Company Formation in Netherlands
Why choose Netherlands for Company Registration?
Netherlands provides better growth opportunities as the country is ranked 4th in the world by the Competitiveness Ranking 2021 of the Institute of Management Development because it has a very competitive international climate. Netherlands ranks 2nd on economic performance, 4th in business efficiency, 12th on government efficiency and 7th on infrastructure Hence it an optimum place for registration of a company. Due to the European Single Market, you can freely import and export goods and services throughout the entire EU. Next to that, the location of the Netherlands proves to offer great logistical benefits. So You can Register your Company in Netherlands.
Forms of Business registrations in Netherlands
Sole proprietorship:
A Dutch eenmanszaak is a legal structure without legal personality. As sole trader you alone are responsible, and liable, for the company, its finances and its debts. You can only set up one sole proprietorship in the Netherlands, but you can operate under various trade names, perform different commercial activities and work from multiple premises.
The General Partnership
It is for companies with two or more partners united under the same name and having the same economic objectives, with unlimited liability on the firm’s debts. They share the profits among them and they don’t have to present a minimum share capital, like for Dutch BV. The personal assets of each general member of the partnership can be taken by the creditors if there are debts that can’t be covered by the company funds.
The Limited Partnership(CV)
If you are thinking about setting up a commercial partnership (vof), but are short on capital or need a financial backer, then a limited partnership might be just the legal structure for you. In a cv, your financial backer actually becomes a partner in your business. He or she is referred to as a limited, sleeping or silent partner. Although, the managing partners are personally liable for possible debts of the company.
The Private Limited Company (BV)
limited liability company is a limited company whose equity is divided into shares that are owned by shareholders. It is a business structure with legal personality which means that the BV is liable for any debts, rather than individual. A private limited company may appoint a supervisory board to monitor its board of directors (two-tier board), or the supervisors may be part of the board of directors (single-tier board). BV must have 1 director and 1 shareholder and minimum 50% of decision making directors be the residents. The BV should have a Dutch registered address. No minimum capital requirement in case of a BV.
The Public Liability Company (NV)
The Public Liability Company (NV) is proper for large investments and it needs a minimum share capital of 45,000 EUR where at least 20% of this capital must be issued. The board of managers will be responsible for daily decisions. Though, the NV is a large investment vehicle it can even then have a single shareholder. The NV can further opt for listing of the Company on stock exchange.
The Branches/Subsidiaries
The Branches/Subsidiaries of foreign companies can be opened in the Netherlands. The main differences between these two business forms is the degree of independence of the local branch or subsidiary from the parent company.
A branch of a foreign company operating in the Netherlands does not need to register as a separate legal entity, but it does have to be listed in the Dutch Business Register
Foreign companies can only register in the Business Register if they are legal entities. If you wish to open a Dutch branch of, for instance, your foreign sole proprietorship, you will need to set up a new business. If you are a foreign legal entity that does not have a permanent establishment in the Netherlands, you do not have to register with the Business Register. However, if your business involves VAT, you will have to register with the Dutch Tax and Customs Administration.
Foreign legal entities planning to do business in the Netherlands don't have to be converted to a Dutch legal form. The legal entity's organisation and structure is then governed by the foreign law under which it was founded. National laws in the country of origin remain applicable.
A branch of a foreign company operating in the Netherlands does not need to register as a separate legal entity, but it does have to be listed in the Dutch Business Register
Foreign companies can only register in the Business Register if they are legal entities. If you wish to open a Dutch branch of, for instance, your foreign sole proprietorship, you will need to set up a new business. If you are a foreign legal entity that does not have a permanent establishment in the Netherlands, you do not have to register with the Business Register. However, if your business involves VAT, you will have to register with the Dutch Tax and Customs Administration.
Foreign legal entities planning to do business in the Netherlands don't have to be converted to a Dutch legal form. The legal entity's organisation and structure is then governed by the foreign law under which it was founded. National laws in the country of origin remain applicable.
Companies
Domestic Company
A domestic company (DC) is domiciled and doing business in Mauritius. The domestic company can be non-resident of Mauritius with minimum one shareholder. At least one director must be appointed who is resident in Mauritius.
