In the Netherlands, a subsidiary is a normal company – a separate legal entity with share capital partially or fully owned by an international company. This is an important difference from the Dutch branch – an entity that is more strongly linked to its international founder.

The international company established abroad can control its subsidiary in Holland, but, in contrast to the situation with branches, it does not carry full liability for the Dutch subsidiary’s debts, obligations and actions. The subsidiary does not have to engage in the same operations as its parent company and, if necessary, it can register for the performance of more activities. This and the limited liability of the parent company are the two main advantages when opening a subsidiary.

The founders of a Dutch subsidiary are able to choose between 2 very common types of entities: private or public companies with limited liability.

Types of legal forms for Dutch subsidiaries

The private company with limited liability (or BV) is suitable for small and medium businesses. There is no minimum capital requirement for the incorporation of a BV as a Dutch subsidiary – it can be established with 1 Euro. Its share capital has to be split into non-transferable registered shares.  The shareholders carry limited liability to the extent of their contributions to the capital of the company. One or multiple directors can be appointed to manage the business. There are different methods for BV incorporation, depending on the main goal: privacy of the directors and shareholders, tax minimization, a holding structure for international business or a BV owned by a special structure, e.g. a foundation.

Entrepreneurs can also open public limited liability companies (NVs) as subsidiaries. The minimum capital required to establish an NV is EUR 45 000 split into bearer and registered shares. NVs can issue certificates of shares with respect to bearer shares, in contrast to private companies with limited liability. Shares can also be transferable. The shareholders carry limited liability covering the capital they have provided to the company. In contrast to BVs, NVs can be traded on the Securities Exchange.

Dutch subsidiaries must have a minimum of 2 managers, forming a management board. A board of supervisors can also be formed to oversee the activities of the managers. Large companies like NVs follow more stringent requirements in yearly reporting, auditing and accounting.

The procedure for registering a Dutch subsidiary

The first step in registering a Dutch subsidiary is to open an account in a local bank, deposit the required capital and obtain a document to certify the deposit.

The subsidiary founders need to check whether the name they chose for the subsidiary is unique. This is done at the Commercial Chamber. A confirmation of the name’s validity is sent by email. If the name is available, the founders can proceed with registration.

Before registration at the Commercial Chamber, the subsidiary founders must obtain a non-objection declaration issued by the Ministry of Justice. For this purpose, they have to file an application and pay the relevant fees.

The association articles, the subsidiary establishment application and the deeds of foundation need to be notarized. All documents mentioned above have to be presented at the Commercial Chamber, accompanied by a deposit certificate and the non-objection declaration.

Taxation of Dutch subsidiaries

Any subsidiary registered in Holland is considered a resident company and has to pay corporate taxes identical to those of any other local company. Therefore, registration at the Tax Office is obligatory. The subsidiary should be registered at the Administration for Social Security in order to hire employees locally.

The corporate tax in Holland is 19% for yearly profits up to EUR 200 000 and 25,8% for income exceeding this threshold in 2024. Local companies pay taxes with respect to any profits generated worldwide. Holland is an EU member, so the EU Directive for parent companies and subsidiaries is applicable to Dutch subsidiaries of international companies. The Directive and the treaties for avoidance of double taxation between Holland and other countries guarantee significant tax relief and incentives.

Other taxes that Dutch companies need to pay include the tax on real property, transfer tax and contributions to social security. The fiscal year usually matches the calendar one. All subsidiaries of international companies need to follow the Dutch reporting and accounting principles. Incompliance with the filing requirements can result in fines and penalties.

The procedure for subsidiary registration for business purposes in Holland is uncomplicated and takes approximately 8 work days.

If you need more information on the procedures for setting up a Dutch business, do not hesitate to contact our local agents. They will provide you with more information on company formation and legal advice.

The Netherlands is among the leading exporters of food and agricultural products worldwide due to its innovations in agri-food technology. The sector offers a reliable source of safe and healthy food produced using nature- and environment-friendly methods.

In case you are in interested in establishing a business in the agriculture and food sector of the Netherlands, please contact our agents specialised in company formation. They will provide you with legal advice and additional information on how to set up a Dutch company.

Delivering healthy food from sustainable sources

The rapid global urbanization and the migration of people from rural areas to the big cities lead to an increasing demand for healthy and sustainable food supplies in the urban zones. The security of food is paramount to social wellbeing and economic performance. The search is on for solutions regarding food safety, animal welfare, habitation and waste-disposal, as well as education, governance and social fairness. The Netherlands is located in a relatively small delta region with low elevation, where the land is a precious resource. This is one of the reasons why the local farms are among the most efficient, sustainable and intensive worldwide.

