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If you want to start a company in the Netherlands as a foreigner, there are different sets of rules you will have to comply to. When you are a resident of the European Union (EU), you can generally set up a business without any permits or visa. If you come from a different country, however, there are extra steps you need to take in order to be able to legally start a company in an EU country. Since Turkey still hasn’t joined the EU fully, this also applies to you, if you are a Turkish resident who wants to own a Dutch business. Nonetheless, it’s actually not so complicated to achieve this. You will have to obtain the proper visa and prepare the necessary documentation. Once you have this, the business registration process only takes a few business days to complete. We will describe the steps you will need to take in this article, and how Intercompany Solutions can support you with your endeavor.

What is the Ankara Agreement exactly?

In 1959, Turkey applied for a membership of association with the European Economic Community. This agreement, the Ankara Agreement, was signed on the 12th of September 1963. The agreement stipulates that Turkey may eventually accede to the Community. The Ankara Agreement also laid the foundations for a toll union. The first financial protocol was signed in 1963 and the second followed in 1970. It was agreed that in time all tariffs and quotas between Turkey and the European Economic Community would be abolished. It was not until 1995 that the treaty was concluded and a customs union was established between Turkey and the European Union. The Ankara Agreement of 1963 between Turkey and the EU and the Additional Protocol contain, among other things, some rights in favor of Turkish entrepreneurs, highly educated employees as well as their family members.

Although these rights in favor of Turkish citizens exist, it can still be a bit difficult to organize everything in a country that is foreign to you, and has a bureaucracy very different from the Turkish system. Having someone guide you through the procedure will not only ease your burden, but you can also avoid unnecessary mistakes and wasted time. Please keep in mind, that starting a foreign business always comes with certain responsibilities and risks. For example, you should become acquainted with the national tax system of the country you would like to establish a business in. You will be required to pay Dutch taxes when you operate within the Netherlands. The upside is, that you will be able to profit from the European Single Market and thus, can transport goods and offer services freely within the borders of the EU.

What kind of business can you start in the Netherlands?

If you have been thinking about owning a business in the EU, then you probably already have a basic idea about the type of company you would like to start. The possibilities are actually very broad, as Holland thrives in many ways. The Dutch continually strive for innovation and advancement throughout various sectors, which will make it possible for you to benefit from the healthy and stable corporate climate. Next to that, the corporate tax rates are beneficial compared to many neighboring countries. Furthermore, you will find a highly educated and mostly bilingual workforce in the Netherlands, This means you will find high quality employees easily, certainly now the job market has opened up. Next to contracting people, you can also choose to hire freelancers to do some extra work for you. Since the Netherlands are extremely well-connected to the rest of the world, it will be very easy to start a logistics company or other type of import and export company. You have the port of Rotterdam and Schiphol airport within a maximum of two hours travel within your vicinity, which enables you to swiftly transport goods all over the world.

Some company ideas that you might consider:

These are just a few suggestions, but the possibilities are nearly limitless. The main requirement is that you are ambitious and willing to work hard, since you need to take into account that you might have a lot of competition. We strongly advise creating a good business plan, in which you do some marketing research and include a financial plan. That way, chances are greater you can find a third party to finance you, if you need extra funds to start your business.

Benefits of owning a Dutch business

As we already discussed above, there is a lot of potential to start a successful company in Holland. Next to being a trade country, the infrastructure in the Netherlands is considered to be one of the best in the world. Not just the physical roads, which are excellent, but also the digital infrastructure. The Dutch have invested a lot of time and effort into connecting every household to a fast internet connection, so you won’t ever have connection problems. The country is economically and politically stable, plus the cities are considered to be very safe compared to many other countries. The Dutch also have many bi- and multilateral agreements with other countries, which prevent double taxation and other issues that might negatively impact your business. This allows you to focus on your main objectives, as opposed to being worried about certain problems that might arise. Lastly, the Dutch are ambitious and like to work alongside foreigners. You will feel welcome and able to meet many like minded entrepreneurs to potentially do business with.

The visa and permits you might need

If you want to start a business as a Turkish resident, there are two things you will need:

The general requirements for the permits you need are as follows:

Requirements

See the website of the Netherlands Enterprise Agency (in Dutch: Rijksdienst voor Ondernemend Nederland or RVO) for more information on innovative entrepreneurship.

Requirements for facilitators

The RVO keeps a list of facilitators who meet these requirements.

We understand that this can be a bit complicated for someone who has never done business in the Netherlands before. Therefore, Intercompany Solutions can support you with setting up your Dutch business from A to Z. We have a specialized immigration lawyer who can assist you in obtaining the necessary visa and permits, when it turns out you will need these to settle here.

Intercompany Solutions can assist you with the entire business establishment process

Thanks to our experienced team, our company has already successfully established more than 1000 businesses in the Netherlands. All we need from you is the correct documents and information, and we take care of the rest. Once your company is registered at the Dutch Chamber of commerce, you can start your business activities immediately. We can also help you out with extra services, such as opening a Dutch bank account, looking for a suitable location for your offices, your periodical and yearly tax return and any legal issues you might confront along the way. Feel free to contact us for more information about the process, we will gladly share all you need and aid you in your journey towards entrepreneurship.

[1] https://ind.nl/en/residence-permits/work/start-up#requirements

If you want to start a company in the Netherlands as a foreigner, there are different sets of rules you will have to comply to. When you are a resident of the European Union (EU), you can generally set up a business without any permits or visa

Privacy is a very big deal nowadays, especially since worldwide massive digitalization happened. The way our data is handled needs to be supervised and regulated in order to prevent certain individuals from misusing or even stealing it. Did you know that privacy is even a human right? Personal data is extremely sensitive and prone to misuse; therefore, most countries have adopted legislation that strictly regulates the usage and processing of (personal) data. Next to national laws, there are also overarching regulations that influence national legislation. The European Union (EU), for example, implemented the General Data Protection Regulation (GDPR). This regulation came into force in May 2018, and applies to any organization that offers goods or services on the EU market. The GDPR applies even if your company is not based in the EU, but at the same time has customers from the EU. Before we get into the details of the GDPR regulation and its requirements, let's first clarify what the GDPR aims to achieve and why it's important to you as an entrepreneur. In this article, we will thus explain what the GDPR is, why you should take appropriate actions to comply, and how to do this in the most efficient way possible.

What exactly is the GDPR?

The GDPR is an EU regulation that covers the protection of the personal data of natural citizens. It is therefore solely aimed at the protection of personal data and not professional data or the data of companies. On the official website of the EU, it is described as follows:

“Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data. The corrected text of this regulation was published in the Official Journal of the European Union on May 23, 2018. The GDPR strengthens citizens' fundamental rights in the digital age and promotes trade by clarifying the rules for businesses in the Digital Single Market. This common set of rules has eliminated the fragmentation caused by divergent national systems and avoided red tape. The Regulation entered into force on May 24, 2016 and has been in effect since May 25, 2018. More information for companies and individuals.[1]”

It is basically a means to ensure that personal data is handled safely by companies that need to handle data due to the nature of the goods or services they offer. For example, if you order a product on a website as an EU citizen, your data is protected by this regulation because you are based in the EU. As we explained briefly before, the company itself does not need to be established in an EU country to fall under the scope of this regulation. Every company that deals with customers from the EU needs to adhere to the GDPR, ensuring the personal data of all EU citizens is protected and safe. This way, you can rest assured that no company will use your data for other purposes than those specifically stated and outlined.

What is the specific purpose of the GDPR?

The main purpose of the GDPR is personal data protection. The GDPR regulation wants all organizations, large and small, including yours, to think about the personal data they use and be very thoughtful and considerate about why and how they use it. Essentially, the GDPR wants entrepreneurs to be more aware when it comes to the personal data of their customers, staff, suppliers, and other parties they do business with. In other words, the GDPR regulation wants to put an end to organizations that only collect data about individuals because they are able to, without sufficient reason. Or because they believe they can somehow benefit from it now or in the future, without much attention and without informing you. As you will see in the information below, the GDPR actually doesn't really prohibit much. You can still participate in email marketing, you can still advertise, and you can still sell and use the personal data of customers, as long as you provide transparency on how you respect the privacy of individuals. The regulation is more about providing sufficient information about the way you use the data, in order for your customers and other third parties to be informed about your specific goals and actions. This way, every individual can provide you with their data based on informed consent, at the very least. Suffice to say, you need to do as you say and not use the data for other purposes than what you stated, since this might result in very hefty fines and other consequences.

Entrepreneurs to whom the GDPR applies

You might ask yourself, "Does the GDPR also apply to my company?" The answer to this is fairly simple: if you have a customer base or personnel administration with individuals from the EU, then you process personal data. And if you process personal data, you must comply with the General Data Protection Regulation (GDPR). The law determines what you can do with personal data and how you must protect it. It is therefore always important for your organization, as it is mandatory for all companies dealing with EU individuals to comply with the GDPR regulation. All of our professional and personal interactions are increasingly digital, so considering the privacy of individuals is simply the right thing to do. Customers expect their beloved stores to handle the personal data they provide with care, so having your own personal regulations regarding the GDPR in order is something you can be proud of. And, as an added bonus, your customers will love it.

When you handle personal data, according to the GDPR, you are almost always processing this data as well. Think of collecting, storing, modifying, supplementing, or forwarding data. Even if you create or delete data anonymously, you are also processing it. Data is personal data if it concerns people that you can distinguish from all other people. That’s the definition of an identified person, which we will discuss in detail later in this article. For example, you have identified a person if you know their first name and last name, and this data also matches the data on their officially issued means of identification. As an individual involved in this process, you have control over the personal data you provide to organizations. First of all, the GDPR gives you the right to be informed about the specific personal data that organizations use and why. At the same time, you have the right to be informed about how these organizations guarantee your privacy. In addition, you can object to the use of your data, request that the organization delete your data, or even request that your data be transferred to a competing service.[2] So, in essence, the individual to whom the data belongs chooses what you do with the data. This is why you need to be meticulous as an organization with the information you provide regarding the exact use of the personal data you acquire, as the individual the data belongs to needs to be informed about the reasons their data is processed at all. Only then is an individual able to decide, whether you are using the data correctly.

Which data is involved exactly?

Personal data plays the most important role within the GDPR. Protecting the privacy of individuals is the starting point. If we read the GDPR guidelines carefully, we can divide data into three categories. The first category is about personal data specifically. This can be categorized as all information about an identified or identifiable natural person. For example, his or her name and address details, e-mail address, IP address, date of birth, current location, but also device IDs. This personal data is all information by which a natural person can be identified. Note that this concept is interpreted very broadly. It is certainly not limited to a surname, first name, date of birth, or address. Certain data - which at first sight has nothing to do with personal data - can still fall under the GDPR by adding certain information. It is therefore generally accepted that even (dynamic) IP addresses, the unique number combinations with which computers communicate with each other on the internet, can be regarded as personal data. This must, of course, be considered specifically for each specific case, but consider the data you process.

The second category is about so-called pseudo-anonymous data: personal data processed in such a way that the data can no longer be traced without the use of additional information, but still makes a person unique. For example, an encrypted e-mail address, user ID, or customer number that is only linked to other data via a well-secured internal database. This also falls within the scope of the GDPR. The third category consists of entirely anonymous data: data where all personal data that allows trace back has been deleted. In practice, this is often difficult to prove, unless the personal data is traceable in the first place. This is therefore outside the scope of the GDPR.

Who is qualified as an identifiable person?

It can sometimes be a bit difficult to define who falls under the scope of an ‘identifiable person’. Especially since there are many fake profiles on the internet, such as people with fake social media accounts. In general, you can presume that a person is identifiable when you can trace back their personal data without too much effort. Think, for example, of customer numbers that you can link to account data. Or a phone number that you can easily trace, and thus figure out to whom it belongs. This is all personal data. If you seem to have problems identifying someone, it is necessary to do a bit more research. You can ask the person for a valid form of identification, just to be sure you know who you are dealing with. You can also look in verified databases to acquire information regarding someone’s identity, such as a digital telephone book (which actually still exists). If you are unsure whether a customer or other third party is identifiable, try to contact that customer and ask for personal data. If the person doesn’t answer your query, it’s generally best to delete all the data you have and discard the information you were provided with. Chances are, someone is using a fake identity. The GDPR aims at protecting individuals, but you as a company also need to take appropriate steps to protect yourself from fraud. Unfortunately, people are able to use fake identities, so it’s important to be vigilant about the information people provide. When someone uses someone else’s identity, this might have serious repercussions for you as a company. Due diligence is advised at all times.

Legitimate reasons to use third-party data

A main component of the GDPR is the rule, that you should only use third-party data for specified and legitimate purposes. Building on the requirement of data minimization, the GDPR prescribes that you may only use personal data for a stated and documented business purpose, supported by one of the six available GDPR legal bases. In other words, your use of personal data is limited to a stated purpose and legal basis. Any processing of personal data you undertake must be documented in a GDPR register, along with its purpose and legal basis. This documentation forces you to think about each processing activity and carefully consider the purpose and legal basis for it. The GDPR enables six legal bases, which we will outline below.

  1. Contractual obligations: When entering into a contract, personal data must be processed. Personal data may also be used when exercising a contract.
  2. Consent: The user gives explicit permission for the use of his/her personal data or the placing of cookies.
  3. Legitimate interest: Processing of personal data is necessary for the purposes of the legitimate interests of the controller or a third party. Balance is important in this case, it should not violate the data subject's personal freedoms.
  4. Vital interests: Data may be processed when situations of life or death arise.
  5. Legal obligations: Personal data must be processed according to the law.
  6. Public interests: This mainly has to do with governments and local authorities, such as risks regarding public order and safety and the protection of the public in general.

These are the legal bases that allow you to store and process personal data. Oftentimes, some of these reasons might overlap. That is generally not an issue, as long as you can explain and prove that there is actually a legal basis. When you lack a legal basis for the storage and processing of personal data, you might be in trouble. Keep in mind that the GDPR has the protection of the privacy of individuals in mind, hence the reason there are only limited legal bases. Know and apply these, and you should be safe as an organization or company.

The data the GDPR applies to

The GDPR, at its core, applies to the processing of data that is either fully or at least partially automatic. This entails data processing via a database or computer, for example. But it also applies to personal data that is included in a physical file, such as files stored in an archive. But these files need to be substantial in the sense that the data included is connected to some order, file, or business dealing. If you own a handwritten note with only a name on it, it doesn’t qualify as data under the GDPR. This handwritten note might be from someone who is interested in you or otherwise be of a personal nature, after all. Some common ways data is processed by companies include order management, a customer database, a supplier database, staff administration, and, of course, direct marketing, such as newsletters and direct mailings. The person whose personal data you process is called the "data subject."This can be a customer, newsletter subscriber, employee, or contact person. Data regarding companies is not viewed as personal data, whereas data about sole proprietorships or self-employed persons is.[3]

Rules regarding online marketing

The GDPR has a significant impact when it comes to online marketing. There are some basic rules you will need to comply with, such as always offering an opt-out option in the case of email marketing. In addition, a tenderer must also be able to indicate and adjust their preferences. This means that you have to adjust the emails, if you currently don’t offer these options. Many organizations also use retargeting mechanisms. This can be achieved, for example, via Facebook or Google Ads, but keep in mind that you will need to request explicit permission to do this. You probably already have a privacy and cookie policy on your website. So with these rules, these legal parts also need to be revised. The GDPR requirements state that these documents need to be more comprehensive and transparent. You can often use model texts for these adjustments, which are freely available on the internet. In addition to legal adjustments to your privacy and cookie policies, a data processing officer must be appointed. This person is responsible for the processing of data and ensures that the organization is and remains GDPR-compliant.