There is no compulsory requirement of registered office and a virtual office may suffice for the registration of a Domestic Company. There are no minimum capital requirements for the
incorporation of a DC.
There is no compulsory requirement of registered office and a virtual office may suffice for the registration of a Domestic Company. There are no minimum capital requirements for the
incorporation of a DC.
Authorized company (AC)
An Authorised Company is an entity where the majority of shares or voting rights or the legal or beneficial interest, business activities and control & management outside of Mauritius. an Authorised Company shall not conduct a business activity specified in the Fourth Schedule. (Banking, Financial services, Providing of registered office facilities, nominee services, directorship services, secretarial services or other services for corporations, Providing trusteeship services by way of business).
An Authorised Company is treated as a non-resident for tax purposes in Mauritius. An Authorised Company also does not benefit from double tax treaties that Mauritius has with various countries. While having its control & management abroad, an Authorised Company is also required to appoint a registered agent in Mauritius.
It can have foreign residents as shareholders and directors.
An Authorised Company is treated as a non-resident for tax purposes in Mauritius. An Authorised Company also does not benefit from double tax treaties that Mauritius has with various countries. While having its control & management abroad, an Authorised Company is also required to appoint a registered agent in Mauritius.
It can have foreign residents as shareholders and directors.
Global Business Cooperation (GBC)
A Global Business Corporation is a resident corporation which proposes to conduct business principally outside of Mauritius and is licenced by the Financial Services Commission.
Where the Company is controlled by non-citizens of Mauritius and its main activities are conducted outside of Mauritius, it will have to apply for a Global Business Licence. A GBC demonstrates substance in Mauritius and being tax resident entity, it benefits from Mauritius’ Double Tax Treaties.
There shall be at least two directors who are resident in Mauritius. However, there can be 1 non-resident shareholder with no minimum capital requirement and can be represented in currency. It is necessary to have a registered office and a principal Bank Account of a GBC in Mauritius.
A GBC enjoys residency in Mauritius for tax purposes and gets benefited from the advantages of the Double Taxation Avoidance Agreements which Mauritius has signed.
Where the Company is controlled by non-citizens of Mauritius and its main activities are conducted outside of Mauritius, it will have to apply for a Global Business Licence. A GBC demonstrates substance in Mauritius and being tax resident entity, it benefits from Mauritius’ Double Tax Treaties.
There shall be at least two directors who are resident in Mauritius. However, there can be 1 non-resident shareholder with no minimum capital requirement and can be represented in currency. It is necessary to have a registered office and a principal Bank Account of a GBC in Mauritius.
A GBC enjoys residency in Mauritius for tax purposes and gets benefited from the advantages of the Double Taxation Avoidance Agreements which Mauritius has signed.
Taxation
If you own a private limited company (bv) or public limited company (nv), you will have to file returns for corporate income tax in the Netherlands on behalf of your company.
The corporate income tax rate depends on the taxable amount. The taxable amount is the taxable profit in a year reduced by deductible losses.
- If the taxable amount is € 395,000 or less, the corporate income tax rate is
15%.
- If the taxable amount is more than € 395,000, the corporate income tax rate is €59,250 plus 25.8% for the taxable amount exceeding € 395,000.
A reduced rate of 9% applies to activities covered by the innovation box. The innovation box provides tax relief to encourage innovative research. All profits earned from innovative activities are taxed at this special rate.
The corporate income tax rate depends on the taxable amount. The taxable amount is the taxable profit in a year reduced by deductible losses.
- If the taxable amount is € 395,000 or less, the corporate income tax rate is
15%.
- If the taxable amount is more than € 395,000, the corporate income tax rate is €59,250 plus 25.8% for the taxable amount exceeding € 395,000.
A reduced rate of 9% applies to activities covered by the innovation box. The innovation box provides tax relief to encourage innovative research. All profits earned from innovative activities are taxed at this special rate.
Dutch Dividend Tax
As a private or public limited company you may decide to distribute profits to your shareholders. This usually takes the form of a dividend. If so, you'll also have to
pay Dutch dividend tax.
Comparative chart for entity types:
pay Dutch dividend tax.