Due to the fertile soil, high produce quality, intensive farming, trading expertise and extensive knowledge in agriculture, the Netherlands exports food products on a global scale. This covers products of both plant and animal origin, i.e. poultry (meat), eggs and livestock. Other key export items are automated food processing machines such as pickers for soft fruit, meat separators and equipment for potato processing, as well as knowledge on food processing. Twelve of forty leading companies producing foods and drinks have Research and Development centres in the country.

Five reasons to choose the Netherlands for your business in the food and agriculture industry

1. The country is a world leader in innovation and export of foods and agricultural products

After the United States, Holland is second in export of agricultural products in the world. It falls in the global Top 3 of fruit and vegetable producers, along with the US and Spain, supplying 25% of all vegetables for export from the European continent. The Dutch sector of agriculture is diverse and covers a variety of plant cultivation and animal husbandry subsectors, including field and greenhouse cultivation, fruit-growing, pig and dairy farming.

The Netherlands sees things in perspective. This is evident from the world-famous innovation and research infrastructure in the country. The University of Wageningen was rated first among agricultural universities worldwide for three consecutive years in the Taiwan Ranking that includes 300+ universities dealing with scientific research. Of the leading twenty-six companies in the sector of agriculture and food, five have Research and Development facilities based in the country. Here are some examples of investments made by private companies:

• a new Research and Development centre of Danone in Utrecht concentrating the European research of the company on children nutrition and clinical nutrition;
• a new European Research and Development centre of Heinz in Nijmegen;
• a new Research and Development centre of Royal FrieslandCampina in Wageningen;

2. The Netherlands has a mild climate, fertile soils, flat terrain and favourable location in the centre of the European continent

Next to its excellent geographic characteristics, the country has extremely well-developed infrastructure, logistics, food processing branch and commerce.

3. Successful renewal of the chains of agri-food production

For many years the agriculture in the Netherlands has maintained its leading position in the international competition through active investment aimed to renew the chains of agricultural production. Growers and farmers are eligible partners in this chain. Their main goal is to supply food and plants (including ornamentals) with the best possible value for money using sustainable, innovative and socially responsible methods.

4. The Netherlands supports the Global Food Security Alliance

It has been estimated that by 2050 the world population will reach 9 billion. If the current levels of food production remain unchanged, there will be a 70% shortage. The Alliance plans to solve this problem by using a Dutch approach based on climate-smart systems in agriculture. It intends to intensify and expand small-scale projects of fishermen, small farmers and horticultural growers and to maintain a high level of food safety by focusing on beneficial private-public partnerships.

5. Environmentally friendly and sustainable agriculture

Regardless of the tight margins of profit, the agricultural business invests significant resources in protection of the environment and implements improvements regarding animal welfare. While the agricultural business is a main engine of the national economy, it carries certain risks for the environment. During the past decades, agriculture has shown a trend of increasing scale and intensity of production, leading to a growing impact of manure and fertilizers in non-urban areas. Farming needs to be more sustainable. Currently, the agricultural sector in the Netherlands is directed towards sustainability in order to provide safe and healthy food, produced with care for the environment and the landscape.

Read here to explore the Dutch horticulture industry.

International companies planning to establish presence on the Dutch market at a low cost can open local branches. The branch does not have a legal personality and is considered an extension to the international company. Therefore the parent company established abroad is liable for all of its actions.

The operations of Dutch branches are managed by representatives of the parent companies by virtue of a PoA (Power of Attorney).  The branch has to carry out the same operations as its parent and its name must be identical. Its actions are governed simultaneously by the Dutch laws and the legislation of the country where the international parent company is incorporated.

The branch provides permanent establishment at a lower cost in comparison to other Dutch company types and there are no minimum capital requirements with respect to its incorporation. This is why many international companies prefer this form of business.

Dutch branches vs. local companies

The main defining characteristic of a branch, as compared to other business forms like subsidiaries in Holland, is its full dependence on its international parent company. Therefore the international company carries liability for any obligations and debts of the Dutch branch.

The procedure for branch registration is easier compared to other company types, e.g. the private limited liability company, but it still needs to comply with the legislative requirements for taxation and employment. According to the law, all branch employees should be covered with social insurance. Otherwise, the branch representative may become personally liable in case of failure to pay the necessary contributions. Branches opened in the Netherlands usually have financial obligations identical to those of local companies.

The numerous treaties for avoidance of double taxation that the Netherlands has signed with other countries decrease the branches’ tax burden if they qualify for reduction of the rate of withholding tax for royalties, interest and dividends.

Registration of a Dutch branch

The branch has to be registered in the Trade Registry at the Commercial Chamber with the relevant documents and details before it can commence its business activities. All papers need to be notarized, with a legalized translation in Dutch. The notarization takes place in the state where the parent company resides.

