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Incorporation

Setting up a company in Netherlands

When setting up a company you may want to consider these factors:

  1. Business Factors

    • The industry and type of business
    • Nationality of the headquarters/individual(s) and
    • Presence of existing trade agreements or relationships
  2. Location

    Netherlands is made up of 12 provinces. While Netherlands regulations seem relatively unified, each province may have differences in their requirements and processes. Information researched aimed for general Netherlands-wide information, but in some cases may be based on Holland.

  3. Language

    Language may be an influence. While a large number of people speak English (reportedly 87%), and Amsterdam recognizes English as one official language, the official national language is Dutch. Furthermore there are various regional languages such as Frisian.

  4. Visas

    Being an EU member state, the Netherlands allows free movement of goods and labor from and to other member states. However for non-EU or EEA citizens or residents, requirements for working and living in the Netherlands will be more complex. If you come from outside of the European Union, this means that you will need a residence permit (MVV). In some cases you may also need to apply for a work permit (TWV). If you are not a resident of the EU, the best thing to do is to first go to the IND. On the website you will find everything you need to know to be able to apply for your stay in the Netherlands.

  5. 'The Netherlands' vs 'Holland'

    Historically the Netherlands in its entirety has often been referred to as ‘Holland’. However this is an older practice, that was due to the county of Holland being the economically and politically most important county in the region. In the current day and age referring to the Netherlands as Holland is incorrect, and now ‘Holland’ strictly refers only to North and South Holland, two of the nation’s twelve provinces.

  6. Requirement for Recognized Qualification

    There are some professions in the Netherlands which are regulated and require a recognized qualification. This should be considered for people such as sole entrepreneurs, representatives, managing directors and the like. The Netherlands Organization for International Cooperation in Higher Education (NUFFIC) provides a foreign qualification accreditation service, which will confirm whether or not your qualifications meet the standards required for conducting business in the Netherlands.

Your Options

The Netherlands is known for its history of international trade reaching back to the colonization era. The Dutch are considered internationally oriented and the labor market is characterized by a low level of unemployment, a high level of education and good language skills (reportedly the highest percentage of good command of the English language outside an English speaking country – although the same is often said of countries like Sweden and Norway). Furthermore, the Netherlands offers a high level of political and legal stability and well-developed financial and economic infrastructure.

There are no particular restrictions on foreign owned companies in the Netherlands, and a high number of tax treaties prevent double taxation and often provide additional tax benefits.

The Netherlands is also considered an ideal location by many foreign businesses to position themselves to enter markets throughout Europe, the Middle East, the Far East, Africa and beyond.

If you come from outside of the European Union, and are going to run the business in the Netherlands or move foreign staff there, this means that you will need a residence permit (MVV). In some cases you may also need to apply for a work permit (TWV).

Note: Information on specific requirements can also be obtained in more detail from the Dutch Chamber of Commerce, which is also a good source of information and advice on other aspects of running a business in the Netherlands.

Note: Generally no special permissions are required. However, there are some professions in the Netherlands which are regulated, and you would require a recognized qualification in order to set up a business within that sector. The Netherlands Organization for International Cooperation in Higher Education (NUFFIC) provides a foreign qualification accreditation service, which will confirm whether or not your qualifications meet the standards required for conducting business in the Netherlands.

Representative Office (RO)

A representative office may be established as a location or office in the Netherlands, but generally speaking no business activities are conducted there. A typical activity of a representative office is a location for doing market research, providing product information, etc.

A representative office does generally not have to be registered with the Chamber of Commerce (in fact registration is not possible and will be denied) and furthermore a representative office does under certain conditions not constitute a taxable presence in the Netherlands. The representative(s), however, must register for personal income tax. A work permit and residence permit are also required.

A representative office can have employees. If so, the foreign entity needs to register itself as a “withholding agent” with the Dutch tax authorities (obligation to withhold wage tax).

Any Dutch VAT incurred by a representative office is under certain conditions eligible for refund. In order to get a refund, the foreign company should file a periodical request with the Dutch tax authorities.

While this kind of entry is informally accepted by Dutch authorities, there does not appear to be a clear ‘official’ representative office status due to lack of any registration required.