Tips and ways to comply with the GDPR

The most important thing, of course, is that you, as an entrepreneur, comply with legal regulations and rules, such as the GDPR. Fortunately, there are ways to comply with the GDPR with as little effort as possible. As we already discussed, the GDPR in itself doesn’t actually prohibit anything, but it does set strict guidelines for the way in which personal data can be processed. If you don’t adhere to the specific guidelines and use the data for reasons that aren’t mentioned in the GDPR or fall outside its scope, you risk fines and even worse consequences. Next to that, keep in mind that all parties with whom you work will respect you as a business owner when you also respect their data and privacy. This will provide you with a positive and trustworthy image, which is genuinely good for business. We will now discuss some tips that will make compliance with the GDPR an easy and efficient process.

1.      Map out which personal data you process in the first place

The first thing to do would be to research which exact data you need and to what end. Which information are you going to collect? How much data do you need to achieve your goals? Just a name and email address, or do you also need extra data such as a physical address and phone number? You also need to create a processing register in which you list which data you keep, where it comes from, and with which parties you share this information. Also take into account the retention periods, because the GDPR states that you must be transparent about this.

2.      Make privacy a priority for your business in general

Privacy is a very important topic, and this will stay this way in the (un)foreseeable future, since technology and digitalization are only progressing and increasing. Thus, it is very important that you, as an entrepreneur, inform yourself about all necessary privacy regulations and prioritize this whilst doing business. This will not only ensure that you are compliant with all applicable laws, but it will also build an image of trust for your company. So, as an entrepreneur, immerse yourself in the GDPR rules or otherwise seek advice from legal experts, so you can be sure that you are doing business legally when it comes to privacy. You need to find out which exact rules your company must comply with. The Dutch authorities can also help you on your way with tons of information, tips, and tools to use on a daily basis.

3.      Identify the correct legal basis for processing personal data

As we already discussed, there are only six official legal bases that allow you to process and store personal data, according to the GDPR. If you are going to use data, it is of vital importance that you know which legal basis is underlying your usage. Ideally, you should document the different types of data processing you do with your company, for example, in your privacy policy, so customers and third parties can read and acknowledge this information. Then, identify the correct legal basis for each action separately. If you need to process personal data for new motives or reasons, be sure to add this activity as well before you start.

4.      Try to minimize your data usage as much as possible

You, as an organization, must ensure that you collect only the minimum data elements to achieve a certain goal. For example, if you sell goods or services online, your users usually only need to provide you with an email and a password for the registration process to run smoothly. There is no need to ask customers for their gender, place of birth, or even their address as part of the registration process. Only when users continue to purchase an item and want to have it shipped to a certain address does it become necessary to ask for more information. You then have the right to request the user's address at that stage, as this is essential information for any shipping process. Minimizing the amount of data collected minimizes the impact of potential privacy or security-related incidents. Data minimization is a core requirement of the GDPR and extremely effective in protecting your users' privacy since you only process the information you need and nothing more.

5.      Know the rights of the people whose data you process

An important part of becoming knowledgeable about the GDPR, is informing yourself about the rights of your customers and other third parties, whose data you store and process. Only by knowing their rights can you protect yourself and avoid fines. It is true that the GDPR has introduced a number of important rights for individuals. Such as the right to inspect their personal data, the right to have data corrected or deleted, and the right to object to the processing of their data. We will discuss these rights briefly below.

The first right of access means that individuals have the right to view and consult the personal data processed about them. If a customer asks for this, you are therefore obliged to provide them with it.

Rectification is the same as correction. The right to rectification therefore gives individuals the right to make changes and additions to the personal data that an organization processes about themto ensure that this data is processed correctly.

The right to be forgotten means exactly what it says: the right to be 'forgotten' when a customer specifically asks for this. An organization is then obliged to delete their personal data. Do note that if there are legal obligations involved, an individual cannot invoke this right.

This right gives an individual as a data subject the opportunity to restrict the processing of their personal data, which means that they can ask to have fewer data processed. For example, if a company asks for more data than is absolutely necessary for the process involved.

This right means that an individual has the right to transfer their personal data to another organization. For example, if someone goes to a competitor or a staff member goes to work for another company, and you transfer data to this company,

The right to object means that an individual has the right to object to the processing of their personal data, for example, when the data is used for marketing purposes. They can exercise this right for specific personal reasons.

Individuals have the right not to be subject to fully automated decision-making that may have significant consequences for them or cause legal consequences of human intervention. An example of automated processing is a credit rating system that will fully automatically determine whether you are eligible for a loan.

This means that an organization must provide individuals with clear information about the collection and processing of their personal datawhen an individual asks for this. An organization must be able to indicate which data they process and why, according to the GDPR principles.

By familiarizing yourself with these rights, you can better foresee when customers and third parties might inquire about the data you are processing. You will then find it much easier to oblige and send them the information they are requesting, because you were prepared. It can save you a lot of time to always be prepared for inquiries and have the data at hand and ready, for example, by investing in a good customer management system that allows you to pull the necessary data fast and efficiently.

What happens when you do not comply?

We already touched on this subject briefly before: there are consequences when you do not comply with the GDPR. Again, be informed that you don’t need to have a company based in the EU to be required to comply. If you have even one customer that is based in the EU whose data you process, you fall under the scope of the GDPR. There are two levels of fines that can be imposed. The competent data protection authority in each country can issue effective fines at two levels. That level is determined based on the specific violation. Level one fines include violations such as processing personal data of minors without parental consent, failure to report a data breach, and cooperating with a processor that does not provide sufficient guarantees in terms of required data security. These fines can amount to up to 10 million euros or, in the case of a company, up to 2% of your total worldwide annual turnover from the previous financial year.

Level two applies if you commit fundamental offenses. For example, failure to comply with the data processing principles or if an organization cannot demonstrate that the data subject has actually given consent to the data processing. If you fall under the scope of level two fines, you risk a maximum fine of 20 million euros, or up to 4% of your company's global turnover. Do note that these amounts have been maximized and depend on your personal situation and your business’ yearly revenue, amongst other factors. In addition to fines, the national data protection authority may also impose other sanctions. This can range from warnings and reprimands to the temporary (and sometimes even permanent) cessation of data processing. In that case, you may temporarily or permanently no longer process personal data through your organization. For example, because you have repeatedly committed criminal offenses. This will essentially make it impossible for you to do business. Another possible GDPR sanction is the payment of damages to users who file a well-founded complaint. In short, be vigilant about the privacy and personal data of individuals to avoid such hefty consequences.

Do you want to know whether you are GDPR-compliant?

If you are planning on starting a business in the Netherlands, you will have to comply with the GDPR. If you are doing business with Dutch customers, or customers based in any other EU country, you will also have to adhere to this EU regulation. If you don’t know for sure whether you fall under the scope of the GDPR, you can always contact Intercompany Solutions for advice on the subject. We can assist you in finding out if you have applicable internal regulations and processes in place and if the information you provide to third parties is sufficient. Sometimes it can be very easy to overlook important information, that could nonetheless get you in trouble with the law. Remember: privacy is an extremely important topic, so it’s essential that you are always up-to-date regarding the latest regulations and news. If you have any questions about this subject or would like more information about business establishments in the Netherlands, feel free to contact Intercompany Solutions anytime. We will gladly assist you with any query you might have, or offer you a clear quote.

Sources:

https://gdpr-info.eu/

https://www.afm.nl/en/over-de-afm/organisatie/privacy

https://finance.ec.europa.eu/

[1] https://commission.europa.eu/law/law-topic/data-protection/data-protection-eu_nl#:~:text=The%20general%20regulation%20dataprotection%20(GDPR)&text=The%20AVG%20(also%20known%20under,digital%20unified%20market%20te%20.

[2] https://www.rijksoverheid.nl/onderwerpen/privacy-en-persoonsgegevens/documenten/brochures/2018/05/01/de-algemene-verordening-gegevensbescherming

[3] https://www.rijksoverheid.nl/onderwerpen/privacy-en-persoonsgegevens/documenten/brochures/2018/05/01/de-algemene-verordening-gegevensbescherming

When you start a Dutch business, you will very often benefit from some startup perks and options. During the first five years of your business, for example, you can opt for the so-called ‘starter deduction’ for three times. This means you will get a discount on your yearly tax return. This is just one example of possible financial benefits, that the Netherlands offers to starting entrepreneurs in order to enthuse people to start a company. Another option is the extended first financial year, that is also created especially for starting entrepreneurs. It means that, during the first year of your business, you will not have to draw up annual accounts and submit the corresponding declarations to the tax authorities. Instead, you can choose to do this one year later. In this article, we will explain some of the advantages and disadvantages of the extended first financial year, making it easier for you to choose whether this is a viable option that will aid your startup.

What is an extended first financial year exactly?

An extended financial year is the first financial year, that can be extended beyond the next filing date of the annual accounts. This happens on the basis of the articles of association, which you set up when you established the company. The main reason to extend the first financial year is when you establish your company later or in the middle of a year, for example in August. Every financial year lasts from the 1st of January until the 31st of December. So if you set up a business in August, you only have a maximum of 5 months left before the year ends. This would mean, that you would already have to draw up your annual accounts after a period of 4 to 5 months, which often is too little to determine whether your company is doing well. Thus, you can make a request to extend the first financial year. This will mean your first financial year will be extended with 12 months. This allows you to wait until the next financial year, before you submit the annual accounts, for a period of 17 months.

The annual accounts and the financial year

It’s probably best if we explain some of the terminology we use in more detail, since not everyone is well-acquainted with accounting and fiscal matters regarding Dutch companies. Especially if you are a foreign entrepreneur, since you don’t know Dutch laws as well as Dutch residents are supposed to. The financial year is basically the period during which the complete accounts of the enterprise are carried out. During this period, you need to draw up the annual accounts of your company, to show the Dutch Tax Authorities your financial data. The annual accounts contain the balance sheet, which reflects the situation of the company at that specific time.

In addition, the annual accounts contain a profit and loss account, with an overview of the total yearly turnover and yearly costs your company has made. Finally, the annual accounts must contain an explanation of, among other things, the persons employed by your company. It also needs to state the manner in which the balance sheet is drawn up. How extensive this explanation should be, depends on the size of the company. If you would like to know more about the way you should draw up your annual accounts, then you can always contact Intercompany Solutions for in-depth information. We can also assist you with the entire process of your yearly tax return, so you can focus your attention on important matters, such as your daily business activities.

More details about the financial year

A financial year is the period over which the financial report is created. This report consists of drawing up the annual accounts, the annual report and filing returns. The financial year usually lasts 12 months and in most cases runs parallel to the calendar year. Every calendar year starts on the 1st of January and ends on the 31st of December of each year. This is considered to be the clearest timeframe for most companies. If you decide to deviate from the calendar year, then the year is called a 'broken financial year'. This is also why entrepreneurs decide to extend the first financial year, due to the fact that a broken financial year is sometimes very short.

When you know that a financial year will last shorter or longer than a regular calendar year, you will need to submit a request to the tax authorities to arrange this. In general, information about when the financial year ends is included in the articles of association of your company. If you want to adjust the length of the financial year in any way, then you need to take into account that the articles of association must also be amended. You also need to keep in mind, that it is not permitted to change a financial year for the sole purpose of obtaining a tax advantage in a particular situation. Please make sure you always have a solid reason to amend the regular financial year. An extended first financial year is possible for a Dutch BV, but also for a partnership and a sole proprietorship.

Does the financial year differ from a regular calendar year?

For almost all companies it is advisable to keep the calendar year as a financial year, but for some organizations it’s more convenient to proverbially ‘close the books’ at a divergent time. For example, if you run a company that provides goods and services to schools and universities. A school year is different from a regular calendar year, since schools start each year in August or September and end in June or July. Oftentimes, when the schools start again, new boards are elected and changes are made to institutions and companies. The board is responsible for the proper delivery of an annual report, so that the new board can start well-read and informed regarding finances. Hence, for companies that are heavily involved in the school system, it can be more beneficial to have the financial year run parallel to the academic year.

A broken financial year

As we already discussed above briefly, a broken financial year is a year that contains less than 12 months. This is due to the fact, that a company can be started anytime during a calendar year. If this has happened, we speak of a broken financial year. The financial year then starts at the time of incorporation, and runs until 31 December that same year. When you want to extend the first financial year, the extension will always be a period of 12 consecutive months. So, the year will be exactly one year longer than usual, the amount of extra time depends on the date you established your business. This can be one single day (if you incorporated your company on the 30th of December), but also almost an entire year, for example, when you founded your business at the end of January that same year. In such cases, your first financial year will actually last almost 2 entire years in reality.

When to request an extended first financial year?

In general, you request an extended first financial year when there is a broken financial year. We already explained this phenomenon in detail above. The main purpose of an extended financial year is the fact that companies that have only existed for a few months, must already draw up annual accounts and submit declarations. The financial year for these companies with an extended first financial year then runs until the 31st of December the following year. You can easily apply for an extended financial year via the website of the Dutch Tax Authorities. There are as good as no requirements for postponing this first financial year. If you like, Intercompany Solutions can also help you with extending your first financial year, simply contact us for more information and assistance.

What are the advantages and disadvantages of an extended first financial year?

One main benefit of an extended first financial year, is the fact that you save yourself a lot of work during the first stages of your business set-up. Drawing up annual accounts actually takes a lot of time, which you can definitely put elsewhere when you are still in the starting phase of your company. Next to saving time, you also save money since you don’t have to outsource your administration during the entire first year of your business. This saves considerably in costs for the administration and the preparation and auditing of the annual accounts by an accountant. The corporate tax rates in the consecutive year can also be a reason to opt for an extended financial year. During the past years, the corporate income tax in the Netherlands fluctuated a lot. Depending on when your financial year ends, this can mean that you save money because you will have to pay less taxes. There are also certain tariff brackets with limits, but in practice, you won’t reach these limits in the first months of opening your company. Thus, it can be profitable for you to opt for an extended first financial year when you set up your company during the second half of the year.

One main disadvantage is directly linked to the previously mentioned advantage of possibly lower tax rates, when you extend the financial year. When tax rates can drop, they can inevitably rise too. So, a disadvantage of an extended first financial year is the uncertainty about the possible amount of the (corporate) income tax rate one has to pay. If there is a tax increase in the following year, you will not only have to pay more tax on the profit generated in that year, but also on the profit from the previous year, because it is 'booked' in the same year. If you have to pay corporate income tax over an extended financial year and therefore several years, it may be that the rate has changed in the meantime, if it increases you pay the increased rate. Another disadvantage is that you have to wait longer to draw up the annual tax return, which causes you to have less insight into your own financial data. The success of a company can be measured by its profits during the first year. If you extend the first financial year, you will simply have to wait a bit longer before you draw up the report.

