BV or NV

There are two types of limited liability companies in the Netherlands. Which type of entity should you incorporate: a BV or a NV?

Most likely the answer is a BV but it is worth taking a look at what exactly the differences are. The BV is an LLC; a limited liability company. One of the main purposes is keeping liability for the owner limited. It is broadly comparable with the private limited liability company in the United Kingdom, the German Gesellschaft mit beschrankter Haftung (GmbH) and the French société a responsabilité limitée (SARL).

Next to the BV, Dutch Companies can also be a ‘naamloze vennootschap’, or NV. The NV is comparable to the American ‘Corporation’. The legal entity of companies traded at stock exchanges is NV. This legal entity is also comparable to the British public liability company (plc), the Aktiengesellschaft (AG) in Germany and the French Société Anonyme (SA).

Registered Shares and Bearer Shares

The BV can only issue registered shares. This in contrast to the NV, which can issue registered AND bearer shares. NV shares are freely transferable, for example through the stock exchange. Since 2012 (introduction flex BV) shares of a BV are freely transferable as well. Whether or not you can transfer BV shares freely depends on what rules are drafted in articles of association. Often transfer restrictions limit shareholders in this freedom. If so, a shareholder cannot transfer shares without the consent of the other shareholder(s). They have a first (pre-emptive) right to buy the shares from the selling shareholder.

A BV has become an even more attractive business entity since 2012 when the flex BV was introduced. There is no minimum share capital required to set up a BV limited liability company anymore. From a legal perspective the NV and BV do not differ a lot. For most small and medium sized companies a BV is the best solution between the two.

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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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