects and destruction of companies' doing.

Nowadays, big corporations can buy carbon certificates from companies that compensate their carbon impact by renewable or green projects. Which will look good on paper. But in reality, will it change anything?

Will the proceeds of these taxes actually be invested in renewable projects by the governments receiving these taxes? Or might it be used for other internal policies. If actions are taken on the European level, rules might be applied more effectively. And more difficult for corporations to avoid. In this way it is possible to avoid any single nation to have to sacrifice it's own economy or competitiveness.

If only one nation takes action, multinationals in that nation could simply move their headquarters a few hundred kilometers, to the nearest border if this avoids high costs. Or they may negotiate a deal with that country, to get favourable treatment.

Green growth in the Netherlands

The Dutch economy has increased as an effect of the environmentally friendly laws and regulations of the country. The Netherlands is still dependent on fossil fuel as the main energy provider, but through the use of green resources, the country has been able to decrease greenhouse emissions as well as carbon dioxide emissions.

The Green Growth report as issued by Statistics Netherlands also shows that the ecological footprint of the Dutch population is decreasing. This shows that biodiversity in the country is definitely improving.

The Dutch Central bank is expecting the impact on the Dutch economy from Carbon Tax to be relatively modest. And might be used to improve the ecological footprint by using the earnings to stimulate alternative energy needs.

Furthermore, the reports show that the Netherlands is using its raw materials in a cost-effective way because recycling is encouraged in both personal and corporate capacities.

Our company formation agents can answer all your questions about the environmental laws of the Netherlands and the process of establishing a green business in the country. You can also read our article on how to open a company in the Netherlands.

In the recent Global Competitiveness Index, it was published that the Netherlands reached the fourth position on an international level. The index issued by the World Economic Forum showed that the country excelled in education, primary health, infrastructure and business etiquette.

The country has fared well in recent years and managed to retain the same position as last year. It continues to perform well in maintaining a stable profile for competitiveness, as well as in other fields of business. Education and training are still two of the most important fields that the Dutch continue to invest in, and it is due to this that the workforce remains highly qualified. The report also showed that the country ranked 9^th in terms of technology, which is growing at a rapid rate in the state.

Read more on the latest Dutch economic developments.

Strong points of the Netherlands

The Dutch are known for their innovative thinking and developments, and this reflects on their business sector as well as their ability to keep up with global trends. One of the strongest aspects of the Netherlands is their transportation infrastructure that is only surpassed by Germany in this regard.

The top ten countries in the Global Competitive Index were as follows: at first position was Switzerland, followed by Singapore, USA, Finland, Germany, Japan, Hong Kong, the Netherlands, the UK, and lastly, Sweden. It was comprised out of 144 countries from all over the world.

If you would like to receive information on opening a company in the Netherlands or the Dutch legislation regarding foreign investors, you can contact us today.

In the wake of the Brexit referendum, entrepreneurs are taking steps to safeguard their businesses.

Although Article 50 has not been invoked yet, many entrepreneurs are already planning how to secure the future of their business.

Many United Kingdom based businesses have to cope with the economic uncertainties after the outcome of the Brexit referendum; to separate from the European Union. There is no saying whether the Brexit will be beneficial or highly unfavourable for UK-based companies.

Entrepreneurs are now choosing for stability and security by incorporating a Netherlands-based company or subsidiary.

Why should you consider moving to the Netherlands?

Even though most of the population voted ‘’out’’, there are many international UK-based businesses that are ultimately dissatisfied with the decision. Many corporations, from trading companies to large financial institutions have considered the opportunity to move their business to the Netherlands or are in process of doing so. The decision to establish a business in the Netherlands could turn out to be essential. As the Netherlands is located in close proximity to London, it seems like a practical and efficient move to relocate your company there. The Netherlands is considered a stable location in terms of its position in Western Europe and its accessibility to the Eurozone, both in economic and logistical terms.

As the Netherlands is located in close proximity to London, it seems like a practical and efficient move to relocate your company there. The Netherlands is considered a stable location in terms of its position in Western Europe and its accessibility to the Eurozone, both in economic and logistical terms.

Read more on opening a company in the Netherlands

Opening a subsidiary

Some companies like the idea of relocating to the Netherlands, however, they do not want to move their business entirely. These companies have the option to transfer just a part of their organisational operations to the Netherlands.

Foreign companies are able to open a branch or a subsidiary in the Netherlands and test the traits of the market by forming a virtual representative office for their company.

The process of moving a company from the United Kingdom to the Netherlands is easily manageable with the right help from an experienced party. Foreign investors in The Netherlands will need a Dutch legal entity to conduct their business. The most popular type of business is a private limited liability company. There are several options for legal entities in the Netherlands. If you want to relocate and open a firm in The Netherlands you will need to know what kind of legal entities can be used and which are recommended.

Moving to the Netherlands in light of the Brexit vote can ultimately improve and change your business and life, providing more stability and security for your business.