starting a business in the netherlands

A Guide to Company Formation in the Netherlands

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The Basics

 

WHY THE NETHERLANDS?

The Dutch business environment is very attractive for foreign entrepreneurs to establish their company.
And this is why:

  • Our location is great! We are located in the midst of the EU; we are the center of international trade.

  • You can easily reach over 500 million potential (European) clients. They’re all closeby.

  • Our infrastructure is first class. We are the home of important waterways and seaports, one of the largest airports in the EU, a high-speed road network, rail network and broadband networks.

  • We are multilingual - And fluent in English. Over 90% of our populations speaks English.

  • Many businesses will agree we have a great business climate: Cisco, Danone, Dow, Fujifilm, Heinz, Huawei, Siemens, Astellas.. and so forth...

Focused on the formation of your company, it is important to know that the Dutch Chamber of Commerce
typically completes company registrations and changes within one day, compared to f.e. two weeks in Germany.
You will find this level of efficiency also in your tax affairs, banking and other relevant business services.


To establish a more attractive business environment in the Netherlands, the government is advancing its policies
for private companies. A private company can be established with an initial capital of 0.01 EURO. With this policy
the government wants to attract more entrepreneurs by providing savings in costs and time.

STEP BY STEP COMPANY FORMATION

The exact procedure of the incorporation could differ regarding the corporate entity and urgency of the request. However, there is a standard procedure which can be roughly followed. Firstly, INCO will require the following documents and information to begin the process:

  • Passport copy of the chosen director or shareholder(s)

  • Proof of address (e.g. utility bill) of the director and shareholder

  • Complete order form

  • Invoice details (name and address)

In the event that the chosen shareholder is a legal entity, we will require:

  • Legalized Certificate of Good standing, or;

  • An extract from the Companies Registrar which identifies the neutral person who is authorized to sign the Memorandum of Association of the new Dutch BV

Once we have received these, we will send you the following documents:

 

  • Draft statutes

  • Personal data card

  • Power of Attorney

  • Invoice

If you are not visiting INCO at one of our offices, these documents need to be printed and signed at the public notary. You will then need to send us scanned copies for approval. As soon as we have approved these, we will need you to send us the originals by courier.

On receipt of the original signed documents, we will begin incorporation of your Dutch company and register it at the Chamber of Commerce in the Netherlands.

Upon successful incorporation, which will take a few days, INCO will send you scans of the company documents and an extract with your company’s registration number. With your registration number you will be able to apply for a Dutch business bank account.

Before you decide to use the BV, which is the most common private limited company within the Netherlands, INCO could also help you consider other legal entities. The Dutch Partnership or Dutch Foundation being two examples.

LEGAL ENTITIES

When exploring the options of opening a new business in the Netherlands, it is of high importance that you select the right legal entity for your business. Since, each country has it's own business structures and regulations it is advised to thoughtfully review the benefits and disadvantages of each kind of firm within that country. Legal entities often differ in the way they are structured: amount of share capital, number of partners involved,  independence and tax regulations. 
 
We have listed the 6 types of firms in the Netherlands 
 
1. The Dutch BV (limited liability company)
This kind of company can be registered if you have a minimum share capital of 0.01 EUR, according to the recently amended Company Law. There are a series of requirements related to Board of Directors and local company headquarters, both being required for what the local regulations describes as “substance”, and our company INCO Business Group is able to provide all required services to foreign businessmen. 
 
The Dutch BV is one of the most selected legal entity for foreign entrepreneurs. Contact us to review your situation and get a personalized advice. 

2. The General Partnership
This kind of business is for companies with two or more partners united under the same name and having the same economic objectives, with unlimited liability on the firm’s debts. They share the profits and they don’t have to present a minimum share capital, such as for the Dutch BV. The personal assets of each general member of the partnership can be taken by the creditors if there are debts that can’t be covered by the company funds. 
 
3. Dutch Limited Partnership
To register another form of partnership, the Dutch Limited Partnership, are necessary at least two partners - one general who has unlimited liabilities and takes the management decisions - and silent one who must deliver a capital to the firm and has his liability limited to his contribution.
 
