The Netherlands is among the top business destinations for international investors because of its stable developed economy and open policies with respect to commerce and investments. Therefore it is a wise decision to open a Dutch NV company. Local businesses have the advantage of a flexible tax regime allowing corporate tax exemptions for income from capital gain and dividends.
NV is the abbreviation of Naamloze Venootshap, a type of company with limited liability. If you plan to incorporate an NV in the country, first you need to understand the general features of the entity. Most importantly, the minimum required share capital amounts to 45 000 EUR and no less than 20% of it has to be issued. NVs are most suitable for investors who plan to raise public capital.
The mandatory requirements for opening an NV include a minimum of one shareholder plus established boards of supervisors and managers. Also, the company must have a local registered address. A Dutch NV company has freely transferable bearer shares, registered shares or share certificates and can repurchase 10% of outstanding shares.
NV formation requires the services of a local lawyer and a Dutch notary with experience in preparing and executing incorporation deeds.
An important step in the formation of a Dutch NV company is its inclusion in the Dutch Commercial Register. The following documents are necessary for this registration procedure: a personal identity document, a statement from the bank, not more than thirty days old and a reference paper for a residential address or alternatively a copy of the contract for rent of the local property. These papers are needed to receive a registration number that is unique for the company.
Incorporators of a Dutch NV
The first stage in starting a Dutch NV is to establish the incorporators or founders of the company. These may be a single or multiple legal entities of any nationality, residing anywhere in the world. If for any reason the founders are unable to stay in the Netherlands during the process of incorporation, a Power of Attorney is sufficient for their representation.
Procedure for incorporation of a Dutch NV company
A Latin notary is able to execute the Incorporation Deed of the company containing the AoA.
If the newly opened NV owns registered shares, then it must also keep a register of shareholders. After the process of registration of the company is completed, the Latin notary shall prepare the register of shareholders to be maintained by the Managing Board in the official office of the company. Every shareholder is included with complete name, address, type and number of shares, currency and issue date, amount of paid-in capital per share, pledges, and other hindrances. Also, if the above details change the registration should be updated. This is a responsibility of the Managing Board and its representatives.
Procedure for Dutch NV registration
Within a period of 8 days after successful incorporation, some of the company’s details need to be included in the Registry at the Chamber of Commerce located in the same district as the NV’s registered office.
If you need more details on Dutch NV formation, please call our local incorporation agents. They will provide you with thorough information on the matter and will offer you personalized advice depending on your case and specific requirements. We also assist with the incorporation of private limited companies in the Netherlands. Read here on the difference between private and public liability company (BV vs. NV).
What kind of entity is the BV?
The BV is the equivalent of a private company with limited liability (LLC) in the Netherlands. Therefore its shareholders are liable (financially) only for their own investments in the business and do not carry personal liability for the company’s debts. This is why, among other reasons, Dutch BVs are preferred by international entrepreneurs.
Who owns the BV?
The owners of the BV are its shareholders that have acquired privately registered shares. There must be a minimum of one shareholder. Any shareholder can be either a Dutch or a foreign physical or legal entity.
If the shareholder is only one, the shareholder’s details are available to the public at the Chamber of Commerce. If the shareholders are more than one, only the details of the BV’s directors are listed in the public registry.
How much cash is needed for share capital?
In October 2012 the Government of the Netherlands passed a new act on the requirements for establishment of BVs to stimulate entrepreneurship. The share capital necessary for incorporation was reduced from EUR 18 000 to EUR 0.01. Our advice, however, is to start your BV with a capital of EUR 100 with a nominal share value of EUR 1.00. If you would like to opt for a share value above EUR 1000, please, let us know, because in this case, the procedure for incorporation will be a bit different.
What are the other requirements for incorporation?
Director(s)
The limited liability company should have a minimum of one director. There is no need to appoint a secretary. The director’s position can be taken by the single shareholder or by nominated directors.
In principle, the director is the official representative of the BV under any circumstances, unless his powers are limited by the provisions of the Articles / Memorandum of Association (AoA / MoA), or supplementary agreements with shareholders and managers.
Registered office
Dutch BVs are obliged to have registered addresses in the country. The address has to be physical, P.O. boxes are not acceptable.
What obligations does a BV have in terms of legal and financial requirements?
The limited liability company is required by law to submit a yearly report and financial statements at the Commercial Registry in the Chamber of Commerce. If the company is categorized as a VAT liable company, it is generally obliged to submit a VAT declaration quarterly.
External audits are required when (two out of three conditions have to be fulfilled) the BV’s turnover is above 12 million Euros, its total balance exceeds 6 million Euros and its average staff number is 50.
Understood, now what should I do to start the procedure for incorporation?
The incorporation of a Netherlands BV can be finalized only by a public notary. After all shareholders agree on the incorporation deed, the same is executed before the notary. After incorporation, the company must submit its documents at the commercial registry and the tax authorities. Public notaries can execute deeds of incorporation through Power of Attorney (PoA), therefore the shareholder(s) do not have to be present in person.
In order to initiate the incorporation procedure, we need basic information including the number and the details of the shareholders and the main scope of operations of the BV. According to the law in the Netherlands, the deed must be prepared in Dutch. A translated version is also necessary so that the shareholders understand the documents requiring their signature. In case you would like to see an example of AoA, please let us know and we will send you a free sample.
The process of incorporation can be finalized within 3 days, but the actual period depends on the particular situation, the issue of a PoA and the fulfilment of all identification requirements.
Great, Pepsi BV sounds fantastic!
One last thing you need to know before you start. It is not allowed to incorporate a company with a name already in use by another BV or included in the list of official trade names, like Pepsi. Contact us to check whether the name you like for your company is available at the beginning of the process of incorporation.
The name also has to start or end with “BV”. Along with the main name you are free to include additional commercial names. In this way, you will be able to represent multiple brands with one and the same legal entity.