Which types of companies can ask for an extended first financial year?

There are many different legal entities to choose from in the Netherlands, each with its own benefits and disadvantages in some cases. In our experience, by far most entrepreneurs choose for a Dutch BV, which is the same as a private limited company. But some people also choose a sole proprietorship, or partnerships. Each type of Dutch company has to do with a financial year. However, you can only apply for an extended first when you established either a Dutch BV, a general partnership or a sole proprietorship. The other legal forms are not eligible for an extended first financial year.

Intercompany Solutions can assist you with opting for an extended first financial year

An extended financial year can be advantageous for many starting entrepreneurs. If you set up your Dutch business during the latter part of the year, and you expect to stay below the future rate bracket of 19% with your accumulated profits, we advise you to opt for an extended financial year. This will make the first year a lot easier for you, also due to the fact that you extend your fiscal responsibilities for a while. WE also advise you to invest in solid accounting software, which will automatically track data for you and your company. It will also enable you to look at your data before you actually have to file the annual tax return, making it possible for you to gain insight into your company’s success.

If you want to include an extended financial year in the administration, you can do that well via this type of accounting software. Are you in doubt, or do you still have questions? Please feel free to contact one of our advisors, or use the contact form on the website to contact Intercompany Solutions. We aim to answer your query as soon as possible, with clear and efficient solutions to your questions. Of course, we are also able to take some work off your hands, making it easier for you to focus on your core business.

There is a lot of debate going on regarding the environment and how our behavior impacts the climate of our planet. This has already pushed many well-known multinationals to do business in a more climate-friendly, or even climate-neutral, way. Governments all over the world have very ambitious goals when it comes to a climate-neutral and circular way of living. Such as further reducing C02 emissions, recycling every possible material and making sure plastic waste will be eliminated in the future. These are all very sensible goals, aimed at making our environment healthy for everyone on the planet. If you are also interested in environmental issues and would like to actively contribute to certain climate goal, then The Netherlands offers you a solid base of operations for your future business. The Dutch are very innovative and ingenious when it comes to solutions for existing climate problems, and welcome any foreign entrepreneur who is willing to put in the effort, too. In this article we will outline some measures that the government believes will impact the climate positively, how you can implement such measures and what kind of company would be an interesting fit for you.

How can we positively influence the environment and climate?

During the past decades, it became very clear that some parts of the planet are too heavily polluted. This includes cities with too much air pollution that are covered in smog, oceans with tons of plastic waste, lakes where toxic waste is dumped in, garbage in city streets and also the pollution of soil due to the incessant use of pesticides. Most of these causes can be linked back to companies and corporations, since regular citizens generally don’t go out and dump waste in the water. Nonetheless,; consumers have also become environmentally conscious in the past few years. We all recycle more, try to buy sustainable materials and don’t dump waste in the park. In order to clean up the Earth, so to speak, we must all be able to put in an effort to minimize waste and toxic materials as much as possible. This has resulted in some general guidelines that are being promoted worldwide, that will help everyone to live in greater harmony with the planet and environment. These guidelines contain some of the following measures:

These are just a few general guidelines, but they show the broader picture of, for example, the UN’s (United Nations) plan. This also means, that any already existing company as well as startup, needs to take into account that their company will also have to be (partly) climate neutral in the coming decades. This requires you to think creatively about how you want your business to be run, and how you will deal with possible pollution and waste in your supply chain.

What can you do as an entrepreneur to adhere to certain climate goals?

The guidelines and measures are fairly broad, so it might seem difficult to instantly convert these to smaller and achievable goals. If you, for example, own a company that has been dumping toxic waste, it’s fairly easy for you to understand that you need to stop doing this. If your company produces and/or uses a lot of plastic materials, you can look for recycled alternatives to make a positive impact. Or you can ask for a small deposit from your customers for using the item, which will enable them to return it to you easier, so you can reuse or recycle the item. This has been the case in the Netherlands and Germany for a while now when it comes to plastic bottles. These need to be returned to the store where the consumer bought them, where they get their deposit back, so the bottles can be cleaned and reused. If you own a clothing company and import a lot of materials, you can make sure that the sources of these materials are environmentally-friendly and sustainable. Another thing you can do, is to try to make deals with local suppliers. This substantially limits the amount of time the goods need to travel to your location, which will reduce your carbon footprint.

If you own a restaurant, or another place where consumers eat directly in your establishment, you can do some research into sustainable accessories such as cups and straws. Needless to say, there are many areas in which we can all become more environmentally friendly and conscious, and some of these measures are actually pretty small and non-invasive regarding your daily business activities. It can be as simple as replacing a regular garbage bin with one that has recycling options, which enables you and your customers to separate your waste immediately. Whatever your chosen industry or business sector is, there is always something you can do to limit any negative impact your company might have on the environment. If you want to learn more about climate goals in or near the location where you have an office, you can always look up the website of the municipality in the Netherlands. They will generally provide you with current goals that they want to achieve, as well as helpful tips and tricks on how to achieve this.

Business sectors that are putting in effort to become climate neutral

In essence, all businesses and industries need to put in the effort to realize certain climate goals, but some companies need to take more direct action, than others. If you own a company, or plan to start a company, that is involved in one of the following, then you can expect more drastic changes will need to be made:

All these companies use larger amounts of fossil fuels than other businesses. But next to that, they are also more prone to create toxic waste due to the often toxic (raw) materials they use. Furthermore, a lot of companies are also involved in dealing with animals, for example the bio-industry and the pharmaceutical industry, if and when they perform test on animals. These two sectors are under heavy scrutiny, mainly due to animal welfare activism. The general consensus is leaning more and more towards a society in which animal cruelty is abolished completely, and for good reason. If you plan to operate in one of these sectors, you should inform yourself about set goals and how your company will be able to adhere to new laws and regulations. If you want to operate in a different sector, then it would be wise to see how your competitors are handling climate goals. The future is leaning towards a more clean and responsible way of handling our daily affairs, so it’s best if you learn how to adapt and stay flexible.

What kind of business would you like to start in the Netherlands?

After reading the above, we can understand when you feel hesitant about taking appropriate steps and measures to reach certain climate goals. How would you do this? Where can you start? A lot depends on the industry you choose. We already gave some practical tips in a former paragraph, but there are more ways to limit your carbon footprint and lessen a possibly negative impact on the environment. If you deal with the import and export of goods, then make sure your suppliers are trustworthy and, preferably, sustainable. This will rid your entire supply chain of any negative influences. If you own an internet business, try to screen any suppliers and clients before you provide them with your services. That way, you will know whether you are pulled into something shady. Another good tip is to invest in clean energy, whatever your type of business is. Try to inform yourself a little bit about these goals, and brainstorm about how you can contribute with your business. It will not only have a positive impact on your environment, but also your client database. Many consumers are very conscious about what they buy and where they buy it, nowadays. If you create a solid image for yourself by sticking to such goals, chances are large that you will also attract higher-end clients.

Intercompany Solutions can establish your Dutch company in just a few business days

If you want to start a company in the Netherlands, it’s important that you also handle all the administrative tasks efficiently, such as the registration of your company with the Dutch Chamber of Commerce. Intercompany Solutions has acquired many years of professional experience and expertise within the field of business establishment. Thus, we can assist you with the entire company registration process, from A to Z. You can find more general information about registering a Dutch company here. Next to that, we also provide extra services aimed at keeping your company stable and flourishing. We can help you with your periodical tax return, or give practical advice that will propel your business to another level. If you need help with certain regulations or laws, we can also explain these to you in simple terms. This also includes any climate laws and measures. Feel free to contact us anytime with your query, and we will get back to you with advice as soon as possible.

Health is becoming an increasingly hot topic, especially since the pandemic broke out two years ago. A lot of people are looking for easy and practical ways to boost their health, as opposed to taking a wide variety of chemical medications to suppress symptoms of health issues. To stay healthy, it’s very important to eat nutrient-dense foods, drink a lot of water and become active on a daily basis. Nonetheless, sometimes someone requires more than just these basics, for example after disease or recovery. This is where lifestyle and supplement companies come into the picture. There are many ways to improve your health, ranging from fasting and special diets, to supplementing with various substances to boost your overall immunity. If you are someone who is very enthusiastic about health in general, and you would also like to help others achieve a fit and healthy physique, the lifestyle and food supplement niche might be a perfect option for you when you are seriously considering establishing a Dutch company. Due to the continuously growing clientele within this market, you are almost certain to generate good sales quotes and thus, achieve rapid success with your company. Provided you know what you are doing, and the advice and products you offer are of high quality. Would you like to know more about starting a Dutch business within the lifestyle and healthy industry? Then read on for general information about this market, some helpful tips and tricks when starting a business and the most practical way to register your company with the Dutch Chamber of Commerce.

Health is booming

Health is wealth, at least that’s how most people perceive it. When you are healthy, you can go about your daily routine and do the things you want and love to do. When something is wrong with your health, however, you are substantially limited in carrying out your daily tasks and chores. Diseases vary in severity and duration, of course. A common cold is something entirely different from long-term illnesses, which is why there is no one-size-fits-all solution to overcome illness. Every human being is unique, and thus, every approach to a healthier lifestyle should be tailored to the individual at hand. During the past century, we have seen that most regular approaches in medicine tend to suppress the symptoms of a disease, whilst the core problem is often overlooked. Societal problems like stress, a heavy workload and unhealthy habits take a large toll on people, which inevitably can lead to long-term health problems and issues. When you have a sincere ambition to help people become more healthy and strong, it is very important that you educate yourself properly on the subject of health. Ideally, you studied medicine or any other topic that covers a wide range of health problems. This will make it easier for you to diagnose health issues and offer correct treatment.

If you are not a medical professional, however, you can still help others achieve a balanced way of life and optimum health. There is a wide variety of subjects and topics you can focus on, such as:

As you can see, there are many ways in which you can assist any individual to recover back to good health, whilst also complying with any necessary official medical treatments. Sometimes people are in chemotherapy, or receive treatments for long-term illnesses, that can also harm the human body at the same time. By offering supplemental treatment, you can strive to negate (a part of) the negative effects such treatments have on the patient. This can be acquired in a large variety of ways, which you can learn by adequate schooling and training. By assisting others to achieve a stable health condition, you essentially help society to become better and healthier as a whole.

Lifestyle and food supplements cover a wide range of topics

As we already briefly discussed above, there are many ways to help others with their health. Maybe you are excited about helping others exercise more? Exercise is a fantastic way to help your body to stay in shape, which will automatically lead to a better and stronger immune system, which will inevitably prevent many diseases. You can also dive into the world of supplements and figure out, what each supplement does to the human body. This can cover any possible supplement, ranging from regular minerals and vitamins, to amino acids, superfoods, special herbs and other natural products that boost the human immune system and performance supplements. Coaching is another fantastic way to help others to strive for their goals. Often people have coping mechanisms, such as unhealthy habits, that ‘get them through the day’.

Needless to say, unhealthy habits wreak havoc on the human body and are thus counterproductive when it comes to strengthening the human body. By providing your clients with coaching sessions, you can figure out the root cause of their unhealthy habits and transform those into healthy ones. There are many topics you can become experienced in, such as specialized natural health care like acupuncture, which has been proven to be successful for centuries. Meditation has also proven to be highly successful when trying to nurse someone back to health, due to the many benefits it offers for the body and the mind. Meditation is a surefire way to eliminate stressors in life. Stress is a huge risk for every human body, since it causes the body to produce cortisol and adrenaline in large amounts. This, in time, proves to cause many different illnesses and in bad cases even leads to early death. Preventing diseases always trumps curing diseases, so you can focus on prevention as well as finding substantial ways to cope with already existing diseases, which will in turn improve the overall quality of life of any client you might have. The right choice for you is basically the topic you are already experienced in, or the one you feel most comfortable with. Try to do an ample amount of research before you decide on your niche, so you know for sure that you choose something you can actually help others with. Also keep in mind, that you can never overrule any already existing official medical treatments. Always consult the medical practitioner of your client, before you start something new. Some natural ways of healing can have adverse effects on a medical treatment.

Education and experience needed

As you can see, there are many topics to choose from when it comes to health, lifestyle and supplement advice. There are even more courses and specialized training to learn about a certain topic. You can never start a health company without proper training and education, as you might potentially harm others, and that’s a path you do not want to tread. If you aim to help others become healthy, that is exactly what you should do. Inform yourself about the various types of education available, because this will make it easier for you to pick something that resonates with you. Also, study literature and academic papers, since these often offer new insights into existing problems and treatments. If you want to study something official, there is a possibility you might have to go back to school or university. But try to see this as a grandiose way to deepen your knowledge, even if it might take you some years to finish. People are never too old to educate themselves on new topics! Education will make the difference between a successful company that heals people, as opposed to running a shady business that offers no guarantee whatsoever regarding health and the safety of your clients. A lot of health companies are founded by people who actually know nothing about health, they are just trying to make money off promising products, that actually do nothing at all for the individual. Or, in worse cases, these products actually damage health. Many supplements that are created for losing weight and/or boosting a work-out contain substances that can be harmful for certain individuals. Educate yourself on such topics, before you start selling goods and services.

What type of company can you start within the lifestyle and supplement market?

As there are many topics that fit into this niche, there are also many different company types that go along with it. These companies range from only selling certain products, to full-on coaching trajectories that help an individual to become healthy again. Your level of expertise and knowledge essentially dictates, what type of company you can start. Some company ideas that don’t involve the need for accredited education include (but are not limited to):

In some cases, a diploma might be needed, for example in the coaching industry. Nonetheless, most coaching courses are not very long or intimidating, nor are these very expensive. You could try to look around for courses that match your profile and expertise. If you own a diploma or certificate, the chances are substantially higher that clients will trust you more. Thus, you will acquire more clients in the long run. Some company ideas and professions that involve proper training and education are as follows:

These are generally professions that require a certain amount of knowledge and training, due to the fact that you can also hurt others when you provide incorrect treatment or advice. You should definitely broaden your scope about these topics, and see whether some of these professions are a good fit for you. You can also combine some of the topics, such as providing dietary advice, advice about supplements and exercise plans. That way, you cover all the basics, making it easier for you to tailor the program to someone’s individual needs as well as you can.

The Netherlands is strategically located

One of the many benefits of starting a Dutch company, is the strategical location of the rather tiny country. You have access to Schiphol airport as well as the port of Rotterdam, making it easier for you to buy high-quality products and having these shipped to you as fast as possible. Also note, that there are a lot of expats and travelling entrepreneurs in the Netherlands. You can help these people, even if you don’t know the Dutch language, since almost everyone in Holland is fluent in English. Most of the Dutch citizens are bilingual or even trilingual, making it easier for you to communicate with your client. It is also a very beneficially located country to import and export products, especially within the European Union (EU), since you are able to access the European Single Market directly. This means that you will have much fewer customs documentation to deal with, and you will also not have to charge others VAT. Feel free to ask us for advice about this topic anytime, as it can save you a lot of time and money whilst doing business internationally. This will make it very easy for you to acquire the necessary products for your company, such as supplements, herbs and other related products. Since the Dutch are very into health and a healthy lifestyle, you will have no problems acquiring clients here, provided the services and products you offer are of high-quality, and you do what you promise. There are many competitors in this particular market, but many websites don’t offer personal aid or programs. If you prepare well, you can thus manage to stand out from your competitors and reach the target audience you map out.

