Compare legal forms in the Netherlands
In the Netherlands, choosing the right legal form for your business is a crucial decision with far-reaching implications. This comprehensive guide examines various Dutch legal forms, including the Besloten Vennootschap (BV), sole proprietorship (also known eenmanszaak as ZZP), partnership, co-operative, and foundation.
Our in-depth comparison table highlights the key characteristics of each entity type, allowing you to make an informed decision based on factors such as setup procedure, requirements, liability, taxation, and governance. Whether you're launching a start-up or restructuring an existing company, this article will provide valuable insights to help you navigate the Dutch business landscape.
Compare the various business structures in the Netherlands below or request a free quote for setting up a legal entity in the Netherlands.
Guide to the Netherlands
| BV / LLC | Branch | Co-operative | Foundation | Sole proprietorship | Partnership | |
|---|---|---|---|---|---|---|
| Description | An autonomous legal entity governed by a board of directors responsible for making significant business decisions, managing daily operations, and overseeing the company's affairs. Shareholders appoint the directors, and the company can establish a supervisory board to monitor the directors' policies and overall business direction. Alternatively, a unified board comprising executive and non-executive directors can be formed. | A branch office is not considered an independent legal entity. It functions as a local office of a non-Dutch legal entity in the Netherlands, representing the head office. | ||||
| Suitable for type of business | Small and large | Existing foreign companies with limited presence in the Netherlands | The Dutch foundation (Stichting) is a legal entity that can be used for various purposes, such as charitable, cultural, educational, or scientific activities. It is commonly used for non-profit organizations | Freelancers, very small businesses with one owner. | Very small businesses with more than one owner. Also frequently used for professionals, such as accountants, lawyers and healthcare professionals. | |
| Minimum capital requirement | No capital requirement (minimum share capital is one share of 0,01 euro) | |||||
| Setup steps | Select a unique company name. Engage a notary to draft Articles of Association. Appoint directors and shareholders. Register with the Dutch Chamber of Commerce. Acquire any required permits or licenses. Open a corporate bank account. Register for taxes with the Dutch Tax and Customs Administration. | Determine if you have a permanent or non-permanent establishment. For a permanent establishment, register with the Dutch Business Register (Handelsregister) using forms 6, 11, and 13. Submit required documents (proof of company registration, Memorandum of Association, Articles of Association, and Certificate of Incumbency). Pay the one-time registration fee. For a non-permanent establishment, register for VAT with the Dutch Tax and Customs Administration if required. | Choose a unique business name. Register with the Dutch Chamber of Commerce (KVK). Obtain any necessary permits or licenses. Open a business bank account. Register for taxes with the Dutch Tax and Customs Administration. Consider acquiring relevant insurance coverage. | Select a unique business name. Draft a partnership agreement outlining roles, responsibilities, and profit distribution. Register the VOF with the Dutch Chamber of Commerce (KVK). Obtain any necessary permits or licenses. Open a business bank account. Register for taxes with the Dutch Tax and Customs Administration. Consider acquiring relevant insurance coverage. |
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| Local office lease requirement | There is no strict local office lease requirement for a Dutch BV. However, having a registered office address in the Netherlands is mandatory. This address will be used for official correspondence and must be registered with the Dutch Chamber of Commerce (KVK). In many cases, a virtual office is not considered sufficient to fulfill the registered office address requirement. It is generally preferable to have a physical office space, which can help establish substance and presence in the Netherlands. | |||||
| Is a virtual office sufficient? | No | No | No | No | No | No |
| Nationality or residency requirements | It is not a legal requirement. However, tax substance rules mandate that Dutch tax resident directors make up at least 50% of the board. Banks and notaries often require a resident director to meet KYC requirements. | Subject to the regulations of the head office's jurisdiction. | In order to set up a sole proprietorship (eenmanszaak/zzp) you will need to be a resident in the Netherlands and hold a valid social security (BSN) number. | All partners should be residents in the Netherlands | ||
| Issued capital is minimal EUR 0.01 (1 share of 1 cent). No minimum capital requirement. | No, not for the branch itself. Subject to the regulations of the jurisdiction where the head office is located. | No minimum capital requirement. | No minimum capital requirement, provided that each partner contributes some form of capital or assets to the partnership, as agreed upon by the partners. | |||
| Personal liability | No | No | Yes | Yes | ||
