Setting up a company - in the Netherlands

How do you start a company - in the Netherlands?

Corporate law in the Netherlands, from a comparative perspective, provides greater flexibility than most other corporate systems when it comes to foreign entrants conducting business in The Netherlands. Companies whose origins lie outside Holland’s borders face no special restrictions as that of a national company when setting up a business. Establishing operations in The Netherlands can be achieved through various legal frameworks. This can range from the more common subsidiary route, to a Branch or Dutch holding company. The subsidiary option tends to be the most favoured. Alongside this framework, are different legal forms that can be pursued in the creation of your business operations.

Which legal form should you choose to set up a company in the Netherlands?

The most common legal forms used for companies is that of the public (NV) and private (BV) limited liability companies. The initiators of an NV or BV can either be individuals or legal entities, regardless of both nationality and current domicile. These two mechanisms enable a legitimate foundation in setting up a company but differ on what they provide and allow for in a company’s activities.

A NV (‘Naamloze Vennootschap’ in Dutch) is registered as a public company, which can issue bearer shares that in turn can be listed on the stock exchange. This method is generally adopted by well-established larger companies, who can manoeuvre through the greater restrictions. These restrictions are generally imposed by EU law, which seeks harmonised standards in all corporate governance forms at the EU level. As a result, NV’s are subject to capital protection rules in terms of capacity and the issuing and payment of shares. The main requirement being a minimum paid in capital of EUR 45,000.

In contrast, BV’s (‘Besloten Vennootschap’ in Dutch) are privately owned and designed with flexibility in mind. They are not subject to the same strict capital protection standards, provided that at least one share is issued to an entity other than the company itself or its subsidiaries. As a result, they have greater freedom in managing their corporate structure and Articles of Association.

How do you satisfy incorporation in the Netherlands

Both legal forms will require incorporation under Dutch corporate law. This is accomplished via means of a notorial act, an execution of a notorial deed of incorporation. In conjunction with this, the Articles of Association must also be produced. The notorial deed must be drafted in the Dutch language and executed by Dutch notary. In addition, if the shares of the company are registered, corporate law requires a Shareholder Register. This must be a complete list of the name and address of each shareholder alongside an accurate report of the shares they own. A skilled lawyer, who is well versed in corporate law, is often required in the creation of these documents.

How to comply with company registration in the Netherlands?

It is necessary for both an NV and BV to be registered with The Netherlands Chamber of Commerce within eight days of the company’s incorporation. Where this is done in the country is dependent on the principal place of business of your company. The details of the company needing to be registered include all of its managing and supervisory directors, and, if present, any proxy holders in the company.

Legal advice on setting up a company in the Netherlands

Setting up a company in The Netherlands can be a challenge for foreign entrants with no familiarity of Dutch corporate law. However, seeking adequate legal advice and assistance in drafting the required documents is a crucial step in ensuring an easy establishment of business operations in the country.