Consider going international

In line with what we mentioned above, it is very much possible to expand your Dutch business internationally in due time. If you can successfully aid people in the Netherlands with your services and products, chances are you might be able to expand internationally as well. Maybe you are considering putting a new product on the market, or offering a certain treatment that isn’t used often? In such cases, the clients you help will be more than willing to tell others about your mutual success. You can translate your website into various languages, although English generally seems to be sufficient in order to reach people internationally. Make sure there is something unique about what you are offering, since there is already a massive amount of lifestyle and supplement companies all over the globe. Try to offer a very individual approach to every client, since this will make them feel heard. It will also enable you to pinpoint your client’s problems precisely, which will make it easier for you to get them back to health. Try to look at some websites of companies that offer similar services, to see where you could stand out and make a difference.

How can Intercompany Solutions support your business?

Intercompany Solutions is specialized in the entire registration process of starting a Dutch company. We can offer you various types of assistance, such as starting up your company, opening a  bank account, taking care of tax related matters and helping you with a solid business plan. We can also help you with a good business idea, provided that you already know what you want to do, and why. Our specialists can take care of the entire registration process in just a few business days, which enables you to start your company almost immediately. If you have any questions about importing or exporting goods and services, the best way to arrange this and which documentation you will need, you also have come to the right address. Please feel free to contact us with any queries you might have, or if you would like to receive a personalized quote for establishing your business. We will gladly help you with anything you need.

If you are currently the owner of a crypto company, or plan to establish one in the near future, then launching an ICO can be an interesting way for you to raise funds for your business. It can also allow you to create a new coin, service or app. An ICO is essentially a profitable way to raise money, for services and products that are somehow related to cryptocurrency. An ICO is somewhat derived from an IPO, with the difference that an ICO is mostly aimed at software services and products. In some cases, ICOs have been massively successful with a high amount of returns for all investors. In other cases, ICOs failed or turned out to be fraudulent. This means, that we do strongly discourage people with no knowledge of cryptocurrency at all, to launch an ICO. You will be better off investing in some already established coins instead. To launch an ICO, you need at the very least a basic understanding of cryptocurrency, exchanges and wallets. Due to the fact that ICOs are mostly unregulated, investors should be cautious and diligent when investing in any ICO.

What is an ICO exactly?

ICO is an abbreviation of Initial Coin Offering. When someone starts a new crypto project, they launch its own coin (token), which is then sold to early investors. This model is very similar to the first round issue of shares of a regular company, which is named Initial Public Offering (IPO). One major difference is that the issue is accessible to the general public, on the contrary to solely being reserved for venture capital. Most ICOs are taking place on Ethereum (ETH). The offered tokens can also sometimes be purchased in a regular currency such as euros or dollars, but in general investors pay with already established cryptos. When you can find a handful of investors who believe in the new project, they will pay you in ETH, and get the new tokens in return. The investors can use the coins in the new app, or simply sell them at a profit at a later stage. ICOs are internationally purchasable, since anyone with internet access and a digital wallet can buy the tokens.

So in general, ICOs are a profitable way for (new) companies to finance the development of their products or services. Via the use of blockchain technology, the provider issues new digital tokens during an ICO. All crypto tokens differ greatly in design and function, and you are fairly free in the development stage. Often tokens constitute a right to the service to be developed, or a (future) reward, and sometimes no value whatsoever. It is also possible that you entitle investors to a share in a project, or a predetermined part of the expected returns. ICOs are structured in a way that they often fall outside the scope of financial supervision, as we already explained above. As a result, the general protection that Dutch financial supervisory legislation offers to investors is absent. With a few exceptions, the AFM cannot therefore supervise ICOs.[1]

More about blockchain technology

If you are fairly new to crypto, it’s advisable that you inform yourself about the technology that backs it: blockchain technology. Blockchain technology is based on the principle of a decentralized system and openness. A blockchain essentially consists of a network of computers, but these computers are not the exclusive property of solely one participant. Via algorithms, all participants in the network are able to decide which information is valid and which is not. This involves factors  such as transactions that are carried out on the network. Then, this information is stored in ‘blocks’, that together form a chain. Hence, the term blockchain. This means, that all participants in the network have access to the same information in the blockchain, simultaneously and at any time. This is made possible in the form of a shared ledger, that any participant can access.

One of the main benefits of blockchain technology is, that it’s completely impossible for any participating individual to manipulate information. Due to the fact that everyone has access to the same information, the information doesn’t become tainted with redundant or fraudulent data. There are many possible variants of a blockchain. At this moment, bitcoin is the most famous application. Many blockchains have an open character, so this means almost anyone can participate. If you have access to the internet, then you can use such a blockchain, for example, to carry out transactions. All participants in the network then verify these transactions, and record the valid transactions in the blockchain. Information about all actions is stored securely and truthfully.

What is the difference between cryptocurrency and an ICO?

People often ask what the difference between an ICO and crypto is. Currently, there is not really a very clear distinction between tokens in an ICO and regular cryptos, since these terms are mostly used interchangeably. Nonetheless, they are definitely not completely the same. Once important difference is the fact, that anyone can create and spend tokens, if they have a bit of programming knowledge. In crypto, though, this is carried out by an algorithm that has a predetermined set of rules. The regulation of the creation of units, which is called mining, is possible due to certain cryptographic techniques. These also play a part when transactions on the decentralized blockchain network need to be verified.

This means, that the issuance of the units involved is determined in advance. This relates to, for example, how many and in which way the tokens will be issued. If you take Bitcoin as an example, you see that miners receive tokens as a form of reward for finding blocks in the chain. Then, the transactions are recorded as Bitcoins in these blocks. After that, the block will be added to the already existing blockchain. This actually requires a very high amount of computer power. On the other hand, digital tokens can be seen as units that can be created on an already existing blockchain. If you are the designer of such a token, you basically can decide a lot of details for yourself. This entails the amount of tokens you would like to create, how to issue these, and other functionalities you want to assign to the token. The Ethereum blockchain is actually specifically designed for this purpose.

ICOs create new and exciting opportunities

One of the main benefits of an ICO is the fact, that it makes it very easy to raise a substantial amount of funds very quickly – if it succeeds, of course. This enables you to start up new crypto projects, plus you are obviously also rewarded for your work in the process. A reason that tokens are so popular, is due to partial ownership. This also plays a role in the issuance of shares, since owning a token or share might bring in money at some point. As long as you still own the token, there is a possibility of making a large profit. Therefore, it is fairly easy to encourage people to join your network. Furthermore, ICOs open up many possibilities for investors who don’t have that much to invest. Not everyone is a millionaire: most people have to live with regular wages. But even with a regular salary, you can easily invest in tokens. It sounds like a dream, which it can be, but it is very important that you also inform yourself about all the risks involved with starting an ICO. We will outline these below.

Are there any risks involved with launching or investing in ICOs?

If you consider launching or investing in an ICO, you should be acquainted with the various troublesome scenarios that currently flood the market. For example, there are many cases known in which people bought tokens with money they actually needed, and thus, this got them into trouble. The same applies to people who borrow money to buy tokens, in some cases these amounts are staggeringly high. Why do people do this? Because they feel they might miss a great opportunity, since they believe that the price of the token will yield as much profit as Bitcoin did. This anticipation of extremely high profits can blind people to the risks associated with an ICO, whether you are the one launching it or investing. You genuinely risk losing your entire investment. Please keep in mind that the crypto market is still speculative in nature. Therefore, you should never invest money that you cannot miss at the moment, or might need for later. There are other factors that might negatively impact your investment, which are explained in detail below.

Be sure your knowledge about the market and topic is sufficient

One of the main ingredients of a successful investment, is prior knowledge about its specifics. If you don’t know what you are investing in, you are basically giving others the power to scam you. Especially in a volatile and fast-paced market such as crypto, it is essential to educate yourself about the coin you want to invest in. In the past, due to this reason, the possibility of investing in a start-up was generally reserved for professionals with plenty of knowledge and expertise. Nowadays, it is possible to privately invest due to blockchain technology. Anyone with a bit of money, an internet connection and a wallet can invest in tokens. A lot of private investors get carried away with exaggerated promises of almost impossibly high returns on investment, and thus, underestimate their own experience and knowledge. Without this expertise and in-depth knowledge, actually meaningful revenue models are almost not distinguishable from projects with no added value. Make sure you know what you are doing and spend time reading information, before you spend money.

Do not overestimate possible returns beforehand

Crypto has mesmerized millions of people, especially after Bitcoin skyrocketed during recent years. This has led many investors to believe, that their investment will also yield enormous returns. Please be cautious, though, since crypto is still in its infancy. The promise of fancy new revenue models always attracts plenty of investors, but only experienced investors should actually put money into something so new and volatile. If you want to invest, it would be wise to seek assistance from someone who knows the ropes. New technology always creates new revenue models, but can also lead to expectations that are overoptimistic. There is a big chance, that your personal expectations will not be met. Especially ICOs are in very early stages of development, and thus, it is highly unclear if any plans or expectations can be fulfilled in reality. Blockchain technology in itself is very new and still in development. Errors in the code can pose a threat, as well as theft of your tokens. Even a great idea can tumble sometimes, so make sure you can miss the money if you decide to go for it. Because there is also a chance, that the value of the token will be much lower than your initial investment.

A general lack of transparency

Another issue with ICO’s is the fact, that certain providers aren’t always transparent regarding the information they provide to potential investors. Often, basic information is hard to find, and important parts are even left out completely. This can include information such as the rights that the holders of the tokens are granted, the risks involved with a specific project, and the way the financing of the project is spent. If you don’t have all the essential information, it’s almost impossible to be able to value an ICO correctly. Furthermore, it is also very difficult to distinguish good projects from fraudulent ones. Next to that, a lack of transparency can also lead to inefficient pricing of tokens. Always try to provide as much information you are able to, when you launch an ICO. If you are an investor, make sure you have all information you need. If this information is not provided, you should try to contact the provider and ask for extra information before you invest.

ICOs attract scammers

One of the largest problems with ICOs is the fact that it attracts scammers internationally. Blockchain technology allows for cross-border investments, which means that everyone can participate worldwide. But there is also the topic of anonymity surrounding crypto. Even though it’s generally a positive feature of crypto, it inevitably also attracts criminals and fraudsters. Due to it’s worldwide reach, some have taken advantage of this fact in a very negative way, by creating very advanced pyramid schemes. These are sometimes hard to recognize for people who don’t know much about ICOs and crypto, so there are a lot of very easy targets for fraudsters to hit. The hype surrounding crypto makes it easier for them to make investors believe, that they might miss a fantastic opportunity by not investing. There are also fraudulent ICOs, aimed at misleading investors to get rich themselves. The intentions of providers are generally good, but keep in mind that some others might outright scam you too. Some of these scams are known as exit-scams, where the provider and developers suddenly disappear after they have sold their own coins. Be mindful and watchful when you invest.

Massive price fluctuations

Last but not least: keep in mind that all tokens are subject to enormous price fluctuations. Most people who invest in ICOs generally step in with a speculative purpose. They essentially invest, because they expect they will be able to sell their tokens quickly for a higher price. This speculative nature surrounding ICOs leads to extremely volatile prices of traded tokens, on various platforms. Since these platforms do not fall under the scope of financial supervision, this is something that cannot be regulated. Sometimes a token can fluctuate up to 100% per day. This can be exhilarating when the price goes up, but at the same time disastrous when it goes down. On top of that, the trading of a lot of tokens is limited. This makes it possible for fraudsters to manipulate the process, if it suits them.

Is it wise to even consider launching an ICO with so many risks involved?

The list of possibly negative scenarios within this business is quite severe. It might put a lot of people interested in ICOs off, which is not exactly a bad thing. As we already stated above, it is of the utmost importance that you inform yourself about the entire market. If you don’t, you can easily fall into the hands of experienced scammers. We generally advise investors and start-ups to read information and acquire substantial knowledge, before taking action. You can also seek aid from more experienced parties, such as companies and individuals specialized within the market. Intercompany Solutions can definitely assist you, in order to make sure that you don’t make any mistakes. This can have very serious consequences, ranging from losing all your money to going to jail.

When does an ICO fall under the Dutch Financial Supervision Act (Wft)?

As previously discussed, a large portion of the worldwide crypto market falls outside the scope of financial supervision institutions such as the Dutch Wft. Most tokens can be structured, for instance, in the form of a (prepaid) entitlement to a future service of the issuer. In all these cases, they fall outside the scope of the Wft. One exception to this, is if the token, for instance, represents a share in the project or if the token gives entitlement to part of the (future) returns from the project. In these circumstances, the token may qualify as a security or a unit in a collective investment scheme, as defined in the Wft. The Dutch Authority on Financial Markets (AFM) assesses each case separately to determine whether the Wft applies, and will also closely supervise whether the Wft might apply. Potential issuers need to properly analyze the extent of any overlap with financial regulation and supervision, before launching their ICO. It would be prudent to investigate properly what the definitions are, that the AFM uses to determine the security status. It is a possibility to approach the AFM with a clear prospectus (offering), and get a ruling in advance. This way you limit risks on your end.[2]

The qualification of a security (effect)

In each separate case, it has to be determined whether a token qualifies as a security as defined in Section 1:1 Wft. This is done on the basis of the token’s legal and other features. In line with the definition in this section, it is important to establish the extent to which the token qualifies as a negotiable instrument that is equivalent to a negotiable share or other negotiable instrument or an instrument equivalent to a right. A token may also qualify as a security, if it represents a negotiable bond or other negotiable debt instrument. A token additionally qualifies as a security, if a share or bond can be acquired through the exercise of the rights attached to a token or through conversion of these rights. Lastly, a token meets the definition of a security if it is a negotiable security that can be settled in cash, where the amount to be settled depends on an index or other measure.

