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Dutch Company Types

Dutch Company Types

Foreign investors interested in starting a business in the Netherlands should first verify all the available types of entities and choose the best option according to their needs. Our company registration agents in the Netherlands can help you select the right type of company.

 Quick Facts  
Applicable legislation   Dutch Company Law

  Availability of sole proprietorships (YES/NO)

 Yes, sole proprietorships are available for registration in the Netherlands.

  Availability of partnerships (YES/NO)

 Yes, general and limited partnerships can be set up in this country.

  Availability of limited liability companies (YES/NO) Yes, they are divided into private and public limited liability companies. 
  Options for foreign companies

– branch offices,

– representative (liaison) offices,

– subsidiaries

 Minimum share capital requirements

– public company – EUR 45,000,

– private company – EUR 0.01 in cash or kind

  Particularities of sole traders

Sole traders are simple business forms that can be registered by natural persons. 

  Requirements to create partnerships

Both types of partnerships require minimum two members who enter a partnership deed. 

  Limited liability companies registration requirements

 Dutch companies must be incorporated with the Commercial Register.

  Taxation of sole traders Income tax entering the Box 1 – Taxable income from employment and home-ownership category 
 Taxation of partnerships

 Each partner must pay the income tax as a self-employed person, if they are natural persons.

 Corporate tax paid by limited liability companies

 19% on income up to EUR 200,000, the standard 25.8% on the excess amount

  Business registration timeframe

 Approx. one month

 Special requirements for foreign investors (if any)

 No, there are no special requirements imposed to foreign investors.

 Company incorporation services (YES/NO)  Yes, you can rely on us for assistance in setting up a business in the Netherlands.

The Dutch Company Act allows both national and foreign businessmen to open the following Dutch company types:

  • private limited liability companies (BV), which are the most popular business entities in the Netherlands;
  • public companies (NV), which are established for large operation or for trading on the stock exchange;
  • foundations, which can be established as non-profit organizations (NGOs) in the Netherlands;
  • associations and cooperatives, which can be employed for the creation of Dutch investment funds;
  • general and limited partnerships, which are not that often established in this country.

Foreign enterprisers can also establish sole proprietorships, while foreign companies can set up branch offices in the Netherlands.

With a vast experience in the field of company registration, our Dutch consultants can help foreign investors with the establishment of any type of company.

The sole proprietorship in the Netherlands

The sole trader is the simplest business form and the easiest way of starting a business in the Netherlands. Foreign investors who want to set up their own businesses as sole proprietors must first obtain a residence permit. They can also apply for a Dutch self-employment visa which will allow them to start a Dutch company.

The main characteristics of the sole proprietorship are that it can only be established by one person who will have a full responsibility for the business, including its debts and obligations. The disadvantage is that the liability will include the owner’s personal assets.

The sole trader also has certain advantages, especially related to its taxation, however, if the business start earning profits that no longer allows it to operate as a sole proprietorship, it can be converted into a limited liability company.

The registration of a sole proprietorship is quite simple, and it only requires a business registration form to be filed with the Trade Register. After that, the sole trader must obtain the necessary licenses which will allow him or her to start the activities.

Our company formation specialists in the Netherlands can help foreigners who come here and want to set up a sole proprietorship.

The Dutch private limited liability company (BV)

The private limited liability company or the Dutch BV is one of the most employed types of companies in the Netherlands. According to the new Company Act, a Dutch BV does not require to have minimum share capital anymore. The Dutch BV must have at least one shareholder whose responsibility is limited to the amount invested in the company.

Public companies in the Netherlands

The Dutch public company (NV) is the legal form employed by those wanting to establish a company in order to be listed on the Stock Exchange. The minimum share capital for opening a public company in the Netherlands is 45,000 euros.

Dutch foundations

During the last years, the Netherlands has become a sought destination for opening a foundationDutch foundations can be established very easy, requiring a deed of formation drafted and notarized by a public notary. The Dutch foundation is one of the best tax minimization vehicles.

Associations and cooperatives in the Netherlands

Associations are usually established as non-profit organizations and are not required to register with the Dutch Trade RegisterCooperatives are associations that can pay dividends to their members.

The main characteristics of Dutch company types can also be found in the scheme below:

the-characteristics-of-main-types-of-dutch-companies

Partnerships in the Netherlands

There are two types of partnerships foreign investors can open in the Netherlands:

  • private partnerships,
  • public partnerships;
  • professional partnerships.

The difference between the two types of companies resides in the liability of the partners regarding the debts and the obligations of the company. The partners in a general partnership are jointly and severally accountable for the company’s debts and obligations. In limited partnerships, there is a silent partner and a general one. The general partner will be held accountable for the company’s debts with all his assets, while the silent partner will be liable only up to the amount invested. 

Dutch professional partnerships are usually created as organizations established by professionals with the purpose of offering specific services and not for carrying out a commercial activity.  

If you need more information on these types of companies in the Netherlands, you can address our specialists.

The subsidiary, the branch office and the liaison office in the Netherlands

The subsidiary and the branch office are business forms which can be registered by foreign companies expanding their operations in the Netherlands. The main differences between these types of companies are related to the relationship with the parent company and the activities they can undertake in the Netherlands.

The subsidiary has a higher degree of independence and must be registered as a limited liability company, be it private or public. It must respect the same share capital requirements of the business form it takes and must fulfill the same tax obligations of a local company. In terms of licensing, the subsidiary can undertake various types of activities which need not be bound to those of the parent company.

