Local director requirement

We advise every BV company to have at least 1 Dutch resident (nationality not important) on the board of directors. While it is technically possible to register a NL company without living in the Netherlands, there are a few things to consider. Mainly the fact that every company should have at least one Dutch resident as its director. This is part of the 'substance requirements'.
Failing to meet this requirement can mean that the company will not get a VAT number and/or bank account.

  • If a company does not have a local director we would need;
    • A clear reason why this is not necessary for the company to meet this requirement. And details on how the company will be operated remotely.
    • Or a detailed plan on how the company is planning to meet this requirement in the near future. In other words, will the company hire a director or will you move to the Netherlands to become the local director in the next few months. And if so, how this will work exactly.

Reasons for the local director requirement

One of the Dutch substance requirements is that at least half of the directors of the company should be resident of the Netherlands in order to be sure that you can have a company that is ready to trade.

The tax authorities in the Netherlands want businesses to have a real connection to the Netherlands. Preferably this is demonstrated through actual investment and activity in the Netherlands. This is not always possible and in many cases it takes some time for a business to constitute this sort of activity in the Netherlands. Many startups do not have much activity at the start.

A second obstacle for companies without a local director are the banks' KYC/AML (Know-your-customer / Anti-money laundering) regulations.

Although technically we could set up a company without a resident director, this can lead to the company being denied a VAT/BTW number and/or a bank account. Banks usually require that at least 1 director is a Dutch resident. For these reasons Legalee recommends its clients to employ a Dutch resident (nationality not important) as one of its directors. Registering a company without a local director is technically possible but you would  not meet the Substance Requirements, which can have the aforementioned consequences.

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