The Netherlands has created extremely interesting conditions for foreign business. Experienced entrepreneurs who have already achieved considerable success in their home country, as well as ambitious newcomers with only a promising business idea and modest personal savings, are eager to register their companies in this jurisdiction. It is not without reason that the authoritative Forbes magazine has added the country of tulips to the list of countries with the most competitive economies.
Year after year, the Dutch not only reclaimed land from the sea, but also worked hard to build one of the most prosperous economies in Europe. By registering a company in the Netherlands, you will have the opportunity to develop your business in a safe and relatively stable business environment, almost unaffected by global economic crises.
The Dutch entrepreneur has several tools at his disposal to reduce the tax burden on his business: from numerous double tax treaties with other countries, to favourable tax rates for certain types of commercial activities in the Netherlands.
The main territory of this country is located in Western Europe. There are also three Caribbean islands, which are directly part of the Netherlands, and three islands in the same region, the so-called Caribbean Netherlands, which are part of the Kingdom of the Netherlands. This relatively small and densely populated European country has a well-developed transport infrastructure, access to the sea and very conventional borders with its nearest neighbours – Belgium and Germany. Therefore, after registering your company in the Netherlands, you will have access to a huge European market.
Entrepreneurs who plan to carry out their work directly at the place of registration will be pleased with the high level of training of Dutch employees, as well as their multilingualism. According to some reports, more than 90 per cent of Dutch people are fluent in English.
The Netherlands has entered into dozens of international agreements to regulate taxation, investments and emerging economic disputes of Dutch companies operating outside the country.
Disputes arising between firms in Holland are resolved in an independent corporate court, where all proceedings are conducted in English.
With the support of an experienced corporate lawyer, you will spend only a few working days on the procedure of opening a company. In some cases, you can register a new business structure remotely, without even leaving your home.
In order to limit the liability of the founders for the debts of the organisation to the amount of their contribution to the share capital, foreign entrepreneurs in Holland register a BV – a limited liability company (“Besloten Vennootschap”).
Peculiarities of the structure of the Dutch BV
For small and medium
Amount of authorised capital
Minimum €0.01, recommended €2,500.
Is it necessary to pay for the authorised capital?
Yes
Minimum number of shareholders
1
Minimum number of directors
Who can be the founder of a BV?
Individuals and companies (both local and from abroad).
Does at least one director of the BV have to be resident in the Netherlands?
No
With the help of a professional corporate lawyer, you can register your company in the Netherlands quite quickly. The whole process is divided into four steps:
The Dutch do not have any special requirements for the future name of your organisation. It is enough that the name of the future company:
The country’s corporate law does not prohibit a BV from having more than one name at a time. It is common for a prospective Dutch businessman to come up with more than one name for his company. All of them are then checked for acceptability either in the commercial register of the Dutch Board of Trade or on the website of the Benelux Intellectual Property Office.
Before contacting a notary, you should determine what structure your company will have: record the composition of the founders and their shares in the share capital of the company, as well as appoint the management.
In the most common Dutch legal form of organisation, the closed limited liability company (BV), no bearer shares can be issued and all information about the founders and issued shares is recorded by a notary in the share register. The share register is then kept by the director of the organisation. The original of this document must be kept at the office of your Dutch company.
A director, like a shareholder, in a BV can be a single director. In this case, it is acceptable for the founder to be a director of his company at the same time. However, if your Dutch firm has more than one director, the rules require that a Board of Directors be formed and a chairman appointed.
So, before going to the notary, you need to gather the following information and documents:
When you have agreed with the founders on the structure of the company, determined the direction of its future activities, appointed a director and collected all the necessary documents, your corporate lawyer contacts the notary.
The notary, in turn, on the basis of the information received from your representative, prepares the following documents for signing:
As a rule, the notary uses standardised forms of articles of association and memorandum of association in Dutch. If you are starting an international company, a similar set of articles of association will be prepared in English for an additional fee.
When all the founding documents are ready, the shareholders must sign them in the presence of a notary. In other words, the notary officially confirms the establishment of the company by certifying the relevant notarial deed.
Is it possible to open a company in the Netherlands without travelling to meet a notary in person? This option is available to those founders who are willing to delegate authority to their official representative in the country.
