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Establish a Branch in the Netherlands

Establish a Branch in the Netherlands

Foreign companies that want to establish their presence in the Netherlands with low costs can establish a branch. This business form is not considered a legal entity but an extension of the foreign company so all the responsibilities for its actions are taken by the parent company abroad. 

 Quick Facts  
  Applicable legislation

Local and of the parent company’s home country

Best used for

Highly regulated activities, such as banking, insurance, financial operations

Minimum share capital

 No
Time frame for the incorporation (approx.) 

Approx. 4 weeks

Management 

Local 

Legal representative required

Yes

Local bank account 

Yes

Independence from the parent company Fully dependent on the parent company
Liability of the parent company Fully liable for the branch office’ obligations
Corporate tax rate   25% on worldwide income. Tax exemptions profit remittance apply.
Possibility of hiring local staff  Yes
Documents to be filed by the parent company 

– information about the parent entity;

– personal information of the appointed Dutch officers;

– proof of legal address, etc.

 Annual accounts filing requirements

Dutch branch offices must file annual accounts of the parent company with the Trade Register. 

 Travel requirements for incorporating a branch (YES/NO)

No, there is no need to travel to the Netherlands until the last stages of the company registration process. 

 Double tax treaty access (YES/NO)  Yes, the Netherlands has signed approximately 100 double tax treaties.
 Special licenses required (YES/NO)

 Yes, depending on the activities of the Dutch branch.

 Dutch legal address required (YES/NO)

Yes, a local legal address is mandatory for a branch in the Netherlands. 

 Special trading name requirements (YES/NO)

 Yes, the branch office must bear the same name as the parent company.

 Activities permitted

 The same activities as the parent company.

 Employee transfer possibility (YES/NO)

Yes, the foreign company can transfer employees to its branch. 

 Advantages of a Dutch branch office

– easy to register;

– simplified incorporation requirements;

– access to double tax treaties, etc. 

 Incorporation services availability (YES/NO)

 Yes, you can rely on our local agents for setting up a company in the Netherlands, including a branch office.

The actions of the branch in the Netherlands are assured by a representative that will act on behalf of the company based on a power of attorney. The Dutch branch will need to perform the same business activities as the parent company and have the same name. The laws governing its actions will be both Dutch laws but also the laws from the foreign company’s country of residence.

The branch is a preferred business form because it provides a permanent establishment with lower costs than other types of companies in the Netherlands and has no requirements for a minimum capital.

Differences between a branch and a local company in the Netherlands

The most important difference between a Dutch branch and other form of business, like a subsidiary in the Netherlands, is that the branch is fully dependable on the parent company abroad. This means that the foreign company will be liable for the debts and obligations incurred by the branch in the Netherlands.

Although the company registration procedure is easier than for other types of companies, like the Dutch BV for example, the branch will need to observe the laws for employment and taxation. For example the law stipulates that the employees of a branch must be registered for the social insurance. If not, the representative of the branch may be personally liable for not paying the contributions. A branch opened in Netherlands is usually subject to the same financial obligations as the local companies. 

A number of double tax treaties signed by the Netherlands and other countries can ease the tax burden on branches, provided that the branch qualifies for the reduced withholding tax rate for dividends, royalties or interest.

The branch vs. the representative office in the Netherlands

A foreign enterprise will conduct a thorough market research before deciding on the type of entity it can set up in Netherlands. The two resembling one another the most are the branch and the representative office. However, there are also important differences between them.

A branch does not have its own legal status, a principle that also applies to a representative office in the Netherlands. Also, the branch totally depends on the main office located in a foreign country.

As far as the differences between the Dutch liaison office and the branch office, the latter must be incorporated with the Dutch Business Register. The branch office will usually share the same structure as the parent company due to the dependent relation between the two of them. The representative office also depends on the parent company, with the mention that it has to comply with more restrictions compared to the branch.

If you want to expand your operations by starting a company in the Netherlands, you can rely on our local specialists who can help you choose between a branch and a representative office. Additionally, you can decide on a subsidiary, however, this needs to be created as a distinct entity.

Restrictions between the branch and the liaison office

An interesting fact about the Dutch representative office and branch is that they are both subject to restrictions, but in different ways. Here is what you should know about them:

  • the branch can undertake commercial activities, while the liaison office cannot engage in such operations;
  • however, the branch office’s activities must be the same as the parent company’s.

This is an important aspect to consider when choosing between the two legal forms, because the parent company must decide what its enterprises in the Netherlands will be.

Our Dutch company formation agents can assist with the set up of both types of business entities and can also make recommendations on how to select the appropriate one.

Uses of a Dutch branch vs. a representative office

How it will be used is the main aspect to consider when deciding to open a representative office or a branch in the Netherlands.

From this point of view, here are the main uses of a branch:

  • well-regulated activities, most branches operating in sectors like telecommunications and finances;
  • other activities the parent company is engaged in, even if they are not highly regulated.

