Available Jurisdictions


Netherlands

Company Registration: The Besloten Vennootschap (BV)

Netherlands or Holland (NL) legislation is based on Civil law and the governing law for Dutch entities is the Commercial Code of the Netherlands with the most commonly used form of private business entity being the Dutch Besloten Vennootschap (BV) of limited Liability Company whereby the liability of the beneficiaries of the company is limited to the amount, if any, unpaid on their respective shares, in other words the liability of the members is limited up to the amount contributed to the capital of the company.

 

The information below relates to Besloten Vennootschap (BV) registration procedure and the information & documentation that must be provided to our Law Firm by the client in order to register a BV:

 

 

Company name

The Besloten Vennootschap (BV) must have the following suffix to denote limited liability: BV.

 

The BV cannot have a name that is similar to or identical to an existing company, a well-known name that is known to exist elsewhere, a name that implies illegal activities, a name, which in the opinion of the Registrar is considered undesirable, obscene or offensive or a name that implies royal or government patronage.

 

The BV name can be expressed in any language using the Latin alphabet. The Registrar may request a Dutch or English translation to ensure that the proposed name does not contravene name restrictions.

 

The BV requires consent or a License for 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 or any name in English or a foreign language that may suggest association with the banking or insurance industries.

 

 

Directors, Shareholders, Secretary & Registered Office

Details of beneficial directors and shareholders such as nationality, country of residence, address, profession etc.

 

Scanned and notarized copy of the passport of the directors and beneficiary shareholders.

 

Scanned copy of a recent (not older than 3 months) utility bill, i.e. electricity bill, being proof of residence of the beneficiary shareholders and the directors.

 

The BV can be incorporated with one director, directors can be individuals or companies and there is no requirement for a local resident or Dutch director but in order to obtain relief under the taxation treaties signed by The Netherlands it is likely that the company would need to be seen to be Dutch resident and therefore have a majority of the directors based in The Netherlands.

 

The BV can be incorporated with one shareholder and shareholders can be individuals or companies.

 

The BV can be incorporated with 100% foreign ownership.

 

The BV can be incorporated with nominee directors and/or nominee shareholders provided relevant Nominee Agreements & Deed of Indemnity are signed in favor of our Law Firm.

 

The BV can hold the annual board of directors anywhere.

The BV must hold its annual meetings of the shareholders in the Netherlands.

 

The BV need not be incorporated with a local secretary.

 

The BV must be incorporated with a registered office in the Netherlands.

 

The BV cannot be subject to re-domiciliation.

 

 

Activity

The BV cannot engage in banking, insurance, financial services, consumer credit related services and employment agencies.

 

 

Share Capital

The standard authorized share capital is € 90, 000 of which 20% (€ 18,000) must be issued and fully paid.

 

The minimum paid-up share capital is € 18, 000.

 

The BV can have various classes of Shares and registered shares have restrictions on their transferability

 

 

Confidentiality

There is no disclosure of Beneficial Ownership to the authorities, although if the company has a single shareholder this is a matter of public record.

 

The BV can be incorporated with nominee directors and/or nominee shareholders.

 

The names of the directors are publicly accessible therefore BV is usually registered with nominee directors and nominee shareholders so that it is they who appear instead in the public records.

 

The names of the shareholders are publicly accessible when there is only one shareholder, not when there is more.

 

Time schedule & delivery

The process of company registration & apostil takes a minimum of 4 weeks, plus the time to deliver the company via express courier (DHL).

Company Registration: The Naamloze Vennootschap (NV)

Netherlands or Holland (NL) legislation is based on Civil law and the governing law for Dutch entities is the Commercial Code of the Netherlands with the most commonly used form of public business entity being the Dutch Naamloze Vennootschap (NV)which aims at raising capital publicly.

 

The information below relates to Naamloze Vennootschap (NV) registration procedure and the information & documentation that must be provided to our Law Firm by the client in order to register a NV:

 

 

Company name

The Naamloze Vennootschap (NV) must have the following suffix to denote limited liability: NV.

 

The NV cannot have a name that is similar to or identical to an existing company, a well-known name that is known to exist elsewhere, a name that implies illegal activities, a name, which in the opinion of the Registrar is considered undesirable, obscene or offensive or a name that implies royal or government patronage.

 

The NV name can be expressed in any language using the Latin alphabet. The Registrar may request a Dutch or English translation to ensure that the proposed name does not contravene name restrictions.

 

The NV requires consent or a License for 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 or any name in English or a foreign language that may suggest association with the banking or insurance industries.

 

 

Directors, Shareholders, Secretary & Registered Office

Details of beneficial directors and shareholders such as nationality, country of residence, address, profession etc.

