Start Dutch Company

Want to start a business in the Netherlands?

Starting a business in the Netherlands is now even easier. Our notary partner firms can even perform remote legalization and remote company formation. Which saves you the time and cost of having to legalize your official documents.

Have you been thinking about setting up a business overseas? And seriously considering the Netherlands as a potential option? You are definitely not the first person to come up with this idea. Because it would be a smart decision! The Dutch offer a multitude of benefits for aspiring foreign entrepreneurs. This, in turn, leads to a continuously growing amount of foreigners wanting to invest in the Netherlands. Or start their business here.

Here are some reasons why you should definitely think about it:

• Holland has one of the lowest tax rates in Europe: starting from 19%
• There is also no value added tax (VAT) for transactions between member states of the EU
• The Dutch offer the largest number of treaties for double tax avoidance worldwide
• Dutch companies have an amazing and well-known reputation in global (e-)commerce
• More than 90% of the Dutch speak English and often a second foreign language, like Spanish and French, too
• The Netherlands have a highly educated labor force (third in the global top for education level)
• Holland offers an outstanding and innovative international business atmosphere
• The country welcomes foreign entrepreneurs and investors by offering a very stable legal and political climate as well as superb international relations

The Dutch are strong in many different sectors

One of the main benefits of becoming a company owner in the Netherlands is the multitude of sectors the Dutch are really successful in. The Netherlands offers very favorable prospects to either start a business, or invest in an already existing company. Dutch companies are world-famous for their innovative, pioneering and efficient solutions and ideas. Certain industries stand out in this regard from others, like Information & Technology, Logistics, the Health sector, the Creative & Arts sector, Renewable & Offshore Energy, High-Tech Systems & Innovations, Agriculture and the Pharmaceutical and Chemical sector.

It’s no surprise that Holland was ranked the 3^rd best country for business this year by none other than Forbes Magazine. The World Economic Forum ranked the Netherlands the 5^th most competitive and innovative country in the world. Still not convinced?

Financial and economic opportunities

When considering Holland for your start-up, you are basically also considering the whole European Union. The Netherlands is part of the EU and this provides you with endless possibilities and opportunities:

• The European Single Market allows you to freely import and export services and goods throughout the EU
• The Netherlands houses Schiphol as well as Rotterdam port: two logistical powerhouses connecting your business to the whole world in an instant
• The Netherlands is a stable core member of the EU, which will make your company look solid and dependable too
• The Dutch are famous for their international trade skills and their accessibility to huge international markets, which of course will become available to you too
• The workforce in the Netherlands has long been known as well-educated and bilingual, which allows you access to a plethora of fantastic recruitment opportunities for your company
• The costs for starting a company in the Netherlands are relatively low when compared to a lot of neighboring countries
• Because of this trade mentality and strong infrastructural position, the Netherlands are currently holding the 20^th position of largest economy in the world. Not bad for one of the smallest countries on the planet!
  

  Amsterdam Canals

The Netherlands and neighboring countries: a comparison in tax rates

Next to all the benefits already listed above, the tax rates in Holland are very favorable as well. It’s no secret that The Netherlands is loved by an infinite amount of wealthy investors due to the mild tax rates. Combine that with the innovative atmosphere and logistical power and you have a golden combination. Just take a look at the tax rates of some neighboring countries:

Country	Corporate Income Tax Rate
France	33,33-36,6%
Germany	23-33%
Luxembourg	29-30%
Belgium	29%
Netherlands	19-25,8%

Who can start a business in the Netherlands?

In general, everyone can start a Dutch business. Any persons from any country may start a BV company in the Netherlands, it does not matter from which country you are.

The procedure for foreigner entrepreneurs is slightly different.

Legal business forms in the Netherlands

When you decide to start a business in the Netherlands, you will be presented with a vast array of legal entities to choose from. Limited liability company is an incorporated business structure, this means that your private assets are separate from the business assets. This is also one of the main reasons most foreign entrepreneurs choose to start a Dutch private limited company.

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  Rotterdam Central Station

Characteristics of the Dutch legal form

In general most foreign investors and entrepreneurs choose the private liability company or a BV holding structure due to the largest amount of financial benefits and its limited private liability.

Foreign entrepreneurs mostly opt for a limited company since the Dutch limited does not have any restrictions on foreign residents as owner or director.

Private Limited Company

The private limited company is the most chosen incorporated business form in the Netherlands. Not just by Dutch entrepreneurs but by foreign investors as well. Since 2012 the flex-BV has been introduced, which meant the previous minimum share capital of 18.000 euros was eliminated. Nowadays everyone can start up a private limited company with as little as 1 eurocent.

