The Netherlands appeals to businesses and entrepreneurs looking to establish a foothold in Europe, with its robust commercial infrastructure. Its business-friendly environment and strategic location offer a wealth of opportunities to forward-thinking businesses. The ease of doing business in the Netherlands makes it a preferred hub for global entities. Most importantly, it takes just around 3 weeks to incorporate a company in the Netherlands.
Whether you are a startup or an MNC, forming a company in this country brings in several advantages. The country has a skilled workforce, a stable economic environment, and favorable tax norms.
In this comprehensive guide, we have discussed how to register company in Netherlands. Read on to understand different business structures, tax incentives, and the process of setting up your company in this country.
Why Do Global Brands Choose the Netherlands for Expansion?
The strategic location of the Netherlands gives you access to more than 500 million customers. Located centrally in Europe, the country boasts one of the most advanced logistics and infrastructure systems in the world. The quick access to the Port of Rotterdam and Schiphol Airport significantly bolsters international connectivity and trade.
Global brands benefit from doing business in the Netherlands as the country has a highly skilled and multilingual workforce. The government strongly emphasizes innovation and education, as the country ranks high in terms of competitiveness and innovation globally. Thus, the Netherlands has emerged as the ideal hub for technology, research, and development.
The Dutch government also lends active support to foreign businesses through favorable tax regimes and a transparent regulatory framework. With competitive corporate tax rates, several tax treaties, and incentives for research and development, the Netherlands has emerged as an attractive destination for businesses.
Setting up a Business in the Netherlands: Different Types of Business Structures
Private Limited Liability Company (Besloten Vennootschap or BV)
The most common business structure for small and medium-sized enterprises in the Netherlands, a Private Limited Liability Company (BV) is the most common type of business structure. Businesses benefit from liability protection, which implies that their shareholders are liable only for their respective investments in the company.
The company incorporation process requires a notarial deed, which must be executed in Dutch. Most importantly, there’s no minimal capital requirement, making it suitable for small businesses. The BV structure offers adequate flexibility, ensuring the easy transfer of shares. It is also adaptable to different decisions made by the government.
Public Limited Liability Company (Naamloze Vennootschap or NV)
A Public Limited Liability Company (NV) is suitable for larger companies in the Netherlands. These companies may raise capital through public offerings. An NV is different from a BV since the former can issue shares to the public and be listed on a stock exchange.
The process to register company in Netherlands under the public limited liability structure is more complex. Businesses following this model require a minimum share capital of €45,000 for the notarial deed. The regulatory and reporting requirements of NVs are more stringent.
Other types of business entities in the Netherlands
Cooperative
Foundation
Sole Proprietorship
Partnerships
Partnership businesses in the Netherlands can be of three types:
- General Partnership: Two or more partners in a general partnership business share their profits, losses, and liabilities. Although the structure is flexible, it comes with joint and several liabilities for partners
- Limited Partnership: Such a partnership includes both general and limited partners. General partners manage the business and bear unlimited liability, while limited partners contribute capital and have liability limited to their investment.
- Professional Partnership: Professionals like doctors and lawyers often register their businesses as a professional partnership. Such a business structure allows them to jointly share their profits and losses based on mutual agreement.
Step-by-Step Guide to Registering a Company in the Netherlands
Business Plan and Legal Advice
Choose the Right Business Structure
Registration with the Chamber of Commerce (KvK)
1. Choose a name for the business
2. Check the availability of the business name
3. Drafting the Deed of Incorporation
4. Submitting the Registration Application
5. Obtain the Company Registration Number
6. Register for Taxes
7. Open a Business Bank Account
Legal requirements for doing business in the Netherlands
Physical Address
Share Capital
Registration with Dutch Authorities
Besides registering with the Chamber of Commerce (KvK), all entities doing business in the Netherlands should comply with other regulations. These include:
- Tax registration
- Data protection and privacy with adherence to the GDPR
- Social security and employment regulations regarding minimum wages and benefits
Taxation in the Netherlands
Overview of Taxes
| Type of Tax | Rate | Notes |
|---|---|---|
| Corporate Income Tax | 15% up to €395,000 | 25.8% above €395,000 |
| Value Added Tax (VAT) | 21% standard, 9% reduced, 0% specific | Applies to goods and services; reduced rates for essentials and specific services |
| Dividend Withholding Tax | 15% | Rate can be reduced or eliminated under tax treaties |
| Environmental Taxes | Variable | Includes energy tax, waste tax, and water pollution tax |
| Real Estate Transfer Tax | 6% | 2% for residential properties |
| Payroll Taxes | Variable | Includes wage tax and social security contributions |
Tax Incentives and Benefits
When you set up a company in Netherlands, you can take advantage of several tax incentives and benefits, as presented below:
- Innovation Box: Businesses engaging in innovative activities enjoy a reduced tax rate of 9% on profits
- WBSO (R&D Tax Credit): This involves deductions of wage tax and direct tax credits for R&D investments
- Energy Investment Allowance (EIA): EIA involves the deduction of a percentage of investment costs in energy-efficient technologies from taxable profits
Tax Filing Requirements and Deadlines
After you set up a company in Netherlands, it’s imperative to file your taxes on time to avoid additional interest charges and penalties. It’s advisable to reach out to a professional tax advisor like the IMC Group to meet your obligations with professionalism.
- Corporate income tax returns in the Netherlands have to be filed within five months after the end of a fiscal year, although extensions may be granted upon request.
- VAT has to be filed every quarter, and businesses need to pay the amount within a month after the reporting period
- Payroll tax returns are to be filed monthly, and the payment would be due within one month after the end of the reporting period
Professional Support for Company Incorporation and Tax Filing in The Netherlands
While setting up a business in the Netherlands takes little time, the stringent legal norms in the country looks demanding. Considering the challenges like evolving regulatory requirements, opening a bank account, or registering your company, having a professional team of advisors on your side can significantly help.
The IMC Group continues to be your trusted partner during company incorporation in the Netherlands, offering a holistic range of advisory and tax services. The professionals also enable businesses capitalize on the tax incentives with proper knowledge. Forward-thinking companies doing business in the Netherlands habitually seek professional consultation from seasoned experts to speed up the incorporation process and ensure tax compliance.
