Dutch |
Print| Operating through a BV | Operating through a branch | |
| Liability | The shareholders of the BV have limited liability | The foreign company has unlimited liability for the obligations of the branch |
| Corporate law | Dutch corporate law applies to the BV | Dutch corporate law does in principle not apply |
| Minimum capital | The minimum capital is € 18,000 | There is no limited capital requirement for a branch (there is a law prescribing minimum capital requirements for branch but the status of this law is uncertain due to European jurisprudence) |
| Business permits | For special lines of business a BV may be required to obtain a permit | For special lines of business a branch may be required to obtain a permit |
| Foreign directors | Allowed | Allowed |
| Commercial | Within the Dutch and European market a Dutch BV has a good and reliable reputation and business image | Depends on home country |
| Registration requirements | A BV needs to be registered with the Dutch Chamber of Commerce and with the Dutch tax authorities | A branch needs to be registered with the Dutch Chamber of Commerce and with the Dutch tax authorities, unless it concerns a representative office |
| Filing requirements | A BV needs to file annual financial statements with the Dutch Chamber of Commerce as well as periodical tax returns | A branch does not need to file annual statements, but instead limited information about the foreign company should be filed. The periodical tax filings are basically the same as for a BV |
| Funding | Solvability of BV will be decisive | Solvability of the foreign company will be decisive |
| Incorporation procedure | Notarial deed required as well as consent of the Dutch Ministry of Justice | No notarial deed or consent of Dutch Ministry of Justice required; only registration with Chamber of Commerce and tax authorities |
| Incorporation cost | The minimum cost for incorporation is approximately € 1,500. What should be added are the expenses for the tax registration, etc. | Basically only the expenses for registration with the Chamber of Commerce and the expenses for registration with the tax authorities |
| Annual maintenance cost | The costs of preparing the financial statements, the annual contribution to the Chamber Commerce, and the costs of tax compliance | Mainly the costs of tax compliance |
| Corporate tax | A BV is in essence subject to corporate tax for its worldwide profits | Depending on the nature and volume of the activities of the branch, the branch may not be subject to Dutch corporate tax. If a branch does have a taxable presence in the Netherlands it is only subject to Dutch corporate tax for profits allocable to the business of the branch. The rules applying to a branch are further similar to the rules which apply to a BV |
| Capital tax | n.a. | n.a. |
| Dividend withholding tax | Dividends paid by a BV are subject to 15% Dutch dividend withholding tax, unless a tax treaty or European regulations prescribe a lower percentage (even reduced to nil) | Profit distributions by a branch are generally not subject to Dutch dividend withholding tax |
| Wage tax | A BV has a withholding obligation for wage taxes in relation to its employees. The BV must keep a wage tax administration and should file periodical tax returns | The wage tax obligations are the same as for a BV unless it concerns a representative office |
| Value added tax | A BV is subject to the Dutch VAT regime and should file periodical VAT returns | A branch is subject to the Dutch VAT regime similar to a BV unless it concerns a representative office. For a representative office special rules apply for the refund of input VAT |
| Tax treaties | A BV has in general access to the Dutch tax treaty network | A branch has no access to the Dutch treaty network, with the exception of certain tax credit facilities |
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