Start a Dutch
When you are expanding your business to The Netherlands, you can consider starting with a ‘representative office’, also called a ‘liaison office’.
The main purpose of a representative office is to represent your overseas company, in a new market (such as The Netherlands).
The ‘representative office’ is typically limited to providing information to prospective customers or business partners and is not able to perform any independent sales activities (as would be operated by a ‘sales office’).
The exact restrictions and purpose of the representative office are typically decided by the business owner/shareholders. By restricting the freedom of the representative office to perform any further activities, they also limit their liabilities and formalities of running a full-on operation. There are also legal or tax restrictions and conditions to consider when starting a representative office in The Netherlands.
The representative office typically does not require a full registration, as would be the case with a permanent establishment in The Netherlands that performs activities. Therefore it’s important to understand how the Dutch representative office, compares to other types of business structures.
The representative office can be structured in different forms
No local director or shareholder is required to start a Dutch representative office
No registration at the Chamber of Commerce or tax authorities might be required
In case you appoint local staff members, the representative office must be registered as an employer
The branch registration is the most popular way to start a representative office
A representative office, structured as a branch, would not require to involve a notary or prepare Financial
Statements in The Netherlands
Which legal entity is most suitable for a ‘representative office’ in the Netherlands
The representative office, as definition, refers to the type of operations of a business structure. It does not necessarily mean that a specific kind of company form is used. A representative office could be structured via a Dutch B.V. (private limited), or via a branch registration. In fact, a representative office could even be structured in such a manner, that there would be no requirement at all to register the representative office at the Chamber of Commerce (or tax authorities!).
BV or Branch
A Dutch representative office is typically structured as a branch office, as as a Limited Company (in the form of a subsidiary). For European companies (especially if it has English statutory documents in place) it might be easiest to register a branch. A representative office is typically not likely to have any serious liabilities, and therefore the branch registration has no downside from that perspective, whereas the advantages are that it’s cheaper to establish and not required to prepare Dutch Financial Statements. You can read more about the differences in our Business Toolkit.
In case you start a representative office in The Netherlands, in which your payroll staff, it’s typically required to have the representative office registered at the Dutch Chamber of Commerce (as an Employer, read more about that here).
Advantage of starting a representative office in The Netherlands
The main reason that companies decide to start a representative office in The Netherlands, is to improve their local reputation, and the way they can interact with the Dutch market. The representative office allows companies to use a local phone number, and address, and to involve a local sales agent that can represent the company under certain conditions
YOUR BUSINESS TOOLKIT
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Our experts have combined their knowledge and strengths to create a tool we call the Business Toolkit.
The Business Toolkit will help you and entrepreneurs from around the globe to truly understand the Dutch market, regulations and laws. And will enable you to take a deep-dive into the topics displayed below.
This way you will easily get up to speed with our Company formation process, Dutch Accounting and our corporate services.
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