 

Scanned and notarized copy of the passport of the directors and beneficiary shareholders.

 

Scanned copy of a recent (not older than 3 months) utility bill, i.e. electricity bill, being proof of residence of the beneficiary shareholders and the directors.

 

The NV can be incorporated with one director, directors can be individuals or companies and there is no requirement for a local resident or Dutch director but in order to obtain relief under the taxation treaties signed by The Netherlands it is likely that the company would need to be seen to be Dutch resident and therefore have a majority of the directors based in The Netherlands.

 

The NV can be incorporated with one shareholder and shareholders can be individuals or companies.

 

The NV can be incorporated with 100% foreign ownership.

 

The NV can be incorporated with nominee directors and/or nominee shareholders provided relevant Nominee Agreements & Deed of Indemnity are signed in favor of our Law Firm.

 

The NV can hold the annual board of directors anywhere.

The NV must hold its annual meetings of the shareholders in the Netherlands.

 

The NV need not be incorporated with a local secretary.

 

The NV must be incorporated with a registered office in the Netherlands.

 

The NV cannot be subject to re-domiciliation.

 

 

Activity

The NV cannot engage in banking, insurance, financial services, consumer credit related services and employment agencies.

 

Share Capital

The standard authorized share capital is € 225, 000 of which 20% (€ 45,000) must be issued and fully paid.

 

The minimum paid-up share capital is € 45, 000.

 

The NV can have registered or bearer shares

 

 

Confidentiality

There is no disclosure of Beneficial Ownership to the authorities, although if the company has a single shareholder this is a matter of public record.

 

The NV can be incorporated with nominee directors and/or nominee shareholders.

 

The names of the directors are publicly accessible therefore BV is usually registered with nominee directors and nominee shareholders so that it is they who appear instead in the public records.

 

The names of the shareholders are publicly accessible when there is only one shareholder, not when there is more.

 

Time schedule & delivery

The process of company registration & apostil takes a minimum of 4 weeks, plus the time to deliver the company via express courier (DHL).

Entity Registration: The Limited Liability Optional Cooperative (Coop)

Netherlands or Holland (NL) legislation is based on Civil law and the governing law for Dutch entities is the Commercial Code of the Netherlands with the most commonly used form of association entity being the Dutch Limited Liability Optional Cooperative (Coop) whose articles of association may exclude or limit any liability of the members or former members of the cooperative.

 

The Coop is a special type of association which has its roots in the agricultural sector. The Coop is an agreement and provides therefore a lot of flexibility regarding content of the articles and profit allocation between members

 

The Coop is established by notaries deed, and, as a separate legal entity, can own assets, contract in its own name, sue and be sued.

 

The information below relates to Limited Liability Optional Cooperative (Coop) registration procedure and the information & documentation that must be provided to our Law Firm by the client in order to register a Coop:

 

Company name

The Limited Liability Optional Cooperative (Coop) must have the following suffix to denote limited liability: Coop.

 

Other criteria apply as for BV & NV entities (see relevant web pages).

 

Directors, Members & Registered Office

Details of beneficial directors and shareholders such as nationality, country of residence, address, profession etc.

 

Scanned and notarized copy of the passport of the directors and beneficiary shareholders.

 

Scanned copy of a recent (not older than 3 months) utility bill, i.e. electricity bill, being proof of residence of the beneficiary shareholders and the directors.

 

The Coop can be incorporated with one director, directors can be individuals or companies and there is no requirement for a local resident or Dutch director.

 

The Coop must be incorporated with two members and members can be individuals or companies of any nationality but can then change to one member.

 

The Coop can be incorporated with 100% foreign ownership.

 

The Coop need not be incorporated with a local secretary.

 

The Coop must be incorporated with a registered office in the Netherlands.

 

Activity

The Coop can own assets, contract in its own name, sue and be sued.

 

The Coop is increasingly used as holding and financing company.

 

No minimum Share Capital

There is no standard authorized share capital requirement or minimum paid-up share capital requirement.

 

Confidentiality

The names of the directors are not publicly accessible.

 

Time schedule & delivery

The process of company registration & apostil takes a minimum of 2 weeks, plus the time to deliver the company via express courier (DHL).

Taxation, Reports & Double Tax Treaties

Below are the main features of the Dutch tax system:

 

Dutch companies, whether private Besloten Vennootschap (BV) or Naamloze Vennootschap (NV) or Limited Liability Optional Cooperative (Coop) need to have ‘substance’ (presence in NL with offices & staff) in order to benefit from tax advantages.

