Dutch BV or Dutch branch company 2016-10-20T09:43:33+00:00

Dutch BV or Dutch branch company?

You want to set up a Dutch company? But you don’t exactly know which type of legal form to choose? Your options are setting up a Dutch BV company or a Dutch branch company. We would like to explain the differences to you.

Difference Dutch BV and Dutch branch company

If you want to set up a Dutch company, but are hesitating between a Dutch branch or a Dutch BV, please be aware the biggest difference is that with a BV company you need to go to a notary. Downside with a Dutch branch is that the foreign company in the home country is fully liable for everything the Dutch branch is doing.

The (dis)advantages of a Dutch branch company

Advantages:

  • No Dutch legal formalities are required so no Dutch notary is needed, since no legal entity (like the Dutch BV) is set up. The only requirement is to register the Dutch branch at the Chamber of Commerce and apply for the tax numbers at the Dutch tax authorities;
  • Possible extra tax deductions in the home country with a Dutch branch;
  • Easier since nothing needs to be changed (website, email address, name);
  • When you stop doing business in the Netherlands, there will be no liquidation / elimination process needed (closing is easy);
  • No substance is needed. As a result, important management decisions do not have to be made in the Netherlands;
  • The business administration of the branch can be maintained in the home country.

Disadvantages:

  • The foreign company who established the Dutch branch is fully responsible for all the obligations and liabilities of the branch / permanent establishment;
  • To the outside world it looks better to have a legal entity instead of operating under the foreign name on the Dutch market;
  • From an accounting perspective: there might be more overview when choosing a separate Dutch BV.

Steps of setting up a Dutch BV or a Dutch branch company

The steps of setting up a Dutch BV or a Dutch branch company are nearly the same:

In case of a Dutch BV:

  1. The first step is to incorporate the Dutch BV means of a deed of incorporation executed by a Dutch civil law notary.
  2. After the execution, the deed of incorporation needs to be signed by all parties.
  3. The BV company in the Netherlands will be registered with the Dutch Chamber of Commerce by the Dutch civil law notary.
  4. The Dutch tax authorities will issue tax numbers
  5. A Dutch bank account has to be opened in the name of the BV.

In case of a Dutch branch company:

  1. The first step is to register the company at the Dutch chamber of commerce.
  2. The Dutch tax authorities will issue tax numbers

This process takes about 1,5 or 2 weeks.

More information about a Dutch BV company vs. a Dutch branch company?

In case you want more info, please contact us. We would be happy to help you to inform you about the differences and the similarities. Do you want to incorporate a Dutch company, but cannot decide on a legal form? We are happy to give you legal advice. Please do not hesitate to contact us via our contact form. You can also call us from within The Netherlands at (0)85 0030140 or call us from abroad at +31 (0)20 2615615.