Company Formation Netherlands
In order to register a company in the Netherlands, a set of steps must be taken. Firstly, a bank account where the start-up capital will be deposited must be opened. The client must present identification documents, such as passport copies, identification cards or driver license, a recent utility bill or a bank statement as proof of residential address and, if the client is a legal entity, the beneficial owner of the company must be referred to the Dutch bank.
The requirement to have a bank account for a newly founded entity is imposed to all jurisdictions in Europe and at a global level as well. The same applies to offshore jurisdictions, where investors who want to register various company types, prescribed by the national law of the said jurisdictions, have to set up an offshore bank account.
The second step will be drafting the incorporation documents and notarizing them in front of a Dutch public notary. Representation is also possible through notarized power of attorney. Our team of consultants in company formation in Netherlands can represent you in the process of opening a business through the notarized power of attorney.
The last step for company incorporation in Holland will be filing all required documents with the Dutch Trade Register and obtaining a Dutch tax ID. Dutch companies must have a local director and a registered office. The shareholders of a company in Netherlands can be foreigners or Dutch residents, both natural persons and other corporate entities. However, in certain cases, the founders can be only natural persons. BridgeWest provides company formation in the Netherlands. Our Dutch agents provide assistance for the following:
- drawing up the articles of association that can be signed through power of attorney (Dutch laws require power of attorney for any public notary proceedings);
- drawing up documents for company incorporation in Holland - specimen signatures, identification papers copies, application form required by the Dutch Company Registration Office;
- arranging public notary proceedings (all procedures for company incorporation are done in front of a Dutch public notary);
- providing a registered office in the Netherlands on demand - the registered office serves as the headquarters for the company in the Netherlands and it will be made public;
- setting up a bank account for the company in Holland - BridgeWest will help in setting up the share capital bank account, as well as a current bank account once the company is incorporated;
- recommending a Dutch accountant, as accounting services are needed for new businesses in the Netherlands.
Types of companies in the Netherlands
The Dutch limited liability company (Besloten Vennootschap - B.V.) – the requirements for a Dutch limited liability company are: to have at least one shareholder and one director, a registered office and a minimum share capital of EUR 0,01. The shareholders of a limited liability company in the Netherlands are held liable for the company’s obligations and debts to the extent of their share contributions which is the reason why the Dutch BV is the most common type of company for foreign investors.
The Dutch BV is one of the most common ways to start a business in the Netherlands, due to the few restrictions investors have, low capital requirements, and the fact that it can be registered by those opening a small business, alike those who want to register a medium-sized company, with a more complex management structure and more employees.
This company type is the most common across all European jurisdictions under the name of limited liability company, private limited company and others and legal entities with similar characteristics are available for offshore incorporation. Depending on the provisions prescribed by the national legislation of a country, the limited liability company can be incorporated with a very low capital, as it is the case of the Dutch BV, or with a higher capital requirement.
The process of opening a company in the Netherlands as a Dutch BV starts by preparing the company’s incorporation documents, prepared in front of a public notary. Then, the capital has to be deposited; the investor (or investors) has to prepare the set of documents that have to be submitted with the Commercial Register and then to register with the Dutch Tax and Customs Administration.
Although the capital requirements are very low, investors who want to open a company in the Netherlands have to take into consideration additional taxes and registration fees that will be paid upon the incorporation of the company. For instance, notary fees for the notarization of various documents can be charged with a fee of EUR 500 to EUR 1,500.
The registration with the Dutch Commercial Register will require the payment of a small fee, of EUR 50. Various registration fee are typically charged when starting the process of company formation or offshore company formation, but some registration procedures can be exempted from the payment of a fee – this can depend based on the institution, the jurisdiction, the company type, etc.
The Dutch joint stock company (Naamloze Vennootschap - N.V.) – the Dutch joint stock company requires a minimum share capital of EUR 45,000, it must have at least one shareholder, a management board and a supervisory board. The Dutch NV is also required to have a registered office.
The incorporation process of the Dutch NV is similar with the one of the Dutch BV. The company has to be registered with the Netherlands Chamber of Commerce and all the company’s directors must be registered with the Commercial Register. The Dutch NV is a company type that can be listed on the Stock Exchange, but one must know that new regulations were introduced for such Dutch NVs that are not listed.
In accordance with the rules of the Prevention of Money Laundering and Terrorism Financing Act, Dutch NVs which are not active on the Stock Exchange have to register their ultimate beneficial owner (UBO). In the Netherlands, persons who own more than 25% of the company’s shares and who have more than 25% of the voting rights are considered UBOs. Companies that are already registered as Dutch NVs which are not active on the Stock Exchange can make the necessary modifications by mid 2022.
The Dutch general partnership (Vennootschap Onder Firma - VOF) – Dutch general partnerships do not require a minimum share capital as they are not legal entities. The shareholders of general partnerships in Holland will be held liable both jointly and separately for the company’s debts and obligations to the extent of their personal assets.
The Dutch branch, subsidiary or representative office - foreign companies are allowed to set up separate enterprises from the parent company, where the foreign company will be a shareholder in a Dutch company. Foreign companies can also open extensions of the parent company in the Netherlands.
Taxation in Netherlands
- in 2020, the lower corporate tax rate, which used to be charged a rate of 20%, was imposed at a rate of only 16.5% for an yearly taxable income below EUR 200,000;
- in 2021, the tax base for the lower corporate income tax was raised at EUR 245,000;
- starting with 1st of January 2021, the lower corporate tax rate is applied at 15% for an income below EUR 245,000;
- starting with 2022, the tax base for the lower corporate tax will be raised to EUR 395,000, which means that more companies will benefit from a lower corporate tax system;
- the new tax measures are ratified under the amendments brought to the Corporate Tax Act, which were enforced starting with January 1st 2020, as specified by the online governmental platform created for entrepreneurs in the Netherlands.
The corporate tax is one of the main taxes companies have to pay in the Netherlands and this is a common tax charged by most of the jurisdictions. However, there are certain countries where the corporate tax may not apply, as it is the case of various offshore jurisdictions. Numerous investors opt for offshore company setup due to the fact that certain taxes do not apply.