 

Taxation is paid by companies in the Netherlands based upon annual accounts, which are submitted to the Dutch tax authorities at the end of the company’s financial year. A company is free to choose its own year-end.

 

The Dutch Holding Company, whether BV or NV or a Coop is an ordinary company which falls within the scope of general tax law and therefore benefits from the double taxation treaties and the European tax directives.

The Dutch holding company may be used to combine various activities such as collecting dividends, interest and royalties from subsidiaries.

 

Corporate Tax Rates are:

20% for taxable income up to €40,000

23% for taxable income above €40,000 and not exceeding €200,000

25.5% for taxable income above €200,000

 

Corporate income tax is charged on worldwide profits of companies resident in the Netherlands. However, the taxable profit is not necessarily calculated on the basis of the annual financial statements.

 

Expenses incurred in connection with the conduct of a business are, in principle, deductible. If expenses exceed normal arm’s length charges and are incurred directly or indirectly for the benefit of shareholders or related parties, the excess is considered a non-deductible profit distribution and possibly regarded as hidden distribution of dividends.

 

The costs of running the subsidiary are not deductible from the taxable profits of the parent Dutch company if participation exemption is applied. However, according to changes in the law effective from 1 January 2004, the Dutch holding company is able to receive tax free dividends and capital gains from its subsidiary and is allowed to deduct expenses, including interest on loans.

 

 

Participation exemption from Dutch corporate tax is allowed on:

(1). Capital gains and dividends derived from qualifying subsidiaries (“participation exemption”);

 

No distinction is made between capital gains and other income. All income is taxed at the corporate tax rate. However, under the participation exemption, all capital gains on the sale of shares of a subsidiary are tax free in the Netherlands irrespective of whether the subsidiary is resident or non-resident.

 

The general rule is that all dividends paid by a subsidiary to a Dutch parent company are subject to corporate income tax.

 

Under the EU Parent-subsidiary Directive, if a Dutch company holds at least 25% of the shares of another EU company no tax will be imposed on dividends.

 

Where a Dutch holding company comes within the “participation exemption rules” all income received from the subsidiary whether by way of dividends or otherwise is tax free if the following conditions are met:

-the Dutch holding company must hold at least 5% of the subsidiary’s shares (a trading company that owns shares in another corporate entity is deemed a holding company for purposes of the participation exemption rules);

-shares must be held since the beginning of the fiscal year but not as current assets: this applies to BV & NV entities, there is no holding period for Coop entities.

-the parent company must be involved in the management of the subsidiary.

 

(2). Income attributable to a foreign business enterprise (“permanent establishment”).

 

Withholding tax on Dividends applies to BV & NV entities, not to Coop entities. The Coop’s profits may be distributed to its members.

Withholding tax on Dividends is at 15% but may be reduced under a tax treaty concluded by the Netherlands. Dividends paid by a Dutch company to an entity in another EU Member state are exempt from withholding tax if the following provisions are met:

-Each company is resident in the European Union (EU) or an European Economic Area (EEA) state, and

-The EU or EEA investor holds a minimum of 5% in its EU shareholding, which qualifies under the Dutch participation exemption rules if the place of residence of the EU/EEA investor would have been the Netherlands.

 

Withholding tax under Dutch domestic law does not apply to interest and royalties paid by a Dutch company.

 

 

A tax group (“fiscal unity”) can be formed in the Netherlands when;

(i) a Dutch company holds 95% or more of the shares in another Dutch company, and

(ii) the financial years of the companies are the same.

 

Losses can be carried back to profits of the first preceding year and carried forward to profits of the following nine years.

 

Corporate tax returns need to be filed in the Netherlands within 5 months after the end of a financial year (an extension can be requested).

 

Dutch corporate tax is paid during the financial year on the basis of an estimate.

After the financial year, the exact final tax due is determined on the basis of the corporate tax return.

 

Savings and investments are subject to personal income tax on their fair value at a fixed rate  The fair value of savings and investments is assets minus liabilities.

 

There is an annual government license fee of € 230 which must be paid in order to operate and that is included in the annual fees of our Law Firm.

 

 

Annual Reporting Requirements

There is an obligation to prepare & file accounts with the Chamber of Commerce.

There are publicly accessible accounts for big companies, not small ones.

There is an obligation to submit annual returns.

 

There is a requirement for Dutch private limited companies to be audited if it meets two of the following three requirements;

Assets greater than Euro 6m,

Turnover greater than Euro 12m,

And average number of employees greater than 49.

