20 December 2017

Before you decide to start your business in the Netherlands, it’s worth knowing the basics of creating a company in this country. The Netherlands is a very attractive location that offers many advantages for investors who want to open a company. The country is a dynamic center of commercial activity and industry with a stable economy. Employees in the Netherlands are multilingual and motivated.

Types of Dutch business entities

Each type of business entity has its own specific requirements, and investors should choose the form of business that best suits their interests and needs. The most popular form of doing business in the Netherlands is a limited liability company.

Dutch law distinguishes two types of limited liability companies:
a public limited company (Naamloze Vennootschap – N.V.) and a private limited company (Besloten Vennootschap – B.V.).

The Dutch limited liability company BV is similar to the German GmBH, American LLC or English limited liability companies. The founder and shareholder of the B.V. can be a natural or legal person. If there is only one shareholder in the company – despite the fact that he does not bear personal responsibility, his name will appear on the founding certificate.

Dutch law does not provide for restrictions on the number of founders and shareholders of B.V., their nationality or residency. Liability of shareholders of B.V. having separate legal personality is limited to the amount of contributions made by them for its share capital. It can be set up with initial capital of up to EUR 1. If the shares in a company are held by one shareholder, then each contract between him and the company must be concluded in writing – the same applies to the resolutions adopted by that shareholder.

The Dutch public company NV is the most popular legal form for companies that can be listed on the stock exchange. The capital requirement for NV is 45,000 euro.
The share capital may be divided into registered shares or bearer shares. Shares in N.V. may be sold without limitation, unless the articles of association provide otherwise. Registration of the company N.V. is possible only after covering at least 20% of its share capital. Shares may be acquired for both cash and non-cash contributions.

Current management of the company’s affairs and its representation towards third parties belong to the board, whose composition may be limited to one managing director. The function of such a director may be a natural person or a legal person, regardless of the place of residence or citizenship.

In the Netherlands, the examination of the annual reports by an expert is mandatory when two of the following three conditions are met: the value of the company’s assets exceeds 4,4 million euros at the end of the year, its annual turnover exceeds 8.8 million euros, the average number of employees during the financial year of persons is not less than 50.

Dutch foundations (eg Stichting or STAK – Stichting Administratiekantoor)

The Dutch foundation is formed in a relatively similar way to Dutch BV, the founding deed of a notary establishes a foundation. Dutch Stichting can be used to minimize taxes.

Partnerships (Vennootschap onder company, Commanditaire vennootschap or Maatschap)

Partnerships in the Netherlands are used by people who want to cooperate in a specific common business goal, but do not want to create a separate economic entity for this purpose.