You can choose to set up a private limited company on your own, or with partners. In that case the ownership of the company is distributed into shares. All shareholders together have the power to make decisions for the company. But the general management is usually in the hands of the directors. It is possible to be both a shareholder and a director. In that case you are considered to be an employee who acts on behalf of the company.

Which company type will you choose in the Netherlands?

Starters are often a bit in doubt about which legal entity will suit their needs best. The choice will mostly be between a private or public limited company. In general if you manage to make a lot of money in a short time, the benefits of a private limited company can prove very advantageous. Not only fiscally speaking, but the Dutch BV is most practical for foreign entrepreneurs. As the company may be owned by any foreign resident.
This is exactly why almost all foreign entrepreneurs and investors will choose the private limited company from the start. The tax rates are lower for a private limited company. This makes it more suitable for companies with a higher turnover and/or investments. Additional benefits of a private limited company include (but are most certainly not limited to):

Limited liability

As a shareholder you will never be personally held accountable for any business debts. All risks are linked (and thus limited) to business investments. So your private funds are in general safe.

Minimum share capital has been reduced to almost nothing

Before October 2012 the minimum share capital for establishing a private limited company used to be 18.000 euros. Since this date the amount has been reduced to a mere 1 euro cent, which opened doors for many more entrepreneurs to invest in this company form.

You won’t have to pay taxes on interest, dividends and royalties

In the Netherlands companies are able to benefit from reduced tax rates on interest, royalties and dividends. This is due to a large network of treaties with nearly a 100 different countries and jurisdictions. You will also be able to benefit from reduced rates on transferred dividends to Dutch companies, and lower tax rates on capital gains from share sales in a source country.

The holding structure for a Dutch private limited company

Apart from a single private limited company, you can also choose to establish a so-called holding structure for your company. This is also a legal entity, which holds only assets. This means that a holding does not have any liability or risks involved with any operations. It is a very secure way to start your business. All actual business activities will be carried out though a subsidiary.

The subsidiary belongs to the umbrella holding company, it is possible to have multiple subsidiaries under one holding. The subsidiary performs all business activities like services or trade and is liable for any debts or claims. The holding however, is safe from these claims or debts. The combination of a holding and a subsidiary is a holding structure, which has the following characteristics:

• the holding structure includes two or more separate private limited companies
• one of these private limited companies is a holding without any business activities
• one (or more) private limited company is a subsidiary and engages in business activities
• the company founder (you) owns the shares of the holding company
• and the holding company owns the shares of the subsidiary
  

Benefits of a holding structure in the Netherlands

When you establish a holding structure, you reduce two unwanted factors: risks and taxes. Risk is reduced because you add an extra layer of protection between your business activities and you as a business owner. You can structure your private limited company in a way that it protects your capital. Profits and pension provisions you accumulate over the years are protected from business related risks this way. In terms of reduced taxes, you can profit from some nifty tax advantages like the participation exemption. This will allow you as an owner to sell your company without having to pay profit tax. How? By simply transferring the profits to the holding company.

A holding structure is advisable for people who:

• will very likely sell their company one day, due to the abovementioned participation exemption
• need risk protection for their capital
• desire to start a fiscally flexible Dutch business

The procedure of starting a Dutch company

If you want to start a company in the Netherlands, it is not mandatory anymore to physically travel here. You and potential other shareholders can authorize our notary partner firm to act on your behalf. The entire procedure can be completed in a very small timeframe if you so wish: only 3-5 working days. This can only be achieved when all your documentation is complete and correct though. By far the largest amount of time is spent on the necessary verification of all documents, so please make sure you checked these well. When we have received all the forms, this is how we proceed:

Step 1

The identity of all the people involved and the accompanying documents are all checked. We also check the availability of your preferred company name.

Step 2

We prepare all the documents for the formation of a business, which will then be sent back to you and possible shareholders to sign. After you place a signature, you send all documents back to us.

Step 3

When we receive the signed documents, we will start the registration procedure. Our partner notary will sign the deed of incorporation and submit the deed of formation to the Dutch Chamber of Commerce. The chamber of commerce will issue a company registration number, which is basically the identification number of your company. At this point, your company officially exists!

The Chamber of Commerce provides us with a corporate extract. After all this, you can basically start doing business. We advise to immediately take care of all other necessities as well at this point and finding a suitable accountant. You will need an accountant for your tax filings and the annual statement which is published every year at the Chamber of Commerce. Lawyers in Netherlands helps with corporate accounting.

How much time does each individual step take?

