Doing business in the Netherlands - How to incorporate a BV
The Dutch B.V. is the most frequently used legal entity in The Netherlands for conducting business activities. Moreover it is still one of the most popular entities to be used as a holding, financing or royalty company in international structures.
Below we will elaborate on the incorporation procedure of a Dutch BV and the services which we can provide to you in this respect.
A "BV" is a private company with limited liability; in Dutch: "Besloten Vennootschap met beperkte aansprakelijkheid". In comparison to other jurisdictions the BV can be seen as the equivalent of the German "GmbH", the American "LLC", or the English "Ltd".
The BV has legal personality and it has an equity divided into shares.
A BV can only have registered shares and shares are always not freely transferable.
The shareholders of a BV are in general not personally liable for acts performed in the name or on behalf of the B.V., nor can they be compelled to make more funds available than that part of the capital for which they have subscribed. Statutory directors can be held liable for acts of bad management.
There are no legal requirements for a BV to have substance in The Netherlands.
However, from a tax persepctive it is highly recommendable to have at least a Dutch registered address and a majority of Dutch resident directors. This is generally perceived as the minimum substance required to qualify for treaty benefits.
There are parties in the market place which offer domiciliation (registered address) and management services (statutory directors). They can also provide regular bookkeeping services and ongoing legal support. See also the page "Management and Trust Services".
We have an extensive network of service providers which render the aforementioned services. We only work with parties who have experience with the international business practise and have proven to deliver qulaity for money. We can refer you to suitable parties or co-ordinate their input if you prefer.
The incorporation procedure of a BV requires the involvement of a Dutch public notary.
Under normal circumstances the incorporation can be done by proxy, so that personal attendance of the directors or shareholders is not required.
Untill June 2011 the incorporation procedure included the obligation to obtain a so-called declaration of no objection from the Dutch Ministry of Justice. In most cases this was a formality but still it was a hurdle to be taken which delayed the incorporation process. As from June 2011 this requirement has been abolished.
In theory this seems to imply that the public notary can incorporate a BV overnight. This is true, but still the incorporation cannot be completed untill the public notary receives the required bank statement certifying that the capital has been transferred to the bank account of the BV i.o. See also below under "Opening bank account".
The public notary will require legalized copies of the passports of the future directors of the BV and the incorporator(s) if individuals. If the incorporator is a corporation, the public notary will require a legal opinion on the existence of this corporation and the person (director) representing the corporation.
Once the public notary completes the articles of incorporation, the BV can be registered with the Chamber Commerce as a "BV in incorporation" ("BV in oprichting" or "BV i.o"). As soon as the BV i.o. is registered with the Chamber of Commerce, the incorporator/ directors can open a bank account for the BV i.o. The incorporator must then transfer the capital to this bank account and the bank should then issue a bank statement certifying this event. As soon as the public notary receives the bank statement, the incorporation procedure can be completed.
During the last couple of years banks have become more stringent with regard to the procedure for opening a bank account. It is required that the directors/ incorporators attend to the bank in person, identify themselves and fill out the necessary forms.
We have good contacts with the major international banks in The Netherlands (like ING, ABN-AMRO, RABO bank, Deutsche Bank)) and we can co-ordinate this procedure for you.
The total incorporation procedure normally takes a period of one up to two weeks.
For the entire procedure, including the gathering of necessary information and documentation, in our experience you should consider a period of four up to six weeks. We emphasize that an accelerated procedure is possible.
As an alternative for an incorporation procedure, one may consider to acquire a shelf company.
The articles of incorporation of a BV are in Dutch, but with our partners it is common practise that English translations are made available by the public notary. Upon request we can provide translations in other languages as well.
The public notary needs to be provided with certain information and documentation about amongst others the nature of the business, the required statutory provisions, and the identity of the directors and the shareholders.
Furthermore, information should be available about amongst others the address of the new B.V., the purpose of the B.V. as well as details of the incorporators, amongst which certified copies of the articles of the incorporating entity and a certified excerpt from the Company registrar.
Furthermore, the names and personal details of the first managing director(s) should be provided and it should be decided who will represent the incorporator(s) (a power of attorney is usually given to the public notary to enable incorporation by proxy).
The minimum capital required is € 18,000 for a BV. The capital can be contributed "in cash" (read: by bank transfer) or in kind.
In case of a cash contribution (most common), the incorporation cannot be completed unless a financial institution provides a statement confirming that the minimum capital has been transferred to a bank account of the "BV in incorporation". This means that a bank account must be opened by the "BV in incorporation". This can only be done after the BV has been registered with the Chamber of Commerce as "BV in incorporation". See further above under "Opening bank account".
Capital contributions in kind are possible as well (like for instance assets for shares or shares for shares). It will then be required that the assets to be contributed to the BV are described and that an registered auditor provides a statement certifying that the value fo the contributed assets at least equals the nominal value of the shares issued by the BV.
ExecutionAs soon as the bank statement is obtained, the public notary can execute the articles of incorporation and the BV can be registered in the Trade Register of the Chamber of Commerce. A shareholders register is to be created and should be kept at the company’s office.
It is noted that as soon as the incorporation procedure is started up, it is already possible to do business in the name of the BV. The BV should then however first be registered as a "BV in incorporation" with the Chamber of Commerce. Until the incorporation procedure is completed the "BV in incorporation" is in fact a branch/partnership of the incorporator(s).
On incorporation, the company must ratify all the transactions the founders entered into in the pre-incorporation period. The directors/incorporators are personally and jointly liable for acts performed during the pre-incorporation period untill ratification by the BV.
Registration with tax authorities
The B.V. needs to be registered with the Dutch tax authorities and also with the social insurance office if any employees are to be hired. The tax registration will in essence be done automatically with the first registration of the BV with the Chamber of Commerce. We can monitor this process for you to ensure proper registration.
The cost of incorporation depends on various parameters such as volume nominaal capital, number of incorporators/ directors, required special provisions in the articles, etc.
The cost of incorporating a standard holding BV is around € 1,500 to € 2,500 (VAT excluded).
We have trusted relationships with various public notaries. We only work with parties who have experience with the international business practise and have proven to deliver quality for money. We can refer you to suitable parties or co-ordinate their input if you prefer.
Many clients approach us for assistance with the incorporatin of BV on a daily basis.
It ussually starts with an inventory of the plans for the BV and the potential tax consequences and tax compliance requirements. Once the decision to set up the BV has been taken, we can arrange for proper fee quotes from the public notary and other parties who's involvement is requirement (like a trust company for providing domiciliaton and management services).
To the extent required we can further co-ordinate the input of these parties and make sure that the incorporation process goes smoothly and efficiently.
Once the BV has been set up we can monitor the tax registration and later handle the tax compliance such as the preparation and filing of VAT returns, the annual corporate income tax returns, etc.
The services we provide include:
| Advice on corporate law and tax issues linked to the incorporation |
| Advice on appropriate legal form |
| Coordinate the incorporation procedure |
| Advice on the tax efficiency of the structure |
| Negotiation of an advance tax ruling |
| Deal with registration requirements |
| Deal with tax compliance matters (filing tax returns, etc) |
We are gladly prepared to coordinate and to assist you with the incorporation process and if required to mediate with the public notary, legal advisors or auditors involved. Please feel free to contact us via e-mail or call us at our office in Rotterdam (+31 (10) 2010466) or Amsterdam (+31(20) 5709440) for more information.