BV or Branch in the Netherlands

If you are looking for a long-term business presence in the Netherlands it is almost always recommended to set up a BV company. This is a Dutch private limited company. Although the branch office is a technically possible, in practice it has a few disadvantages.

Downsides of a branch versus a BV

First and foremost, Dutch consumers and suppliers do not like working with a branch of a foreign company, but rather deal with a Dutch company. Clients will be more sceptical in working with a branch office than with a permanently established entity.

Furthermore, liability for risk/debt of the branch lies with the founding mother company. Additionally, it possibly leads to double taxation problems.

Therefore it is usual more sensible to set up a structure properly straight-away, instead of having to change the structure again once the business is actually taking off.

Finally, the establishment and maintenance costs of a branch versus a BV are not substantial.

This is why in most cases we recommend the BV to any foreign business looking at expanding to the Netherlands. There are exceptions. Get in touch to have us evaluate your case.

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BV incorporation

The BV is a limited liability company and preferred legal form for foreign entrepreneurs in the Netherlands. That is because the BV is flexible, easy and affordable to set up. On top of that, the overall tax pressure on a BV in the Netherlands is one of the lowest in Europe. Finally, your BV will shield you from personal liability of your company’s actions, debt and bankruptcy.

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