For a token to qualify as a security equivalent to a share, one important consideration is whether the token holders participate in the company’s capital and receive any form of payment for this. This payment must correspond to the return achieved with the invested capital. Any controlling rights are not decisive in this respect. The AFM moreover uses a wide and economic approach for the term negotiability. Further information on this is available in the Negotiability Policy Rule of the AFM. If the tokens qualify as a security, a prospectus approved by the AFM is compulsory – to the extent that no exception or exemption applies. Further information is available on the AFM website. In any case, investment firms facilitating trading in such securities must observe the requirements with respect to the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.[3]

Qualification of a unit of participation in a collective investment scheme

An ICO is subject to financial supervision, if it concerns the management and offering of units in a collective investment scheme. This is the case, if an issuer of an ICO raises capital from investors in order to invest this capital in accordance with a certain investment policy in the interests of those investors. The funds raised have to be used for the purpose of collective investment, so that the participants will share in the proceeds of the investment. An increase in net asset value also qualifies as the proceeds of an investment. In this connection, amongst other things, the AFM applies the guidelines published by ESMA on key concepts of the Alternative Investment Fund Managers Directive. Under Section 2:65 Wft, a license from the AFM is required for the offering of units in a collective investment scheme, unless the issuer is eligible for the registration regime. Further information is available on the AFM website.[4]

Trading of tokens falling under the Wft

So what happens to certain platforms, when tokens are traded that fall under the Wft? We discussed before, that most platforms don’t fall under any financial supervision. Nonetheless, when platforms facilitate the trading of tokens that fall under the Wft, these specific platforms will also require a license from the AFM. This is necessary for the provision of investment services, pursuant to Section 2:96 Wft. If you want further information about this topic, then you can find it on the AFM website. Potential issuers considering an ICO, and wishing to issue it subject to financial supervision, may contact the AFM for any questions. The Intercompany Solutions team can also help you with any questions you might have regarding this topic.

What to think about when you want to launch your own ICO?

If you have read all the information and still want to launch an ICO, then we can definitely assist you with your plans. It is smart to research other providers. This is undoubtedly a requirement for the coin offering. If you really want to start, it’s essential to make a list of everything you need to do beforehand. Especially for ICOs you will have to look into various aspects. The following questions can help you sort out the most important information:

Once you have accumulated all this information, it will be much more clear to you, as well as your investors, what it is you are trying to accomplish. When you are ready, you can contact our team to help you further with your ICO.

Intercompany Solutions

Intercompany Solutions has assisted in the establishment of hundreds of different companies in the Netherlands, ranging from small businesses to large multinationals. Currently, Intercompany Solutions is also assisting several other crypto firms. One of our clients is starting an initial game offering, whom we are assisting with all the legal paperwork and regulations. The initial game offering is quite similar to an ICO as an idea, however the products that are sold vary from tokens. We have also extensively researched the legal and tax status of cryptocurrency in the Netherlands, so we have quite some information readily available. If you want to launch an ICO, please make sure you can provide us with all the information we need, for a smooth process. When we receive the relevant information, we can discuss your case with our Authority of Financial Markets specialized lawyer. We can always schedule a phone call and give you a quick estimation of the scope of the requirements, the best course of actions and timeline. Feel free to contact us anytime.

Sources:

https://www.afm.nl/professionals/onderwerpen/ico

https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp

[1] https://www.afm.nl/professionals/onderwerpen/ico

[2] https://www.afm.nl/professionals/onderwerpen/ico

[3]funds for your business. It can also allow you to create a new coin, service or app. https://www.afm.nl/professionals/onderwerpen/ico

[4] https://www.afm.nl/professionals/onderwerpen/ico

Ever wanted to operate as an independent consultant? In the Netherlands, you can benefit from many possibilities to achieve this dream. Starting a consultancy business involves a lot of thinking on your part though, before you actually establish the business. So where do you start? Whether you are an independent communication consultant, a legal consultant or an ICT consultant, this article will help you on your way to starting your own business. Do colleagues and friends often ask you for advice? Then you have probably already  thought about setting up a consultancy firm. We will outline some of the most important factors you should consider, in order for your business to achieve potential success. We will also provide you plenty of examples and extra details to think about.

Why would you start a consultancy business?

Some people have worked as a consultant for a larger firm, and decide they want to jumpstart their career by opening their own business. In other cases, maybe the profession of consultant simply appeals. The Dutch consultancy market is a very vibrant and demanding one. During the past decade it has grown exponentially. One of the main reasons for this development is the improved flexibility of the Dutch labour force. Not only do people work more from home, but many previously employed consultants started their own smaller businesses. This lead to an increase in the amount of Dutch freelancers.

The fact that these smaller firms now exist, has put some serious pressure on some very well known larger firms. A large firm has a lot of expertise and experience to offer, but due to the amount of employees, the firm can sometimes put a consultant on a project who doesn’t fit there at all. This has led to many clients preferring somewhat smaller consultancy firms. A smaller firm offers a more personal approach, often with a very clearly defined niche. Next to that, the rates of a smaller consultancy form are often lower than the rates the large companies offer. This makes consultants also affordable for smaller businesses.

Which basic knowledge do you need to start as an independent consultant?

If you want to start a consultancy business, experience and knowledge about this field of work is essential. No client will hire you, if you cannot prove your worth. In general, consultants are very proficient at conducting research and analyzing the results they have obtained from the research. Consultants collect a lot of (related) data, which will help them come up with workable solutions for the client they work for. A consultant is able to identify behavioral patterns, production bottlenecks, market trends and of course customer preferences. With those and other factors, they can create standard business processes that can help the organization achieve its goals and objectives.

As a consultant, your core responsibility is to improve your client's operations or business activities, by making changes based on your analysis. You must be able to implement the changes for your client within an agreed time. Companies are willing to pay very high rates, as long as they get the preferred results. A very specific trait of the consulting industry, is that there is a readily available market for such services, simply because clients naturally want to improve their performance on an annual basis. Companies always strive for evolution and more success. So if you are well positioned, knowledgeable and know how to deliver results, you can achieve very good results with a Dutch consultancy company.

Consultants are good in one thing: problem-solving

If you want to know whether you can keep your head above water as a consultant, you should look into your personal problem-solving skills. As a consultant, you are constantly solving problems for your clients. When a client offers you information about an internal issue, you create a business case out of this. It is very important to know which problem you are actually solving. One way to look at the bottleneck from all angles, is to interview many employees who are involved in the same business process. The business case generally consists of three steps: determination of the problem, finding out why it exists at all, and offering a solution to fix the situation.

Determining the problem

There are many possible business cases, since every company has its own personal problems. One issue that very often comes up, are outdated business processes. Since technology evolves very rapidly, businesses need to update and refresh their business processes on a structural basis. In such cases, you should find out exactly which processes need updating and how you will achieve this.

Figuring out the reasons for the problem’s existence

In the case of business processes, the fact that these have not been updated is mainly the issue. But with other problems, you should dig deep and find out how the internal issue originated in the first place. Maybe some employees are behind on work? Or maybe management hasn’t provided enough information to its employees? Maybe the employees need training? Every problem has its own solution, and it’s your job as a consultant to expose the core of the difficulties.

Offering a solution to the problem

Once you know the problem and the reasons for its existence, you need to come up with solutions to solve it. Obviously, that is what your client is paying you for. In the case of the previously mentioned business processes, the best solution is to implement new and updated processes. Make sure that you are good at solving problems, before you start a consultancy business. Otherwise, you should not expect to earn a lot of money.

Choosing the specialization or niche of your business

If you want to open a  small or medium-sized consulting company, then we usually recommend clients to choose a well-defined niche. In the consultancy world, a niche usually means specializing in a certain type of client and/or subject. To determine your niche, you should look at what skills and knowledge you have that could benefit clients in the Netherlands. Of course, you need to have the necessary expertise to be able to give advice at all. Do you know a lot about a certain subject? Then you can start a consultancy business within this field it. The most chosen niches in the consultancy world are:

Marketing consultancy

A lot of start-ups are marketing consultants. This is also one of the easiest niches to enter, since you can rely much more on your expertise, than your education. Marketing is something that can be very easily learned online, without the need of formal education. You will need to have a knack for marketing subjects, and it’s imperative that you build a solid reputation during the first years of your business. Marketing results can very easily be measured via a wide variety of marketing tools and apps. If you are also a graphic designer, then this is an added bonus. If not, take into account that many clients will ask you to design new company logo’s and similar things. You will need to outsource this, if you don’t know how to create material. Keep in mind that the marketing consultancy industry in the Netherlands is extremely fierce. You will have to be able to stand your ground, in order to succeed.

Communication consultancy

The communication consultancy market in Holland is also booming. Clients are always looking for new ways to deliver the same message. Communication consultancy also involves writing, so if you are a good writer and have a talent for solving marketing issues too, this might provide a good start for your business. It can help to join the Dutch Association of Recognized Advertising Consultancies (VEA). This is the association of communication consultancies in the Netherlands. There is also a lot of competition in the communication consultancy industry, so you will need to stand out and offer something that others don’t.

Management & strategy consultancy

The management and strategy industry is mostly aimed at larger companies, in which there is also high-level decision-making involved. In essence, if you are a management consultant, you will help your clients with managerial problems. This means you will also act as a company executive in some cases. Large corporations often hire external parties to solve executive issues, due to the fact that external parties can look at problems independently. It is imperative that you have experience with management consultancy before you start a business, because you will be dealing with high-level problems that require a solid amount of experience and knowledge.

Operations consultancy

The operations consultancy industry is specifically aimed at the optimization of operational and business processes. A good example is advising on the supply chain of a logistical company. But as an operations consultant, you can have clients from all industries. Often, governmental organizations are looking for operations consultants, to streamline the vast amount of processes within the organization. This niche requires you to be adept in logical thinking, and seeing where processes are failing.

HR consultancy

Human resources is mainly concerned with the personnel policy and the organizational policy of the client. In Dutch, HR consultants are also referred to as P&O consultants. This means you will help out clients with hiring employees, training employees and all kinds of administrative matters. You will generally need to show education within this field, if you want to start a successful company.

I(C)T consultancy

ICT is currently one of the consultancy industries with the highest growth. This sector includes information and communication, and the space where these two overlap. In general, as an IT consultant you advise companies on the solutions they want to achieve in the field of digital work processes and services. This can be system development and system integration, but also the introduction of entirely new systems. Proficiency with information and technology is a must to be able to be an IT consultant.

Legal consultancy

Last, but certainly not least, there is the option of becoming a legal consultant. In the Netherlands you do not need a law degree, to name yourself a legal consultant, since the title is not protected. It is essential that you have experience with and knowledge of the Dutch legal system, otherwise you will not be able to help any single client. You can also start a legal consultancy business based on the legal framework of your home country, and help expats and people who might need your specific expertise in the Netherlands.

The necessity of market research

So you want to start a consultancy company, and you know which niche is best for you? Then it’s time you do some market research. This involves creating a target audience that you will research first. You can do this by looking up demographics about your niche on the internet, and finding out which area might have potential clients. You can also schedule interviews with people from your target audience, in which you talk about your plans and their wishes. It is also possible to start a conversation with people from your target group in focus groups, or to send out online questionnaires via social media. The most important thing to find out, it whether there are clients in the Netherlands who are willing to pay for your services.

How do you acquire new clients for your business?

The Netherlands houses a very wide array of consultancy businesses. The best thing you can achieve, is to stand out to your specific type of client. A potential client will be looking for a certain type of expertise, and it’s your job to know when someone is looking. The way you present yourself is also just as significant, since first impressions are very important in the consultancy industry. You should pay a lot of attention to the overall look and feel of your website and marketing material, but also the clothes you wear when you have a meeting with a potential client. Finding clients can be tedious sometimes, but the Netherlands offers an enormous amount of networking events for all industries. You can also join a certain type of business club, or look at online platforms aimed at freelancers. Once your business is up and running, and your clients are satisfied, you are sure to get new projects via referrals.

Explore the competition in your region or field

Once you know what your market is waiting for, it's important to investigate what the competition is doing. The best things to do is to look up at least ten competitors within your region, including large as well as smaller firms. We also advise to map out the ten best firms within your specific niche. Examine the strengths and weaknesses of each competitor, so you can quickly see where your opportunities lie. You can also request the annual accounts and extracts of your main competitors from the Dutch Chamber of Commerce. Also research what prices they charge, since this will help you in determining a realistic rate.

Choosing a legal Dutch entity for your business

Every entrepreneur must choose a Dutch legal entity, to be able to register in the trade register of the Chamber of Commerce. Which form is most suitable for your company, depends on factors such as your expected turnover and number of board members. The Netherlands offers the following legal entities:

We strongly suggest establishing a Dutch BV, whether it’s a new firm or a subsidiary. This legal entity offers limited liability, plus it is also seen as a professional choice to select a Dutch private limited company. If you would like some advice on this matter, feel free to contact the team of Intercompany Solutions anytime.

Creating a solid business plan

If you have a clear idea of what you are going to do, you can create a stable basis for your future consultancy company. That is why it is highly advisable to draw up a business plan. Your business plan is essentially a tool that will keep you on the right track. You can save your plan and update it yearly, when you look at your business results. A business plan makes it very clear what you want your business to be, and how you will achieve this exactly. There are many templates on the internet regarding a business plan, you can browse around a bit to find a template that resonates with you. Keep in mind that you can also use the business plan, to convince potential investors.

A business plan should always answer the following questions:

Many starting entrepreneurs find writing a business plan quite difficult. Intercompany Solutions can assist you with this process, if you feel you can use some help.

Contracts and legal documents you might need for your consultancy businesses

Once your business is established, you will need to prepare some standard legal documents for projects. One of the most important documents is the assignment agreement between you and potential clients, which is also called a freelance contract. This contract arranges the specific terms under which you will work for your client(s). This will inevitably vary per client, as every consultancy project will be subject to different terms and conditions. There is no legal requirement that obliges you to create an assignment agreement, we strongly urge you to do this, though. Because an agreement makes it easier to resolve any issues that might come up in the future. You can make a draft for your first client, which you can then use for any consecutive client as well.

Next to the assignment agreement, we also advise you set up general terms and conditions for the services you offer. These terms and conditions apply to all business activities you get involved in, as well as all clients. You can describe various standard conditions, such as payment and delivery conditions. Another document you should have at the ready is a non-disclosure agreement (NDA). A lot of the work you will do might entail sensitive information. Signing an NDA will make the relationship between you and your client feel more safe and trustworthy.

If you choose to establish a Dutch BV, you will also have to sign an employment contract between yourself and your company. This is due to the fact, that you are employed by your own company as a managing director. You can also choose to set up an account agreement between your BV and yourself. This enables you to establish a loan between you and your company, without having to set up a loan agreement every time you do this. The last mentionable document concerns a shareholders’ agreement, in the case that your Dutch BV will have multiple shareholders. This document describes the exact relationship between the shareholders, to avoid any misunderstandings in the future.

The registration procedure

Do you feel like a Dutch consultancy business might be something for you? And have you read all the information above, still feeling like this could be a possibility for you? Then you should inform yourself about the Dutch company registration procedure. You can find more information about it here. This will enable you to prepare some necessary documents, that you will need to make the registration final. Intercompany Solutions can assist you during every step along the way. Once we receive all documents, we will validate these and send them back to you to sign. After we receive the signed documents back, we start the official registration procedure. We can also help you with extra tasks, such as setting up a Dutch bank account. The entire procedure can be realized within just a few business days. Feel free to contact us anytime for more information, or a clear quote for your future business.

