Did you know that doing international business has numerous benefits? We are here to provide you with essential information about what you need to know when establishing a company in the Netherlands.
Have you ever dreamed of running an international business in the Netherlands, located at Europe’s front door? If you haven’t — why not? Establishing a company in the Netherlands can be a strategic step toward entering the European market and expanding your global operations.
Overseas business owners who are looking to start a business in the Netherlands may establish operations as a one-man business, a private limited company (BV), a partnership, or a limited partnership. The country’s legal infrastructure is business-friendly, and the process of establishing a company in the Netherlands is streamlined for foreign investors.
Main Forms Of Company/Business In The Netherlands
The two most common types of business entities in the Netherlands are:
- Private Limited Liability Company (Besloten Vennootschap – BV)
- Public Limited Liability Company (Naamloze Vennootschap – NV)
Both structures offer limited liability protection, but the BV is more suitable for small to medium-sized businesses, while the NV is typically chosen by large enterprises or those planning to list on the stock exchange. For many investors, establishing a company in the Netherlands in the form of a BV is the most cost-effective and flexible choice.
Forms Of Corporation In Netherland
Branch and Representative Offices in the Netherlands
Foreign companies that want to explore the Dutch market without establishing a full subsidiary can open a branch office or a representative office. While branches can engage in commercial activities, representative offices are limited to non-commercial tasks such as marketing or coordination. This method can be an initial step toward establishing a company in the Netherlands while minimizing risk.
Taxation in the Netherlands
Corporate Income Tax in Poland
Standard corporate tax rate is 19% and reduced rate is 15% (for some income level and business)
Value Added Tax – VAT
VAT
General VAT rate is 23% in Poland and reduced amounts are 8% and 5%.
| 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.
The Dutch BV (Private limited company)
The Dutch BV (Besloten Vennootschap) is the most popular company type when establishing a company in the Netherlands. The Dutch limited company can be registered with a minimum share capital of 1 EUR, according to corporate law. A Dutch BV is deemed tax resident by law in the Netherlands.
Required documentation for the formation will consist of a legalized and apostilled copy of valid identification and proof of address. A power of attorney is required to be signed by a notary for remote incorporation. But: it is not necessary to travel to Holland to do this. The shareholders can authorize us to take care of the necessary filings on their behalf.
A personal visit is not required for starting a business in the Netherlands, and the procedure can be completed from abroad. We can also open a bank account remotely. With certain banks, the director has to be present to open a bank account.
A limited company in the Netherlands may have corporate shareholders and directors. For the registration process, the corporate shareholders must be verified and have the authority to sign the deed of incorporation or formation. Furthermore, an extract from the business register of the corporate entity must be received from the entities, which will act as shareholder or director. If registration is performed remotely, a power of attorney must be received and signed on behalf of the shareholder or director.
In the case of corporate shareholders, the Dutch company will be a subsidiary. It is also possible to register a Dutch branch; a branch office has less substance than a subsidiary and may be treated differently by the Dutch tax authorities. Substance may come from appointing a resident director.
Dutch NV Company
The Dutch NV (Naamloze Vennootschap) is a public company structure best suited for large-scale investments and enterprises planning stock exchange listings. It requires a minimum capital of EUR 45,000 and is governed by a board of directors. Shareholders can appoint or remove directors through annual meetings.
For investors interested in scaling operations significantly, establishing a company in the Netherlands as an NV offers access to public markets and broader financing opportunities.
Partnership (maatschap)
Entrepreneurs in the liberal professions (such as doctors, lawyers and graphic designers) often set up partnerships (maatschap).
A partnership is an arrangement by means of which at least two partners, who may be individuals or legal entities, agree to conduct a joint business. Each partner brings money, goods and/or manpower into the business. Each partner is personally, either jointly or severally, liable for all the obligations of the partnership. A partnership does not possess legal personality. Registration with the Chamber of Commerce is required for a partnership (maatschap), only if it enters into a business.
A public partnership (openbare maatschap) participates in judicial matters under a common name. The possessions of a public partnership are legally separated from the possessions of the partners.
General/commercial partnership (VOF)
A general partnership can be defined as a public partnership that conducts a business instead of a profession. A VOF and its partners must be registered in the Commercial Register at the Chamber of Commerce.
The Dutch Foundation
The Dutch Foundation is an excellent entity for tax planning. Dutch foundations can be used as commercial entities, tax-free family funds, and holding entities. The foundation may hold shares and real estate, it may strive for profits. Dutch foundations can be tax-exempt under certain conditions. Or can even be exempt from accounting or reporting requirements. If the Dutch foundation is concluded under notary agreement, the foundation will be limited in liability.
Dutch CV company, a limited partnership
Dutch CV company, a limited partnership can be formed with at least two partners, the partners can be legal entities (like a Dutch BV) or individuals. The partnership consists of a partnership agreement and an official registration process in the Dutch business register. The limited partnership has limited or ‘silent’ partners and general partners. The liability for the limited partner is limited to the capital contribution put into the company. This is similar as with a Dutch BV. The general partner is fully liable for the company. The silent partner is liable only up to the amount of his capital contribution. He is not allowed to act as an active partner and his name cannot be used in the name of the partnership. If the silent partner enters the business (to provide extra finance for growth) he becomes liable as an active partner.
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 |
|---|---|---|
| – | € 200,00 | 20.0% |
| 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.
Conclusion
Establishing a company in the Netherlands offers international investors multiple legal structures, minimal capital requirements, and a favorable tax regime. Whether through a BV, NV, partnership, or foundation, the Dutch legal framework is flexible and supportive of global business expansion.For more information, please contact us.