Representative Branch Registration Process

Appoint a Representative

The existence of the representative office basically depends on the appointment and establishment of one or more representatives. The representative(s) must register for personal income tax. A work permit and residence permit are, of course, also required.

If at a later date the activities of the representative office change into a branch, the appropriate registration/amendment of registration in the trade register will have to be made. At the same time, the new entity must register for corporate tax, VAT etc.

Agency: N/A (arranged by your company)

Time: N/A

Cost: N/A

Register with Tax Office

Our research did not find an explicit requirement to register with the tax office for a representative office. Nonetheless, if employing people, the office is presumably required to then register with the Dutch Tax Authorities to obtain a VAT number and for taxation purposes.

Agency: Tax and Customs Administration (Belastingdienst)

Time: 5 days

Cost: No charge

Register for Employee Insurance

Regardless of its less formal status, when hiring staff the representative office must observe the normal rules of labor law. If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.

The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can also opt to be a self-insurer.

Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.

Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).

Time: 1 day

Cost: no charge

Risk Inventory and Evaluation

If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.

It is not clear whether this requirement also applies to representative offices that employ staff, but assumed that it is and thus listed here for consistency.

The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:

  • Which risks you and your employees encounter;
  • What measures you have taken in order to prevent harm to your own health and that of your employees;
  • What measures you are planning to take (Plan van Aanpak).

Agency: N/A (arranged by your company)

Time: N/A (actually making the plan will take some time, but there is no registration or approval process)

Cost: N/A

Branch Office

The branch office is considered an extension of its foreign parent, and thus the parent company will be responsible for its legal obligations and debts.

A branch is generally useful in the early stages of having a presence in the Netherlands, and the speedy formation of the branch can be advantageous. On the other hand, a disadvantage is the full liability of its parent.

The foreign head office only needs to file certain documents and information with the trade register of the Chamber of Commerce in the district where the branch will be located. Documents generally include:

●      Name and address of the foreign legal entity or partnership, its legal form, details about the registration in its home country (such as name register and registering body, city and country of registration, registration number).
●      A proof of registration, not older than one month, issued by the foreign registering body.
●      In the case of a foreign legal entity, a copy of the articles of incorporation and articles of association (if these last are a separate act). These documents must be original or certified copies. All these documents should be in Dutch, English, French or German or have been translated into any of these languages.
●      The identities and addresses of its directors and the identity of the branch manager, empowered to legally bind the company.
●      The office address of the branch in the Netherlands, which is to be considered its legal domicile.
●      The trade name and a description of the business.

Generally speaking, all the information that the foreign company needs for registration in its own country should be sufficient.

Altogether the steps will take about 1 week, though it is advised to allocate between 2 and 4 weeks for the whole procedure.

Branch Office Registration Process

Check Trade Name

Before forming the company, a business name which is unique within the Netherlands must be selected. A method for searching this can be via with the Benelux Office for Intellectual Property to make sure the business name has not already been taken as a trademark.

Agency: Benelux Office for Intellectual Property

Time: Instant

Cost: None

Register the Business and Name at Dutch Chamber of Commerce

The documents detailed below are required by the Dutch Chamber of Commerce trade register in order for branch registration.:

  • A copy of the parent company’s Certificate of Incorporation
  • A copy of Memorandum & Articles of Association of the parent company
  • A copy of the parent company’s Certificate of Good Standing
  • All registered directors and proxy holders of the parent company in its domicile country must also be registered in the Netherlands
  • Directors and proxy holders of the parent company must provide a passport copy and proof of their private address – i.e. a current and original statement or invoice from the bank or a utility company

There is no requirement for any share capital for Dutch branches.

All required documentation must be officially apostilled and translated into Dutch or English by a certified translator.

Agency: Dutch Chamber of Commerce (KvK) 

Time: 1 day

Cost: 50 EUR

Register with Tax Office

The branch company must register with the Dutch Tax Authorities to obtain a VAT number and for taxation purposes.

You do not usually need to register separately with the Tax and Customs Administration. The Chamber of Commerce will pass on your details automatically. This step is thus just listed separately for reference.

