Establishment of a private limited company in the Netherlands: we are your trusted advisor

In the Netherlands, starting a business can be very easy. One of the primary questions involved in the starting process is in which legal form the business is supposed to be exploited.

In itself, this matter can be complicated, as there are multiple options one could pick from. The fact remains, however, that the Dutch private limited company (“Besloten Vennootschap met beperkte aansprakelijkheid”) is the most popular legal form in the Netherlands in which individuals operate their company.

In this article, the Dutch private limited company is explained. A brief answer is provided on how to establish a private limited company, as the main focus of this article is the establishment of a private limited company in the Netherlands.

Overview of the Dutch business environment

The business environment in the Netherlands offers a favourable landscape for expats and international entrepreneurs, characterised by:

  • a robust economy; 
  • strategic location; and 
  • a business-friendly atmosphere. 

Our well-developed infrastructure, efficient transportation networks, and a highly educated workforce contribute to its appeal. 

Moreover, the Netherlands promotes innovation and sustainability, providing a nurturing ground for startups and established businesses alike. Being an internationally oriented country, English proficiency is widespread in the Netherlands, easing communication for expats. 

Additionally, the Dutch government offers various incentives and support programs, including tax breaks and grants, fostering an environment conducive to business growth. Major Dutch cities, such as Rotterdam, The Hague and Amsterdam serve as European business hubs, attracting international talent and fostering a diverse entrepreneurial community. 

Furthermore, the transparent legal system and straightforward bureaucracy further simplify the process of establishing and running businesses. The result of this transparency and simplicity is that businesses can be easily operated through legal entities, such as private limited companies.

Overall, the Netherlands presents an inviting and dynamic setting for expats and international entrepreneurs seeking opportunities in a thriving European market.

A step-by-step guide on how to establish a private limited company

Establishing a private limited company in the Netherlands involves several key steps. These steps are crucial if you want to meet the establishing norms for a PLC. Below, the essential stages of the establishment of a private limited company are mentioned:

  1. Business Plan: Begin by outlining a comprehensive business plan, detailing your company’s objectives, structure, and financial projections.
  2. Choose a Business Name: Select a unique and available name for your company, adhering to Dutch regulations.
  3. Notary Appointment: Schedule an appointment with a Dutch civil law notary to draft the company’s articles of association and to formalise the registration process.
  4. Deposit Share Capital: Deposit the required minimum share capital of €0.01 into a Dutch bank account.
  5. Notarial Deed: Attend a meeting with the civil law notary to sign the notarial deed, which includes company details and shareholder information.
  6. Chamber of Commerce Registration: Register your company with the Dutch Chamber of Commerce (Kamer van Koophandel or KvK), providing necessary documents such as identification, notarial deed, and business details.
  7. Tax Registration: Obtain a tax identification number (BTW number) and register for corporate income tax.
  8. Employer Obligations: If applicable, fulfil employer obligations, such as registering for wage tax and social security contributions.
  9. Bank Account: Open a business bank account in the company’s name.
  10. Post-Registration Compliance: Ensure ongoing compliance with Dutch corporate and tax regulations.

By following these steps, you can successfully conclude the process of the establishment of a private limited company in the Netherlands. 

As we deal with incorporations of private limited companies every day, please contact us for legal and financial considerations relating to the abovementioned key steps. This can also be done in English, as we provide our clients with English language advice on a daily basis.

Legal and financial considerations and tax implications when establishing a private limited company

When establishing a Dutch private limited company, careful attention to legal and financial considerations is essential. 

Regarding legal structure, a private limited company offers limited liability to its shareholders, meaning their personal assets are protected. 

The minimum share capital requirement, often set at €0.01, must be deposited in a Dutch bank account. Directors and shareholders play pivotal roles in the company’s governance, with the flexibility to combine roles or appoint separate individuals. Shareholders are responsible for major decisions, while directors manage day-to-day operations. 

Turning to the Dutch tax system, private limited companies are subject to corporate tax rates, currently set at 25%. However, tax implications for expats can be advantageous. The 30% ruling, a tax benefit for highly skilled migrants, enables expat employees to receive 30% of their salary tax-free. Additionally, private limited companies engaging in innovative activities may benefit from the innovation box, offering reduced tax rates on qualifying profits. 

To navigate these complexities and maximise tax advantages, seeking professional advice is recommended to ensure compliance with Dutch regulations and optimise financial outcomes. We can assist you (in English) in this regard as well.

> In need of assistence for the transfer of shares in a private limited company? Westport Notarissen is ready to help you with all legal matters

frequently asked questions

Below, we have listed a few frequently asked questions by individuals who contact us. 

How long does the establishment of a private limited company in the Netherlands typically take?

The process of establishing a private limited company in the Netherlands usually takes approximately two to four weeks, contingent on factors such as document preparation and government processing times.

What are the tax implications for expats owning a private limited company in the Netherlands?

Expats owning a private limited company in the Netherlands enjoy tax advantages, including the 30% ruling for tax-free salary reimbursements and potential reduced corporate tax rates through incentives like the innovation box.

What are the ongoing compliance and reporting requirements for a private limited company in the Netherlands?

Ongoing compliance and reporting requirements for a private limited company in the Netherlands encompass various aspects. Regular financial statements must be prepared and filed annually. Companies are obligated to adhere to Dutch accounting standards and maintain proper administrative records. 

Additionally, fulfilling tax obligations, including corporate income tax filings, is crucial. Compliance with employment and environmental regulations is essential, and statutory meetings with shareholders and directors should be conducted as stipulated by Dutch company law.

Arranging a meeting with Westport Notarissen

We would be happy to lend you a hand in all Dutch and international legal matters. If needed, our advice can be in English. We have extensive experience and know-how in incorporating Dutch private limited companies, the establishing plc norms and also in an international frame. This applies to cross-border conversions and cross-border mergers as well.

Please do not hesitate to contact us for more information on any of these topics and to schedule an exploratory appointment to discuss the establishment of your private limited company. During this appointment, we can precisely determine the specific actions required for your case.

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