The Dutch limited liability company (known in the Netherlands as the besloten vennootschap, the BV) is the most used type of company in the country because of its easy set-up procedure and lower requirements for reporting and taxation, compared to the public company.
The shareholders can be Dutch nationals or foreign investors in the Netherlands who are allowed to have full foreign ownership for this legal structure. The Dutch BV has a series of requirements for the company documents that need to be presented upon registration but also for the number of shareholders and the reporting and taxation requirements in the Netherlands. These special issues can be addressed with the help of a law firm in the Netherlands.
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The Dutch BV is a private limited company in which the assets of the investors are fully protected from the company assets, unlike in the case of the sole proprietorship. The BV has legal personality, it can enter into agreements and it may have registered share, which, however, are not transferable.
The BV in the Netherlands must pay the corporate income tax and it is also subject to other taxes, including a real estate transfer tax, social security taxes for employers and withholding taxes. Double taxation relief is possible under the double tax treaties signed by the Netherlands.
The attorneys at our Dutch law firm specialize in a wide range of issues concerning business and company law. They can assist you during all of the company formation phases as well as answer any particular questions that might help you decide if the BV is the right legal entity for your needs.
The registration of a private limited company is a simplified process in the Netherlands. This particularity, the fact that the new business can be easily incorporated, is one of the reasons why investors prefer this business form.
All new BVs must be registered with the Dutch Companies Registry belonging to the local chamber of commerce. Copies of the Articles of Association are provided at this stage and they must be drafted either in Dutch or in English, for foreign companies. The founders must bring proof that the mandatory share capital has been paid and that the company has a valid, operational bank account.
The company’s Articles of Association are signed in front of a Dutch notary and our lawyers in the Netherlands can help you with legal representation at this stage. The chosen company name must be available and not infringe any other existing company names. After the company is incorporated it can start its business activities, however, investors may need to obtain additional special permits and licenses for their companies, according to the business field.
The list below includes the four main steps for opening a private limited company and we present them in order so that investors can easily see the process and its steps:
The final step can be handled with the help of a civil law notary. Alternatively, our company formation package includes complete services offered by our team of attorneys in the Netherlands. As far as the costs for these steps are concerned, investors should remember that they will include the registration fee with the Commercial Register (approximately 50 euros) as well as the deposit fee and the notary fees, which will vary. The faster the civil law notary processes the registration, the faster the company will be able to function.
The experts at our law firm in the Netherlands can provide complete assistance during the BV registration procedure. Our team can also help investors with information about structuring a BV. The shareholders are the ones who hold the company’s equity, however, the activities of the business are run by the directors which can be supervised by a Board (if appointed for this supervisory purpose). In other cases, is it often common that in small BVs the sole shareholder also acts as the company director.
Our team can assist investors who are willing to register a trademark in the Netherlands for their Dutch BV.
Apart from the issues regarding registration, investors should also keep in mind some of the other characteristics or defining traits of the BV company:
The tax year in the Netherlands is generally the same as the calendar year (although companies can use a different time period). The Dutch BV files its annual corporate income tax return annually. Auditing becomes mandatory when the company meets two of the following three criteria: it has total assets of more than 6,000,000 euros, it has at least 50 employees (full-time) or has a net revenue of at least 12 million euros.
Investors should know that they might commence trading even before the BV is fully set up. In this case, they will engage in business operations under a BV in formation, while the civil law notary is still handling the incorporation procedures. For the BV in formation, the abbreviation will be BV io. When operating in this fashion, it is important that investors remember to signal the fact that they are still under incorporation, so that clients or business partners are aware of this aspect. Sole traders who have decided to change their business form to a private limited company while still trading most often use the BV in formation. One of our lawyers in the Netherlands can give investors more details about changing the business form.
The private limited company is a convenient business form, one with a low incorporation capital, a set of simple formation steps and one that allows for a great degree of flexibility while investors retain limited liability, only to the amount of their invested capital in the company.
If this type of companies engages in trade activities in the EU or outside of the Union, it will need to obtain an EORI number.
According to statistics published by the Dutch Government, the private limited company is a preferred business form, as there are many businesses of this type incorporated every year:
You can contact our law firm in the Netherlands if you have any questions about the Dutch private limited company or other business forms and the legislation for foreign investments in the country.