Netherlands

The Netherlands companies which may be established by both physical persons and legal entities include:

• Besloten Vennootschap (BV) - private limited liability company;
• Naamloze Vennootschap (NV) - public limited liability company;
• Vereniging - association;
• Stichting - private foundation.

Companies which may be established and managed by physical persons only include:

• Freelancer - private entrepreneur;
• Vennootschap - partnership.

Besloten Vennootschap - BV

Besloten Vennootschap (private limited liability company) may be established by one shareholder of any nationality or country of registration. All future directors and shareholders are required to obtain a certificate of approval from the Ministry of Justice of the Netherlands; this is to be followed by the performance of all necessary incorporation formalities by notary. Directors’ and shareholders’ data is provided in the notarial incorporation certificate, and this information is available to third parties concerned.

BV may have several registered operating names and is characterised as follows:

• minimum capital is € 18’000. The charter capital may be increased in future only to an amount no more than 5 times exceeding the initial amount. One of the changes in the law provides that such companies may be established with a minimum capital of €1 shortly;

• at least 25% of the capital is paid up at the time of registration; If the capital is paid up with non-monetary assets, an independent expert in the Netherlands needs to be engaged to assess the contributed property or services. After the new law comes into force, both those provisions will be cancelled;

• only registered shares which may not be freely transferred to third parties without being priorly certified by notary and approved by the other shareholders may be issued; Changes in the law provide that shares without voting rights may be issued soon and that shares may be publicly transferred at a shareholder’s request. This, however, must be specifically stipulated in the memorandum of association;

• share certificates are not issued, and shareholders are registered in the shareholders’ register maintained by directors;

• share register must be kept at the company's office;

• if a company has only one shareholder, he may be the sole director;

• if the number of shareholders is more than one, the company is managed by the Board of Directors. Memorandum of association may provide for various relations between the Board and individual directors in the corporate governance. For example, it may require the countersigning of various types of limited powers of attorney which the Board may issue to an individual director, or prohibit a Board member from taking part in the corporate governance when a particular business transaction affects that director’s interests, etc.;

• directors are appointed and dismissed by the general shareholders’ meeting. Changes in the law allow shareholders, if applicable, to appoint and dismiss directors;

• it is not required to appoint a secretary in the company;

• if the staff number is more than 100 or the capital exceeds €13’000’000, the company has to set up a supervisory board;

• if the company's turnover exceeds €7’000’000 or the balance sheet shows a profit over €35’000’000, the company has to be audited by an independent auditor and its financial statements have to be published in the Netherlands.

Naamloze Vennootschap (NV)

Naamloze Vennootschap is a public limited liability company; its only differences from a private company is that its minimum capital is €45’000 and that the company may issue both registered and bearer shares freely transferable to third parties without a prior certification by notary.

Vereniging

Vereniging (association) is set up, as a rule, for uniting for political, charitable or other non-commercial purposes. Associations are legal entities which may be engaged in business activities generating profit for statutory purposes but the profit may not be distributed among members of the association. In the Netherlands, there are two types of associations — having full and limited rights; they differ in the registration procedure and in the measure of managers’ responsibility.

Stichting

Stichting (private foundation) is a non-commercial legal entity without shareholders or members, and, depending on a specific purpose of its establishing, each company has a strictly determined statutory profit distribution procedure.

Freelancer

Freelancer (private entrepreneur) has unlimited liability for his business debts and obligations. A private entrepreneur may manage his business alone or hire a manager and other work staff. From the taxation perspective, all private entrepreneur’s income is deemed his personal income and is subject to taxation at income tax rates for physical persons in the Netherlands.

Partnerships

The current law distinguishes three types of partnerships:

• Silent Partnership, private partnership without legal personality and without a need to be registered in the Trade Register, regulated by the memorandum of association. Business activities do not require any official corporate name, management functions are delegated to one of the partners. The partnership’s debts are divided among all members pro rate to their shares in the partnership. Each partner is considered as private entrepreneur for taxation purposes;
• Public partnership without legal personality – OV suggests that there are partners who bear equal unlimited liability with all their property for the partnership’s debts and obligations in the Netherlands. The entire partnership’s property is considered the partners’ personal property, and the partnership itself may not own movable or immovable property on its own behalf. The partnership may not enter into business relationship without an approval by all partners. Each partner is considered as private entrepreneur for taxation purposes;
• Public partnership with legal personality – OVR, like any typical company, must be registered through a notarial deed, and suggests that there are active and passive partners who bear limited liability for the partnership’s debts and obligations in the Netherlands. As a rule, active partners perform management functions and are more liable for debts, and passive partners are involved in financing only and are liable only within invested funds. The partnership may enter into business relationship without an approval by all partners. The partnership may own movable or immovable property on its own behalf.
All companies (except those specified above) are subject to registration in the Netherlands in trade and commercial registers and required to periodically report on the results of their business activities.

Netherlands is not a tax heaven or offshore jurisdiction, and a concept of Netherlands tax exempt company (and/or Netherlands international business company (IBC), offshore company, trust, foundation etc. registration) does not exist in Netherlands as such. A company formation in Netherlands could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Netherlands. To set up a company in Netherlands is possible by correspondence, but to open a bank account in Netherlands will, most probably, require a personal visit.

Netherlands Double Taxation Agreements

Albania, Algeria, Argentina, Armenia, Aruba, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Croatia, Curacao, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Ghana, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Latvia, Lithuania, Liechtenstein, Luxembourg, Malawi, Malaysia, Malta, Mexico, Moldova, Montenegro, Morocco, Netherlands Antilles, New Zealand, Nigeria, North Macedonia, Norway, Oman, Pakistan, Panama, Philippines, Poland, Portugal,Qatar, Romania, Russian Federation, Saudi Arabia, Serbia, Singapore, St Maarten, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Surinam, Sweden, Switzerland, Taiwan, Tajikistan, Thailand, Tunisia, Turkey,Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, USA,Uzbekistan, Venezuela, Vietnam, Yugoslavia, Zambia, Zimbabwe.