The documents necessary for incorporation can be case-specific, but in general the following are necessary: 

• Proof of the establishment of the international company (an extract from the trade registry in the country of residence with registration date and company details)
• Registration certificate, name, registered address, names and details of the directors and the secretary (or other managers)
• Protocol of the discussion where the board decided to open the branch
• Address and name of the branch
• Representative’s name
• powers of the representative and branch activities

After the registration, the Company Register in the Netherlands will release the registration certificate recorded under a unique number. Then the branch has to be registered for tax and social security contributions. After all these steps the branch can begin to operate in Holland.

Advantages of opening a Dutch branch

The procedure for branch registration is easy and takes less time than the direct incorporation of a Dutch company. This is why some international corporations prefer to establish branches. Other advantages include low incorporation costs and mild accounting requirements.

The main characteristics of branches in the Netherlands are more or less the same as in other countries. For example, in Hong Kong, the procedures for branch taxation and registration are very similar. Still, it is in your best interest to use the services of a local specialist in incorporation or a lawyer to ensure that you follow the Dutch regulations and rules for company establishment.

If you need more details on starting a Dutch business, please, contact our local agents in company formation.

Corporate Law in the Netherlands, also called “Company Act”, is the major source of statutory regulations and rules for company incorporation and management.

The law lists the different types of companies that can be incorporated in the Netherlands and the rules pertinent to the procedure of establishment. It covers the compliance, taxation and management of corporations, and the procedures in cases of bankruptcy, merger and company acquisition. The document also stipulates the allocation of responsibility and power within companies.

Company establishment in the Netherlands

The Dutch Company Act specifies what business forms can be incorporated and what regulations and rulings are applicable to each form. Depending on the particular activities and the preferred manner of managing a business, investors can choose between a private (BV) and public company with limited liability (NV), or a limited and a general partnership. The law does not recognize partnerships as legal persons.

The Company Act also describes the process of formation and the corporate purposes of companies. The procedure for incorporation must follow the steps outlined in the law. The necessary documents, e.g. incorporation deed, must be notarized locally. The company’s managing directors are its representatives and their liability is determined by the specifics of the entity they decide to establish. For the purposes of incorporation, the entity will need a contributed capital; the subsequent share transfer is also covered by the corporate law.

All regulations in the Dutch Civil Code are consistent with the EC Directives, the law on securities trade supervision and the act on listed companies, partially governing the manner in which Dutch companies are managed. Foreign investors planning to form a Dutch company can initiate a process of due diligence.

Dutch company management

Company management, as provided in the Company Act, is a two-layered system, consisting of an executive board of managers and an advisory board of supervisors that oversees the managerial work. The model is valid for both public and private companies with limited liability. These boards are compulsory for large companies.

The company owners appoint the members of the managing board during incorporation. The responsibilities and powers of the managing board are laid out in the association articles. The liabilities and duties of the directors are legally established and may include criminal and civil liability.

Business owners hiring personnel in Holland should also observe the law on employment. It contains important rulings with respect to the employment conditions, the obligations and rights of employees and employers, the dismissal procedure, the wages and the working hours. The Dutch legislation on labour is flexible as regards workforce and has many particularities.

Do you need more information about the Dutch corporate law or would you be interested in registering a company in the Netherlands? Call our local agents in company incorporation for support and advice.

The worldwide transport of goods increases in distance and volume every day. The Netherlands plays a major role in the world market thanks to its developed logistics.

If you are interested in starting a logistics company in the Netherlands, please contact our incorporation agents. They will provide you with further information on opening a company in the Netherlands and legal advice.

A world trade centre

Logistics relates to the expertise and knowledge necessary for effective planning, performance and streaming of information and goods. The Netherlands is an age-old centre of world trade. It has two major European cargo ports, Rotterdam and Schiphol, and the drive from one to the other takes less than an hour. The country is a main logistics hub with respect to freight transport to Europe and, therefore, a desirable location for international companies.

The expanding global trade and the increasing transportation of commodities worldwide require efficient and sustainable logistics. Various new measures for reduction of the carbon dioxide emissions of the sector are in place: e.g. use of quayside electricity by ships in ports and hybrid vehicles for delivery in urban areas.

The logistics sector in the Netherlands has the ambition to become a global leader by 2020 thanks to sustainable innovation. Logistics also plays a key role for all other industries: from raw material to finished product transportation. The sector generates a profit of €55 billion a year and provides employment for 813 000 people creating a strong driving force for the national economy.

Five major factors for the key role of the Netherlands in the logistics industry of the world

1. Connecting consumers and producers worldwide

Holland is a key player in the global economy, connecting consumers and producers around the world through complex logistics. Its success lies in the combination of top service providers, modern infrastructure and a convenient coastal location in the middle of Europe. Its strategic location on the coast provides direct access to the continent’s market and its 500+ million end users.