To illustrate the procedure in steps, every step takes the following amount of time:

• The preparation and signing of all necessary documents: 1-2 days
• The verification and authentication of all received documents: 1-2 days
• The drafting of all the notary documentation: 1-5 days
• Applying for a VAT identification number: (Local VAT number) (depends on the tax office)

Dutch taxes explained in detail

Once you have a business in the Netherlands, you will be obligated to pay taxes. There are multiple types of taxes in relation to businesses:

• VAT: in the Netherlands this is called ‘belasting toegevoegde waarde’ (BTW) or Value added Tax (VAT) in English
• Corporate income tax (Income tax for a corporation)
• Payroll tax when you have employees

Dutch VAT

Apart from certain pre-defined exemptions, all Dutch businesses are obligated to charge VAT on their products and/or services. In most cases, this is the standard rate of 21%. In other cases a lower rate might be applicable. You can find a list of all exemptions on the website of the Dutch tax authorities (Belastingdienst). This tax is collected via the VAT declaration you hand in on a quarterly basis.

The Dutch VAT rates:

• 21% is the standard VAT rate
• 9% is a special lower VAT rate (per 1 january 2019 the lower rate has changed from 6% to 9%)
• 0% is a VAT tax exempt rate
• 0% is also used for transactions between all EU member countries, this is called the ”reverse charge.”

The VAT you pay can be deducted from most business expenses. Think office supplies, travel costs but also larger things like electronics and company vehicles. Last but not least: always remember to submit your quarterly VAT declaration on time. If you don’t, you will be fined by the tax office.

Dutch corporation tax

If you are the owner of a public or private limited company, you will need to pay corporation tax every year. Sometimes associations or foundations also have to pay corporation tax under certain conditions. As mentioned previously, the current corporation tax rates are 19% for all profits below 200.000 euros and 25,8% for all sums above this figure. The Dutch government hopes to attract more foreign investors by making attractive regulations.

Dutch payroll tax

If you plan to hire employees for your business, you will also need to take into account that you will have to deduct payroll taxes from their salaries. Payroll taxes include several separate sums, such as pension premiums, the contribution for insurance and wage tax.

Frequently Asked Questions about starting a Dutch company (FAQ)

1. Can I start a Dutch business while currently living somewhere else?
   It is possible for residents of all countries worldwide to start a business in the Netherlands. To establish a company, you don’t have to be physically present as the whole procedure can be done remotely.
2. Will my company need a Dutch address?
   Yes, your company will have to be registered at a valid address in The Netherlands. There is also an option to start a representative office or branch of your already existing international business. By law, our firm is not allowed to offer this service.
3. Which company forms are available in the Netherlands?
   There is a total of 9 different legal entities in Holland you can choose from. The most popular business type by far is the Dutch private limited company, the ‘BV’. The BV is the only type of company we assist with.
4. I am interested in establishing a private limited company, can you provide me with detailed information about this Dutch legal entity?
   We are always happy to provide you with all the information you need, just give us a call.
   1. What procedure do I have to follow to start a company in the Netherlands?
      The main procedure at our firm includes four steps:
   1. Our notary partner will be drafting the deed of incorporation
   2. Our notary partner will be drafting the Articles of Association
   3. Assisting with an application for a VAT number request to the tax office
5. Which documents do I need to form a Dutch company?
   To start a business you will need Articles (and Memorandum) of Association.
6. Is there a minimum share capital required?
   Since the introduction of the ‘Flex-BV’ in 2012 the minimum share capital for a private limited company is set at 1 euro cent.
7. How long is the procedure to start a Dutch company?
   It will take between 3 to 5 working days to start a business. Please contact us for more information.
8. How can I register a brand or trademark?
   If you want to register a brand or trademark, the logical order would be to first establish a business and then apply for the registration. Our lawyers can assist with preparing the application of a trademark registration at the Benelux trade mark agency.
9. Are there any legal requirements for foreign investors?
   As a foreign investor you basically have exactly the same rights as Dutch citizens. You must keep all relevant legislation in mind when investing, applying for permits and licenses and so on.
10. Can I start an international trade business through a Dutch company?
    Yes, this is a possibility and done often by international traders. Local incorporation can bring you many benefits.
11. Which taxes will I have to pay when I own a Dutch company?
    You will have to pay VAT, income tax, corporate tax if you have an incorporated business and possibly payroll tax if you hire employees.
12. What are the requirements for employment in the Netherlands?
    International employees need permits in order to be able to work in the Netherlands. You will always need to draft a written employment agreement which needs to be signed by both parties. The relationship between you and your employees is regulated by the Dutch Law of Employment.
13. What are the most important legal aspects of starting a company in the Netherlands?
    The things you will need to consider are
    1. Availability of your preferred company name and compliance with relevant Dutch laws
    2. You will need to have an administrative company address in The Netherlands

Do you have a question, or would you like to start a company in the Netherlands?

If you have any questions on the procedure or you would like to ask our advice about your plans for starting a company in the Netherlands, write us for a free consultation. We will answer your case within 1 working day.