Note: You can apply for registration at the Trade Register also via a service called Message Box. For this purpose you need identification with e-Identity (EID) token (eHerkenningsmiddel) level 4 or signing with the PKI certificate (Public Key Infrastructure). Message Box is a secure e-mail system that enables you as an entrepreneur to exchange digital messages with Dutch government agencies.

Agency: Tax and Customs Administration (Belastingdienst)

Time: 5 days (ie. after registration at the Chamber of Commerce in previous step)

Cost: No charge

Open Corporate Bank Account

It is possible to use a foreign bank account while doing business in the Netherlands, a feature which has been facilitated by the new SEPA rules. Nonetheless, a Dutch account may be preferred, since it will probably make transactions smoother being based in the Netherlands.

Generally it is possible to make an appointment to open a commercial bank account as soon as the company has been registered with Chamber of Commerce, and it is possible for the appointment to take place at the same day.

The bank will need to identify the limited company plus the board member(s) and/or owners. The following documents are generally required:

  • An original, recent (not older than 3 months) certified extract from the Chamber of Commerce that the company is registered.
  • The articles of association (deed of incorporation).
  • Separate responsibility of the board members, showing in the extract from the Chamber of Commerce, boards can decide to let only one board member identify himself in order to open the bank account.
  • Joint responsibility of the board members, showing in the extract from the Chamber of Commerce, the boards that choose this structure need all of the members to show up and identify themselves to open the account.
  • An original valid identity paper of each director to an employee of the bank who can then identify the person directly or
  • A copy of a valid identity paper of each director that is legalized by a notary located in the Netherlands.
  • The name, address and date of birth + residence data of each director;
  • A completed and signed ultimate beneficial owner (UBO) statement for each director

Agency: Commercial Banks

Time: 1 day

Cost: None

Register for Employee Insurance

If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.

The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can opt to be a self-insurer.

Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.

Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV)

Time: 1 day (can be combined with previous step)

Cost: no charge

Risk Inventory and Evaluation

If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.

The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:

  • Which risks you and your employees encounter;
  • What measures you have taken in order to prevent harm to your own health and that of your employees;
  • What measures you are planning to take (Plan van Aanpak).

Agency: N/A (arranged by your company)

Time: N/A (actually making the plan will take some time, but there is no registration or approval process)

Cost: N/A

Subsidiary Company

A more full level of operation is setting up a full subsidiary via a Dutch incorporated company. Dutch law distinguishes between two types of limited liability companies:

  • The public limited liability company (Naamloze Vennootschap or NV)
  • The private limited liability company (Besloten Vennootschap or BV).

Difference between NV and BV

The NV is more common for companies that are listed on a stock exchange, or engage in banking or insurance, but is not restricted to these businesses. The BV is mainly privately owned, and used for smaller businesses or group holdings.

BVs cannot issue share certificates and can’t issue bearer shares. However BVs can be formed with a minimum share capital of EUR 1 (ie. at least one share with voting rights and one share with profit rights or a single share with a combination of both), while NVs must have a minimum share capital of € 45,000.

Subsidiary Company Registration Process

Altogether the steps will take about 1 week, though it is advised to allocate between 2 and 4 weeks for the whole procedure.

Check Trade Name

Before forming the company, a business name that is unique within the Netherlands must be selected. A method for searching this can be via with the Benelux Office for Intellectual Property to make sure the business name has not already been taken as a trademark.

Agency: Benelux Office for Intellectual Property

Time: Instant

Cost: None

Notarize Articles of Association

The incorporation of a BV or NV requires the services of a civil-law-notary, a Dutch lawyer specializing in drafting and executing deeds of incorporation and articles of association.

Agency: Dutch civil-law-notary

Time: 1 day

Cost: EUR 1,750-2,500 for NV or BV (with relatively “standardised” articles of association)

Register the Business and Name at Dutch Chamber of Commerce

When you have decided on the type of business you would like to start, then you need to have it registered with the Dutch Chamber of Commerce (Kamer van Koophandel or KvK).

You also have to submit the trade name when registering with the KvK. This name must meet the conditions of the Trade Name Act (Handelsnaamwet).

Note: If you wish for your trade name to also be protected as a trademark you must register your trade name at the Benelux Office for Intellectual Property (BOIP).