The KvK, also known as the Dutch Chamber of Commerce, is where a new company that has already been established by a notary public is registered. The registration documents must be submitted within 8 days after the company has been established.
It usually takes no more than 5 working days for the representatives of the Board of Trade to verify the information provided by the notary. After that, the new organisation is registered, given an eight-digit KvK number and entered in the commercial register. The data about the registered company is automatically transferred to the Dutch tax authorities.
In addition to registration, the KvK supervises the reorganisation and liquidation of commercial structures and provides information on any officially registered firm in the country upon official request.
The exact amount of time depends on the degree of readiness of the future Dutch entrepreneur to register. Therefore, we will assume that you have complete clarity:
Let’s also assume that the whole process of opening a company in the Netherlands is accompanied by consultations with a competent corporate lawyer. And all the founders of the company are already in the Tulip Country or have sent there their authorised representatives.
In this case, it will take you about 7 working days to register:
As in the case of calculating time costs, the amount of your expenses depends on many variables: the chosen legal form, the size of the share capital, the scope of commercial activity, the economic presence of the firm in the country, the cost of renting an office, the presence of local employees in the company.
The minimum amount required to register a Dutch company starts at €1,500. To find out how much money you will need to start a business in Holland for your circumstances, book a consultation with a specialist.
As an integral part of the European Union, the Netherlands has never been an offshore zone, so Dutch companies pay corporate tax on all their profits. The tax legislation of this country has its own peculiarities:
Example of calculation: If a company made €560,000 profit in the accounting period, the amount of corporation tax is:
€200,000 x 19% + €360,000 x 25.8% = €130,880.
In particular, the corporate tax rate is reduced to 5 per cent for companies operating in the field of innovative research. Preferential taxation applies to Dutch shipping companies, as well as to those firms that earn money from the sale of rights to use intellectual property.
Dividend income is subject to corporate tax at a reduced rate if the company’s shareholding in another company exceeds 5% and the investment is not a portfolio investment. For more details on how else you can optimise the fiscal burden on your Dutch firm, please contact Imperial & Legal’s advisors.
Value added tax in the Netherlands is charged at the rate of 21%. A favourable VAT rate of 9% applies to certain products.
Dutch businesses also pay tax on the transfer of real estate ownership (standard rate of 8% of the market value), municipal tax and social security contributions (if they employ employees in the Netherlands).
Dutch businessmen are required to keep accounting records in their company and to prepare and submit tax and financial statements.
A monthly personal income tax report is filed if your firm has an actual presence in the country and employs staff.
A value added tax report must be submitted on a quarterly basis.
Annual reporting includes a tax return, a statistical report and an annual financial report to the Chamber of Commerce.
The complexity of financial reporting depends on the size of your company. The Dutch authorities use 4 gradations for businesses operating in their country: micro, small, medium and large. The size is determined by 3 parameters:
Most BVs belong to small and medium-sized businesses. Medium and large companies submit audited annual accounts to the Chamber of Commerce. In other words, they have to have their financial statements audited and approved by the founders’ meeting.
In order to register a Dutch company quickly and without unforeseen expenses, ask our lawyers for advice. Imperial & Legal’s London-based lawyers have a wealth of experience in successfully working with entrepreneurs in the UK and the European Union.
With our help you will launch your business in the Netherlands in a short time, open a corporate bank account, optimise taxation and prepare competent annual accounts.
Individuals must provide:
Legal entities provide:
All documents must be in Dutch or English, or have an apostilled translation attached.
If the possibilities of a Dutch BV are not enough, you can choose another legal form for your business – a public limited company (NV).
Unlike BVs, such firms are better suited for large businesses. Public limited companies can issue bearer shares and even trade them on the stock market. The liability of shareholders is usually limited to the market value of their shares.
Another difference between NVs and BVs is the set minimum share capital of €45,000, which must be fully or partially paid up (deposited in a special account in a Dutch bank).
In order to start a company, you will need to provide a registered office in the Netherlands in your statutory documents. As your company has the right to enter into contracts before its incorporation and registration is complete, you will be able to rent office space on behalf of the company that is not yet open. And when the registration of your Dutch company is finalised, it will automatically take over all contractual obligations arising during the start-up process.
A Dutch company is classified as a medium-sized business if it has achieved at least 2 of the 3 indicators at the end of its first financial year:
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