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Netherlands company formation: how to set up a company?

Netherlands company formation: how to set up a company?

The Dutch are one of the great historic trading nations of the world.

Today is no different. The stable economy of the Netherlands and its enterprising population make it a great place to form a business.

Indeed, the Netherlands recently ranked seventh in the best countries in the world to start a business. Employees are likely to agree too, with employee happiness ranking consistently high too.

Incorporating is often a long and arduous task. That’s why we’ve written this article. To unmuddy the waters for you.

Let’s dive in and look at how to register a company in the Netherlands.

Why do companies register in the Netherlands?

Many choose to register their company in the Netherlands due to its open trade culture, strong economy and handy distance to the UK and Europe.

There’s also ‘Dutch happiness' to consider. The Netherlands is consistently ranked one of the best places to live in the world in terms of freedom, stability, job security and environmental quality. It was recently ranked number 8 spot for quality of life.

How to register a company in the Netherlands

First things first.

There are a few things you need before you can consider incorporating, namely the following:

  • A Dutch address
  • Citizen service number
  • Valid residence permit
  • Valid identification document
  • A business premise lease or a declaration of consent (if your business address differs from your private address.)

Every company registered in the Dutch Business Register must have a Dutch address. This could be a personal address — even an accountant’s address, though you’ll have to get your Dutch accountant’s written permission.

You must also have a citizen service number which you can get by registering with the Personal Records Database in your city of residence.

If you’re a non-resident, you must have a permanent address abroad as well as a temporary one in the Netherlands.

There are a number of ways to obtain the permit. You can apply, providing you meet the standards, or you can receive one through a visa or scheme for entrepreneurs. These permits are issued by the Dutch Immigration and Naturalisation Service — check with them how you can apply if you’re coming from abroad.

Once you have the above prepared, here are the steps to take to register a company in the Netherlands:

1. Decide on the type of company and legal structure

Decide on the structure of your company. Possible structures include the following:

  • Sole proprietor
  • Private limited company
  • Public limited company
  • General partnership
  • Limited partnership
  • Foundation
  • Association with a notarial deed
  • Professional partnership
  • Cooperative or mutual insurance society.

If you’re setting up a public limited company, you must first go through a notary as they’ll handle the registration.

The civil-law notary will draw up the notarial deed containing the articles of association and register your business in the Netherlands Chamber of Commerce (KVK) Business Register.

All directors are added to the same register, so you will be personally liable until the process is formally completed. At least € 45,000 of starting capital is required.

To set up a private limited company, you have to enlist the help of a civil-law notary as there are several legal requirements to follow. The setup includes drawing up the statutes in a notarial deed, depositing € 0.01 starting capital, registration in the KVK’s Business Register and registration at the Dutch Tax and Customs Administration (also usually completed by the civil-law notary).

2. Choose a trading name

This will likely stick with your business forever, so it’s important to consider your options carefully.

This can’t be a brand name used by another company, or similar. You can check this in the Business Register.

Some advice. Don’t use another person’s name in your company name (you can only use your own). The name shouldn’t give the wrong impression as to what your business does and it shouldn’t be misleading to customers or suppliers. Symbols or numbers shouldn’t be used either.

The name will be approved or rejected based on the Trade Name Act.

3. Check if you must register UBOs

UBOs stand for ‘Ultimate Beneficial Owners' and refer to the owner or people who are in charge of the company. There is a UBO register which makes it clear where money is sent.

Note: all legal entities must register their UBOs.

4. Fill out the initial form

Before speaking with the KVK, you’ll have to fill out a form that provides them with key information. This can be filled out online, but it has to be printed. The printed version will then be asked for at either a face-to-face appointment or via post.

5. Contact or meet with the KVK

You can then make an online appointment or call +31 88 5 851 585 to meet with the KVK. Some may have to visit a KVK office in person. The registration will be taken care of following the meeting, providing everything is correct.

There’s also a one-time fee of € 75 and you must complete your registration no later than one week after starting your business.

How much does it cost to register a company in the Netherlands?

Registering at the Netherlands Chamber of Commerce (KVK) costs € 75.

If you’re starting a business without legal personality, you’ll just have the one-off cost unless you enlist the services of an accountant or company to help with the registration.

If you’re starting a business with a legal personality, costs can vary. You’ll have to pay for a notary to complete the application and it may require a specific minimum of starting capital.

Can a foreigner set up a company in the Netherlands?

You can set up a company in the Netherlands as a foreigner, though it will take extra time. You have three options: the Dutch Start-up Visa, the Self-employment Scheme, and the Orange Carpet scheme.

Dutch Start-up Visa

This is for non-EU entrepreneurs who offer viable products/services and it includes a one-year residential permit.

Your product or service must be innovative to be eligible, involve a collaboration with a reliable facilitator, and have step-by-step plans and sufficient financial means to reside and live in the Netherlands.

Self-employment Scheme

For entrepreneurs and self-employed individuals who wish to continue their business activities after their startup visa expires, the self-employment scheme may be beneficial.

Your product or service must be new and you’ll be assessed on your personal experience, business plan and added value for the Netherlands.

Orange Carpet

This makes it easier for business travellers and employees of companies with economic interests in the Netherlands to attain a visa.

