Foreign companies have several types of structures at their disposal if they want to expand their activities on the Dutch market. Apart from the subsidiary and the branch office which are by far the most common ones, there is also the permanent establishment which can be registered under the Company Law in the Netherlands.
Below, our company formation in the Netherlands explain the main characteristics of the permanent establishment and the requirements to set one up. We can also help those who want to open a permanent establishment in the Netherlands.
The permanent establishment is mainly defined by the Netherlands’ double tax treaties under which such a structure can take various forms. Nevertheless, the Dutch permanent establishment is usually set up by foreign companies seeking to have business premises in this country. These premises must offer the foreign company the possibility of operating as an independent company. The permanent establishment is usually employed to service or sell goods to clients in the Netherlands.
The representatives of foreign companies can register permanent establishments with the help of our Dutch company formation specialists.
A Dutch permanent establishment can take various forms, among which:
The permanent establishment is usually created as an extension of a foreign or local company which is also known as a branch office in the Netherlands.
As mentioned above, the term ‘permanent establishment’ is usually used in Dutch double taxation conventions in order to determine how a foreign company will be taxed in the Netherlands and/or in its home country with the intention of avoiding the double imposition of certain taxes.
With a vast experience in taxation matters, our local consultants can help foreign investors determine if they are running their operations in the Netherlands through permanent establishments or not.
The procedure of setting up a Dutch permanent establishment implies registering it with the Trade Register. The incorporation procedure will imply following the same steps as for any other company in the Netherlands:
Our company registration advisors in the Netherlands can help you register a permanent establishment here.
One of the most key aspects of setting up a permanent establishment in the Netherlands is that the income generated by the entity will be taxed here alone. Under the Netherlands’ double tax treaties, the following types of incomes generated by a permanent establishment are liable for taxation in the Netherlands:
According to the European Commission, the Dutch economy:
For assistance in setting up a permanent establishment in the Netherlands, please contact our consultants.