2. Schiphol Airport in Amsterdam and Rotterdam Port

Rotterdam Port is the largest port in Europe and the fourth largest in the world, while Schiphol Airport is a major passenger and air-freight hub. They offer the services of leading providers in the area of logistics and are connected with a large network of railways, roads, pipelines and inland waterways. This combination makes the Netherlands a gateway to continental Europe with very active water and road transport.

3. Excellent infrastructure

The Global Economic Forum rates the infrastructure’s quality as one of the best worldwide, with modern facilities for air, maritime, railroad and road transportation, ranked 4^th, 1^st, 7^th and 2^nd, respectively for 2015. In 2015, the Business School of IMD ranked Holland first in the world with respect to its infrastructure for water transport.

4. Wide-ranging application of IT

Holland uses extensively Information Technology in order to provide optimised solutions for the supply chain in industries where time has crucial importance (e.g. flowers and food).

5. Sustainability is a priority

Holland is also pioneering developments with respect to silent logistics and environmentally sustainable operations.

Change your company type in Holland. Business expansion may prompt investors to consider changing the types of their companies. There are many reasons to make such a decision: better recognition on the market, less liability and increased access to funds.

The initial choice of company type is largely dependent on the amount of available capital and the business opportunities at the time. The first step often is to set up a small business. In time the investors will decide whether to upgrade to another type of business form allowing them to broaden their horizons and develop further.

Converting a sole trader into a company with limited liability

Service providers can initially register as sole traders. This is a simple form of business allowing entrepreneurs to provide services to customers at low administration and incorporation costs. Sole proprietorship is a business owned by a single person. However, after some time the owner may decide to change the structure of the business and establish a company with limited liability (called a BV in Dutch).

The major reason for switching from a one-man business to a BV is limiting the liability. Sole proprietors are liable for all obligations and debts of their businesses, while the assets of BVs are considered separately from the personal assets of their owners. Read more on the difference between a Dutch BV and a Sole Proprietorship.

Investors converting to companies with limited liability have to incorporate their BVs following the normal procedure and register them at the Commercial Chamber. They also need to obtain an available company name and a registered address.

Our Dutch experts in company formation can assist you in incorporating your new company. Once the BV is established, the one-man business ceases all of its operations and its assets are transferred.

If you plan to switch to another form of business in Holland, you must remember that all contracts of the business will have to be signed again after the incorporation of the new entity.

Dutch company types

The available forms of business in Holland include partnership, private or public company with limited liability and sole proprietorship. International investors are free to incorporate any of these entities and pick the one corresponding to their business requirements.

Partnerships can be transformed into BVs through a procedure similar to the one described for one-man businesses. The partners have to establish a new entity, dissolving the partnership. The procedure for conversion from private to public limited liability companies and vice versa requires more steps including amendments to the Association Articles of the company.

If you need further information on incorporation in Holland, please, do not hesitate to contact our agents in company registration.

The Dutch high technology industry is one of the most inventive worldwide due to the modern facilities and the innovations in the field of development and research. The Dutch high-tech products and expertise are in high demand and are subject to global export.

In case you are interested in starting a business in the Dutch high tech industry, please do not hesitate to contact our incorporation agents. They will assist you with information and legal advice on how to start your business in the Netherlands.

Achievements in collaboration and technology

The long-lasting Dutch tradition of entrepreneurship, creativity, openness, collaboration and pragmatism is a perfect match for the sector of High Technology Materials and Systems. These characteristics make the country the ideal place to seek solutions related to the contemporary challenges of society in the fields of wellness, health, renewable energy, security, climate and mobility. These challenges are quite complex and such solutions are mainly found through achievements in collaboration and technology. The key to success in this complex and fiercely competitive sector lies in active collaboration and innovation across the whole value chain and establishment of an effective network (or ecosystem) of institutions and companies. The Netherlands has such ecosystems, competency centres scattered on its territory. Perhaps the main centre is Brainport in Eindhoven, located in the south-eastern part of the country. In 2015 it was voted the most innovative region in the world. Other Dutch areas, in particular Delft and Twente, also boast good concentrations of universities and companies working in the field of high technology. The sector encompasses many industries that are closely related to each other, such as high technology systems, aerospace, materials (incl. steel) and automotive.

Five reasons why the high technology industry in the Netherlands is crucial to meeting contemporary global challenges

1. The Dutch tradition of openness, creativity and entrepreneurship

The long lasting Dutch tradition of pragmatism, creativity, openness, collaboration and entrepreneurship is the ideal match for the sector of high technology materials and systems. There are many examples of the nation’s ingenuity, including the sawmill, the rotary screw pump, the submarine, the microscope, the Variomatic, the  six-cylinder engine, various systems for navigation and methods for transformation of food crops and waste into energy. All these characteristics make the country the ideal place to seek solutions related to the contemporary challenges of society in the fields of wellness, health, renewable energy, security, climate and mobility. These challenges are quite complex and such solutions are mainly found through achievements in collaboration and technology.

