Company formation in the Netherlands
Do you want to know more about company formation in the Netherlands or Dutch company formation and incorporation? Setting up a Dutch private limited liability company (Dutch BV) can be quite complex for somebody from abroad. Please find below the procedure and the actions that need to be taken for the Dutch company formation and incorporation.
Setting up a company in the Netherlands can be very lucrative for both companies and individuals. Below, we have outlined several reasons that should be considered when thinking about starting a Dutch company. MFFA Tax Advice can assist you during the whole process of the establishment and the many years ahead, regarding all tax and related legal and accounting matters. For example, we support you step by step through the entire process of the formation of a BV company or with the set up of a branch in the Netherlands.
Reasons for starting a company in the Netherlands
- Infrastructure and location: Gateway further into Europe via world class main ports Rotterdam Harbor, Schiphol Airport, via train, boat or highway.
- Highly educated workforce: Knowledge and language skills are world class in a variety of fields.
- International business environment: Many multinational enterprises have their headquarters in the Netherlands
- Political stability: The Dutch political landscape is predictable and often initiates projects to further enhance the business climate.
What is the procedure of company formation in the Netherlands?
The Dutch company formation comprises the following steps:
- A Dutch BV is incorporated by means of a deed of incorporation executed by a Dutch civil law notary. Officially the deed of incorporation is in Dutch. MFFA Tax Advice will provide a full translation.
- After the execution, the deed of incorporation needs to be signed by all parties. It is not required to have the incorporator (or its representatives) appear in person before the civil law notary to execute the deed of incorporation. The incorporator may provide a power of attorney to the notary. Please note that the power(s) of attorney has (have) to be signed by (the representative(s) of) the incorporator, duly authorized to do so, and the signature(s) must be legalized by a notary or lawyer. If the incorporator is a foreign company, the signatory’s authority must be confirmed as well.
- The BV company in the Netherlands must be registered with the Dutch Chamber of Commerce
- The Dutch tax authorities will issue tax numbers
- A Dutch bank account has to be opened in the name of the BV.
Fiscal reasons for company formation in Holland
Apart from the above reasons, there are also fiscal reasons to set up a company in the Netherlands. Fiscal reasons are one of the most important factors for European, US and Asian companies for coming to the Netherlands. Some fiscal advantages when establishing your business in Holland are:
- The Dutch participation exemption for incoming dividends and capital gains;
- Clarity and certainty in advance with the Dutch tax authorities on future tax positions (Dutch ruling policy) and the willingness to cooperate and support;
- The Dutch Cooperation (Dutch Coop) outgoing dividends from the Dutch Coop are not subject to dividend withholding tax;
- Innovation Box (R&D) resulting in a tax rate of 5% (effective);
- Article 23 VAT license: This tax facility avoids immediate payment of VAT upon importation (VAT deferral);
- 30% tax ruling which is an attractive instrument for employers to attract high qualified/skilled personnel;
- The Netherlands concluded many tax agreements with a large group of countries (avoidance of double taxation)
Company formation in the Netherlands does require some necessary steps in order to start your Dutch operations. Besides the practical aspects such as a business address (office space, warehouse, etc.) and a proper name, other aspects concerning legal and tax matters have to be taken care of. Contact MFFA Tax Advice for a reliable partner for your starting or expanding company.
Frequently asked questions concerning company formation
We receive frequently asked questions from businesses wishing to form a Dutch company, such as:
Before we set up the company, we will provide you with a step-by-step plan of approach of the whole incorporation (depending of your requirements). Consequently, we will start the whole set up such as opening a bank account, arrange business address, check availability trade name, housing, notary (if applicable), chamber of commerce, registration Dutch tax authorities (wage tax number, VAT and CIT number) etc. Usually, it takes around 2-3 weeks to finalize the whole incorporation and formation of a Dutch company (opening a Dutch BV).
- The incorporation costs for a branch in the Netherlands are lower then for a Dutch BV;
- Regarding the liability: The foreign company who formed the permanent establishment is liable for the obligations. The Dutch BV is a legal entity, as a result the shareholder is liable to the extent of its capital contribution;
- For the reputation of a company a Dutch BV looks better to the outside world then performing through a branch
- Different local tax regulations may apply for a branch than for a Dutch BV (for example receiving licenses etc.)
- For wage tax, corporate income tax and VAT the same rules apply for both. With respect to dividend a branch is in principle free of withholding tax.
Feel free to contact us if you would like to discuss if a branch or a subsidiary is better for your business in the Netherlands.
- Tax structuring (so determine the best tax structure in combination with all the entities)
- Implementation and registration of the company at the Dutch tax authorities and chamber of commerce;
- Having the business address on our company address
- Relocation services for the employees (finding a house or business address, arrange a work permit for non-EU, arrange employment contract etc.);
- Implement and maintain a payroll administration / wage tax obligations (application 30% ruling)
- Assignments / secondments in the Netherlands
- Tax compliance services
- Applications of subsidies
- VAT advice
- Accountancy services
Download our guide to doing business in the Netherlands
Specific info about forming a Dutch company
A proposed name may conflict with existing names or may be misleading to the public. Therefore, a trade name survey should be initiated with the various Trade Registers of the Chamber of Commerce in the Netherlands. If you provide us the proposed name for the BV, we will check for you if there is any conflict.
The chosen trade name may also conflict with an already existing other intellectual property right, such as a trademark. We can advise you in this respect.
Registered seat and company address
Under Dutch law, the articles of association must state the registered seat of the company, which has to be situated in the Netherlands. It should be noted that the registered seat and the address where the company maintains its main office may be in different cities.
A description of the anticipated business activities of the BV company in the Netherlands must be included in the objects clause of the articles of association.
Capital structure / share capital
The share capital of the Dutch BV can be incorporated with one share with a value of € 0,01 and one voting right. No other requirements are involved.
Power to represent the Dutch BV company
The management board as a whole is authorized to represent the BV company, at law and otherwise. Furthermore, each managing director is authorized to represent the BV. In the event that there is more than one managing director the articles of association may provide that a managing director may only act jointly with one or more managing directors or other persons.
The articles of association may also provide that certain acts of managing directors are subject to prior approval of the supervisory board (if any) or of the general meeting of shareholders. Such restrictions, however, cannot be invoked by or against third parties and, therefore, do not restrict a director’s power to represent the company.
Based on Dutch tax rules issued by the Dutch revenue, the decisions of the Dutch BV must be taken in the Netherlands. Therefore, it is recommended to have one Dutch resident managing director. A Dutch trust service provider can offer this service for you. See also our article about substance in the Netherlands
More info about company formation in the Netherlands?
Do you want more information about the Dutch company formation and incorporation of BV company? Or do you want a proposal how much the incorporation and maintenance cost will be? You can make an appointment through our contact form or give us a call from within The Netherlands at (0)85 0030140 or call us from abroad at +31 (0)20 2615615.