During the past decade, we have seen a steady rise of companies establishing a subsidiary in the Netherlands. There are multiple reasons to do this, for example to be able to access the European Single Market. Currently, this is especially profitable for company owners in the United Kingdom, since the UK has been mostly cut off from the European Union after Brexit. Participation in the European Single Market offers a lot of benefits, particularly if you own a company with a logistical component. The EU houses a staggering amount of large (multinational) distribution centers, and not without reason. This enables these companies to trade goods and services without

The European Union currently has 27 Member States that profit from the Single Market. This Single Market was established, in order to guarantee the free movement of capital, goods, people and services within all participating Member States. This is also known as the ‘four freedoms’. If you want to purchase goods within the EU and sell these in a country that isn’t a Member State, opening a Dutch subsidiary might help you enormously, both fiscally and in terms of time-efficiency. The same goes for a reversed situation: when you would like to sell goods produced in the country your company is based in on the European Single Market. We will outline how you can streamline your flow of goods with a Dutch subsidiary in this article, and explain the benefits of establishing a company in the Netherlands.

What exactly is the ‘flow of goods’?

The flow of goods is essentially the flow of your available means of production, and the products you offer, within your company. This flow of goods is necessary to transport raw materials, semifinished or finished products from point A to point B. Due to the fact that all means of transportation cost a company time as well as money, an efficient flow of goods is indispensable for any company dealing with distribution activities. In general, the items that are delivered to a store usually do not come directly from the manufacturer, but from a wholesaler or a distribution center.

At every single store, most goods are not directly delivered from the manufacturer, but from a distribution center. A distribution center (DC) is basically a central warehouse. In a distribution center all orders from stores are collected and then shipped. A big advantage of this way of doing business, is that the store only has to communicate with the head office or the DC about deliveries. Within logistics and distribution, people often talk about an internal flow of goods that often follows a fixed pattern:

Incoming goods

Outgoing goods

The above list is almost always the basis, on top of which are often the movements to supplement the pick locations (for example, rack space for pallets of which only a few pieces are picked at a time). In order to run a tight business, it is very important to keep your warehouse in order. Next to the physical shipping of goods, other administrative tasks are involved when you supply goods to customers overseas. Especially if you live in a country outside the EU zone, and you want to do business within the EU, because this means you will need to create extra customs documents.

If you want to import and/or exports goods, you need to fill out various customs documents and official paperwork. Otherwise, you risk your goods being kept, or claimed, at the border. Within the EU, this problem does not exist due to the European Single Market. But if you own a company outside the EU, the paperwork can become excessive and time-consuming. Hence; if you establish a Dutch subsidiary, you don’t have to deal with the rather large amount of official paperwork anymore.

How to buy or sell goods using a Dutch BV?

If you want to establish a logistical trading company, or if you want to expand your foreign business to the Netherlands, it is necessary for you to create solid connections with sellers and buyers within your market. Especially if you own a webshop and you rely on punctual delivery times. If you already own a business, chances are you have already made such connections. The logistics market is a very dynamic one, with many changes happening in short bursts of time. In order to be able to deliver your goods on time, it is important to set up tight delivery schedules.

The profitable part of owning a Dutch subsidiary, like we mentioned before, is the fact that you get access to the European Single Market. This means you can freely trade your goods with the other 26 Member State as well as the Netherlands, which can help you save a substantial amount of money on customs and shipping costs. For example; if you own a clothing company and you want to enter the Single Market, all you need is a subsidiary. Via this subsidiary, you can ship goods to and from your home based company, without the extra hassle of international shipping. This is due to the fact, that you are transferring goods internally, meaning within your own company.

Which entities are involved with the flow of goods?

When you own an international logistics company, you already know that you have to deal with many different partners and organizations on a daily basis. This means that you best choose your partners wisely, like we mentioned before. But also consider the fact that preparing and creating customs documents requires the proper time and expertise. In most cases, you will be dealing with partners such as wholesalers and different kinds of sellers, as well as a wide array of buyers, of course. Next to that, there will be external parties involved, such as the Tax Authorities of the country your business is situated in.

If you decide to establish a subsidiary in the Netherlands, keep in mind that you will have to adhere to the so-called Dutch substance requirements. These have been put in place, in order to avoid the unintended use of (double) tax treaties by companies established in the Netherlands. The Dutch Tax Authorities monitor such things, so always be concise with your administration and business activities. Next to a country’s Tax Authorities, you will also deal with other organizations such as customs and the Chamber of Commerce. If you want to run a solid business, make sure your administration is always up-to-date.

Which business activities will take places in which country?

Once you decide to establish a Dutch subsidiary, you will have to make a business plan that covers every change you will have to make regarding your current regular business activities. For example; you might have to move your main distribution center, or set up an extra distribution center in the country you establish a subsidiary in. You will also need to figure out where you plan to take care of your administration, since this fact is very important to figure out where the substance of your business is situated. This also includes where you will center your business in general, and where the ‘real’ headquarters of your business will be.

In general, you will need to divide all business activities and see which country would suit which business activity best. If you have a lot of European customers you structurally ship goods to, it would probably be best if you base your (main) distribution center in an EU Member State. You can still do your administration from where you live, since it is not required in the Netherlands that you do this in the country itself. You are also not obligated to live in the Netherlands, which is why it is fairly easy to set up a subsidiary here. If you would like more information about the benefits a Dutch subsidiary can offer your company, feel free to contact us for personal advice.

How can you establish a subsidiary in the Netherlands?

The process of obtaining a Dutch business is fairly straightforward, but it does involve several steps that need to be followed through very precisely. We have a very broad guide regarding the formation of a company in the Netherlands, where you can look up all the information you need on the subject. The procedure itself consists of three steps or phases, which can generally be carried out in 3 to 5 business days. The amount of time the procedure will take greatly depends on the amount and quality of information you can provide, so make sure to acquire all the necessary documents beforehand. Most of the time is spent verifying the documents you provide, so it is beneficial if everything is correct and concise.

For the formation of a subsidiary, which is a Dutch BV (private limited company) in most cases, we follow the next three steps.

Step 1 – Identification

The first step consists of providing us with your identity information, as well as the identity of possible extra shareholders. You will need to send us copies of the applicable passports, next to a completely filled out form regarding the formation of your future Dutch business. We also ask you to send us your preferred company name, since this name will need to be verified in advance to ensure availability. We strongly suggest you don’t start creating a logo, before you know whether you can register this company name.

Step 2 – Signing of various documents

Once you send us the necessary information, we will proceed by preparing the initial documentation for the formation of the business. Once this is done, the shareholders will need to visit the Dutch notary public to sign the formation documents. Alternatively, it is possible for us to prepare the formation documents to be signed in your home country if you are unable to visit here in person. You can then send the original signed documents to our corporate address in Rotterdam. We will tell you exactly what you will need to do.

Step 3 – the registration

When all documents are verified and signed and in our possession, then we can start the actual registration process. This involves filing your company with the Dutch Chamber of Commerce. After this is finished, you will receive your registration number. The Chamber of Commerce will automatically forward your company information to the Dutch Tax Authorities, who will subsequently provide you with a VAT-number. We can also assist with several other necessities, such as opening a Dutch bank account. We also have solutions to apply to certain Dutch banks remotely.

What can Intercompany Solutions do for your company?

If you are interested in expanding your logistics business, the Netherlands offers very exciting opportunities. With one of the best infrastructures in the world, you obtain access to a huge market of potential. Next to that, the IT infrastructure is considered one of the most advanced, with very fast internet speeds. Holland houses a very colorful and wide array of foreign entrepreneurs; from small business owners to large multinationals who have set up subsidiaries or even headquarters here. If you are an ambitious professional, your business is sure to thrive here, provided you put in the necessary work.

If you own an international webshop, you will also find plenty of opportunities in the Netherlands. This rather small country has been world-famous for its international trading capacity and this still shows. If you would like to receive personal advice regarding your company and the possibilities that are open to you, please feel free to contact Intercompany Solutions at any time. We will gladly assist you with any questions you might have, or offer you a clear quote.

Extra sources:

https://business.gov.nl/starting-your-business/choosing-a-business-structure/private-limited-company-in-the-netherlands/

https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/vat/vat_in_the_netherlands/vat_relating_to_purchase_and_sale_of_goods/purchasing_goods_in_the_netherlands

A lot of the entrepreneurs  we do business with are starting an entirely new company, often from abroad. But in some cases you might already own a company, which you would like to move to a more stable and economically thriving location. Is this possible? And, more importantly; is it possible to move your company to the Netherlands in particular? According to current EU regulations, as well as Dutch national law, this is entirely possible. And we would like to help your with this, if you need assistance. In this article we will outline exactly how you can achieve this, which information you will definitely need and how Intercompany Solutions can assist you during the process, if necessary.

What does it mean to move your entire company to a new country and/or continent?

Often entrepreneurs start a business locally, to find out during a later stage that their direct environment doesn’t provide the best basis for their specific product, service or idea. Next to that, some countries on this planet simply offer more entrepreneurial possibilities than other(s). In such cases, it might be desirable to consider moving your company abroad. For example, if you would like to own a company that deals with resources such as water, it helps if your company is actually situated near water. This is just a crude example, but the fact of the matter is that a lot of companies would benefit from a registration in a foreign country, due to a much larger market potential.

If you want to consider the step of moving your company abroad, this entails some administrative as well as practical decisions and actions. In the long run, it will definitely provide you with enough business opportunities to earn back the investment of moving your company. The choice to decide where your company is situated is entirely yours; in this new day and age, we don’t need to have an office building anymore, nor a permanent residence in a certain country in order to establish a business there. Business is profitable for the entire world, and you as a (potential) business owner should be free to establish yourself in any desired location.

Why would you choose the Netherlands as your company’s home base of operations?

Once you decide to move your company abroad, the very first question you should ask yourself is: where am I going? This is a very valid question, one that deserves the proper time to think about, since you will need to connect your personal business goals with a certain type of inviting national climate. Even though the world is internationalizing at a high rate, all countries still have the benefit of keeping their unique traditions and national customs. This, in the end, is what makes us all unique. Hence, your business can definitely flourish in one of the 193 countries on this planet.

So why is the Netherlands a good decision? One of the main reasons mentioned by both media and reputable business platforms, is the fact that the Netherlands has always been excellent in (international) trade. This tiny country, with currently around 18 million citizens, has achieved a worldwide status as one of the most entrepreneurial countries in the world. The Dutch are famous for their innovative spirit, cross-border cooperation and ability to link multiple interesting yet also contradicting disciplines. If you decide to do business in the Netherlands, you will have plenty of opportunities to elevate your business to your desired status.

Next to the trading history, the Netherlands is also very welcoming towards foreigners and actively stimulates diversity in every way. The Dutch have learned from hundreds of years of travel all over the world, that every single nation has something valuable to offer. This, in turn, provides for a very colorful and lively business climate, with the potential to attract customers from all over the world. You are sure to find a broad clientele for your product or service, provided that it’s good. If you want to know more about the Dutch, you can read some of our blogs about special sectors and characteristics of the Netherlands as a business haven.

Is it legally possible to move your company oversees?

In order to understand how you can move your already existing foreign company, it is crucial to know what the Dutch law says about this. Due to increasing internationalization, there is a larger demand for company relocation. There have been many developments within this area in Europe during recent years. Pursuant to Section 2:18 of the Dutch Civil Code (Burgerlijk Wetboek), a Dutch legal entity can convert into another legal form subject to certain requirements. However, Book 2 of the Dutch Civil Code does not yet contain any rules for the cross-border conversion of companies. There is also no legal regulation at European level at this moment in time. Nonetheless, it is still entirely possible. We will now explain in detail how you can achieve this.

Cross-border conversion of companies

Cross-border conversion means that the legal form and nationality (applicable law) of the company change, but the company continues to exist and retain legal personality. The conversion of a Dutch legal entity into a foreign legal entity is also called an outbound conversion, and the reversed variant (when a foreign company moves to the Netherlands) is named an inbound conversion. The EU/EEA Member States apply different doctrines, when determining the law applicable to a company. Some Member States apply the incorporation doctrine, whilst others apply the real seat doctrine.

The incorporation doctrine means, that a legal entity is always subject to the law of the Member State in which it is incorporated and has its registered office. The Netherlands applies this doctrine; a Dutch legal entity must have its registered office in the Netherlands and must be incorporated in the Netherlands. According to the doctrine of the real seat, a legal entity is subject to the law of the State in which it has its central administration or real seat. As a result of these theories, there may be a lack of clarity as to whether a transfer of seat is possible.

Official EU/EC court rulings explain how cross-border conversion is possible

Questions about this have been put to the Court of Justice of the EC/EU several times during recent years. The EC/EU Court of Justice has issued two important rulings on cross-border conversion of companies. The freedom of establishment as laid down in Articles 49 and 54 of the Treaty on the Functioning of the European Union (TFEU) played a role in this. On December 16, 2008, the Court of Justice of the EC ruled in the Cartesio case (Case C-210/06) that Member States are not in themselves obliged to allow the cross-border transfer of a registered office of a company incorporated under their own law. However, it was noted that the transfer of a registered office must be recognized, if the company can be converted into a local legal form after transfer of its registered office in the new Member State of residence. Provided there are no compelling reasons of public interest to impede this, such as the interests of creditors, minority shareholders, employees or the tax authorities.

Subsequently, on 12 July 2012, the Court of Justice of the EU ruled in the Vale judgment (case C-378/10), that a Member State of the EU/EEA cannot hinder a cross-border inbound conversion. According to the Court, Articles 49 and 54 TFEU mean, that if a Member State has a regulation for internal conversions, this regulation also applies to cross-border situations. A cross-border conversion may therefore not be treated differently from a domestic conversion. Keep in mind that in this case, as with the Cartesio ruling, an exception applies if there are compelling reasons of public interest.

In practice, there may be a need for the possibility of converting a company into a legal entity governed by the law of another country, without it ceasing to exist. Without such a conversion, a company that has transferred its activities to another country may be governed by several legal systems. An example of this is a company incorporated under Dutch law that (completely) transfers its activities to a country that follows the actual seat doctrine. Under this law, the company is governed by the law of the country it is residing in. Seen from a Dutch perspective, however, this company (also) remains governed by Dutch law (incorporation doctrine).

Although the company is in fact no longer active in the Netherlands, Dutch obligations with regard to the preparation and filing of annual accounts, for example, remain in force. If these kinds of company law obligations are overlooked, this can have unpleasant consequences, for example, in the field of directors' liability. Because Dutch law does not provide for cross-border conversion of legal entities, the route of cross-border merger was often chosen in the past. This legal concept is in fact regulated in Dutch law, exclusively for mergers between capital companies established under the law of a member state of the European Union or the European Economic Area.

A new European Union Directive has been adopted

Following these historical rulings, an EU Directive on cross-border conversions, mergers and divisions was adopted by the European Parliament and the Council (Directive (EU) 2019/2121) (Directive). This new Directive, amongst other things, appears to clarify the currently existing rules on cross-border conversions and mergers in the EU. Next to that, it also introduces rules specifically applicable to cross-border conversion and divisions, that are intended for all Member States. A country such as the Netherlands might benefit from this Directive, since we already stated before that the Dutch currently doesn’t have any proper legislation regarding this subject. This would allow for international harmonization, making it much more easy to move your company throughout the EU.

