How and why you should set up a Dutch BV for your corporate activities in the Netherlands

In order to enter into agreements and acquire rights and obligations resulting from those, entrepreneurs who wish to conduct their business activities in the Netherlands should establish a legal entity. Many of them choose to set up a Dutch BV or a so-called ‘Besloten Vennootschap’. A BV is a limited liability company, and is similar to the English Ltd. or the German UG company.

The process of setting up a Dutch BV

Parties wishing to set up a Dutch BV have to cope with a few legal requirements in order to do so. To begin with, a minimum of two parties is needed to set up a Dutch BV. Therefore, finding a reliable business partner is crucial before you can continue the process. Those parties can be individuals, but companies or other organizations can also establish a BV. Once you’ve found your business partner, step two is drafting the company’s articles of association. Those articles of association have to be written in Dutch, and contain details about the company’s directors and commissioners, the shareholders, the share capital and the address of the company. After this part of setting up a Dutch BV has been completed, you can enter the registration process. The main steps in this process are as follows:

  • Checking the availability of your proposed company name
  • Reserving your company name if it’s still available
  • Collecting due diligence documentation to send to an incorporation agent
  • Submitting the statutory documents and the deed of incorporation
  • Registering your company in the Dutch commercial register
  • Opening a bank account on behalf of your company and deposit the company capital there

In order to set up a Dutch BV and get your business started, you might need one or more additional  permits. Depending on which field of business you plan to operate in, it could be necessary to get one or more of the following:

  • Financial licenses for payment processing companies or other companies offering financial services
  • A municipal license for hotels or bars
  • Transporting licenses for companies operating within the transport sector
  • Licenses to guarantee health protection for producers of food and cosmetics
  • An EORI-registration for import and export companies

The advantages of establishing a BV

Setting up a Dutch BV might require a little bit of work, but certainly comes with its advantages. One of the main benefits is the fact that you share the ownership of the company with one or more business partners. Each of those business partners invests some capital or goods in the company, and gets shares in return. Usually the amount of shares you’ll get is linked to the percentage of the company’s total capital that you have invested. This means if you invest for 50% in your new company and your partner invests for the remaining 50%, both of you will obtain 50% of the company’s shares. Such shares normally give the holder the right to vote about important decisions related to the company, and entitle the holder to a certain percentage of the company’s profit. Speaking of the company’s capital – the law enables you to set up a Dutch BV with as little as €1,-. A Dutch BV could furthermore act as a director or a shareholder of other BV’s, and could – according to the same principle – be a subsidiary of another (foreign) company as well. Would you like to learn more about establishing a BV in the Netherlands? Then please have a look at the website of Intercompany Solutions, intercompanysolutions.com.