 

 

 

Double Tax Treaties

The NL BV has access to a very large network of double tax treaties:

 

Albania Argentina Armenia
Aruba Australia Austria
Bangladesh Belarus Belgium
Bosnia-Herzegovina Brazil Bulgaria
Canada China Croatia
Czech Republic Denmark Egypt
Estonia Finland France
Georgia Germany Greece
Hungary Iceland India
Indonesia Ireland Israel
Italy Japan Kazakhstan
Kuweit Latvia Lithuania
Luxembourg Macedonia Malawi
Malaysia Malta Mexico
Moldova Mongolia Morocco
Netherlands Antilles New Zealand Nigeria
Norway Pakistan Philippines
Poland Portugal Romania
Russia Serbia and Montenegro Singapore
Slovakia Slovenia South Africa
South Korea Spain Sri Lanka
Surinam Sweden Switserland
Taiwan Thailand Tunisia
Turkey Uganda Ukraine
United Kingdom United States of America Uzbekistan
Venezuela Vietnam Zambia
Zimbabwe

Tax-Planning & Busines environment

The ultimate choice of Netherlands jurisdiction for a company will be dependent on the following factors:

 

Corporate Tax Rates are:

20% for taxable income up to €40,000

23% for taxable income above €40,000 and not exceeding €200,000

25.5% for taxable income above €200,000

 

Participation exemption from Dutch corporate tax is allowed on:

(1). Capital gains and dividends derived from qualifying subsidiaries (“participation exemption”);

 

The general rule is that all dividends paid by a subsidiary to a Dutch parent company are subject to corporate income tax.

Under the EU Parent-subsidiary Directive, if a Dutch company holds at least 25% of the shares of another EU company no tax will be imposed on dividends.

 

Where a Dutch holding company comes within the “participation exemption rules” all income received from the subsidiary whether by way of dividends or otherwise is tax free if the following conditions are met:

-the Dutch holding company must hold at least 5% of the subsidiary’s shares (a trading company that owns shares in another corporate entity is deemed a holding company for purposes of the participation exemption rules);

-shares must be held since the beginning of the fiscal year but not as current assets: this applies to BV & NV entities, there is no holding period for Coop entities.

-the parent company must be involved in the management of the subsidiary.

 

(2). Income attributable to a foreign business enterprise (“permanent establishment”).

 

 

Withholding tax on Dividends applies to BV & NV entities, not to Coop entities. The Coop’s profits may be distributed to its members.

Withholding tax on Dividends is at 15% but may be reduced under a tax treaty concluded by the Netherlands. Dividends paid by a Dutch company to an entity in another EU Member state are exempt from withholding tax if the following provisions are met:

-Each company is resident in the European Union (EU) or an European Economic Area (EEA) state, and

-The EU or EEA investor holds a minimum of 5% in its EU shareholding, which qualifies under the Dutch participation exemption rules if the place of residence of the EU/EEA investor would have been the Netherlands.

 

Withholding tax under Dutch domestic law does not apply to interest and royalties paid by a Dutch company.

 

A tax group (“fiscal unity”) can be formed in the Netherlands when;

(i) a Dutch company holds 95% or more of the shares in another Dutch company, and

(ii) the financial years of the companies are the same.

 

Losses can be carried back to profits of the first preceding year and carried forward to profits of the following nine years.

 

Business environment

The Netherlands, generally known as Holland is bordered by Germany in the East and Belgium in the South. The country is small and just 37,000 square Kilometers. The capital of the Netherlands is Amsterdam. The Hague is the seat of the Dutch Government. Rotterdam is the largest port in the world. The population of the Netherlands is approximately 16 million.

 

The Netherlands is a constitutional monarchy, but political power rests with a democratically elected parliament and is based on a written constitution safeguarding individual liberties. The Netherlands is a member of the EU, OECD, the GATT, the International Monetary Fund, the World Bank, The United Nations and the North Atlantic Treaty Organization.

 

The Netherlands is within easy reach by land, sea and air of the 300 million people in the European market. Due of its location, it has an impressive transportation infrastructure and has become a favored site for international companies in a wide range of industries, particularly for warehousing and distribution.

 

Although the Netherlands has a sophisticated tax system with high tax rates some aspects of its fiscal system are extremely attractive and make it the ideal location in which to base international trading operations.

 

Attractive fiscal incentives are further enhanced by a complex network of double taxation treaties (few of which contain any anti avoidance provisions) and by the existence of a procedure of advance tax rulings whereby the tax authorities who are autonomous and approachable can at short notice specify the fiscal consequences of certain business structures provided that material financial interests are involved and the propositions are reasonable.

 

The Netherlands official and spoken language is Dutch, however most people also speak English and German.

 

The Netherlands currency is the Euro.

 

The Netherlands has virtually no exchange controls although formal reporting requirements are required by the Central Bank these are mainly for statistical purposes.