International companies that do not reside in Holland can advertise their business interests and establish a presence in the country by opening a representative (liaison) office. According to the national law liaison offices are not classified as legal entities, since they do not function and exist independently; they are fully subordinated to and dependent on the international corporations that have established them in Holland.
Generally, international companies are interested in settling liaison offices in Holland for the purposes of marketing research: to introduce and promote products on the local market and sign contracts with resident business partners.
Activities of the local liaison office
Being fully dependent and subordinated to the international company that opened it, the Dutch liaison office cannot perform its own activities (it cannot manufacture goods or provide services). It can, however, support different operations of its parent corporation, e.g. commercial activities (advertisement, promotion and marketing). The Dutch liaison office can also collect information for the purposes of scientific research and similar activities that are auxiliary to the international company.
Dutch liaison offices often serve as intermediaries between their international parent companies and commercial partners in Holland, thus representing the parent companies (acting in their name/on their behalf).
Representative offices cannot generate profit, so international investors willing to establish their products and services on the Dutch market may opt for opening branches instead. Branches are also highly dependent on their parent companies but, in contrast to liaison offices, they can carry out actual business activities.
Dutch liaison office registration
Dutch liaison offices do not need to undergo registration at the National Commercial Chamber. They are considered as structures that simply collect and provide information/provide administrative services to their parent companies without involving any commercial activities. Therefore liaison offices are not taxed in Holland. (Read more on Dutch taxes).
Still, a Dutch liaison office can employ staff and, if so, it has to be registered with the appropriate local authorities for personal income tax. The non-resident individual acting as a Dutch liaison officer and representing the international company needs to apply for residence and work permits.
The Value Added Tax incurred by Dutch liaison offices may be refunded under particular conditions. A Dutch liaison office can receive a refund if its international parent company files regular requests with the local tax authorities.
The Dutch liaison office represents an initial step for international entrepreneurs planning to establish themselves on the market in Holland. At a later point the office may become a branch, if the entrepreneur makes a decision to broaden the range of his local operations.
If you need more information about Dutch liaison offices, please, contact our agents in company incorporation. They will answer your questions about setting up a Dutch business and can represent you in front of the respective authorities.