What type of company should I form in the Netherlands?

This entirely depends on your ambitions, business risk, profits and plans.

The KVK has a helpful quiz that evaluates which legal structure suits your company the best.

How much is corporate tax in the Netherlands?

The standard corporate income tax (CIT) rate stands at 25.8%. There’s a lower rate of 19% which applies to the income bracket of € 200,000 or less.

How does the VAT system work?

In the Netherlands, there are three VAT rates — 0%, 9% and the standard VAT rate of 21%.

The rate will change depending on the goods and services that you offer. For hairdressers and bike repair shops, for example, the rate is 9%. While some goods could see a 0% VAT rate.

If you run a small business that has a turnover of less than € 20,000 per year, you may be exempt from paying VAT and can apply for the ‘Small Business Scheme.'

How quickly can I incorporate my Dutch company?

Providing you’re able to quickly gather the necessary information, a company can be set up within four weeks in the Netherlands.

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Frequently Asked Questions on Incorporating Dutch Company

What are the tax benefits and advantages?

Companies that are formed in the Netherlands benefit from a lower corporate tax rate in comparison to other European countries, standing at 19% for the lower rate. Other benefits include:

  • A tax incentive called the ‘Innovation Box' for those focusing on innovation.
  • The ‘Research and Development Tax Incentive' for companies involved in research and development.
  • Certain firms may benefit from tax breaks when it comes to payroll.
  • Highly trained foreign workers may receive a 30% tax-free allowance.

Other schemes may be applicable.

What are the main types of companies in the Netherlands?

The main types of companies include sole proprietor, private limited company, public limited company, general partnership, limited partnership, foundation, association with a notarial deed, professional partnership and cooperative and mutual insurance society.

What are the main features of an NV company?

A Naamloze Vennootschap (NV) company is a public limited company or open corporation with legal personality and publicly tradeable shares.

An NV issues stock to individuals and entities who are able to make decisions about the company, including appointing people for the board of directors. Shareholders may remain anonymous.

What are the main features of a BV company?

A Besloten Vennootsschap (BV) company is a private limited company with a legal personality. This has become a popular company structure in the Netherlands as, unlike an NV company, the start-up cost is a mere € 0.01 of starting capital.

Shareholders are the owners of the BV, with statutory directors being responsible for ensuring the correct management of the business and the accuracy of statements.

What are the main features of a Dutch partnership?

A Dutch General Partnership, otherwise known as VOF, is a company without legal personality that is formed by more than just one individual. Every person involved is a partner who must contribute something — whether cash, goods or labour.

What are the main features of a branch?

A branch includes a foreign company and is a permanent establishment that forms one entity with a company based abroad.

Essentially, it’s an extension of the foreign partner company. There’s a slightly different tax and accounting regime, no legal capacity (as it operates as a foreign company) and the parent company takes full liability.

How easy is it to recruit staff in the Netherlands?

The Netherlands known for their hard workers was affected by the Great Resignation of 2022 which appeared to swoop through numerous Western countries. 1.5 million people in the Netherlands switched jobs, in search of higher salaries and better conditions.

There’s an abundance of jobs available across numerous sectors — staff have their pick of the bunch. By mid-2022, there were 60,000 jobs available just in Amsterdam alone.

For employers, this means possibly adapting hiring strategies that allow you to stand out from the sea of other companies. There’s also the opportunity to recruit employees from further afield as the EU allows the free movement of human capital across EU countries.

To recruit the right people, consider offering an employee referral program to encourage current team members to reach out to their network. Utilising social media is another beneficial way to raise brand awareness and access a whole new crowd of people.

What is the regulatory environment like?

The Netherlands, like many European countries, has a regulated mixed economy. The state intervenes in certain fields like transportation, resource extraction and heavy industry. The Dutch government also hires a large amount of the labour force, with more than a quarter of the working population working in public services.

Are there financial incentives available?

Financial incentives in the Netherlands largely come from the lower corporate tax rate and the development opportunities provided by the government.

Depending on the sector you’re focusing on, there are a number of grant or funding programmes available that span a variety of industries.

There’s a tax credit available for those investing in research and development. Innovation-related companies could see tax relief through the ‘innovation box' and there’s a fund, named the ‘Innovation Fund for SMEs,' for companies wishing to transform their ideas into profitable new products, services or processes.

If you plan to do business abroad, from your Netherlands-based company, the government may be able to offer support. There’s a ‘Dutch Trade and Investment Fund' available, as well as a grant scheme for demonstration projects, feasibility studies and knowledge acquisition.

How can I get a Dutch Corporate Bank Account?

If you’re opening a business in the Netherlands, you need a corporate bank account. To set up a business bank account, there’s a simple form to fill out that includes all the necessary details the banks need.

Simply send the completed form and the requested documents to the bank of your choice.

To skip the hassle of high exchange costs and hidden fees when dealing with international payments, consider an EMI-certified cross-border payment solution Silverbird.

Silverbird allows you to hold, transfer and exchange 30+ currencies — all from a single multi-currency account and at a fraction of the usual cost.

If you require online payments and business solutions for your Netherlands-based business, chat with us here at Silverbird.

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