2. Excellence in technology: The Netherlands is leading on the market of high technologies

The sector of high technology encompasses many industries that are closely related to each other, such as high technology systems, aerospace, materials (incl. steel) and automotive. National knowledge institutes and companies working in this sector are famous with their technological competence and leadership in their segments of the market. Fast advancement and strong collaboration within the whole value chain is necessary in this complex and competitive sector.

The country is among the leaders in nanotechnologies. Publications from the Netherlands yield more citations in relation to patents than studies from any other country worldwide. The nation ranks third with respect to citation impact. It is also a global leader in design, development and production of micro – and nanocomponents and high technology equipment. The characteristics of the high tech products are:

• high intelligence (embedded software, systems and sensors);
• impeccable precision (precision manufacturing, nanoelectronics);
• high efficiency (smart electronics and mechagronics).

The high technology sector in the Netherlands strives for value, diversity and complexity. It is generally directed towards niche markets and small product patches, relying on high technological competence for success.

3. A population with advanced computer skills

The Dutch are advanced computer users with an exceptionally high rate of broadband / computer penetration and use of mobile services. The IT infrastructure in the Netherlands is among the most developed worldwide and has specialized networks that power global efforts in Research and Development. This environment supports the rise of world-class hardware companies, IT consultancies and software developers working in the fields of safety, healthcare, mobility, business and simulation. Furthermore, a lot of companies develop gaming content for the internet, mobile telephones and major platforms. The country is ranked first in Europe in the embedded systems industry and first in the world in equipment for manufacturing of microchips.

About seventy percent of the Dutch innovations are related to Information Technologies and enable key developments in many fields, e.g. water management, production of ornamental plants and foods, and the automotive industry. The considerable number of partnerships between public and private institutions, where the Dutch government collaborates with the private and educational sector, leads to active development in the diverse fields of embedded systems, modeling, multimedia technologies, virtual laboratories and parallel computing.

4. Specialized networking between institutions and companies, and leadership in open innovations

It is crucial to have an efficient network (or an “ecosystem”) of institutions and companies specializing in the high technology industry. One region with high concentration of entrepreneurs in the sector of high technologies is Brainport, Eindhoven, located in the southeastern part of the country. Other regions, such as Delft and Twente (Yes! and Knowledge park), also boast numerous universities and companies working in the field of high technologies.

The country is a global leader in open innovations and public-private collaborative research. In 2011, the region of Brainport, Eindhoven was voted as the smartest region in the world. This is a good example of collaboration between researchers, companies and governmental institutions with the aim to accumulate knowledge and deliver innovative technologies that set standards worldwide. The result is extensive cooperation between specialized suppliers, OEMs and academia.

5. Always considering future perspectives

The Dutch sector of high technologies is a global frontrunner in the creation of novel materials and technologies for applications in state-of-the-art communication systems, safe and economical aircraft, electric and hybrid cars, large scale production of solar energy and its storage, and modern medical equipment for early detection and effective treatment of diseases.

The Netherlands is among the largest providers of chemical services and products in Europe. The necessary materials are readily available or easily accessible, while the extensive national network for transportation facilitates travel on the continent and overseas.

If you are interested in establishing a company in the chemical industry of the Netherlands, please do not hesitate to contact our local incorporation agents. They will provide you with further information on company formation and investment opportunities in the country. You can also read this article for more information on the incorporation procedure.

Development of intelligent solutions and smart materials

The chemical industry in the Netherlands has adopted a methodical approach to finding solutions to the great challenges of society and, in particular, pays attention to 5 main areas: Resources and Climate, Food Security, Healthcare, Energy and Transport. Due to the multidisciplinary nature of the challenges, the sector works in collaboration with numerous other industries. The Dutch chemical sector has a platform aimed at connecting different stakeholders for the purpose of mutual creation of new solutions.

Similarly to other industries all over the world, the chemical industry in the Netherlands is facing the problem of depletion of resources. Natural sources are becoming increasingly scarce as a consequence of overconsumption or they are simply hard to find. The Netherlands is up to this challenge, as it can provide new opportunities and catalyze the shift towards more sustainable, greener chemicals. The current situation requires the utilization of more sustainable source materials that are also safer for the environment in the development of smart solutions and materials. Also, there is a need to adopt new processes with reduced formation of undesirable wastes and by-products.

Five significant contributions of the chemical industry in the Netherlands

1. Leading services and products

The chemical industry is among the leading sectors at a national level with significant contributions to the country’s economy. Holland is among the strongest providers of chemical services and products in Europe. The necessary materials are readily available or easily accessible, while the extensive national network for transportation facilitates travel on the continent and overseas. Also, the industry is taking important measures to become more sustainable.

