Complete Guide to Company Registration in the Netherlands

Entrepreneurs worldwide view setting up a company in the Netherlands as a lucrative investment. Numerous small and mid-sized Fortune 500 companies operate in the Netherlands. It boasts of a vibrant economic climate enabled by advanced technology, innovation, and infrastructure. It is home to a large pool of well-educated workforce and is the largest port in Europe. 

Moreover, the Dutch tax system provides several incentives to stimulate business activities and grants for starting a business in the Netherlands. Thus, people setting up a company in the country can  benefit from its stable business environment. 

Apart from being an open economy, the Netherlands is an ideal business destination owing to many benefits. Here is a summary of the advantages of doing business in the Netherlands.

• Pro-business environment: The Dutch industry has a worldwide reputation for housing highly successful clusters in life science and health, chemicals, agrifood, IT, hightech systems, clean energy, and creative industries. 
• Strategic location: The competitive advantage of the Netherlands is largely attributed to the Port of Rotterdam, which is a global hub for international trade and a leader in supply chain innovations.
• Springboard into the Europe market: The Netherlands offers an outstanding base in the Eurodelta region. It is also second largest digital data hub in Europe, giving it prime access to the EU market.
• Superior logistics infrastructure: It has reliable airports, seaports, roads, rail, and telecommunication networks.
• Quality workforce: The large working population of the Netherlands outranks its counterparts in standard of education, productivity, digital readiness, and pragmatic labor laws. 
• Supportive legal and tax structures: Businesses in the Netherlands enjoy an excellent fiscal climate with modest tax rates.
• Attractive features and incentives for international companies: The country is politically stable, ranking 6th in the government effectiveness index. The Dutch government also provides lucrative grants for starting a business in the Netherlands. 

Functioning in a competitive, innovative, and trust-based environment like the Netherlands can expand your horizons.

The first step of company incorporation in the Netherlands is to understand what qualifies as an entrepreneur in the country. The Netherlands Chamber of Commerce (KVK) determines the criteria for the same. According to the rules, a business owner can register as an entrepreneur when they:

• Supply goods or services
• Charge a nominal or symbolic fee
• Earn money from it
• Regularly do business with other people
• Compete with other entrepreneurs

Additionally, the Dutch Tax and Customs Administration (Belastingdienst) imposes specific VAT and income tax conditions. Once you register as an entrepreneur with KVK, it passes the details to the Dutch Tax and Customs Administration for further assessment. The Administration considers the factors mentioned below.

Entrepreneur for VAT Purposes

You can find out if you qualify as an entrepreneur for VAT purposes by answering these prompts:

• Are you an independent professional or someone running a business independently?
• Do you earn a regular income?
• Do you have an income besides your permanent job?
• Do you make money from asset entitlements, savings, or other investments?

Entrepreneurs for VAT purposes whose annual turnover is less than EUR 20,000 can participate in the small business scheme (KOR). It simplifies the administration obligations for registering the company. Making use of this scheme exempts you from paying and declaring VAT.  However, in the subsequent  03 years, entrepreneurs can no longer make use of the KOR scheme.

Entrepreneur for Income Tax Purposes

The Dutch Tax and Customs Administration sees you as an entrepreneur if your income is ‘profit from business activities’. The criteria for deciding this are:

• Independence: Are you in charge of arranging the work?
• Business Size: Are you liable for the business debts?
• Business Risk: What is your average annual turnover?
• Continuity: Do you have enough funds to run the business in the future?

Once you have decided to start a business in the Netherlands, you need to meet some administrative requirements, such as applying for a residence and work permit. 

Residence and Work Permit 

The EU law allows nationals from the Netherlands, EEA, EU, and Switzerland to live and work in the Netherlands. If you don’t come under this category, you require a provisional residence permit (MVV) and a work permit (TWV).

A different point system is in place for self-employed entrepreneurs wanting to start a business in the Netherlands. Per this system, one requires a minimum number of points and a compelling Dutch interest (showing how one’s venture can add value to the economy through innovation/investment/employment creation) for a successful residence permit application. 

Startup Visa

The Dutch government has offered an Orange Carpet Programme to international startups since 2015. It involves a special resident permit for startup entrepreneurs valid for one year. The startup scheme makes it easier for foreign nationals to enter the Netherlands and contribute to its economy. 

After fulfilling these initial requirements, business owners can choose a suitable legal structure, select a trading name, and complete the company registration process in the Netherlands.

Business owners have multiple options to start a business in the Netherlands.  They can transfer their entire business to the country or open a branch office. They can also register their business as an innovative startup or part-time business. 

Some may go for only a representative office, which is not legally defined or regulated, hence not listed in the Business Register of the Chamber of Commerce (KVK). 

