Netherlands
BV Company Formation
Company incorporation services
With the implementation of the Dutch Civil Code changes in October 2012, forming and managing Dutch limited companies, particularly the BV (a highly favored legal structure in international contexts), has become more business-friendly and versatile.
TBA offers comprehensive support for establishing Dutch entities, whether they are private limited companies (BV) or public limited companies (NV). We can facilitate the registration of your Dutch entity efficiently, at competitive rates, and within swift timeframes.
Company information
Corporate Information
Legislative Framework: The primary corporate legislation governing operations in the Netherlands includes:
- Netherlands’ Commercial Code
- The Flex-BV Act 2012
Incorporation Process
To initiate the incorporation process, a Public Notary is provided with the necessary information and documentation to draft the Articles of Association. These articles are subsequently submitted to the Dutch Ministry of Justice.
Before the formal incorporation can proceed, the Ministry of Justice must issue a “Certificate of No Objection.” Once this certificate is obtained, the notary executes the Articles of Incorporation. The newly established BV must then be registered with the Trade Registry of the Chamber of Commerce. While the official documents are prepared in Dutch, English translations are available upon request.
Trading Restrictions
Certain specified groups, including those engaged in banking, insurance, financial services, consumer credit-related services, and employment agencies, are subject to trading restrictions.
Corporate Powers
A company incorporated in the Netherlands possesses the same legal powers as a natural person.
Availability of Shelf Companies
Yes, shelf companies are available.
Legislative Language and Corporate Documentation
All legislative texts and corporate documents are in Dutch.
Registered Office Requirement
Yes, a registered office must be maintained within the Netherlands.
Incorporation Timeline
The process of incorporation typically takes approximately one week.
Name Limitations
Company names must not be similar to or identical with existing entities, well-known names already in use elsewhere, suggestive of illegal activities, deemed undesirable, obscene, offensive, or implying royal or government patronage.
Language of Company Names
Company names can be expressed in any language utilizing the Latin alphabet. The Registrar may request Dutch or English translations to ensure compliance with naming regulations.
Names Requiring Consent or Licensing
Specific terms such as “Bank,” “Building Society,” “Savings,” “Loans,” “Insurance,” “Assurance,” “Reinsurance,” “Fund Management,” “Investment Fund,” “Trust,” “Trustees,” “Chamber of Commerce,” “Co-operation,” “Council,” “Municipal,” or their foreign language equivalents, as well as any name in English or a foreign language that suggests association with the banking or insurance industries, may require consent or licensing.
Suffixes for Limited Liability
Companies with limited liability in the Netherlands commonly use the suffixes “Besloten Vennootschap (BV)” and the newer “Flex-BV.”
Disclosure of Beneficial Ownership to Authorities
While there is no requirement to disclose beneficial ownership to authorities, it’s important to note that if a company has a single shareholder, this information becomes a matter of public record.
Compliance
Authorised and Issued Share Capital
Since October 1, 2012, there is no minimum authorized share capital, and it can be denominated in any currency.
Classes of Shares Permitted
Registered shares with transfer restrictions are allowed. Various types of shares, including those with or without voting rights, are now permissible.
Taxation
Corporate taxation in the Netherlands is based on annual accounts submitted to Dutch tax authorities. Companies can choose their year-end.
Corporate Tax Rates
- 20% for taxable income up to €200,000
- 25% for taxable income exceeding €200,000
Value Added Tax (VAT)
- Standard rate: 21%
- Reduced rate: 6%
Double Taxation Agreements
The Netherlands has more than 95 double tax treaties in place.
License Fee
None.
Annual Return
Companies must file an Annual Return, detailing shareholders and current directors, each year.
Financial Statements Required
All Dutch companies must file accounts with the Chamber of Commerce. Dutch private limited companies must undergo auditing if they meet specific criteria.
Directors
A minimum of one director is required, and they can be natural persons or corporate bodies of any nationality. Dutch tax treaties typically require a company to demonstrate Dutch residency, suggesting a majority of directors should be based in the Netherlands.
Company Secretary
Not applicable.
Shareholders
A single shareholder is the minimum requirement.
Advantages of Registering in the Netherlands
Important Aspects of Dutch BV Company:
BV is a legal entity with its own legal rights and obligations.
Abolishment of the minimum capital requirement for Dutch BVs, eliminating the need to transfer minimum share capital before incorporation.
A Dutch notary deed is necessary for incorporation, containing the BV’s articles of association.
Flexibility to create different types of shares, including those with variable voting rights.
The BV can issue non-voting shares and shares without profit rights, if permitted by the articles.
Shares of a BV can be denominated in a currency other than the Euro.
The BV must be registered with the Dutch trade register and file annual reports there.
Tax Planning through the Netherlands
The Netherlands may not be considered an offshore finance center due to relatively high corporate tax rates. However, it offers several advantages, such as:
Holding companies
Under specific conditions, a Dutch company may qualify for the “participation exemption,” exempting it from corporate tax on income and capital gains from qualifying shareholdings.
Finance Companies
No withholding taxes on interest paid by a Dutch company to a non-resident. Many Dutch tax treaties allow foreign companies to pay interest to a Dutch company without withholding or with reduced withholding tax rates. This makes the Netherlands an attractive location for inter-company loans.
Licensing Companies
No withholding tax on royalty payments from a Dutch company to a non-resident. Similar to interest payments, Dutch tax treaties often provide for zero or reduced withholding tax on royalties. Specific margin requirements may apply.
The Netherlands’ extensive network of double taxation treaties enhances opportunities for structuring international financial transactions efficiently.
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Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.