On the other hand, the representative office in the Netherlands can only complete:

  • marketing activities;
  • feasibility studies;
  • representation of the parent company;
  • participating in trades, fairs, exhibitions, etc.

Also, the branch can conclude contract on behalf of the parent company, while the liaison office cannot.

Branch registration documents in the Netherlands in 2024

Before starting the commercial activities, the branch must register at the local Chamber of Commerce in the Commercial Registry with the appropriate documents and information. The documents must be notarized in the country of origin and followed by an authorized Dutch translation.

The requested documents for incorporation may differ from case to case but in essence, the following information is necessary:

  • a proof of existence of the foreign company (an excerpt from the local trade register with the date of registration and details of the company),
  • the certificate of registration of the parent company issued by the Trade Register in its home country,
  • the name and the registered office in the foreign country of the parent company,
  • the name and details regarding the board of directors and secretary (or any form of management),
  • the minutes of the meeting when the decision to establish the branch was made,
  • the branch name which must be the same as the parent company’s and its address in the Netherlands,
  • the name of the appointed representative and the power of attorney which grants him or her authority to represent the foreign company,
  • the powers of this representative and the activities that will be performed by the branch.

After the branch is registered, the Chamber of Commerce will release the certificate of registration with the unique number of recording. After this step, the branch must register at the tax authorities and at the social security funds. After all of these steps are complete the branch may begin its business activities in the country.

You can read about the steps for opening a branch in the Netherlands in the scheme below:

how-to-open-a-branch-in-the-netherlands-in-5-steps-compressor.png

The steps for opening a branch in Netherlands are similar to those in other countries, however it is recommended to ask for specialized assistance as some jurisdictions may have other special requirements. For example, if you are interested in setting up a branch in Hong Kong, we can put you in touch with a team of specialists in company formation matters in Hong Kong.

The advantages of a branch in the Netherlands

Because the registration procedure is easier and less time consuming than for companies incorporated directly in the country, foreign corporations will sometimes choose to establish a branch. The lower costs for incorporation are also an advantage and so are the more relaxed reporting and accounting obligations for branches in 2024.

Opening a business in the Netherlands implies additional steps after incorporation. Depending on the industry in which you work, you might also require extra permits. Additionally, you ought to have obtained the required approvals from the appropriate legal authorities in relation to public health and safety, such as the food, environment, and hospital.

If you are interested in starting a business in another country, such as opening a company in Austria, our agents who can put you in touch with our local partners. 

Why choose to create a branch office in the Netherlands in 2024

The Dutch branch is one of the most suitable options for those who want to expand their operation in this part of Europe in 2024. Apart from enabling the parent company to have full control of the operations of the Netherlands-based business, it will also help it incorporate this type of entity faster compared to other ones.

If you need help registering a Dutch branch in 2024, do not hesitate to ask for the support of our agents.

Taxation of branches and liaison offices

One of the major differences between a Dutch representative office and a branch resides in taxation:

  • the branch is subject to the corporate tax and the value added tax;
  • the representative office is not subject to any taxes, given its non-commercial character.

If you are interested in company registration in the Netherlands, do not hesitate to ask for our consultants’ help.

Estimates for the Netherlands’ future economic performance

According to the data gathered by the European Union:

  • 2024 is expected to bring a 1,1% increase in the country’s economy;
  • for 2025, the forecast indicates a 1,7% growth for the Dutch economy;
  • inflation is also expected to decrease by 3,7% in 2024, respectively 2% in the following year.

Despite a minor increase in unemployment, households are anticipated to spend more as their purchasing power is recovering from a period of sustained inflation. Additionally, it is anticipated that government investment and consumption will rise in the upcoming years, which will boost the Dutch economy. However, because of rising interest rates, it is anticipated that company investments will decrease in the upcoming quarters. Additionally, as fewer homes are being developed, a fall in housing investments is anticipated.

FAQ on branch office registration in the Netherlands

Is it hard to register a branch office in the Netherlands?

No, the incorporation of a Dutch branch office can go smoothly if all the documents are correctly prepared and filed.

Does the branch office need a local director?

The branch office does need a local director.

Can the branch office offer any type of services or sell any kind of goods?

The branch office’s activities will be limited to those of the parent company, meaning that it cannot sell any other goods or provide any other services than the parent company.

How long does it take to register a branch office?

The registration process of a branch office can take up to 2 weeks, depending on how soon the parent company prepares all the documents for incorporation.

How is a branch office taxed in the Netherlands?

The branch office will be taxed on its profits earned in the Netherlands. The current corporate tax rates in the Netherlands are 20% and 25% and are levied based on specific income thresholds.

If you have any other questions on branch registration requirements in 2024, our Dutch specialists will answer them.

We invite you to watch a short video about opening a branch in the Netherlands:

You can contact our company formation agents in the Netherlands for more information about branches and how to open a company in the Netherlands, such as a STAK in the Netherlands.