COUNTRY

The Netherlands is situated in western Europe and is bordered by Belgium to the south and Germany to the east. It also shares a maritime border with the United Kingdom. The population of the Netherlands is estimated to be 16.8 million people, spread over 41,500 sq km. The official language is Dutch, while Frisian also has almost half a million speakers.

The government of the Netherlands consists of the King and a number of cabinet ministers. The King’s role is largely ceremonial, where he is responsible for the official formation of government and signing of laws. Mark Rutte has been the Prime Minister of the Netherlands since October 2010, and King Willem-Alexander has been the monarch since the abdication of Queen Beatrix on 30 April 2013.

The Dutch economy is the sixth-largest economy in the euro-zone. The unemployment rate for 2013 was 6.8% – a 28% increase from the figure of 5.3% in 2012. The inflation rate for 2013 was 2.8%.

The Kingdom of the Netherlands consists of four parts – the Netherlands, Aruba, Curaçao, and Sint Maarten. The Netherlands also has special municipalities in the Caribbean Sea, including the islands of Bonaire, Sint Eustatius, and Saba.

The Dutch have a long history of openness to trade and business. Although there is a sophisticated tax system with high marginal tax rates some aspects of the system are extremely attractive, making the Netherlands an ideal location in which to base international trading operations. There is an extensive network of double taxation treaties (few of which contain any anti avoidance provisions) and a speedy, effective advance tax rulings procedure. Recent developments include a series of tax incentives aimed at entrepreneurs, including availability of an ‘innovation box’ to shelter R&D investment, and improved loss offsets. Almost all Dutch people speak good English, and professional services, while not cheap, are very efficient.

TAXATION

  • Headline tax rates: CIT 20%-25%, PIT 1.95%-52%, VAT 19%
  • Treaty Jurisdictions: Albania, Argentina, Armenia, Aruba, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, China, Croatia, Curacao, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Ghana, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Korea, Republic of, Kosovo, Kuwait, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Serbia, Singapore, Sint Maarten, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Venezuela, Vietnam, Zambia, Zimbabwe
  • TIEA Jurisdictions: Andorra, Anguilla, Antigua and Barbuda, Bahamas, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Japan, Jersey, Liberia, Liechtenstein, Marshall Islands, Monaco, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Seychelles, Turks and Caicos Islands, Uruguay

The corporate tax rate is 20% to 25%. The sliding scale rate is applied as follows:

  • 20% for profits up to 200,000 Euro
  • 25% on profits over 200,000 Euro

The dividends tax can be 0% up to 15%. For natural persons, the withholding tax on dividends is 15%. For dividends paid to other companies who are shareholders, it can be 0%.

The Value Added Tax (VAT) can be from 6% up to 21%.

Holland taxes worldwide income on their resident companies. Non-resident companies only pay taxes on certain income earned in Holland.

It is expected that company and limited company owners incorporating in the Netherlands register with the Dutch tax authorities and the social insurance office as well, if employees will be hired by the corporation. The tax registration for the Chamber of Commerce should be completed automatically after registering with the Dutch tax authorities.

The Netherlands has many double taxation treaties in existence with other countries, including one between the Netherlands and the United States. These treaties prevent foreigners from paying double taxes for the same income.

BUSINESS

  • Suitable for: Shipping, Aviation, Yachting, Trading Goods, Trading Financial, Intellectual Property/Licensing, Holding Companies
  • Company Types: Limited companies, public limited companies, sole proprietorships, branches, general partnerships and limited partnerships
  • Formation Cost: 7000 – 11000 USD
  • Formation Time: 19 – 31 days
  • Maintenance cost: 2000 – 5000 USD

INCORPORATION

There are no particular restrictions on foreign owned companies in the Netherlands, and a high number of tax treaties prevent double taxation and often provide additional tax benefits.

The Netherlands is also considered an ideal location by many foreign businesses to position themselves to enter markets throughout Europe, the Middle East, the Far East, Africa and beyond.

If you come from outside of the European Union, and are going to run the business in the Netherlands or move foreign staff there, this means that you will need a residence permit (MVV). In some cases you may also need to apply for a work permit (TWV).