| Audit required | The balance sheet value is more than €6 million. The net turnover for the financial year exceeds €12 million. The average number of full-time employees over the financial year is more than fifty. If your company meets two of these three criteria, an audit by a certified accountant is mandatory, and you will need an auditor's statement. | |||||
| Shelf company possible / allowed? | Not used in practice. | - | - | - | - | - |
| Accounting tasks and tax returns | Corporate income tax return (CIT): BV companies must file a CIT return annually to report their taxable income and calculate the amount of tax owed. Value-added tax (VAT) return: BV companies must file a VAT return periodically to report the amount of VAT collected and paid on sales and purchases. Payroll tax returns: BV companies must file periodic payroll tax returns to report and pay the tax withheld on employee wages and salaries. Annual accounts: BV companies must prepare annual accounts that include a balance sheet, profit and loss statement, and notes to the financial statements. Corporate income tax provision: BV companies must prepare a corporate income tax provision as part of the annual accounts. Shareholders' meeting: BV companies must hold an annual shareholders' meeting to approve the annual accounts and discuss other important matters. Employer returns: BV companies must file periodic employer returns, including wage tax returns and social security returns, to report and pay employer contributions. | |||||
| Local director or corporate secretary services supplied by law firms or independent providers | Only licensed trust service providers are allowed to offer this. Law firms are not. | - | Only licensed trust service providers are allowed to offer this. Law firms are not. | Only licensed trust service providers are allowed to offer this. Law firms are not. | - | - |
| Carrying losses forward (and back) | ||||||
| Local bank account required? | It's not a requirement for incorporation. You can open a bank account anywhere, but to comply with tax substance rules, the main account must be overseen and controlled from the Netherlands. | No | No | No | ||
| Nominee director allowed? | No | No | - | - | ||
| Business licenses required? | No. Exceptions apply for certain industries such as pharma and finance. | No. Exceptions apply for certain industries such as pharma and finance. | No. Exceptions apply for certain industries such as pharma and finance. | No. Exceptions apply for certain industries such as pharma and finance. | No. Exceptions apply for certain industries such as pharma and finance. | No. Exceptions apply for certain industries such as pharma and finance. |
| Are identity of shareholders and directors publicly available? | The identities of directors and Ultimate Beneficial Owners (UBOs) – individuals who ultimately own or control more than 25% of the company's shares, voting rights, or ownership interests – are publicly disclosed through registration with the Dutch Chamber of Commerce (KVK). | For a Dutch branch office of a foreign company, the identity of the directors and the appointed local representative must be registered with the Dutch Chamber of Commerce (KVK). This information becomes publicly available. However, the identities of the shareholders are generally not required to be disclosed in the case of a branch office. | ||||
| Closing down company process | ||||||
| Name requirements | Uniqueness: The name should be distinct from other registered company names in the Netherlands. Clarity: The name must not be misleading or cause confusion about the nature or purpose of the company. Inclusion of "BV": The abbreviation "BV" (or "B.V.") must be included in the name to indicate the company's legal structure. Avoidance of restricted terms: The name should not contain certain restricted terms or phrases without proper authorization (e.g., "Royal," "National," or "International"). No infringement: The name should not infringe on any existing trademarks or intellectual property rights. | |||||
| KYC requirements | ||||||
| Corporate compliance obligations | Annual director and shareholder meeting. | |||||
| Limitations on share transferability | ||||||
| Common structures per entity | Holding BV: This structure is used to hold shares in one or more subsidiaries, manage assets, or protect intellectual property rights. It can be beneficial for tax planning and risk management purposes. Operating BV: This structure is used for conducting the primary business activities, such as providing goods or services. An operating BV focuses on day-to-day operations, including sales, marketing, and production. Finance BV: This structure is employed to manage intra-group financing activities or act as a centralized treasury center for a group of companies. It can be advantageous for optimizing cash management and minimizing foreign exchange risks. Intellectual Property (IP) BV: This structure is specifically set up to hold and manage intellectual property rights, such as patents, trademarks, or copyrights. The IP BV can help reduce tax exposure on royalty income and protect valuable assets. Real Estate BV: This structure is used to hold and manage real estate assets, either for rental income or capital appreciation. A Real Estate BV can offer tax advantages and liability protection related to property ownership. | |||||
| Tax advantages | Several tax deductions for small entrepreneurs: zelfstandigenaftrek, startersaftrek and MKB-winstvrijstelling. As well as VAT return exemption for very small businesses. | Similar to sole proprietorship. | ||||
| Required and recommended legal documents |