The United Kingdom’s withdrawal from the European Union at the end of January 2020 has created a number of effects, especially for international companies based in the UK as well as UK businesses that were trading with EU companies. Business owners who were looking to mitigate the possible negative impact of the withdrawal on their international business have been looking for an alternative and for some this means relocating their UK-based business.
The Netherlands can be a suitable option as it is a Member State that allows for easy company formation as well excellent international connectivity. Relocating a UK company to Netherlands after Brexit will imply a number of important changes, however, it will grant business owners the important advantage of continuing to do business within the EU and under the Community’s unified laws.
In this article, our team of lawyers in Netherlands briefly outlines the main aspects that are important for investors who are considering relocation. For detailed information, as well as answers to specific questions, you may reach out to our team.
Table of Contents
Issues to consider when relocating a UK business to the Netherlands
The company relocation process should take place following a business plan that will allow the UK company to continue its business operations as long as possible before the actual transfer takes place and, in all and any cases, interrupt the regular business course as little as possible.
The UK legal entity will be dissolved in order to be replaced by a Dutch-based one, ideally with the same business name if it is available for registration. The new Dutch company will be a legal entity, not an extension of the British company, therefore it will be the one to enter into new agreements with existing clients and business partners and new ones as well.
A prior market research can be useful for companies that wish to relocate to the Netherlands after Brexit.
Our attorneys in Netherlands can also answer questions about other issues that may be of interest, such as registration with the Netherlands Enterprise Agency or the Benelux Office for Intellectual Property.
Key advantages for investors in Netherlands
The Netherlands offers many advantages to foreign investors and in 2018 it was nominated as one of the greatest countries for business by Forbes. Some of the main reasons why it is an attractive location to relocate a UK business after Brexit are the following:
- Infrastructure: the Netherlands has an excellent location in Europe, it has good infrastructure and connectivity through airports, ports, road and waterway connections;
- Business environment: a competitive business climate where innovation and growth are familiar; digitization is also a main focus;
- Support: business activities are supported through special schemes such as those for R&D;
- Talent: a multilingual and skilled workforce, the Netherlands is home to both local and foreign talent.
Main steps for company formation in the Netherlands
These are the following:
- Choosing the business form: in most cases, this is the Dutch equivalent of the British company, for example the private limited company (BV);
- Opening the bank account: this is a Dutch business bank account for the new business; the IBAN account will allow the holder to make national and cross-border payments;
- Preparing the documents: these are the Articles of Association for the new company and our lawyers in Netherlands can help you draft them;
- Registering the business: registration with the Chamber of Commerce KVK is compulsory; this is followed by the registration with the Dutch Tax and Customs Administration;
- Sector-specific steps: other registrations will be required depending on the sector in which the company will activate.
Dutch companies are subject to different tax rates compared to UK ones. The taxation regime can influence one’s decision to relocate to a certain jurisdiction. We list some of the most important taxes for companies in the Netherlands below:
- the corporate income tax in the Netherlands is 16.5% on the first 200,000 EUR of taxable profits and 25% on the taxable profits that exceed this amount;
- by comparison, the corporate income tax in the United Kingdom is 19%;
- companies in the Netherlands are required to a value added tax of 21%, with two reduced rates of 9% and 0%.
Understanding the accounting and reporting principles is also a key step before relocating the UK business to the Netherlands. Our team of lawyers can help you understand the requirements that apply for companies in 2021 before you commence the process. We will also help you with VAT registration in Netherlands.
Contact our law firm in Netherlands for more information on the local business environment, the key advantages for foreign investors and the general requirements for setting up and running a business. As legal professionals with international expertise, we can help you with additional issues that may be of interest, such as litigation services or the enforcement of international judgments in the Netherlands.