Doing business in the Netherlands - How to incorporate a BV

1. The legal form of a BV    /\

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.

2. Involvement public notary    /\

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.

3. Identification    /\

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.

The total incorporation procedure normally takes a period of at least 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.

5. Language    /\

The articles of incorporation of a BV are in Dutch, but it is common practise that English translations are made available by the public notary.

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).

It should be decided what the amount of the issued and paid up capital will be (with a minimum of € 18,000). Before the draft articles can be filed with the Ministry of Justice (see below), the public notary should be provided with a statement from a bank confirming that the (minimum) capital is available on a bank account.

When the required information and documentation is provided, the civil law notary can prepare a draft of the articles of association, which then needs to be filed with the Dutch Ministry of Justice.

Before the actual incorporation of the B.V. can take place, the Dutch Ministry of Justice must first issue a "certificate of no objection", for which amongst others the identity and historical background of the incorporators and directors have to be cleared. As an example people who have a criminal record or have been involved in earlier bankruptcy proceedings may be denied consent for incorporation.

As soon as the certificate of no objection 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 already is 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 has been 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.

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.

We have built relationships and work closely together with various public notaries of major Dutch law firms as well as smaller independent firms.

We are gladly prepared to introduce you to a suitable party and to assist you with the incorporation process and if required to mediate with the public notary, legal advisors or auditors involved.

If you are interested in our services, please feel free to contact us via e-mail or to call us at our offices at the number +31 (10) 2010466.