The steps for company formation in the Netherlands
Providing all the necessary information to our company agents for starting a business in the Netherlands:
- full information on the shareholders and directors of the future Dutch company;
- passport copies of shareholders (if natural persons), directors, and UBO's (Ultimate Beneficial Owners) if applicable;
- in the case of foreign companies, an extract from the Trade Register in the home country is necessary;
- required social capital, which in the case of the Dutch BV is 1 euro.
Visit a Dutch Public Notary to sign company incorporation documents
or sign the documents abroad and send them in original to our company's address in Amsterdam
. In the latter case, these documents will be supplied by our office and will have to be properly legalized. Nevertheless, in this case, your visit to Holland will not be necessary.
Before the company registration process is started, the applicant must verify the uniqueness of the trade name. Then, the name can be reserved, and the investor will receive a certificate for that name. After that, he must open a bank account
and deposit the minimum capital share. Next step is the notarization of the company’s deed of incorporation, signed and drafted by a notary.
The documents of the new firm will be submitted to the Chamber of Commerce which will provide a registration number in just a few hours if the acts are delivered in person. This procedure may last a week if the documents are sent by post. The announcement of incorporation is made in the Netherlands Official Gazette (Staatscourant) and the process will be performed by the Chamber.
A tax number must be obtained, so the investors must submit a registration form at the local tax authorities. A separate registration form for income tax
must be delivered. The necessary forms are obtained at the local tax authorities or on official websites and must contain the company's and member's information.
After you registered the firm in the Netherlands
, the owner should hire an accountant
for assistance with the taxes, audit and financial consultancy.
Company formation costs in the Netherlands
the company incorporation fee imposed by the Companies Register in the Netherlands is approximately 50 EUR;
the virtual office cost is approximately 75 EUR per month and it depends on the services requested by the client;
the share capital: there is no minimum amount of money required to be deposited at the registration of the company, therefore the amount must be decided by the businessmen;
the company formation cost if you decide to work with our Dutch specialists starts at around 1,500 EUR in order for you to have a fully operational business;
the accounting services fees - you can benefit from our accounting services starting with a monthly fee of approximately 90 EUR.
Dutch company formation timeline
The timeline of the company registration procedure can be divided into:
- the online procedure of choosing and reserving a company which takes a few hours to complete;
- one day for the drafting and notarization of the company’s incorporation documents;
- registering the company with the Dutch Companies Registrar and obtaining the tax identification number will take another day;
- the registration with the tax authorities and for social security purposes will be completed in another day.
The future business owners must also consider the opening of the bank account which can take a few days and finding the premises for the company which will also be the business’ legal address. This can take a little longer, however, our company formation representatives in the Netherlands
can guide them in choosing the right option and can also help open a foundation - STAK in the Netherlands
Taxation of companies in the Netherlands
Another aspect foreign businessmen wonder about, when starting a business in the Netherlands,
is related to the taxation of the company’s activities
. Once registered for taxation, the Dutch company
will be taxed based on the profits
it makes at a global level if it is a tax resident in this country.
Investors who open a company in Netherlands will need to comply with corporate taxation based on residence, applicable to all companies. A company that is a resident has its place of management in the country and it is taxed on its worldwide income. Other companies, non-resident ones, are only taxed on their Dutch-sourced income. Some exceptions to this rule can apply in case of the income from shareholdings, permanent establishments in several other cases. Branches in the Netherlands are generally exempt from the withholding tax on profit remittances to their foreign companies.
The corporate income tax is levied on all of the profits made from the business, such as trading income, foreign-sourced income, passive income as well as capital gains. Most of the costs related to the business are deductible. The corporate income tax rate in the Netherlands in 2019 was 19% on the first 200,000 euros of taxable profits and 25% on those that exceed this amount.
The tax year in the Netherlands is, in most cases, the same as the calendar year. Investors who start a company in the Netherlands may use an alternative year if specified in the company’s Articles of Association. In the year of incorporation, the company is allowed to have shorter or longer periods, as opposed to the standard 12-month tax year.
As far as financial statements are required, companies are asked to file a provisional assessment within the first month of the financial year. This is based on the prior two years. The corporate income tax return is filed on an annual basis. All filings are made electronically and companies are also asked to accompany these with additional documents that help calculate the taxable profits (the balance sheet, the profits and loss account, and other details, as requested). Late filing or failure to file the returns on the due date results in administrative penalties. Criminal penalties can be imposed in those cases in which fraud or gross negligence is proven.
The taxes that apply after opening a company in the Netherlands, other than the corporate income tax and the withholding tax on dividends, interest, and royalties are:
- - the payroll tax: the company withholds the tax paid on the salaries of the employees;
- - the real property tax: varies according to the municipality; companies can deduct this tax for corporate income tax purposes;
- - social security: both the employer and the employee are expected to pay this tax;
- - transfer tax: a 6% real estate transfer tax applies upon the purchase or property;
- - value-added tax: VAT in Netherlands has a standard rate of 21% and a reduced 9% rate applies to certain types of goods and services.