4. Professional Partnership 
Professional Partnership is formed by two partners, at least, who are responsible for their claims. This kind of business is preferred for practicing a profession and not for business. 
 
5. Public Liability Company
This type of business is proper for large investments and it needs a share capital of 45,000 EUR. The general meeting of shareholders is in charge for management decisions. The board of managers will be responsible for daily decisions.  
 
6.Branches/Subsidiaries
Branches or subsidiaries of foreign companies. The main differences between these two business forms is the degree of independence of the local branch or subsidiary related to the parent company.

GETTING OFFICE SPACE

Affordable, flexible and simple. These are the standout features of a registered office. Many businesses take advantage of registered offices to boost their international presence and make operating a foreign business as easy as possible.

But the biggest advantage of a registered office is; it helps inspire trust in your business from your clients. A registered office (along with a local bank account) help reassure clients that they’re dealing with a local business covered by local law. This helps create confidence in any transactions or contracts that they choose to enter in with your business.

You may be looking to test out a market before you commit to investing in a fully fledged office. Or maybe your services are fully remote meaning you only need presence. Whatever your reasons are, registered offices are a great option for businesses that desire greater flexibility and speed while keeping costs low.

OBTAINING A BANK ACCOUNT

When setting up in a new country, your company will benefit from opening a local bank account. A local bank account will help you establish increased credibility in the eyes of local customers as well as make transactions a great deal easier.
 
But the obtainment process can be difficult, particularly when it needs to be completed in a foreign language. The strict compliance regulations and conducting the process remotely can make the procedure seem impossible to succeed. Establishing a business plan can increases the chance of opening a local bank account. That’s why most of our clients ask us to assist them with the process.

Costs & Facilities
Every bank offers different facilities and fees. We have great relationships with different banks in different regions. So whatever your needs and budget, we’ll be able to find you a bank that works best for you!
 
Below is a list of the most common features that the banks we work with provide:

  • Online banking

  • Free bank cards accepted worldwide

  • Instant online customer service chat

  • Online share trading on all well-known exchange markets

  • Low transaction costs

  • Private banking

  • Attractive investment interest

  • Personal advice from a dedicated account manager

  • Anonymous payments and deposits

  • Privacy of personal data

  • Private & Merchant Bank Account

BANKING IN THE NETHERLANDS

When setting up in a new country, your company will benefit from opening a local bank account. A local bank account will help you establish increased credibility in the eyes of local customers as well as make certain transactions a great deal easier.

But the process itself can be difficult, particularly when it needs to be completed in a foreign language. Strict compliance regulations and having to conduct the process remotely can make the procedure seem almost impossible. That’s why most of our clients ask us to assist them with the process.

 
 
 
 
 
 

lAW & REQUIREMENTS

 

COMPLIANCE

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TAX IN THE NETHERLANDS

A company that is registered in the Netherlands can either obtain a resident or a non-resident VAT number.

 

1. The resident VAT number

The resident VAT number requires a company to fulfill several substance requirements before it can be considered a ‘resident’ company.

At this moment, the tax authorities focus on the office, mainly because Dutch BV does not show any other substance in the Netherlands. If you can provide other evidence to show that the company does have an actual business (or have facilities to run an actual business) in the Netherlands, the VAT still can be activated. Having a virtual office is legal in the Netherlands.

 

There might be two options for you:

  • Renting a physical office (and/or hire an employee to work there) to create a substance on the permanent establishment.

  • Provide documents to show that he has suppliers or clients in the Netherlands, to create substance on business activities. Some contracts or invoices would be very helpful. An "outgoing" invoice to a Dutch customer (individual or legal entity) would be preferable because it is mandatory to have a VAT number if a company provides services in the Netherlands.

 

Aside from the practical matter, there is also the legal matter. The application of a VAT number means, that there should be a 'permanent establishment' from which the client operates. In case such permanent establishment is not present, the tax authorities can reject/revoke a VAT number, and they can suggest applying for a non-resident VAT number.