2. Many leading companies establish their headquarters in the Netherlands

The country hosts sixteen of the top twenty-five chemical companies in the world, including Shell, AkzoNobel, BASF and DSM. Research is carried out at TNO and the universities of Delft, Twente, Wageningen and Eindhoven.

3. Competitiveness and collaboration among companies

The chemical industry in the Netherlands is competitive because of its integrated character. Companies trade with one another to purchase and obtain materials. Furthermore, they collaborate through partnerships with the government directed towards regional clustering, production and innovation.

4. Clusters of joint expertise

The chemical sector in the Netherlands is split into clusters combining specific expertise. For instance, in the south-eastern part of the country, there is a cluster directed towards materials with high performance, while the biotechnological branch has formed a south-western cluster. The companies supplying chemicals for biotechnological purposes are concentrated to the northeast.

5. Stakeholders work together to create innovations

The government, companies and universities collaborate in the development of new technologies, forming a stable chemical community. The sector works openly to create innovations. It achieves its goals through centres of chemical innovation where big companies, small businesses and start-ups work on innovative concepts and assess their feasibility. There are five such centres in the Netherlands: the Valley for Application of Green Polymers, Chemelot, Plant One, the Campus of Green Chemistry and the Biotech Campus. These companies share their expertise, services and infrastructure.

If a group of individuals wants to fulfil a particular goal, for example, all members want to participate in a given sport, make music or improve a shopping area, they have the option to establish an association (vereniging) that is a type of legal entity.

Main characteristics of the Dutch association

• Associations in the Netherlands should have at least two members.
• All association members are entitled to a vote.
• The Members Meeting (Ledenvergadering) has exclusive authority and power.
• The Members Meeting nominates a Committee that includes, as a minimum, a chairperson, a secretary and a treasurer.

Association types

Practically there are two forms of associations in the Netherlands, depending on their legal capacity:

1. Full capacity associations

When you establish an association with full capacity (or volledige rechtsbevoegdheid), theoretically, you do not carry personal liability for its debts. However, you need a Latin notary to prepare a deed that states the establishment of the association and its statutes, including:

• name and address;
• objective (profit sharing among partners is not considered an objective);
• requirements for inclusion of members;
• procedure for holding a general Members Meeting;
• procedures for appointment and removal of committee members;
• post-dissolution surplus allocation.

In case you decide to amend any of the above, you need to hire a Latin notary to update the deed of establishment of the association. Associations have internal regulations complementary to the statutes. They concern the practical daily affairs. These internal rules do not need to be notarized.

Associations with full capacity have to be listed in the Trade Registry (Handelsregister) at the Commercial Chamber (Kamer van Koophandel).

Full capacity associations have the duties and rights of public members, e.g. they can borrow money and inherit and own registered property.

Subsidizing organizations usually require subsidized associations to have full capacity in legal terms.

2. Limited capacity associations

An association set up without a Latin notary has only limited capacity in legal terms (beperkte rechtsbevoegdheid) and its owner carries personal liability for all of its obligations. This liability can be limited by registering the association in the National Commercial Registry.

Limited associations are not allowed to own registered property, for example, real estate.

Both limited capacity associations and full capacity association can be used to form a cooperative. Read here on cooperatives in the Netherlands.

Registration at the National Commercial Registry

You are obliged to register your association at the Dutch Trade Registry to obtain full statutory capacity. You carry personal liability until the date of registration. Usually, the Latin notary dealing with the establishment of your association will also complete the registration, but it is advisable to require confirmation.

You have to report any changes in the list of committee members to the Chamber of Commerce in eight days. Former members of the committee continue to carry liability if they are listed in the National Commercial Registry.

Read more on the Dutch Company Register. 

Taxation

Associations functioning as businesses owe corporative taxes (vennootschapsbelasting). All profits have to be directed to the purpose or objective of the association. Depending on the situation, the association may have to charge and pay Value Added Tax.

Liability of committee members

The association is a form of legal entity. Therefore, in theory, the members of its committee do not carry personal liability for its debts. Still, there are exceptions, e.g. in cases of negligence, mismanagement or failure to register the association at the Commercial Registry.

Members of the committee and staff

Associations are free to employ staff. The members of its committee, however, are usually not employees. Therefore they are not covered by any schemes for employee insurance.

Dissolution of the association

Dissolution of the association is possible when the General Members Meeting votes in favor, there are not any members left or bankruptcy is declared. The procedures and rules for dissolution are laid out in the statutes.

Homeowner associations

All owners of apartments in Holland must be members of homeowners associations (VVE or vereniging van eigenaars). These associations represent the mutual interests of all apartment owners regarding matters of building service and maintenance. VVEs have several obligations. They need to hold at least one members’ meeting per year, to keep reserve funds and prepare yearly financial statements. VVEs have to be listed in the National Commercial Registry.