There exist three legal business structure options for foreign investors looking to set up a company in the Netherlands: 

• Corporate entities (with a legal personality)
• Non-corporate entities (without legal personality)
• Branch office of a foreign legal entity

Corporate Entities

The Dutch law distinguishes corporate entities in the following manner:

• Private Limited Liability Company called ‘besloten vennootschap’ or BV
• Public Limited Liability Company called ‘naamloze vennootschap’ or NV
• The Dutch Cooperative or ‘coöperatie’

Each of these legal entities has definite characteristics and is governed by a specific set of rules. For example, a BV and NV differ in their incorporation, composition, shares, supervisory board, etc. One can incorporate a BV with zero paid-up capital, whereas an NV requires EUR 45,000 as starting capital by the shareholders. You also get more flexibility in drawing up the articles of association of a BV. As for a Dutch cooperative, you can establish it with two members (instead of shareholders) and register it with the trade register of the KVK. 

Non-corporate Entities

Non-corporate entities can be either of the two:

• General Partnership, known as a VOF (‘vennootschap onder firma’)
• Limited Partnership, known as a CV (‘commanditaire vennootschap’)

Both forms have two or more partners, who may be individuals or legal entities. There are limited legal requirements to enter into a partnership.  A partnership agreement is sufficient for partners (vennoten). 

Subsidiary or Branch Office

As per Dutch company law, you are a foreign business owner if you are a non-resident or not established in the Netherlands. 

Suppose you already have a business and now wish to start a business in the Netherlands. In that case, you can set up a subsidiary company or branch. A subsidiary company of the foreign entity is similar to a local Dutch company with an independent structure. You have to register with the Business Register at KVK and the Dutch Tax Administration. 

On the other hand, establishing a branch of a foreign legal entity in the Netherlands does not require prior government approval, only registration with the trade register of the KVK. The Dutch branch thus opened is not separate from the foreign legal entity, and therefore, the rules and regulations of the foreign legal entity apply to it. Essentially, there’s no obligation to change the foreign business structure – your parent firm’s structure would function here.

Depending on the nature and scope of business activities, the branch may qualify as a ‘permanent establishment’ for taxation matters.

Before you finally choose a physical presence of your business in the Netherlands, create a clear business plan and an outline of your needs to weigh your legal and tax options. Familiarize yourself with the requirements of business name registration in the Netherlands, cost of incorporation of a company, process of offshore company registration in the Netherlands, and so on.

After finalizing the business structure, business owners can complete the administrative elements of the company registration process in the Netherlands. 

• Register with the Chamber of Commerce (KVK), which will enter your company name in the Dutch trade register.
• Register with the local municipality. Otherwise, provide authentic proof of foreign residential address.
• Check existing names on Dutch on the KVK search page and select a business name.
• While filling out the KVK online registration form, remember to fill out the form and print it in both English and Dutch. 
• The next step is to book an appointment to visit the KVK. 
• Carry your registration form, registration fee of EUR 50, and valid ID proof (passport, Dutch driving license, or residence permit).

For unincorporated businesses, such as VOF partnerships, submit the registration forms at the KVK. If you have an incorporated structure, such as a BV, submit the registration forms via the notarial deed. 

After completing the steps to incorporate a company in the Netherlands, you will receive a unique business number or KVK number. You can use this on all invoices and outgoing posts of your newly incorporated company.

One has to pay a one-time registration fee of EUR 51.95 to list the company in the Business Register of the KVK. The incorporation costs for different legal structures vary depending on the rules and regulations. 

For instance, if you have employees, you also need to register with the Dutch Tax and Customs Administration. After registration, you will receive a payroll tax number and forms for deducting pay management tax from employees’ wages. 

The cost of incorporation of a company in the Netherlands for different legal structures is highlighted below in EUR, as given by the Netherlands Enterprise Agency, RVO.

The Dutch government has launched a startup package with incentives to encourage international startups to set up an offshore company in the Netherlands. It includes:

Dutch startup visa

A one-year resident permit for non-EU entrepreneurs and facilitators offering innovative products and services in the Netherlands and registered in the Trade Register of the KVK.

Orange Carpet

A facility that makes it easier for business travelers and staff of companies with economic interests in the Netherlands to get a visa.

Self-employment scheme

For independent entrepreneurs who wish to continue business activities in the Netherlands after their startup visa expires  and with a residence permit. 

Dutch Embassy has established a special agency named the Netherlands Foreign Investment Agency (NFIA) for foreign entrepreneurs to help set up business in the country. It guides you as you figure out how to do business in the Netherlands.

The NFIA provides free-of-charge advice and hands-on support for company incorporation in the Netherlands. They offer assistance in finding business premises and partners, among other things related to the tax compliance, rollout, shift, and expansion of your business in the Netherlands. 

When you launch a business in a new country, finding the right talent is vital for successful operations. The well-educated and highly-skilled workforce makes the Netherlands attractive to foreign companies, startups, and investors. But hiring international talent while also setting up business in a foreign country can be overwhelming for new players in the market. 

Multiplier helps streamline your hiring process by acting as a PEO. You can employ talent without setting up a company in the Netherlands. And this would help you test new markets and get new teams on board without the usual hassles. Our in-house staff is well-versed in tax-compliant and legal payroll processing around the globe.

Moreover, we can also help you generate employment contracts, furnish multi-country and multi-currency payrolls, insurance and benefits, ESOPs for startups, cryptocurrency for freelancers, and much more.

As you venture on a new journey in a new country, our experts take care of the nitty-gritty, ensuring adherence to local and international tax laws.