Note: Information on specific requirements can also be obtained in more detail from the Dutch Chamber of Commerce, which is also a good source of information and advice on other aspects of running a business in the Netherlands.

Note: Generally no special permissions are required. However, there are some professions in the Netherlands which are regulated, and you would require a recognized qualification in order to set up a business within that sector. The Netherlands Organization for International Cooperation in Higher Education (NUFFIC) provides a foreign qualification accreditation service, which will confirm whether or not your qualifications meet the standards required for conducting business in the Netherlands.

Representative Office

A representative office may be established as a location or office in the Netherlands, but generally speaking no business activities are conducted there. A typical activity of a representative office is a location for doing market research, providing product information, etc.

A representative office does generally not have to be registered with the Chamber of Commerce (in fact registration is not possible and will be denied) and furthermore a representative office does under certain conditions not constitute a taxable presence in the Netherlands. The representative(s), however, must register for personal income tax. A work permit and residence permit are also required.

A representative office can have employees. If so, the foreign entity needs to register itself as a “withholding agent” with the Dutch tax authorities (obligation to withhold wage tax).

Any Dutch VAT incurred by a representative office is under certain conditions eligible for refund. In order to get a refund, the foreign company should file a periodical request with the Dutch tax authorities.

While this kind of entry is informally accepted by Dutch authorities, there does not appear to be a clear ‘official’ representative office status due to lack of any registration required.

Appoint a Representative

The existence of the representative office basically depends on the appointment and establishment of one or more representatives. The representative(s) must register for personal income tax. A work permit and residence permit are, of course, also required.

If at a later date the activities of the representative office change into a branch, the appropriate registration/amendment of registration in the trade register will have to be made. At the same time, the new entity must register for corporate tax, VAT etc.

Agency: N/A (arranged by your company)

Time: N/A

Cost: N/A

Register with Tax Office

Our research did not find an explicit requirement to register with the tax office for a representative office. Nonetheless, if employing people, the office is presumably required to then register with the Dutch Tax Authorities to obtain a VAT number and for taxation purposes.

Agency: Tax and Customs Administration (Belastingdienst)

Time: 5 days

Cost: No charge

Register for Employee Insurance

Regardless of its less formal status, when hiring staff the representative office must observe the normal rules of labor law. If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.

The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can also opt to be a self-insurer.

Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.

Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).

Time: 1 day

Cost: no charge

Risk Inventory and Evaluation

If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.

It is not clear whether this requirement also applies to representative offices that employ staff, but assumed that it is and thus listed here for consistency.

The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:

  • Which risks you and your employees encounter;
  • What measures you have taken in order to prevent harm to your own health and that of your employees;
  • What measures you are planning to take (Plan van Aanpak).

Agency: N/A (arranged by your company)

Time: N/A (actually making the plan will take some time, but there is no registration or approval process)

Cost: N/A

Branch

The branch office is considered an extension of its foreign parent, and thus the parent company will be responsible for its legal obligations and debts.

A branch is generally useful in the early stages of having a presence in the Netherlands, and the speedy formation of the branch can be advantageous. On the other hand, a disadvantage is the full liability of its parent.

The foreign head office only needs to file certain documents and information with the trade register of the Chamber of Commerce in the district where the branch will be located. Documents generally include:

  • Name and address of the foreign legal entity or partnership, its legal form, details about the registration in its home country (such as name register and registering body, city and country of registration, registration number).
  • A proof of registration, not older than one month, issued by the foreign registering body.
  • In the case of a foreign legal entity, a copy of the articles of incorporation and articles of association (if these last are a separate act). These documents must be original or certified copies. All these documents should be in Dutch, English, French or German or have been translated into any of these languages.
  • The identities and addresses of its directors and the identity of the branch manager, empowered to legally bind the company.
  • The office address of the branch in the Netherlands, which is to be considered its legal domicile.
  • The trade name and a description of the business.

Generally speaking, all the information that the foreign company needs for registration in its own country should be sufficient.

Altogether the steps will take about 1 week, though it is advised to allocate between 2 and 4 weeks for the whole procedure.

Check Trade Name

Before forming the company, a business name which is unique within the Netherlands must be selected. A method for searching this can be via with the Benelux Office for Intellectual Property to make sure the business name has not already been taken as a trademark.

