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Change a Sole Proprietoship into BV

Change a Sole Proprietoship into BV

The Netherlands is very versatile country offering the possibility to businessmen to set up both small or large companies here. From sole proprietorships to limited liability companies, one is first required to choose the business form he or she wants to use upon the Dutch company formation procedure.

Those who start small companies as sole proprietorships have the possibility to change the company type along the way. However, when the business enlarges, then the change in company form becomes mandatory. Most of the times the sole proprietorship is changed into a limited liability company, mostly known as the Dutch BV.

Our company registration agents in the Netherlands can assist with the registration of both sole traders and BVs.

Differences between sole proprietorships and BVs in the Netherlands

In order to understand why the change from sole trader to limited liability company is an usual process in the Netherlands, it should be noted that:

  • –          the sole proprietorship is liable for the business’ debts and obligations with the owner’s personal goods; contrary to that, the BV offer limited liability for the company’s obligations;
  • –          the BV can benefit from lower taxes compared to the sole proprietorship which will pay the income tax;
  • –          the BV can also benefit from certain tax exemptions, while this is very unlikely in the case of the sole trader.

Apart from these, foreign investors can also set up flex limited liability companies, also known as flex BVs, which offer more advantages. Our company formation consultants in the Netherlands can assist those who want to set up BVs and flex BVs.

How can one switch from sole proprietorship to a Dutch BV?

The procedure of changing a sole trader into a limited liability company in the Netherlands is not that simple as it implied de-registering the sole proprietorship and then registering the BV with the Companies Register.

The change will imply:

  • –          obtaining a company name, different from that of the owner of the sole trader;
  • –          preparing incorporation documents for the BV;
  • –          obtaining a new company registration number;
  • –          obtaining a new VAT number;
  • –          obtaining a certificate of registration for the BV.

For assistance in changing a Dutch sole proprietorship into a BV, please contact us.