The Netherlands, commonly known as Holland, is usually considered one of the world’s most calm and liberal countries, with a nonchalant attitude towards, well, practically everything. This also extends to business; conducting business in the Netherlands is generally simple and stress-free due to the Dutch people’s openness to and acceptance of entrepreneurship.
Furthermore, the country’s central geographical location within Europe, as well as its superior infrastructure and logistics services, draws a large number of European and American corporations wanting to establish headquarters and regional offices each year. This is an increasing tendency in the aftermath of Brexit. There is also an increasing tendency among Asian companies to do the same. To date, the Netherlands is home to more than 400 of the world’s 500 biggest companies.
Setting up a company in the Netherlands is not difficult; nonetheless, the structure utilized to carry out one’s operations must be chosen for a variety of reasons. Each entrepreneur must decide on the business form to use to carry out their activity. The private limited liability company, or BV, is the most popular and widely used kind of corporation in the Netherlands; nevertheless, there are alternative structures available. Each legal entity has its own set of benefits. Nonetheless, one of the most crucial considerations to make is whether your company will have a corporate or non-corporate personality since this will affect your obligation to the business.
In this article, our team at Tetra Consultants has introduced the different types of companies in the Netherlands so you can make a more informed decision on the corporate entity you would like to proceed with, once you decide to register company in Netherlands.
Types of companies in the Netherlands
Incorporated business structures
- Incorporated businesses must have a legal form (i.e., a corporate personality or legal entity) reflected by a notary deed. This document safeguards the owner from future corporate debts. There are two main categories of incorporated structures in the Netherlands:
The Dutch Private Limited Company (BV)
- The most frequent type of corporation in the Netherlands is a private limited liability company. It is analogous to the German GmBH, the American LLC, and the English Ltd. Limited liability companies are corporations in which the stock is split into shares. Entrepreneurs investing in the Netherlands frequently use the Dutch private limited company (BV).
- Because the Dutch company legislation has been revised, a Dutch BV no longer requires a minimum capital deposit. A Dutch BV must have at least one resident director and one shareholder of any nationality, and liability is limited to the capital deposited. Further, the shares of the Dutch BV can be transferred by a notary deed.
- Tetra Consultants team can assist with the provision of nominee director services, a resident agent, and a local registered office in order to proceed with the company registration in the Netherlands.
The Dutch Public Company (NV)
- The Netherlands public company, or NV, is the most common legal structure for enterprises that want to be listed on the Dutch Stock Exchange. The NV requires a share capital of €45,000. Public companies are businesses in which a portion of the stock or share is traded on the Dutch stock market for the general public. They can put money into the business in exchange for stock. The NV corporation differs from the Dutch BV in the sense that its shares are readily tradeable, whereas the Dutch BV requires a notary deed. Royal Dutch Shell is the current largest publicly traded Dutch company.
Unincorporated business structures
- A legal form is not necessary for unincorporated business entities (e.g. notarial deeds). Private assets of the owners, on the other hand, might be confiscated to satisfy the business’s outstanding debts. Such enterprises can be formed at the Commercial Chamber without the involvement of a Latin notary.
The Dutch Sole Proprietorship
- The Dutch sole proprietorship is the most popular company structure for independent individuals. The one-man company must file the same tax returns as natural individuals. The owner’s social security number serves as the company’s tax identification number. Because the owner is personally accountable if the firm incurs debts, many entrepreneurs opt to form a limited liability corporation to reduce entrepreneurial risk.
The Dutch Partnerships
- Partnerships comprise two partners or a group of investors who are equally liable and responsible for the enterprise’s actions or consequences. There are two types of partnerships in the Netherlands: private and public. A general partnership’s participants can be held jointly liable for the partnership’s whole liabilities, while severe accountabilities may apply in normal conditions regarding the company’s duties and debts. In the Netherlands, limited partnerships are made up of a general partner and a silent partner.
The General Partnership
- General partnerships exist when two or more persons own the same amount of ownership in a business and are thus equally accountable for the company’s activities, debt, and disputes. Usually, the terms of such partnership are strictly determined by the partnership agreements drafted.
The Professional Partnership
- A professional partnership consists of two or more partners, each of whom is a professional and personally liable for his or her own claims. Professional partnerships are appropriate for dentists, attorneys, accountants, and other self-employed professionals.
The Limited Partnership
- The Dutch CV is made up of two or more partners. One of the partners takes on the job of a general partner, managing the firm. The general partner’s responsibility is unlimited. The other partner or partners are referred to as “silent partners.” The silent partner’s involvement is restricted to his capital investment. The silent partner may or may not be active in the company’s management.
The Dutch Private Foundations
- A Dutch foundation is a legal private entity formed only to serve a certain goal, whether for personal gain, societal good, or charity. The incorporation process is simple and ideal for charities, small family enterprises, and estate planning. The Dutch Stichting can be utilized to minimize taxes.
- The Stak Foundation is frequently used to divide the control and economic ownership of the company by certifying the shares. While the foundation’s board is in charge of running the corporation, the certificates may be given to an heir.
- The Dutch law differentiates between two foundations with specific purposes, the ANBI and the SBBI. The ANBI is commonly used for general-purpose charitable foundations and may be granted by the tax authorities to charitable foundations (this may result in significant tax advantages for the ANBI and the donators). The SBBI is a foundation with the purpose of unifying members in a certain goal, such as an orchestra.
The Dutch Associations and Cooperatives
- Associations are frequently founded as nonprofit organizations. This kind of organization is used by the majority of neighborhood sports groups; members contribute to cover the associations’ overall expenses. Associations that provide financial support to their members are referred to as cooperatives. A cooperative might be a collection of little businesses working together on marketing initiatives in the same area.
Business registration process in the Netherlands:
- By now you should have a decent understanding of what kind of legal entity you want to register in the Netherlands. If you are a sole proprietor, you do not need to register as a legal entity in order to conduct business in Holland. Dutch corporate law and specific legal entities clearly distinguish organizations such as causes, NGOs, and professional partnerships.
- There are several benefits to doing business in Holland, and Dutch legal companies are quite straightforward to incorporate provided you have all of the necessary paperwork. Dutch business legislation supports both domestic and international enterprise, and Holland has some of Europe’s lowest company tax rates. You will have access to a large market and the infrastructure to enable you to develop your business rapidly once you are established.
- Tetra Consultants’ team of experts is well-versed and experienced with the registration of companies in the Netherlands. The steps to register company in the Netherlands can be as follow:
- Step 1: Planning of your business idea
- Step 2: Choosing a suitable corporate entity
- Step 3: Reserving the company name and registration through the Chamber of Commerce (KVK)
- Step 4: Corporate bank account opening
- Step 5: Registration with tax authorities and obtaining relevant business licenses
- Step 6: Staying compliant with financial reporting and tax requirements
- Through this article, you would have learned the different types of companies in Netherlands. If you are unsure of the types of business entities in the Netherlands that suit your business the best, you may wish to engage Tetra Consultants. With Tetra Consultants by your side, the registration process of your business in the Netherlands will be smooth and hassle-free. Our comprehensive service package includes planning and strategizing with our clients to select a suitable business entity, completing the registration process, obtaining required licenses, opening a corporate bank account, and ensuring compliance with government regulations.
- Contact us to find out more about Netherlands company registration and our dedicated and experienced team will revert within the next 24 hours.