 

2. The non-resident VAT number

Non-resident companies doing business in the Netherlands, may have to file a VAT return (turnover tax, BTW) in the Netherlands. If so, they need to register for VAT with the Dutch Tax and Customs Administration.

 

What are the main differences between the two VAT numbers?​

The most important difference from the resident VAT number is that with the non-resident VAT number, you cannot apply for the Article 23 permit without a tax representative.

The article 23 permit allows you to benefit from the reverse charge mechanism, which means that you will be able to postpone the payment of VAT from the moment of import of goods. The VAT is instead then paid after the VAT return for the related quarter.

Consequently, you can decide to

  1. Start with the resident number

  2. Declined for resident number proceed with the non-resident

  3. Start with non-resident immediately due to urgency

  4. How do I apply for a VAT Number?

How do I apply for a resident VAT number?

Before applying for the resident VAT number, one must first consider whether all the substance requirements are satisfied. INCO can assist you by going through a checklist and discuss with you your future plans and determine how and at what point your business can get the resident VAT number. The moment when all the conditions are achieved, INCO can send out the request to the Tax Authority and have progress followed by a dedicated company officer.

How do I apply for a non-resident VAT number?

The non-resident application is the fastest procedure as it requires much less investigation by the Tax Authority.

In case one or more of the following questions apply to you, you qualify for a non-resident VAT number.

  • Do you sell goods to private individuals in the Netherlands?

  • Do you sell goods to individuals from other EU countries from the Netherlands?

  • Do you sell goods to other foreign entrepreneurs in the Netherlands?

  • Do you sell goods to entrepreneurs from other EU countries

  • (Intra-Community supplies) from the Netherlands?

  • Do you bring your own goods from the Netherlands to another EU country?

  • Do you sell goods to customers outside the EU from the Netherlands?

  • Do you have Intra-Community Acquisitions (ICA) in the Netherlands?

  • Did you receive any invoices with Dutch VAT that has been reserve-charged to you?

  • Do you have other deliveries in the Netherlands subject to VAT?

  • Do you charge VAT for services provided in the Netherlands

To apply, you will have to send us the following:

  • The filled in application form; it is important to answer the questions correctly and truthfully.

  • A copy of a valid ID/Passport

  • Proof of the deed of incorporation

  • Outgoing invoices or contracts with preferably Dutch customers. You may also attach of some of your EU customers. This part is optional but much recommended to proof that you need a VAT number.

It’s important to realize that no VAT number will be granted if the BV is not actually located in the Netherlands and there are no business activities in the Netherlands. There is extra attention from the tax authorities in case of a virtual address.

VISA

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REQUIREMENTS

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CHAMBER OF COMMERCE

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NEEDED DOCUMENTATION

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Working With INCO

 

WHY INCO?

INCO Business Group facilitates global entrepreneurship for ambitious entrepreneurs by providing a smooth landing in the Netherlands, with focus on incorporation services and development strategies to achieve future growth in Western Europe.


Since 2007, we have helped more than 1.000 entrepreneurs from 27 countries to set up an international business.
We assist 20-30 clients per month with incorporation of their company and supporting services in the Netherlands. We work with and for entrepreneurs in three phases of their landing in the Netherlands:


Start-up Phase (incorporation), Support Phase (settlement) , Growth Phase (business development)


We work efficiently, professionally, and with fixed transparent fees. This means there are no hidden fees and you know exactly what to expect.

Our team consists of a variety of different nationalities, that we’ve designated to various Expert Desks. This means we speak the language of international business, we have dedicated professionals in each expertise ánd there is a big chance we can discuss it in your own language. We speak a.o English, German, Russian, Hindi and Dutch.Thanks to international cooperation, we have build a valuable network of accountants and financial advisers in most renowned financial centres. We work with various tax lawyers, accountants, lawyers and administrative employees. We build bridges between continents by co-hosting events and investing in our relationships with innovative technology hubs.

COST OF COMPANY FORMATION

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