The Chamber of Commerce will automatically pass on your details to the Tax and Customs Administration (Belastingdienst).

Once you have been registered you will be given a unique number for your business. This number, known as the KvK nummer, will need to be used on all invoices and outgoing post which your new business deals with.

Agency: Dutch Chamber of Commerce (KvK) – http://www.kvk.nl/english/

Time: 1 day

Cost: 50 EUR

Register with the Trade Register and the Tax Office

New businesses must be registered with the Trade Register kept by the Chamber of Commerce.

You do not need to register separately with the Tax and Customs Administration. The Chamber of Commerce will pass on your details automatically. This step is thus just listed separately for reference.

Note:| You can apply for registration at the Trade register also via Message Box. For this purpose you need identification with e-Identity (EID) token (eHerkenningsmiddel) level 4 or signing with the PKI certificate (Public Key Infrastructure). Message Box is a secure e-mail system that enables you as an entrepreneur to exchange digital messages with Dutch government agencies.

Agency: Tax and Customs Administration (Belastingdienst)

Time: 5 days (ie. after registration at the Chamber of Commerce in previous step)

Cost: No charge

Open Corporate Bank Account

It is possible to use a foreign bank account while doing business in the Netherlands, a feature which has been facilitated by the new SEPA rules. Nonetheless, a Dutch account may be preferred, since it will probably make transactions smoother being based in the Netherlands.

Generally it is possible to make an appointment to open a commercial bank account as soon as the company has been registered with Chamber of Commerce, and it is possible for the appointment to take place at the same day.

The bank will need to identify the limited company plus the board member(s) and/or owners. The following documents are generally required:

  • an original, recent (not older than 3 months) certified extract from the Chamber of Commerce that the company is registered.
  • the articles of association (deed of incorporation).
  • Separate responsibility of the board members, showing in the extract from the Chamber of Commerce, boards can decide to let only one board member identify himself in order to open the bank account.
  • Joint responsibility of the board members, showing in the extract from the Chamber of Commerce, the boards that choose this structure need all of the members to show up and identify themselves to open the account.
  • an original valid identity paper of each director to an employee of the bank who can then identify the person directly or
  • a copy of a valid identity paper of each director which is legalized by a notary located in the Netherlands.
  • the name, address and date of birth + residence data of each director;
  • a completed and signed ultimate beneficial owner (UBO) statement for each director

Agency: Commercial Banks

Time: 1 day

Cost: None

Employee Insurance

If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.

The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can opt to be a self-insurer.

Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.

Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) – http://www.uwv.nl/OverUWV/english/

Time: 1 day (can be combined with previous step)

Cost: no charge

Risk Inventory and Evaluation

If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.

The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:

  • Which risks you and your employees encounter;
  • What measures you have taken in order to prevent harm to your own health and that of your employees;
  • What measures you are planning to take (Plan van Aanpak).

Agency: N/A (arranged by your company)

Time: N/A (actually making the plan will take some time, but there is no registration or approval process)

Cost: N/A

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Netherlands, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Netherlands they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where

  • the company is looking to setup an office quickly
  • the company wants to work within a defined budget
  • the company wants to limit its initial commitment in Netherlands
  • the company needs help with tax, employment, immigration and payroll compliance in Netherlands

The complexity of employment regulations in Netherlands makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Netherlands allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Netherlands.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Netherlands. Read more about outsourced employment through Shield GEO.

With a historical foundation of international trade, the Netherlands has a strong and developed business investment environment, economy and infrastructure. It is considered a popular choice for foreign business as a ‘gateway’ into Europe, and has an open framework for foreign business establishment and ownership.

Dutch employment law provides strong labor conditions and protections for employees, thus, employing people will generally be an important investment and commitment. However, options such as using Collective Labor Agreements and temp agencies are popular options for more flexible workforce arrangements.

The business structures available to establish a foreign presence are typical to most western countries: the representative office which has no legal entity status and thus can only be used for preliminary activities such as market research, the branch office which is a legal entity, but as an extension of the foreign parent, and thus the foreign parent is liable for its debts and obligations. Finally, the full subsidiary company, which is a separate legal entity and independently managed from the parent company.

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