Do you have any questions about establishing an association or another company type? Our company formation agents can help you open a company in the Netherlands.

If you are an owner of a Dutch business but at some point, you become unable to cover your company’s debts, you may petition for bankruptcy in front of the Dutch court. For this purpose, you need to fill out a form (in Dutch) either personally or on behalf of the company that you represent. The application can be submitted without hiring a lawyer.

Creditors filing for bankruptcy

If your company has more than two creditors, they may hire a lawyer to file documents for declaration of your bankruptcy. There are certain conditions which determine whether it is worthwhile to apply for bankruptcy, including the amount of money loaned and the particular claims of the creditors. The creditors may suggest mediation in order to agree on terms acceptable for all partiers, instead of requesting the court to declare you bankrupt.

Assets

When you are declared bankrupt, the court seizes your assets. Personal bankruptcy is also possible if the type of legal entity you chose for your business allows it.

Bankruptcy and liability of officers and directors

Directors and officers of private limited companies (BV) or public limited companies (NV) that have become unable to cover particular employee / retirement contributions or taxes (insolvency) are required to report the situation as soon as possible to the National Customs and Tax Administrations, the Dutch Agency for Employee Insurance (UWV) or the respective pension fund. Lack of reporting may lead to personal liability.

Further steps

If your company is declared bankrupt by the court, an authorized receiver will be appointed. The receiver has exclusive rights to administer the company after the declaration of bankruptcy. The receiver can divide proceeds among creditors and sell assets. They decide if you need to stop work immediately or after a certain time period. They are also able to grant permissions for activities that are allowed. These activities may include conclusion of contracts, selling, collecting and paying bills, etc.

Starting fresh

If you plan to start a new business as an entrepreneur, you still need to cover any outstanding debts or accounts to the creditors and the authorities (e.g. the Customs and Tax Administration).

Bankruptcy of customers

If a customer goes bankrupt while owing you money, the appointed receiver will notify you of the bankruptcy. In case you do not receive a written notification, then you should contact the receiver yourself. A meeting will be held with the receiver to discuss the outstanding debts and then you will have the opportunity to explain your claims.

Creditor ranking

When bankruptcy is declared, creditors are ranked in a particular order. The ranking is partially dependent on the nature of their claims. The receiver determines the ranking and prepares a (conclusive) distribution list.

Please note: We cannot assist with bankruptcy cases.

Holland has a good standing with respect to energy efficiency and renewable energy and leads the charts for greenhouse farming, processing of biomass and wind energy in marine environments. The energy industry provides a substantial part of the national income, employment and exports of the country. Therefore the Dutch government has adopted a modern industrial policy in order to take better advantage of any economic opportunities related to grey and green energy.

In case you are interested in opening an energy company in the Netherlands, please contact our experienced incorporation consultants. They will assist you with company establishment and legal advice.

Affordable, reliable and clean

Economic development and social well-being, in general, are largely dependent on the provision of robust and sustainable energy that is affordable, reliable and clean. The achievement of these fundamental goals is inextricably bound to the reduction of carbon dioxide emissions and the globalization of energy markets. The ever-increasing demands for sustainable sources of energy open various opportunities for energy trade, transport and generation in the margins of the sector. Holland has strong prerequisites for continuous growth in the global energy industry. Thanks to its geographic location it has a long coastline for harvesting wind energy. It hosts two of the key harbours in Europe: Rotterdam and Amsterdam. Furthermore, it has significant reserves of natural gas and a developed gas infrastructure. Hence the country possesses a firm basis for development with the aim to become a top European energy hub.

Five strengths of renewable energy in the Netherlands

1. Bold expectations for 2050

Holland has an ambitious plan for the future: it aims to develop a system for affordable, reliable and sustainable energy by 2050. In this respect, the country expects to decrease the emissions of carbon dioxide by 50% and to generate about 40% of its electricity in a sustainable manner by harvesting wind power and producing energy from biomass. The CO₂ emissions can be reduced through the use of renewable and nuclear energy, energy saving, and capture /storage of carbon. The European Directive on Renewable Energy foresees that, by 2020, 14% of the energy used in the EU will be renewable.

2. Decentralised energy

Holland experiments with energy generation from waves, biomass and algae. It has found innovative solutions concerning on-site energy generation in greenhouses, “recycling” of carbon dioxide and utilization of waste heat in horticulture. Therefore the share of distributed energy in Holland is considerably higher in comparison to many other countries.

3. European leader in the production of green gas

Holland is an established key player in the gas market of Europe. It is a major producer of natural gas, develops advanced technologies in the field and is the top gas broker on the continent. The country has five decades of experience with the organization of partnerships between the public and private sector in the business with gas and is currently considered a European hub. The Netherlands has an unparalleled capacity to handle the seasonal changes in demand and to ensure the flexibility in supply sought by northwest Europe. Famous institute, e.g. the Energy Delta in Groningen, educate students from all over the world. Additionally, Holland is also becoming a leader in the area of green gas.