Agency: Benelux Office for Intellectual Property

Time: Instant

Cost: None

Register the Business and Name at Dutch Chamber of Commerce

The documents detailed below are required by the Dutch Chamber of Commerce trade register in order for branch registration.:

  • A copy of the parent company’s Certificate of Incorporation
  • A copy of Memorandum & Articles of Association of the parent company
  • A copy of the parent company’s Certificate of Good Standing
  • All registered directors and proxy holders of the parent company in its domicile country must also be registered in the Netherlands
  • Directors and proxy holders of the parent company must provide a passport copy and proof of their private address – i.e. a current and original statement or invoice from the bank or a utility company

There is no requirement for any share capital for Dutch branches.

All required documentation must be officially apostilled and translated into Dutch or English by a certified translator.

Agency: Dutch Chamber of Commerce (KvK) 

Time: 1 day

Cost: 50 EUR

Register with Tax Office

The branch company must register with the Dutch Tax Authorities to obtain a VAT number and for taxation purposes.

You do not usually need to register separately with the Tax and Customs Administration. The Chamber of Commerce will pass on your details automatically. This step is thus just listed separately for reference.

Note: You can apply for registration at the Trade Register also via a service called Message Box. For this purpose you need identification with e-Identity (EID) token (eHerkenningsmiddel) level 4 or signing with the PKI certificate (Public Key Infrastructure). Message Box is a secure e-mail system that enables you as an entrepreneur to exchange digital messages with Dutch government agencies.

Agency: Tax and Customs Administration (Belastingdienst)

Time: 5 days (ie. after registration at the Chamber of Commerce in previous step)

Cost: No charge

Open Corporate Bank Account

It is possible to use a foreign bank account while doing business in the Netherlands, a feature which has been facilitated by the new SEPA rules. Nonetheless, a Dutch account may be preferred, since it will probably make transactions smoother being based in the Netherlands.

Generally it is possible to make an appointment to open a commercial bank account as soon as the company has been registered with Chamber of Commerce, and it is possible for the appointment to take place at the same day.

The bank will need to identify the limited company plus the board member(s) and/or owners. The following documents are generally required:

  • An original, recent (not older than 3 months) certified extract from the Chamber of Commerce that the company is registered.
  • The articles of association (deed of incorporation).
  • Separate responsibility of the board members, showing in the extract from the Chamber of Commerce, boards can decide to let only one board member identify himself in order to open the bank account.
  • Joint responsibility of the board members, showing in the extract from the Chamber of Commerce, the boards that choose this structure need all of the members to show up and identify themselves to open the account.
  • An original valid identity paper of each director to an employee of the bank who can then identify the person directly or
  • A copy of a valid identity paper of each director that is legalized by a notary located in the Netherlands.
  • The name, address and date of birth + residence data of each director;
  • A completed and signed ultimate beneficial owner (UBO) statement for each director

Agency: Commercial Banks

Time: 1 day

Cost: None

Register for Employee Insurance

If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.

The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can opt to be a self-insurer.

Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.

Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV)

Time: 1 day (can be combined with previous step)

Cost: no charge

Risk Inventory and Evaluation

If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.

The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:

  • Which risks you and your employees encounter;
  • What measures you have taken in order to prevent harm to your own health and that of your employees;
  • What measures you are planning to take (Plan van Aanpak).

Agency: N/A (arranged by your company)

Time: N/A (actually making the plan will take some time, but there is no registration or approval process)

Cost: N/A

Subsidiary Company

A more full level of operation is setting up a full subsidiary via a Dutch incorporated company. Dutch law distinguishes between two types of limited liability companies:

  • The public limited liability company (Naamloze Vennootschap or NV)
  • The private limited liability company (Besloten Vennootschap or BV).

Difference between NV and BV

The NV is more common for companies that are listed on a stock exchange, or engage in banking or insurance, but is not restricted to these businesses. The BV is mainly privately owned, and used for smaller businesses or group holdings.

BVs cannot issue share certificates and can’t issue bearer shares. However BVs can be formed with a minimum share capital of EUR 1 (ie. at least one share with voting rights and one share with profit rights or a single share with a combination of both), while NVs must have a minimum share capital of € 45,000.