This Directive already went into effect on the 1st of January 2020, and all Member States have until the 31st of January to implement the Directive as national law. However, this is not mandatory, since Members States can choose for themselves whether they implement the Directive. Due to the fact that this is the first time, ever, that there is a legal framework in the European Union for cross-border conversions and divisions, it makes it directly relevant for limited liability companies such as the Dutch BV. This also complements both the Vale and Cartesio rulings, since both have shown that these legal operations were already entirely possible, based on the right of freedom of establishment.

A cross-border conversion is defined in the Directive as "an operation whereby a company, without being dissolved or wound up or going into liquidation, converts the legal form under which it is registered in a departure Member State into a legal form in a destination Member State, as listed in Annex II, and transfers at least its registered office to the destination Member State, while retaining its legal personality."[1] One of the main advantages of this approach, is that the company will remain its legal personality, assets and liabilities in the newly converted company. This Directive is aimed at limited liability companies, but for cross-border conversion of other legal entities such as cooperatives, you can still invoke the freedom of establishment.

The amount of cross-border conversions keeps rising

Based on these rulings, both outbound and inbound conversions within the Member States of the EU/EEA are therefore possible. Dutch notaries are increasingly confronted with requests for cross-border conversion, due to the fact that more people are considering moving their company to a more economically friendly atmosphere. There is no Dutch statutory regulation regarding this, but that does not have to be an obstacle to notarial execution of the conversion. In the absence of harmonized legal regulations, the procedures that must be followed in the inbound and outbound Member State must be carefully examined. These procedures may differ per Member State, which can make the process a bit complicated if you are not backed by a professional. Of course, Intercompany Solutions can assist you through the entire process of cross-border conversion.

What are the steps involved to move the registered office of your company to the Netherlands?

Starting a company in the Netherlands involves a few less steps than moving an entire company to the Netherlands. Nonetheless, it’s very much possible. If you want to move the seat of your company, you need to take into consideration that there are multiple legal as well as administrative actions involved in this process. We will outline all these actions in detail below, providing you with enough information to consider your move abroad. Of course, you can always contact Intercompany Solutions if you feel like you need more in-depth information, we are always happy to assist you in any way we can.

1.     Registration of a branch office and company director(s) in the Netherlands

The first thing you will need to do, is register a branch office in the Netherlands. This entails multiple administrative steps that need to be followed, in order for the process to go smoothly. On our website, you can find plenty of articles that describe the entire procedure, such as this one. If you want to settle your company in the Netherlands, you will need to think about some basic decisions such as the location of your company and the legal entity you prefer. If you already have a limited liability company, you can convert it to a Dutch BV or NV, depending on whether you want your company to be private or public.

We will need information from you, such as valid means of identification, details about your current business and market and the necessary paperwork. We also need to know who the current directors of your company are, and whether all directors want to participate in the new company in the Netherlands. This is necessary in order to register the directors in the Dutch Chamber of Commerce. After we receive this information, we can register your new Dutch company in just a few working days. You will then receive a Dutch Chamber of Commerce number, as well as a VAT number from the Dutch Tax Authorities.

2.     Adjusting the foreign notarial deed of incorporation

Once you have registered a company in the Netherlands, you will need to contact a notary public in your own country, in order to adjust the original notarial deed of your company. This means you will have to change all the information that is relevant to your current local company, into the data that you received when you registered a company in the Netherlands. In essence, you are replacing old information with new information, whilst the substantive information explaining your company in detail remains the same. If you don’t know how to do this, you can always contact us for more information and advice. We can also possibly assist you with finding a good notary in your country of residence, and keep in touch with your notary so the cross-border conversion process can be executed smoothly.

3.     Validating your new company via a Dutch notary

Once you have adjusted the foreign notarial deed, you will need to contact a Dutch notary to validate and set up your company in the Netherlands officially. This will entail communication between the foreign and Dutch notary, so all company specifics are adopted correctly. Once this has been initiated, the branch office you registered will be transformed into the new headquarters of your company. Regularly, branch offices are registered for companies and multinationals that want to have an extra location in a different country. Since you will want to completely move your company, the branch office will be the new location of your main company. Hence the necessary extra steps, in comparison to solely opening a branch office in the Netherlands.

4.     Dissolution of your foreign company

Once you have moved your entire company to the Netherlands, you can basically close down the business in your home country. This means you will have to dissolve the company. Dissolution means you completely disband your foreign company, and it will continue existing in the Netherlands instead. Before you dissolve your company, you should ask yourself some questions:

Overall, dissolving a company generally consists of a few steps, but these can vary a lot per country. If you want to know more about dissolving your company in your native country, we suggest you hire a specialist who will take care of all important matters for you. All assets and liabilities your company has, will then be transferred to your new Dutch company, including shares. If you would like more information on this subject, don’t hesitate to contact us directly.

Intercompany Solutions can help cross borders with your company!

Always wanted to do business oversees? Now is your chance! With ever-increasing internationalization within the business sector, chances are great your company might flourish in a new country. Sometimes, the climate of a certain country can simply suit your business needs better, than your native country. This doesn’t have to be a problem anymore, with the possibility of cross-border conversion. Intercompany Solutions has helped thousands of foreign entrepreneurs to settle their business(es) in Holland with success, ranging from branch offices to headquarters of multinationals. If you have any questions about the entire process, or would simply like to chat about the options for your current business, please do not hesitate to contact us directly. Our experienced team will help you along the way.

[1] https://www.mondaq.com/shareholders/885758/european-directive-on-cross-border-conversions-mergers-and-divisions-has-been-adopted

5 business sectors enabling you to achieve success in the Netherlands

If you are a foreign entrepreneur and you are considering in which country you should set up your business, the Netherlands might just be one of your best bets right now. Even during a global pandemic, the Netherlands have maintained a stable economy with plenty of opportunities business wise. Next to being a stable country, the business climate is extremely open to unique ideas, collaboration proposals and general innovation in every sector imaginable. In this article, we will outline some sectors that are open to foreign investors and entrepreneurs, offering you possibilities for ownership of a Dutch business.

Why choose a certain sector?

If you want to establish a business, you generally have some laid out plans about the sector you want to invest your time in. In some other cases this might be different, for example when you just want to broaden your horizons, but you don’t know exactly how to accomplish that yet. In such situations, it is wise to invest some time in your genuine qualities and experience, and think about what might be the best way to invest those in a company structure. Often, the most successful companies rise up out of a combination of experience, passion and determination. Below we will outline some sectors, that are currently booming in the Netherlands.

E-commerce

One of the most profitable business options nowadays is within the field of e-commerce. This sector has been booming since the very incorporation of the internet, but until a few decades ago has been a playground for only a few lucky ones. Thankfully, the internet started to provide everyone with opportunities for the establishment of an online business and now, in 2021, the number of online business owners is exponentially growing at a stable rate. E-commerce can entail everything: from an online webshop that allows you to offer a variety of products, an online advertisement agency to various artistic professions that can be economized. It is basically a gateway to selling whatever service or product you have to offer. The amount of success highly depends on the quality of your work, as well as your ability to do business with different individuals.

Another option is to become an affiliate, for example with a stable e-commerce business like Bol.com. Bol.com is the Dutch equivalent of Amazon, and as such is very often visited. Bol.com accounts for almost 15% of all online shopping actions performed by Dutch citizens, as you can see here for example. When you become a franchisee, you don’t have to worry about factors such as keeping an inventory, as the franchiser will sort out all these details for you. Online business in the Netherlands is a very active and profitable market, provided you run a solid business and have unique ideas. If you want to know more about Bol.com, you can look at this in-depth article about becoming an official partner.

IT and engineering

Another very interesting sector in the Netherlands is IT, especially when combined with engineering. With robotics as a newly upcoming immense industry, this field will change and possibly enhance our society like never before. If you have ambitions related to this sector, the Netherlands will definitely provide you with a very fertile ground for growth and success. Many technical universities in the Netherlands are internationally renowned, such as in Delft, Eindhoven (the city of Philips) and Breda. If you would like to cross bridges between regular mechanical engineering and Artificial Intelligence, this might be the opportunity of a lifetime.

Next to highly skilled and experienced employees, you can find a vast array of interesting freelancers within these fields. This will make it easy to expand your company in due time, because of the very vast amount of well-educated, multilingual and qualified personnel. IT is a very dynamic business that changes almost constantly, which makes it a good sector for anyone who likes constant change within their field of work. Both sectors are also very profitable, mainly due to this constantly evolution. You can jump into the market at any time, provided you have innovative and sustainable ideas.

Freelance opportunities

If you would like to do business in a country with many self-employed people, the Netherlands is one of the safest bets worldwide. With a very colorful array of different universities, excellently reachable cities and plenty of opportunities to co-work, the Dutch have made a habit out of experiencing all life has to offer. This results in many small business owners, who often provide fantastic services for very reasonable prices. If you want to compete with the Dutch as a freelancer yourself, you best make sure you are up for the challenge.

The small business market is highly competitive in the Netherlands, and in general the most highly skilled and unique freelancers flourish. For larger companies this provides a good business opportunity in terms of flexible employment. Due to the high internet accessibility and nearly perfect infrastructure in the Netherlands, most employees will be able to work from home. This makes it easier to establish flexible contracts, plus you will also not have to pay any wage tax or insurance premiums.

Logistics

The Netherlands profits from a logistically very strategical position. This is due to the port of Rotterdam, and the largest national airport, Schiphol, being only approximately one hour away form each other. Hence, there are many multinational logistics companies settled near these areas, as well as many other businesses that profit from a good infrastructure. If you plan to start a business with a warehouse or suspect to own plenty of stock, the Netherlands (at the very least) offers you excellent transport possibilities, making import and export extremely easy. You also benefit from the European Union and its Single Market, which allows for free transport of goods and services throughout the entire EU, as the Dutch have been a member state since the beginning. Especially for e-commerce businesses, this is a great opportunity to trade swiftly and without too many legally necessary documents.

Life sciences sector

The life sciences sector has been in the spotlight for quite some time, especially since the start of the Covid-19 outbreak. The whole world is watching whilst plural companies try to come up with the best vaccine against it, which has resulted in a greater attention for healthcare in general. If you would like to add your expertise within this field, the Netherlands offers a very competitive and also innovative life sciences sector. The country houses many renowned pharmaceutical companies, which are often backed by research institutions and (local) universities. This offers an ample amount of possibilities in terms of groundbreaking research and solutions for existing problems. Just two days ago, researchers in Rotterdam might have possibly found a cure for arthrosis. The life science sector is all about improving life in any way possible, so if this is your niche, you will have plenty of resources in the Netherlands to accomplish your goal.

Intercompany Solutions can set up your Dutch business in just a few working days

If you would like to know more about the various sectors in the Netherlands, or how you can involve yourself with our country, you can always contact our team directly. With many years of experience assisting foreign investors and entrepreneurs with establishing a business in the Netherlands, we know exactly how to tackle all necessary actions and possible problems. Feel free to send us your questions, and we will get back to you as soon as possible.

What are the benefits of establishing a Dutch holding BV company?

If you are thinking about establishing a multinational in the Netherlands, a holding structure is probably exactly what you need. Starting a business oversees can be a tedious task, especially if you are not well-acquainted with the laws and regulations of a specific country. This also entails choosing a legal entity for your business, which can be tricky if you have no prior knowledge about this subject. The legal entity is basically the ‘form’ your business will have. Some legal entities also have legal personalities, whilst others do not. Such details are important, because it regulates factors such as liability and the amount of taxes you will have to pay.

The Netherlands has a vast array of legal entities available, making it possible to tailor your business form to your personal needs and preferences. The best choice for your business depends on a few factors, but in general the Dutch BV is the one of the most chosen company forms in the Netherlands. This legal entity makes it possible to issue shares, and dissolves personal liability for any debts the company makes. In most cases, a Dutch BV with a holding structure could be the most beneficial option. This is especially true for multinational and/or large organizations, since this structure makes it possible to divide various parts of your business.

Forming a holding business requires a professional approach

If you are interested in setting up a holding structure, we advise you to inform yourself about all Dutch legal entities and decide for yourself, what the best choice might be for you. Intercompany Solutions is also ready to assist you with any questions you might have. We understand that a large corporation would prefer professional advice regarding the best location for their European headquarters, since this combines our professional expertise with logical and timely planning – which saves you both money and time. You can potentially set up a holding structure in just a few business days, provided you have all the necessary information at hand.

What exactly can be defined as a holding structure?

When you establish a business with a holding structure, this comprises a Dutch holding BV and one or multiple entrepreneurial BV’s, which are sometimes also referred to as subsidiaries. The role of the holding BV is administrative in nature, as it involves controlling and monitoring the activities of the underlying BV’s. It also deals with all external stakeholders. The entrepreneurial BV’s are aimed at the daily business activities of the company, i.e. gaining and creating profit and extra sources of value. You can thus separate your assets and keep a broad overview of your entire company and its structure.

Benefits of owning a holding company in the Netherlands

One of the main benefits of a Dutch holding is that this legal entity is very advantageous from a tax point of view. This is only true, of course, if you want to generate profits with your business endeavor. Due to the so-called participation exemption, the profit, on which you have already paid tax in the entrepreneurial BV, is not taxed again in the holding company. As a result, you can easily get your profit from your entrepreneurial BV without paying any tax, via a dividend payment to your holding company. You can then also use this profit in your holding company for reinvestment(s), or to provide a mortgage loan to yourself. If you do not have a holding company, however, you must pay tax via box 2 if you distribute the profit to yourself.

You can also cover your risks when you own a holding structure, because this ensures that you separate your activities from your assets. This can be anything, such as your profits of course, but also your website and trademark rights. By placing these assets in your holding company, you cannot ‘lose’ them if the entrepreneurial BV should go bankrupt. When the bankruptcy is being settled, the insolvency administrator cannot access the assets in the holding company. But when the assets are in the entrepreneurial BV, on the other hand, he can access these assets. The same applies to third parties who have claims on the entrepreneurial BV. If valuable items are housed in the holding company, it is not possible for third parties to claim these.

5 reasons why you should definitely establish a (holding) company in the Netherlands

If you are thinking about setting up an oversees business, there are probably many options you are considering. This might involve the location of your business, the approximate size and details such as whether you want to hire staff. But there are other elements that have an impact on the possible success of your company, such as the general economic climate in the country you wish to establish your business. The Netherlands is consistently ranked high in many top lists concerning countries, that are rated excellent for business opportunities, economic wealth and stability as well as innovation in every sector. The Netherlands also has a very welcoming climate for multinationals and holding companies, which is why some of the world’s biggest names are settled here like Netflix, Tesla, Nike, Discovery, Panasonic and now also the EMA (European Medicine Agency).

One of the main benefits of a Dutch company, is the multitude of interesting tax incentives and the relatively low corporate tax rate. The Netherlands actually has quite a history as a well-known jurisdiction regarding company structures, especially when it comes to asset protection and tax planning. If you are serious about your business and invest time in a correct administration, the Netherlands can offer you many benefits for your international business. The Dutch business climate is highly competitive, and thus, you are expected to actively invest in Dutch expansion and innovation. If you want to benefit from something, it’s always good to offer something else in return. This also makes it nearly impossible to establish an artificial presence in the Netherlands, whilst still expecting to take advantage of all the tax benefits the country has to offer.

