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Foreign investors interested in starting a business in the Netherlands should first verify all the available types of entities and choose the best option according to their needs. Our company registration agents in the Netherlands can help you select the right type of company. The Dutch Company Act allows both national and foreign businessmen to open the following types of companies:
- private limited liability companies (BV), which are the most popular business entities in the Netherlands;
- public companies (NV), which are established for large operation or for trading on the stock exchange;
- foundations, which can be established as non-profit organizations (NGOs) in the Netherlands;
- associations and cooperatives, which can be employed for the creation of Dutch investment funds;
- general and limited partnerships, which are not that often established in this country.
With a vast experience in the field of company registration, our Dutch consultants can help foreign investors with the establishment of any type of company.
The sole proprietorship in the Netherlands
The sole trader is the simplest business form and the easiest way of starting a business in the Netherlands. Foreign investors who want to set up their own businesses as sole proprietors must first obtain a residence permit. They can also apply for a Dutch self-employment visa which will allow them to start a Dutch company.
The main characteristics of the sole proprietorship are that it can only be established by one person who will have a full responsibility for the business, including its debts and obligations. The disadvantage is that the liability will include the owner’s personal assets.
The sole trader also has certain advantages, especially related to its taxation, however, if the business start earning profits that no longer allows it to operate as a sole proprietorship, it can be converted into a limited liability company.
The registration of a sole proprietorship is quite simple, and it only requires a business registration form to be filed with the Trade Register. After that, the sole trader must obtain the necessary licenses which will allow him or her to start the activities.
Our company formation specialists in the Netherlands can help foreigners who come here and want to set up a sole proprietorship.
The Dutch private limited liability company (BV)
The private limited liability company or the Dutch BV is the most employed type of company in the Netherlands. According to the new Company Act, a Dutch BV does not require to have minimum share capital anymore. The Dutch BV must have at least one shareholder whose responsibility is limited to the amount invested in the company.
Public companies in the Netherlands
The Dutch public company (NV) is the legal form employed by those wanting to establish a company in order to be listed on the Stock Exchange. The minimum share capital for opening a public company in the Netherlands is 45,000 euros.
During the last years, the Netherlands has become a sought destination for opening a foundation. Dutch foundations can be established very easy, requiring a deed of formation drafted and notarized by a public notary. The Dutch foundation is one of the best tax minimization vehicles.
Associations and cooperatives in the Netherlands
Associations are usually established as non-profit organizations and are not required to register with the Dutch Trade Register. Cooperatives are associations that can pay dividends to their members.
The main characteristics of Dutch companies can also be found in the scheme below:
The difference between the two types of companies resides in the liability of the partners regarding the debts and the obligations of the company. The partners in a general partnership are jointly and severally accountable for the company’s debts and obligations. In limited partnerships, there is a silent partner and a general one. The general partner will be held accountable for the company’s debts with all his assets, while the silent partner will be liable only up to the amount invested.
Dutch professional partnerships are usually created as organizations established by professionals with the purpose of offering specific services and not for carrying out a commercial activity.
The subsidiary, the branch office and the liaison office in the Netherlands
The subsidiary and the branch office are business forms which can be registered by foreign companies expanding their operations in the Netherlands. The main differences between these types of companies are related to the relationship with the parent company and the activities they can undertake in the Netherlands.
The subsidiary has a higher degree of independence and must be registered as a limited liability company, be it private or public. It must respect the same share capital requirements of the business form it takes and must fulfill the same tax obligations of a local company. In terms of licensing, the subsidiary can undertake various types of activities which need not be bound to those of the parent company.
Compared to the subsidiary, the branch office will operate as a satellite of a foreign company in the Netherlands. This type of company cannot undertake other activities than those of the parent company and the latter will have all management decisions related to the operations of the Dutch branch.
The greatest advantage of the branch office is that it has low incorporation and operation costs and can be established quite quickly. Most of the times, branch offices operate in the Dutch financial sector.
When it comes to the registration of any of these two business forms, the parent company will need to file their information with the Dutch Companies Registrar and appoint legal representatives for the companies in the Netherlands.
The liaison or representative office, on the other hand, is a non-corporate business form which can be registered by foreign companies in the Netherlands. This type of structure will be set up in the Netherlands for marketing and promotional activities. It is also a suitable structure before the foreign company starts activating on the Dutch market.
Our company registration representatives in the Netherlands can provide a detailed presentation of these types of companies and can help foreign investors in choosing the right business form in accordance with their needs.
The European company in the Netherlands
As a member of the European Union, the Netherlands has also adopted one of the business structures which can be set up in any of the EU countries: the European company.
The European company (Societas Europaea) or simply SE is a common business form in the Netherlands and can be registered:
- as a merger between two companies registered in two different EU countries;
- through the usual registration procedure in the Netherlands;
- by changing the legal form of a local company.
Just like the SE, there is also the possibility of registering a European cooperative company which resembles the Dutch cooperative.
You can also watch this video for more information on the types of companies available for registration in the Netherlands:
Requirements to register companies in the Netherlands
drafting the incorporation documents, Articles of Association in the case of corporate entities and other agreements for non-corporate structures;
notarizing and filing the incorporation documents with the Dutch Trade Register;
tax registration is also mandatory no matter the type of company established, this is not available for VAT registration, where certain income thresholds apply;
having a local address for the company is another compulsory requirement;
the management of the company must also be ensured by at least one director in the case of companies, and one of the members in the case of partnerships.
Taxation of companies in the Netherlands
Dutch companies are subject to the income tax on profits based on the corporate income they make in one year on their global earnings. These companies will be levied the corporate at two different rates based on the threshold of 200,000 euros. Companies registering profits below this amount will be applied the corporate tax at a 20% rate, while those earning above this threshold will be imposed a 25% rate on their profits.