Compared to the subsidiary, the branch office will operate as a satellite of a foreign company in the Netherlands. This type of company cannot undertake other activities than those of the parent company and the latter will have all management decisions related to the operations of the Dutch branch.

The greatest advantage of the branch office is that it has low incorporation and operation costs and can be established quite quickly. Most of the times, branch offices operate in the Dutch financial sector.

When it comes to the registration of any of these two Dutch company types, the parent company will need to file their information with the Dutch Companies Registrar and appoint legal representatives for the companies.

The liaison or representative office, on the other hand, is a non-corporate business form which can be registered by foreign companies in the Netherlands. This type of structure will be set up in the Netherlands for marketing and promotional activities. It is also a suitable structure before the foreign company starts activating on the Dutch market.

Our company registration representatives in the Netherlands can provide a detailed presentation of these types of companies and can help foreign investors in choosing the right business form in accordance with their needs.

The European company in the Netherlands

As a member of the European Union, the Netherlands has also adopted one of the business structures which can be set up in any of the EU countries: the European company.

The European company (Societas Europaea) or simply SE is a common business form in the Netherlands and can be registered:

  • as a merger between two companies registered in two different EU countries;
  • through the usual registration procedure in the Netherlands;
  • by changing the legal form of a local company.

Just like the SE, there is also the possibility of registering a European cooperative company which resembles the Dutch cooperative.

You can also watch this video for more information on the types of companies in the Netherlands:

Requirements to register companies in the Netherlands

The requisites for opening a company in the Netherlands depend on the type of structure chosen. These requirements usually imply:

  1. drafting the incorporation documents, Articles of Association in the case of corporate entities and other agreements for non-corporate structures;
  2.  notarizing and filing the incorporation documents with the Dutch Trade Register;
  3. tax registration is also mandatory no matter the type of company established, this is not available for VAT registration, where certain income thresholds apply;
  4. having a local address for the company is another compulsory requirement;
  5. the management of the company must also be ensured by at least one director in the case of companies, and one of the members in the case of partnerships.

Our local consultants are at your service no matter the types of companies in the Netherlands you decide on. In case you are interested in setting up a business in the Philippines, our partners can present the available types of companies in the Philippines and assist you through the entire company formation procedure. 

How to choose a legal entity out of all Dutch company types

Starting a business in the Netherlands is not difficult, however, the structure used for completing one’s activities must be selected in accordance with various reasons. Each entrepreneur must decide on which business form he or she can rely on to complete their activities.

Out of all types of companies in the Netherlands, the most appreciated and selected at the same time is the private limited liability company or BV, however, there are also other structures you can choose from.

Each legal entity has its own advantages. Even so, one of the most important decisions to make is if your company will have a corporate or non-corporate personality, as this will impact your liability towards the business. The Netherlands enables investors to use both types of enterprises, among which the sole proprietorship has some important advantages, among which:

  • a quick and simple registration procedure;
  • access to various tax relief programs, including the SME profit exemption, the private business ownership allowance, and the tax relief for new businesses;
  • low setup fees.

Also, it can be changed into a BV. Associations and co-operatives are also non-corporate legal forms that can be used to open companies in the Netherlands. However, these also serve other purposes, such as estate planning, which is why they are often employed for this reason instead of business operations.

As for the corporate forms, the private and public companies, these are often employed for small and medium-sized, respectively large operations.

No matter the Dutch company types, we can advise on choosing the right one for you.

Choosing Dutch company types based on taxation

Taxation is without a doubt one of the main aspects to consider when setting up a business in the Netherlands. From this point of view, all entities are subject to an income tax. However, the rates are different for the various types of companies in the Netherlands.

The personal income tax and payroll tax are the types of levies that firms without a formal structure are required to pay (if there are employees). Additionally, there are a number of attractive tax incentives available. Unincorporated firms do not have to pay the corporate tax compared to businesses with a legal structure.

In the Netherlands, the personal income tax is assessed at progressive rates that are subject to small adjustments each year based on the taxpayer’s annual income. In general, the rates fluctuate between 36,6% and 51,75% annually.

With respect to corporate Dutch company types , these are required to pay the corporate tax, also known as company income tax (vennootschapsbelasting), on their profits. In some circumstances, filing a corporate tax return is not necessary for foundations and organizations.

Because the corporation tax rates are significantly lower than income tax rates, business owners are inclined to choose incorporated entities like BVs. The administration is more difficult, though, and annual expenses may be higher. In most cases, a higher turnover is required to cover these costs.

The rate of the corporate tax in 2022 is:

  • 15% up to and excluding 245,000 euros;
  • 21.7% for incomes of over 245,000 euros.

On any earnings distributed to shareholders, BVs and NVs must also pay a 15% dividend tax. Then, shareholders are required to pay a 25% tax on their profits.

With respect to the number of types of companies in the Netherlandsdata shows that:

  • in the second quarter of 2022, the number of entities without legal personality was 1,616,230;
  • for the same period, the number of entities with legal personality was 480,270.

Taxation of companies in the Netherlands

Dutch companies are subject to the income tax on profits based on the corporate income they make in one year on their global earnings. These companies will be levied the corporate at two different rates based on threshold. 

If you are interested in the types of companies available in other countries, for example in Ireland, we can put you in touch with our Irish partners.

If you want to open a company and need assistance with the registration procedure, please contact our company formation representatives in the Netherlands. Also, if are interested in starting a new business in another country, such as Slovakiaour partners can provide you with assistance. We can also put you in touch with our Asian partners, in case you are interested in forming a company in Vietnamregister a company in Lebanon or establishing a company in India.