Tax incentives for those who open a business in the Netherlands
The Netherlands is an attractive location to open a business also because of the incentives available to companies, most importantly in research and development. The Innovation Box is a regime that allows the taxpayer to choose a lower tax rate on taxable profits derived from intangible assets. The regime is subject to certain criteria and it applies in general to profits derived from innovative activities, thus the name.
Investors who open a company in the Netherlands that activates in the research and development sector can reduce the costs associated with these specific types of activities and they can use a scheme that allows them to minimize the payroll tax and the national insurance contributions that are to be remitted. In order to benefit from the R&D reductions, applicants must file an online application and then fill in the R&D statement.
Companies that make an investment in new energy-efficient assets can benefit from an additional deduction when the investment exceeds 2,500 euros and the said investment meets certain energy requirements. A similar reduction can also apply to investments made in assets that help improve the environment.
How easy is it to hire personnel in Netherlands?
The process of hiring employees starts by checking the nationality of the candidates. If they are not Dutch residents, they may need a staying permit. Proper accommodation and work permits must be granted for the non-residents.
The second step is to verify if the employee’s certificates are appropriate. A healthcare insurance must be provided for each employee. From the Tax and Customs Administration, the employer must receive the tax and social insurance number for each hired person.
Most Dutch businesses are covered by the Collective Labor Agreement so it is necessary to check if the particular business complies with it.
After registering the business, the entrepreneur must meet the payroll tax obligation by filling payroll tax statement.This should be handled by a local registered accountant.
The employer must obey the rules regarding working period and the right of the holiday of the employees and also respect the fact that the employee has the right to the statutory minimum salary and a holiday indemnity.
Frequently asked questions related to starting a business in the Netherlands
Do I need a residence permit if I’m not a EU citizen? Yes, non-EU citizens (except the ones from EEA and Switzerland) will need a residence permit and a work permit for performing economic activities in the Netherlands.
Can I avoid double taxation as a foreign investor in the Netherlands? Yes, if your country of origin has signed a double tax treaty with Netherlands. Our company formation agents can offer you more details and help you with assistance related to taxation mattes in Holland.
Can I receive incentives for my business from the Dutch authorities? Yes, you can receive and you need to contact the Netherlands Foreign Investment Agency in order to find out details about them.
Can I receive a startup visa for entrepreneurs? Yes, it is possible, as the Dutch authorities offer a resident permit that is valid for one year for international entrepreneurs who want to start a business in the Netherlands, in certain conditions.
What are the main taxes I should pay if I have a business in the Netherlands? The main taxes for business owners are the following: VAT, income tax, payroll tax (if you have employees), corporation tax (for incorporated businesses).
The most appealing investment industries in the Netherlands
The Netherlands has a multitude of industries in which foreign investors can set up companies
under the same conditions imposed on local businesspersons. However, there are several economic sectors which attract foreign investors because they are hard to find in other countries. Among these there are:
- agriculture which has many branches, among which the most appreciated one is research and development and the creation of new agricultural products;
- the information technology industry which is made of several clusters, each with specific activities supported by the large number of international companies working here;
- floriculture – the Netherlands is the largest exporter of flowers and bulbs in the world;
- logistics which plays an important role in the trading, FMCG and transportation sectors;
– large quantities of products are manufactured in the Netherlands and take the roads of Europe;
- medical, pharmaceutical and biotechnology are some of the most important industries which combine innovation and tradition in the Netherlands.
The Netherlands is a very appealing country when it comes to the industries one can open companies in which is why if you are interested in starting a business in the Netherlands and need information on the regulations you need to comply with, our local advisors can guide you.
Why start a business in the Netherlands
The Netherlands offers many benefits to those interested in setting up businesses here. The first aspect to be considered when choosing to open a company in the Netherlands
is its location with great access to all means of transportation: air, water, and road.
Then, the business climate in the Netherlands is one of the most open in the world when it comes to foreign investors. Apart from benefiting from the same treatment as local entrepreneurs, foreigners will also be offered several incentives specifically targeted at them.
- a progressive corporate taxation system made of two rates of 20% and 25% based on the yearly income generated by a company;
- specific tax deductions for certain activities in fields like IT, research and development and agriculture;
- tax deductions for hiring foreign employees, among which the 30% advance tax ruling
is one of the most appreciated ones;
- the possibility of remitting profits abroad based on specific double taxation agreements;
- no withholding taxes when remitting interests and royalties outside the Netherlands;
- the participation exemption under which foreign shareholders can benefit from exemptions from the corporate tax.
Almost one-third of the foreign investors decided to set up a company in the Netherlands in the private sector, mainly the manufacturing sector. However, the electrical machinery industry, as well as engineering products, chemicals, petroleum and construction are highly developed too. Nevertheless, the Netherlands is quite attractive for company formation due to its favorable relations with countries all over the world, especially Germany, Belgium, France, and UK
. Please contact us
for assistance in opening a business in the Netherlands.