Aside from being an open economy, the Netherlands is an excellent business destination owing to its many benefits. It has a stable economy, low taxes, and free trade. Also, the Netherlands is called “The Gateway to Europe” because it has the most ideal European business climate, and a unique geographical location.
From a legal standpoint, forming a company in the Netherlands is highly beneficial, as the Dutch government has made it easy to create and run a business and created many tax benefits for entrepreneurs. So entrepreneurs worldwide view setting up a company in the Netherlands as a lucrative investment.
Legal structures in the Netherlands
- Sole proprietorship (Eenmanszaak)
Most entrepreneurs in the Netherlands choose to set up a sole proprietorship (Eenmanszaak) when starting a business for themselves. An sole proprietorship in the Netherlands is a legal structure without legal personality. The sole trader will is responsible for the company and its debts.
- The private limited liability company (Besloten Vennootschap/Bv)
The Dutch BV is the most popular legal form among foreign investors in the Netherlands. It has the benefit that the shareholders are not personally responsible for the legal acts of the B.V.
- Public limited lability company (Naamloze Venootschap/Nv)
Another type of company entrepreneurs may decide to establish in the Netherlands is an NV, which is also the legal form for stock-listed companies, and can be used for non-listed companies.
- General partnership (Vennootschap Onder Firma/Vof)
If entrepreneurs want to launch a business with other self-employed individuals, they usually choose to set up a general partnership. No minimum start-up capital is imposed and all partner brings equity into the Vof in the form of cash or goods. A general partnership is sometimes called a commercial partnership. Since a general partnership isn’t a legal corporate identity, partners are liable for its debts.
Entrepreneurs can also set up a Branch (Nevenvestiging Or Filiaal) or a Non-Profit Organization (Stichting) in the Netherlands.
The company registration process in the Netherlands
Are you contemplating starting a new business in the Netherlands? Let’s look at the process involved
Get residence & work permit
To be able to start up a business in the Netherlands, entrepreneurs must first make sure they can stay there. EU, EEA, and Swiss nationals are allowed to live and work in the Netherlands under EU law. But If the entrepreneur doesn’t come from an EU or EEA country, or isn’t Swiss, then he/she must apply for a provisional residence permit and in some cases a work permit.
After acquiring the permit, the process involved in the company registration will be relatively easy and will involve the steps outlined below:
- Choosing a suitable business name: the incorporator will propose three company names, one of which will be chosen and reserved as a trade name for the company;
- Drafting and notarizing the incorporation documents of the new company
- Register the business at the KvK: the business owner will submit the documentation to the KvK (Kamer van Koophandel), the Dutch Chamber of Commerce, for the official registration of the Company and also register for taxation and VAT purposes(this will be done at the Belastingdienst – Dutch tax office).
- Register for employment and social security purposes
- Apply for essential business licenses with the authorities in the industry in which the company will activate.
Register the UBO of the company
Company registration process in the Netherlands revolves for a large part around the identification and verification of the founding shareholders and directors. And this process has been tightened as a result of new KYC (know your customer) laws. One of the outcomes of this is that the new UBO (ultimate beneficial owner) must also register in the Netherlands.
Depending on the legal structure of the company, the incorporator needs to register UBOs, which is the owner or the person who is effectively in control of the organization.
Registering a company in the Netherlands is not a difficult process but might sometimes seem confusing, so it is recommended to have a professional by your side to guide you through the whole process. To register your company and get started with your business in the Netherlands, let’s go ahead and contact your Damalion expert now and let us help.
