The Netherlands and company formation: what type of company
Do you know that doing an international business has tons of benefits and we are here to inform you further about things you should know in doing business in Netherland
Have you ever dreamed to run an international business in Netherland located at the Europe’s front door ? İf you have not , Why?
Overseas business holders who are looking to start a business in Netherland may establish Netherland operations as a one-man business, a private limited company (BV), a partnership or a limited partnership.
MAIN FORMS OF COMPANY/BUSINESS IN THE NETHERLANDS
The main forms of a company in The Netherlands are the Private Limited Liability Company (BV) and a public limited liability company (NV).
FORMS OF CORPORATION IN NETHERLAND
|Legal||Forms Establishment||Capital required||Liability||Taxation|
|One-man business||Free||none||Private 100%||Income tax, *SME profit dispensation, employer deduction (if hour quota is met)|
|Private Limited Company (BV)||Notarial deed of incorporation||€ 0,01||Board of directors||Partnership tax, income tax over board member salaries and over dividend|
|Public Limited Company (BV)||Notarial deed of incorporation||€ 45.000||Board of directors||Partnership tax, income tax over board member salaries and over dividend|
|Partnership (Maatschap)||Free, preference in writing / (notarial) contract||None||Private for equal amount if partnership does not fulfill obligations||Income tax, *SME profit dispensation, employer deduction (if hour quota is met)|
|Commercial Partnership (VOF)||Free, preference in writing / (notarial) contract||None||All partners privately for 100% if Commercial partnership does not fulfill obligations||Income tax, *SME profit dispensation, employer deduction (if hour quota is met)|
|Limited Partnership (CV)||Free, preference in writing / (notarial) contract||None||Managing partners privately for 100%, Limited partners have limited liability||Managing partners; Income tax, *SME profit dispensation, employer deduction (if hour quota is met)|
|Foundation (Stichting)||Notarial deed of incorporation||None||Board of directors||Possibly partnership tax|
*SME profit dispensation:this is a kind of “tax discount”. One-man businesses and partnerships can deduct 14% of their taxable result, before calculation the tax payable. In fact, they only pay tax on 86% of their taxable profit.
Taxation in Netherlands
Corporate income tax is charged on the taxable profits earned by the company in any given year less the deductible losses. The following are the applicable corporate income tax rates:
|Profit from||Profit up to and including||Rate|
|More than € 200,000||25.0%|
Corporate Income Tax in the Netherlands
The corporate income tax in the Netherlands is 20% up to EUR 200.000 profit a year, the profit of EUR 200.000 and more is taxed at 25%.
The Netherlands has a 21% VAT rate on goods and services delivered in the Netherlands. Between European countries, goods and services may be offered at a 0% VAT rate. Corporations with a VAT number may claim back the VAT. Many international companies have found the Netherlands to be an excellent country to optimize their global tax rates. This is primarily because of the interesting regulations and tax benefits for international companies.