BV - private limited company in the Netherlands

Requirements to incorporation of a BV company:

Incorporating a BV is a fairly straight-forward process. Basically everyone can open their own Dutch private limited. Take the following requirements into account:

  • The BV needs to hold a valid and unique business name.*
  • 0,01 euro (so only 1 eurocent) minimum share capital.
  • The Articles of Association and a Deed of Incorporation (in Dutch) must be drafted before a public notary.
  • The notary needs to be sure you understand what you are signing. Therefore, if you do not master the Dutch language, a translation or translator is required.
  • A registered address in the Netherlands. This can be a residential, office or other type of address. We do recommend you to make sure that the business’ address reflects the nature and scale of the business.

*Choosing a Business/Trade name

The name you select for your company has to be unique in the sector and geographical region you are operating in. Furthermore, the name of your business (for example “Legalee BV”) cannot already be registered in the Chamber of Commerce register. You can find the register at kvk.nl and search if your business name is still available. The Kamer van Koophandel charges €50 for the registration. This a one-off payment. If you incorporate a BV company, the notary will take care of the registration but the fee will be charged to your company after the incorporation.

If your trade name is essential to your business it is recommended to register it as a trade mark in the Benelux (Belgium, the Netherlands and Luxembourg). You can search the database of the Benelux Office for Intellectual Property to see if yours is already taken. If your main focus area lies within several other countries within the European Union (EU) you can consider registering your trade name as a EU Trade Mark. In case your company will actively conduct business outside The Netherlands, Belgium and Luxembourg, you can additionally register your name/mark at the World Intellectual Property Organization (WIPO).

Requirements to trading with a BV company

To incorporate the company at the notary, meeting the criteria mentioned above is sufficient. However, your new company will need to meet some requirements to effectively run it: to obtain a VAT-number and open a bank account. Those requirements are called the substance requirements. These regulations are not strict laws, but they are increasingly important. These requirements include, but are not limited to, the following:

  • At least half of the directors of the company should be resident of the Netherlands.
  • The bookkeeping of the company must take place in the Netherlands.
  • The company must comply with all its tax obligations in the Netherlands and is not treated as a tax resident of another country.
  • The business address of the company is in the Netherlands.
  • The Dutch resident directors should have the professional knowledge and skills to properly perform their duties. These duties at least include the decision making process regarding the company’s transactions and follow-up.
  • The company will have adequate support to run its business.
  • The (most important) board decisions of the company are made in the Netherlands.
  • The main bank accounts of the company are maintained from the Netherlands.
  • The bookkeeping of the company must take place in the Netherlands.
  • The company runs a real risk with respect to its financing, licensing or leasing activities. The company has an equity at risk that corresponds to the functions performed.

Failure to meet these requirements can lead to the company being denied a VAT/BTW number and/or a bank account. Banks usually require that at least one director is a Dutch resident. For these reasons Legalee recommends its clients to employ a Dutch resident (nationality not important) as one of its directors. Registering a company without a local director is technically possible but you would  not meet the Substance Requirements, which can have the aforementioned consequences.

Structure

A Dutch private limited (BV) company can be structured in roughly two ways:

  • A BV with a natural person or company as the shareholder.
  • A BV holding structure consisting of a holding company that owns (part) of the shares in another bv, the operating BV.

Read more on company structure

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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Shareholders agreement

The shareholders’ agreement is one of the most important contracts in the Dutch BV (limited liability company). This contract determines the most important agreements between the shareholders of a company. Among other things, this contract makes clear what happens when one shareholder wants to leave the company. It also determines what happens when the shareholders can not agree on something and in which way they should vote. The shareholders agreement is not relevant if you are the sole shareholder in your business.

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Legalee Premium

Legalee Premium gives you access to all legal paperwork for your Dutch company.

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Milan van Boheemen. Founding partner
Milan van Boheemen. Founding partner

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