4. Extensive experience in efficient energy and solid reputation in the field of renewable energy research

The Dutch energy industry and the government have a long-lasting tradition of voluntary multiannual agreements regarding energy efficiency that has led to the accumulation of extensive experience. This is why the Dutch industry is among the most efficient worldwide in terms of energy use. The Netherlands is internationally recognized for its research in the area of renewable energy, such as solar energy, performed by the institutes ECN, FOM and a number of universities. The University of Technology in Delft has won 7 times the biennial solar car world competition (Solar Challenge) since 2001.

5. Extensive expertise in harvesting wind energy offshore and plans to become the biofuel hub of Europe

The Dutch are leading experts in harvesting wind energy at sea, biomass co-combustion in power plants fired with coal, methods for pre-treatment of biomass, landfill gas use, and heat pumps with cold and heat storage. The Netherlands is also conveniently located in the middle of the European continent and has a state-of-the-art petrochemical, industrial and logistics centre around Rotterdam. It is not surprising that the country has the ambition is to become the biofuel hub of Europe.

Read here to explore the Dutch chemical industry.

Advantages of working in a cooperative

In case you are planning to use the advantages of cooperative work, such as pooled marketing and purchasing efforts, one of the options is to register an entity called “coöperatie” or cooperative. This form of entity is also useful if you are dealing with increasing workloads or have health problems. The other participants in the collective can handle some of your work.

Definition and types of cooperatives

The cooperative is an association concluding specific contracts with its members and on their behalf. Two of its forms are “bedrijfscoöperatie” or business cooperative and “ondernemerscoöperatie” or entrepreneur cooperative.

Read more on associations in the Netherlands. 

Business cooperative

This type of collective works in support of the members’ interests in particular fields, e.g. advertising or procurement. A popular Dutch example of such a cooperative is Friesland Campina; it is a substantial cooperative uniting dairy farmers, where each member contributes to the collective profits.

Entrepreneur cooperative

This type of cooperative has members who work independently and may decide to collaborate on particular projects. This form of entity is suitable for persons who are self-employed and do not have employees of their own (zzp'er or zelfstandige zonder personeel). The entrepreneur cooperative allows members to work together on projects or assignments that would otherwise be too bulky for them to complete on their own. The customers also benefit from the situation by having one contact person and more certainty that the deadlines of their projects will be kept.

Please note, that all participants in common projects working in the capacity of natural (not legal) persons need to have other clients outside the project to be considered as entrepreneurs for the purposes of income tax collection (ondernemer voor de inkomstenbelasting). The distinction is important for the Customs and Tax Administration (Belastingdienst).

All members of the cooperative have the right to vote and are free to leave or enter the collective, as long as this does not jeopardize its long-term existence. Entrepreneur cooperatives are suitable for short-term or small-scale collaborative projects.

Mutual insurance companies

Companies with mutual insurance (onderlinge waarborgmaatschappij) are cooperatives whose members conclude insurance contracts between themselves and with their companies aimed at mutual profits.

Establishment and management of a cooperative

A cooperative may include two or more members. The entity is controlled by an Algemene Ledenvergadering or General Members Meeting (GMM). The GMM appoints a management board to handle the affairs of the cooperative. You will have to use the services of a Latin notary to prepare a deed for the establishment of the entity and to register it at the National Commercial Registry (Handelsregister).

The members of the cooperative cover the costs of its setup and functioning. Any generated profits are distributed with respect to the shares of the members in the general turnover of the collective. The members are free to negotiate particular arrangements with respect to profit sharing.

Liability

The collective is held accountable in its capacity of an entity, but in case its members plan to dissolve it at a time when it has outstanding debts, all of them owe equal shares. Still, liability can be excluded by establishing a limited liability cooperative (BA or beperkte aansprakelijkheid) or an excluded liability cooperative (UA or uitgesloten aansprakelijkheidcooperative).

In entrepreneur cooperatives, partners collaborating in projects carry the responsibility for their outcomes.

Tax

Cooperatives pay corporative tax (or vennootschapsbelasting) with respect to their profits. Their individual members owe income tax (or inkomstenbelasting) with respect to the income they obtain through the cooperative.

Please, refer to this article on Dutch taxes for additional information.

Yearly accounts and reports

Cooperatives are required to prepare and publish yearly financial accounts and reports.

Social security

Regular and board members of self-governing cooperatives have effective fictitious employment relationships (fictieve dienstbetrekking) with the entity. In this case, the salary deductions are the same as for regularly employed persons.

Our legal agents can help you register a cooperative in the Netherlands. Read here if you would like to explore other Dutch company types.