  1. The Netherlands provides a gateway to Europe and the entire international market

One of the largest attractions in the Netherlands business wise, is the access to two internationally renowned logistic hubs: Schiphol airport and the port of Rotterdam. One of the main reasons for establishing a holding company at a certain location, is the access to gateways to international trade and markets. If you want your business to succeed in a relatively competitive situation, it’s essential that you have access to a wide plethora of markets in a short amount of time. Around 95% of the most lucrative markets in Europe are reachable within just 24 hours from the Netherlands, and Amsterdam and Rotterdam are only 1 hour apart from each other. Both the port and the airport are directly connected to one of the best rail networks in Europe, which also offers high-speed connections to large cities Such as Paris, London, Frankfurt and Brussels.

Next to that, the Netherlands’ position along the North Sea also offers many possibilities and benefits. The port of Rotterdam was home to no less than 436.8 million tons of cargo in 2020 alone, even during the pandemic. If you would like to read some interesting facts about the port of Rotterdam, you can look at this leaflet. The sea is connected to an extensive river delta in the country itself., including three deepwater ports, which means you can easily transport goods into and out of Europe via this route. The Netherlands also benefits from a world-class infrastructure, backed by the latest technology and continuous innovation.

  1. Access to highly advanced technology

The Netherlands is very well known for its innovative and unique technological solutions, which are also backed by multiple universities that constantly invest in the future of the country, and the whole world. If you want your multinational company to grow quickly, you will need access to high-quality infrastructure, technology and human resources. This especially involves trustable and professional service providers, who can help you source for intellectual property and new technologies. The Netherlands has everything you need!

Furthermore, the Amsterdam Internet Exchange (AMS-IX) is the largest data traffic hub worldwide, which is quite an example. This concerns both the total traffic, as well as the total number of members. The Netherlands is also ranked 7th place in the world for technological readiness on the World Economic Forum list. On average, you can expect one of the fastest internet speeds in the Netherlands when compared to Europe entirely. This above par digital infrastructure is what makes the Netherlands so attractive for foreign multinationals.

  1. The Netherlands houses exceptional and multilingual talent

Due to the small size of the Netherlands, you can find an extremely high concentration of expertise, knowledge and skills within a very compact area. In contrast to many bigger countries, where resources are further apart and scattered. The Netherlands also houses renowned research institutes, as well as very interesting partnerships between the private and the public sector. This interdisciplinary approach involves universities and knowledge centers, the entire business industry as well as the Dutch government. The Netherlands also has a very old tradition of involving foreign investors and entrepreneurs, in order to advance and accelerate growth in nearly all imaginable sectors. These include huge sectors such as IT, life sciences, high-tech systems, agri-food, the chemical sector and of course the health sector.

Regarding personnel, you can rest assured that the Netherlands is one of the best countries in the world to find highly skilled, well-educated and experienced employees and professionals. Due to the large amount of excellent universities and masters programs, the Dutch workforce is known worldwide for its expertise. Next to being well-educated, almost all Dutch natives are bilingual. If you look for highly qualified personnel, you can even expect employees to be trilingual. The gross salary in the Netherlands is relatively high compared to some other countries in The south and east of Europe, but there are little to no labor disputes. This makes the cost of Dutch labor highly competitive and worthwhile.

  1. The Netherlands provides much in terms of efficiency gains

As a multinational and/or holding, establishing efficiency in the way you do business is crucial. A very well-known motive to start a holding company in Europe, or to expand your already existing multinational, is access to the European Single Market. This allows you to freely trade goods and services in all Member States, without the hassle of extensive customs regulations and border agreements. As such, it is very easy to streamline your European activities such as sales, manufacturing, research & development and distribution from solely one headquarters. This significantly reduces your overhead costs.

The Netherlands provides one of the best bases for a multinational operation, since its access to Europe and the international market is almost unparalleled. The Netherlands has always been on the forefront of worldwide trade, and this is still visible in the current culture and business climate. In the latest World Bank’s Logistics Performance Index, the Netherlands was ranked 6th in 2018. The country especially scores high in terms of the efficiency of its customs and border procedures, but also regarding the high quality logistics and IT infrastructure, the very high level of professionalism in the entire sector and the many easy and affordable shipping options. According to the DHL Global Connectedness Index, The Netherlands is still the world’s most globally connected country in 2020. This has been consistently so for years.

  1. Excellent business climate and tax conditions

Due to the very stable political and economic climate, the Netherlands houses many internationally known multinationals. If you would like to profit from a more attractive business climate, for example one that is better than the country you currently reside in, this country will suit you well. The Netherlands is a perfect base for optimizing your current tax situation, as well as for the protection of your assets and investments. The Netherlands is somewhat considered as a safe haven and also a tax haven, although the last depends on the legitimacy of your business. Criminal activities will not be tolerated.

Nonetheless, the country offers a welcoming and safe climate for entrepreneurs, who otherwise suffer from a rather poor business climate in their native or home country. The country’s economy is naturally very open and also internationally oriented, since it is one of the main goals of the Dutch government to make the international flow of goods, services and capital completely possible without any obstacles whatsoever. One of the main benefits of the Netherlands is also the legal system. The system has plenty of checks and balances, making the legal framework very trustworthy, professional and flexible as well.

How to establish a holding company in the Netherlands, and what should you definitely consider?

When you want to set up a completely new holding company (meaning you don’t already own a multinational company), there are some choices to make and factors to consider. One of the first questions you should ask yourself, is whether you want to start the company alone, or with other people. It is strongly advisable to set up your own holding company, without any other shareholders. This is also named a ‘personal holding company’. If you set up a personal holding company, you can prevent, amongst other things, problems with making certain decisions. This can involve decisions such as profit distribution, or your salary. With a personal holding company, you can make all these decisions yourself. In addition, you no longer have many of the advantages of the holding company when the holding company is not a ‘personal holding company’. For example, you are unable to set up other BV’s yourself, due to the fact that you don’t own the holding company by yourself.

It’s best to establish your holding company in one go

In some cases, new entrepreneurs establish only a Dutch BV, and afterwards find out they would have been much better off with a holding structure from the beginning. For example, it can cost you much more money if you first start your entrepreneurial BV, and only later your holding company. In such cases, you will have to transfer or sell your shares in the entrepreneurial BV to the holding company. You also have to pay income tax on the exact purchase price. The problem with this is, that your entrepreneurial BV often becomes more valuable over time. And the higher the purchase price, the higher the tax you will have to pay to the Dutch government. Avoid this higher tax by setting up your holding structure in one go. If you already own a work BV, it is still possible to set up a holding structure. In that case, keep in mind that a share transfer must take place, whereby the shares of the entrepreneurial BV are transferred to the personal holding company.

What about taxation of a holding company?

A huge benefit of the Dutch tax system is its very low tax rates, compared worldwide. The corporate tax rate is 19% for a profit up to 200,000 euros in 2024. Above that sum, you pay 25.8% in corporate tax. Next to that, the Dutch extensive network of tax treaties as well as the participation exemption regime work to avoid double taxation for all (foreign) companies, that might have to deal with taxation in multiple countries. A nice detail, is that the Dutch Tax Authorities have a very cooperative attitude, and aim to help any entrepreneur along the way in every possible situation.

There are also certain tax incentives available for new and existing entrepreneurs, often to encourage investing in the research & development department. As we stated many times in this article, the Dutch are very interested in innovation and progress. So basically every entrepreneur who enters the Dutch market with such ambitions, will be very welcomed here. These incentives involve the Innovation Box, for example, taxing the income you have derived from IP at a lower tax rate. Furthermore, you can acquire the so-called ‘WBSO-status’, which allows subsidies on certain salary taxes. This mainly involves employees involved in research and development.

One very important factor to consider are the Dutch substance requirements, in order to even be able to benefit from certain Dutch tax incentives. These requirements state, that the management of your holding company must be situated in the Netherlands. Nonetheless, there is no direct requirement to appoint Dutch board members. There is also no necessity to own a physical location in the Netherlands, or have a Dutch bank account. Once your company starts to become engaged in business activities, however, and you start making profit, these factors should be reconsidered for further benefits.

How to establish a holding company in the Netherlands?

The process of establishing a holding company is actually the same as setting up a Dutch BV, with the difference that you are setting up multiple BV’s at the same time. A holding is also considered a Dutch BV, after all, but with a different purpose than an entrepreneurial BV. So the steps involved are exactly the same, just with more companies involved. The first step in establishing a holding company, is deciding the legal entity. As said, a BV will be the best option in 90% of all cases but other legal entities are also able to act as a holding company, such as the foundation.

If you decide to set up a BV as a holding, then this is generally possible in just a few business days. The registration of any Dutch business needs a personal approach, since there is not one singular road to achieve this. If you have all the necessary documents at the ready though, and can provide us with all the information we need, it’s a fairly straightforward and swift process. The one thing that is important to know, is that the shares of all subsidiaries established will be transferred to the also established holding company. That’s one reason why it is named a holding: the holding company holds all the shares of all entrepreneurial BV’s involved.

In general, you can simply see a holding as the center of a spiderweb, which holds all involved entrepreneurial BV’s. In Dutch, it’s also described as a head office. People in the Netherlands find it actually very common to implement a holding structure, especially if you have plans or ambitions to expand in the future. This way you can build around a central core business, that enables the several underlying companies to flourish out of one main hub. The operational activities of practically any business can involve a lot of potential liabilities, so from a safety point of view, it makes sense to limit the risk and put your hard-earned money where it’s most safe. A holding company enables any entrepreneur to pay dividends to the holding BV, which in turn protects these dividends from any external claim. Also, the holding is not taxed for this incoming dividend, and neither is the entrepreneurial BV taxed for the outgoing dividend. This is all based on the participation exemption, you can read more about this here.

Starting a Dutch company as an already existing multinational?

If you want to start a brand-new holding company in the Netherlands, you can simply contact us for more information and, of course, a personal quote. In some cases, you might also be part of a large multinational organization wanting to expand to the Netherlands. There are plural ways to achieve this, which are mainly based on the legal entity you choose and your personal preferences regarding your business. Please feel free to contact us for personal advice any time.

Sources:

https://lpi.worldbank.org/international/global

https://worldpopulationreview.com/country-rankings/internet-speeds-by-country

If you want to set up a Dutch business, you will have to register your company with multiple governmental organizations such as the Dutch Chamber of Commerce and the Dutch Tax Authorities as well. It’s best to be prepared for registration, since you will have to provide a lot of documents and information in order for the process to run smoothly. If you want this done well and precise, Intercompany Solutions can take care of the entire process in just a few business days. In this article, we will outline the necessary steps to acquire a Dutch Tax Authorities registration.

Check whether you need to register with the Chamber of Commerce

Registration with the Chamber of Commerce is only necessary if you aspire to be a real entrepreneur according to Dutch law. According to the Chamber of Commerce, you are an entrepreneur if you independently supply goods or services with the intention of making a profit. But this criterion is a bit too crude to be certain, hence the Dutch Chamber of Commerce has listed extra criteria. Below are the criteria you must meet to register.

Criteria of a Dutch company

Do all 3 of these entrepreneurial criteria apply to you? Then there are a following number of questions that enable you to check whether there is entrepreneurship.

Control questions

If you cannot answer all questions with a ‘yes’, then you probably cannot register with the Chamber of Commerce. If all these questions apply to you, then it is possible to register a Dutch company. This will entail several steps, which we have outlined below in detail. If you so wish, Intercompany Solutions can assist you during the entire process of company registration in the Netherlands.

Registration with the Dutch Tax Authorities

After your registration in the Dutch Trade Register, the Chamber of Commerce will pass on your details to the Tax Authorities. You do not have to register your company separately with the tax authorities, as this has already taken place. If the Dutch Tax Authorities include you as a VAT entrepreneur in the administration, you will receive your turnover tax number and your VAT identification number (VAT ID). The Tax and Customs Administration also determines whether you are an entrepreneur for income tax purposes.

Get organized in advance to register your Dutch company

Before you register with the Dutch Chamber of Commerce, you must prepare yourself. Have you thought about the type of company you want to register? Do you have any previous experience in the field you would like to operate in? These are questions you need to ask yourself and, subsequently, prepare for when you have the appointment. This means that you will have to arrange and prepare several documents and information, which are mentioned below.

A company name

You need a company name to register your company with the Chamber of Commerce. A company name must meet a number of rules, namely that it should not give the wrong impression, it cannot be the same as an existing brand or trade name and it should be clear and understandable. The following characters are allowed: @ & - +. However, characters such as ( )? ! * # / may not appear in your company name. We advise thinking about this for a while, because your company name and logo will be like your company’s business card.

Choose a legal form

As a starting entrepreneur, you must choose a legal form, such as a sole proprietorship, general partnership or a Dutch BV which is equivalent to a private limited company. Which legal form best suits your company depends on your personal situation and preferences. For example, this entails how you arrange liability and which option is the most tax advantageous. Intercompany Solutions can help you decide which legal entity suits your ideas and ambitions best.

Check whether your company has to register Ultimate Beneficial Owners

Depending on the legal form of your business, you must also register beneficial owners. Ultimate beneficial owners are persons who, for example, are the ultimate owner of or have control over an organization. If you are setting up a business alone, this will only be you. But if you want to start a business with multiple people in charge, all these people need to be named and identify themselves with proper identification.

Make an appointment online

To finalize your registration, you must visit the Dutch Chamber of Commerce (Kamer van Koophandel). During your visit to the Chamber of Commerce, you will immediately receive your Chamber of Commerce number. You can make an appointment online easily. When you fill in the Chamber of Commerce registration form, make sure you have the following information at hand:

If you register with the Chamber of Commerce, you will receive an SBI code. This code indicates what your exact business activities are. If you are renting an office building, also take the lease of your business premises with you. If you are establishing the company in a commercial building, you should bring the rental agreement or purchase agreement with you. If you register your company at a so-called registration address, then take the contract with you.

When do you have to come by for registration?

The timing of registering your business is very important. In general, you can register your company at any Dutch Chamber of Commerce office at three distinct times:

How much does it cost to register with the Chamber of Commerce?

Registration in the Trade Register of the Chamber of Commerce involves a one-off payment of 51,30 euros. You must pay this amount on location with your debit or credit card. You cannot pay in cash. During your registration, you need a valid ID. The Chamber of Commerce cannot complete your registration without proof of identity.

What to do if you cannot travel to the Netherlands?

For foreign entrepreneurs who want to start a Dutch business, it might prove to be very difficult to come to the Netherlands in order to show up for your appointment. Especially during a pandemic, since a lot of borders are closed momentarily. Intercompany Solutions can still take care of the entire registration process for you, without the need for you to travel here. Please contact us directly, if you would like to receive more information about such options.

Source: https://www.kvk.nl/advies-en-informatie/bedrijf-starten/moet-ik-mijn-bedrijf-inschrijven-bij-kvk/

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