Comparative chart for entity types:
Basis | BV | NV |
|---|---|---|
Transferability of Shares | The shares are not freely transferable to public. | The shares of a Dutch NV are freely transferable, without the required consent of the other shareholders |
Minimum Capital requirement | There is no minimum Share capital requirement in case of a Dutch BV | Dutch NV does require a paid-up share capital of 45,000 EUR. |
Confirmation of Capital | There is no requirement for a banker’s statement in case of BV. | Incorporation of an NV, requires a statement by a bank or an auditor, confirming that the minimum share capital has been paid up |
Regulatory difficulties | The legislation applicable to a BV makes it very flexible and ‘user friendly’ | An NV is more strictly regulated. |
FAQs
Qu. Can I start a company in the Netherlands if I am not living there?
Ans –Yes, citizens of all countries are allowed to register companies in the Netherlands. It even has procedure to register a company remotely.
Qu. Do one need to have a Netherlands business address?
Ans –Yes, the company must be registered in the Netherlands with a local business address.
Qu.Can a non-resident be Shareholder and Director in Dutch Company?
Ans –Yes, the Dutch law provides no requirement for a director or shareholder being a resident in The Netherlands.
Qu. What is the minimum capital requirement for a Dutch company?
Ans –There is no minimum capital requirement. Technically it is 0.01 euros. So you will need to have at least one share of 0.01 euros.
Qu. How long does it take to open a company in the Netherlands?
The timeline for opening a company in the Netherlands can vary depending on factors such as the chosen business structure, completeness of documentation, and processing times. Generally, it takes around 1 to 2 weeks to register a business with the Dutch Chamber of Commerce (KVK) and obtain a Chamber of Commerce number (KvK number).
Qu. What are the benefits of registering a company in the Netherlands?
Registering a company in the Netherlands offers various benefits, including:
- Strategic Location: The Netherlands serves as a gateway to Europe, providing access to a large market of over 500 million consumers.
- Favorable Business Climate: The country boasts a stable political environment, transparent legal system, and robust infrastructure.
- Tax Incentives: The Netherlands offers attractive tax incentives, including participation exemption, innovation box, and tax treaties with numerous countries.
- Skilled Workforce: The Netherlands is home to a highly educated and multilingual workforce, making it an ideal location for business operations.
- Innovation Hub: The country fosters innovation and entrepreneurship, with thriving startup ecosystems and access to research institutions and funding opportunities.
Qu. Why do companies choose the Netherlands?
Companies choose to establish a presence in the Netherlands for several reasons, including its strategic location in Europe, favorable business climate, attractive tax incentives, access to a skilled workforce, and reputation as an innovation hub. Additionally, the country's well-developed infrastructure, strong legal framework, and supportive government policies make it an appealing destination for both startups and multinational corporations.
Qu. Eligibility Criteria for Netherlands Company Formation
To qualify for company formation in the Netherlands, individuals must meet certain eligibility criteria, including:
- Legal Age: The applicant must be at least 18 years old.
- Residency: There are no specific residency requirements for company formation in the Netherlands. Both residents and non-residents can establish businesses.
- Compliance: Applicants must comply with Dutch laws and regulations governing business activities, taxation, and employment.
Qu. Procedure for Company Registration in Netherlands
The procedure for company registration in the Netherlands typically involves the following steps:
- Choose a Business Structure: Decide on the most suitable legal structure for your business, such as a sole proprietorship, partnership, private limited company (BV), or public limited company (NV).
- Choose a Business Name: Select a unique name for your company and check its availability with the Dutch Chamber of Commerce (KVK).
- Prepare Documentation: Prepare the necessary documents, including articles of association, identification documents, and proof of address.
- Register with the Chamber of Commerce: Submit the required documents to the Dutch Chamber of Commerce (KVK) and pay the registration fee.
- Obtain Tax Identification Numbers: Register for tax identification numbers, including the Value Added Tax (VAT) number and Wage Tax number, if applicable.
- Open a Business Bank Account: Open a business bank account with a Dutch bank to manage your company's finances.
- Fulfill Additional Requirements: Depending on the nature of your business, you may need to obtain licenses, permits, or approvals from relevant authorities.
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