Netherlands

SETTING UP IN BUSINESS

Introduction

The Netherlands has long been a favorite home for foreign investors. It has a stable and successful economy and a trade and investment policy that’s one of the most open in the world. That’s why thousands of international companies have opened up in the Netherlands – contact us to find out how to join them.

What does this mean in practice?

The Netherlands has a liberal tax regime including generous participation exemption – dividends received and capital gains realized are exempt from Dutch corporate income tax. There’s also an extensive network of double-taxation treaties. There are many other aspects of Dutch tax law, but as always, you will need specialist advice. We can put you in touch with one of our local specialists in tax planning.

What are the main types of company in the Netherlands?

There are four major kinds of business entity, and they are as follows:

• public limited company (NV)
• private limited company (BV)
• partnerships
• branches

What are the main features of an NV company?

• the minimum share capital for an NV company is €45,000
• at least 20% of the authorized share capital must be issued
• suitable for companies wishing to raise capital publicly
• no nationality requirement for shareholders
• audited accounts must be filed with Chamber of Commerce

What are the main features of a BV company?

• the minimum share capital for a BV company is €18,000
• shareholders’ liability is restricted to capital contribution
• the most common form of business enterprise in The Netherlands
• no nationality requirement for shareholders
• audited accounts must be filed with Chamber of Commerce

What are the main features of a partnership?

• available as a general, professional or limited partnership
• general partnerships have unlimited liability
• in professional partnership, each partner is liable for own debts
• limited partnerships have limited liability

What are the main features of a branch?

• popular format for foreign companies opening up in The Netherlands
• foreign parent responsible for all liabilities of Dutch branch
• branch required to register with Chamber of Commerce
• minimum of one director; no formal accounting requirements

How easy is it to recruit staff in the Netherlands?

The unemployment rate in the Netherlands, although rising, is low by the standards of other EU member states. This makes recruitment rather more of a challenge than elsewhere in the EU but we will be happy to refer you to one of our carefully chosen local recruitment specialists. The Dutch are famously multi-lingual and their education and workplace skills are high. Please contact us for further information.

What is the regulatory environment like?

Reasonably easygoing with regard to foreign investment and taxation, but certainly not when it comes to labor laws. The Dutch labor market is heavily regulated and generally favors the employee. Companies employing more than 35 workers are legally required to establish a works council which must be consulted on a wide range of issues. If you need to dismiss an employee, count on the intervention of a civil court or government body. You should take legal advice before entering into any kind of employment contract – contact us for details of our network of Dutch legal and recruitment specialists.

Are there financial incentives available?

The Dutch government and local authorities offer incentives to foreign investors based on a number of factors, most particularly the region where the new company is to be based. EU funds are also available. Key agencies here are the government-run regional development corporations which can help start up new businesses and act as risk-bearing partners.

And what about banking facilities?

Amsterdam is one of the world’s top financial centers and most international banks have offices there. The Netherlands has several specialist agencies that provide business funding. The National Investment Bank focuses on medium and long term lending, equity investment and capital market activities and the Industrial Fund provides risk-bearing capital to the larger high-tech companies. You will need to open a bank account in The Netherlands and we can advise you on this.