Subsidiary Company Registration Process

Altogether the steps will take about 1 week, though it is advised to allocate between 2 and 4 weeks for the whole procedure.

Check Trade Name

Before forming the company, a business name that is unique within the Netherlands must be selected. A method for searching this can be via with the Benelux Office for Intellectual Property to make sure the business name has not already been taken as a trademark.

Agency: Benelux Office for Intellectual Property

Time: Instant

Cost: None

Notarize Articles of Association

The incorporation of a BV or NV requires the services of a civil-law-notary, a Dutch lawyer specializing in drafting and executing deeds of incorporation and articles of association.

Agency: Dutch civil-law-notary

Time: 1 day

Cost: EUR 1,750-2,500 for NV or BV (with relatively “standardised” articles of association)

Register the Business and Name at Dutch Chamber of Commerce

When you have decided on the type of business you would like to start, then you need to have it registered with the Dutch Chamber of Commerce (Kamer van Koophandel or KvK).

You also have to submit the trade name when registering with the KvK. This name must meet the conditions of the Trade Name Act (Handelsnaamwet).

Note: If you wish for your trade name to also be protected as a trademark you must register your trade name at the Benelux Office for Intellectual Property (BOIP).

The Chamber of Commerce will automatically pass on your details to the Tax and Customs Administration (Belastingdienst).

Once you have been registered you will be given a unique number for your business. This number, known as the KvK nummer, will need to be used on all invoices and outgoing post which your new business deals with.

Agency: Dutch Chamber of Commerce (KvK) – http://www.kvk.nl/english/

Time: 1 day

Cost: 50 EUR

Register with the Trade Register and the Tax Office

New businesses must be registered with the Trade Register kept by the Chamber of Commerce.

You do not need to register separately with the Tax and Customs Administration. The Chamber of Commerce will pass on your details automatically. This step is thus just listed separately for reference.

Note:| You can apply for registration at the Trade register also via Message Box. For this purpose you need identification with e-Identity (EID) token (eHerkenningsmiddel) level 4 or signing with the PKI certificate (Public Key Infrastructure). Message Box is a secure e-mail system that enables you as an entrepreneur to exchange digital messages with Dutch government agencies.

Agency: Tax and Customs Administration (Belastingdienst)

Time: 5 days (ie. after registration at the Chamber of Commerce in previous step)

Cost: No charge

Open Corporate Bank Account

It is possible to use a foreign bank account while doing business in the Netherlands, a feature which has been facilitated by the new SEPA rules. Nonetheless, a Dutch account may be preferred, since it will probably make transactions smoother being based in the Netherlands.

Generally it is possible to make an appointment to open a commercial bank account as soon as the company has been registered with Chamber of Commerce, and it is possible for the appointment to take place at the same day.

The bank will need to identify the limited company plus the board member(s) and/or owners. The following documents are generally required:

  • an original, recent (not older than 3 months) certified extract from the Chamber of Commerce that the company is registered.
  • the articles of association (deed of incorporation).
  • Separate responsibility of the board members, showing in the extract from the Chamber of Commerce, boards can decide to let only one board member identify himself in order to open the bank account.
  • Joint responsibility of the board members, showing in the extract from the Chamber of Commerce, the boards that choose this structure need all of the members to show up and identify themselves to open the account.
  • an original valid identity paper of each director to an employee of the bank who can then identify the person directly or
  • a copy of a valid identity paper of each director which is legalized by a notary located in the Netherlands.
  • the name, address and date of birth + residence data of each director;
  • a completed and signed ultimate beneficial owner (UBO) statement for each director

Agency: Commercial Banks

Time: 1 day

Cost: None

Employee Insurance

If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.

The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can opt to be a self-insurer.

Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.

Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) – http://www.uwv.nl/OverUWV/english/

Time: 1 day (can be combined with previous step)

Cost: no charge

Risk Inventory and Evaluation

If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.

The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:

  • Which risks you and your employees encounter;
  • What measures you have taken in order to prevent harm to your own health and that of your employees;
  • What measures you are planning to take (Plan van Aanpak).

Agency: N/A (arranged by your company)

Time: N/A (actually making the plan will take some time, but there is no registration or approval process)

Cost: N/A