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During the past decade, alternatives to modern medicine have become exponentially popular. CBD oil especially has made quite the impact on society, as a very large amount of different illnesses and symptoms can apparently be alleviated or even cured with CBD oil. Of course this has also had an impact on the commercial market, as a large assortment of companies has been established that promote and sell CBD oil.

If you are interested in opening a business in the Netherlands to distribute and sell CBD oil, however, there are plenty of things you need to know. It is of the utmost importance that your company follows all applicable laws, rules and regulations. Otherwise, you risk a potential chance to be prosecuted for violating criminal law. In this article we have summed up all these regulations, in order for you to be able to make a well-informed decision.

The gray area of the Dutch law system

Certain sectors such as the sale of cannabis and related products fall into a certain gray area of the law. Some activities are not exactly legal, though allowed by Dutch law. In order to not make any mistakes, it is necessary to know which activities are allowed and which are not. First of all, almost everything related to the production of cannabis to extract CBD is not allowed in the Netherlands. The foregoing follows from the notice of the legal department of the Ministry of Health, Welfare and Sport.

What is allowed?

1.     Medicinal use subject to exemption

Correlating legislation:

Under the Single Convention on Narcotic Drugs, the Office for Medicinal Cannabis (BMC) has the legal exclusive right to import and export cannabis (extracts) and cannabis resin. The Treaty requires this monopoly in order to prevent cannabis from ending up in illegality. If a company, including a customer of said company, wants to import or export these products, this must be done through the BMC and can only do so if the company has an Opium exemption. BMC will then take care of the necessary Dutch documents and transport for a fee.

An Opium exemption?

An Opium exemption is intended for companies or organizations, who wish to carry out activities using the means referred to in the Opium Act. Under certain conditions, this prohibition shall not apply to pharmacists, general practitioners with a joint pharmacy and veterinarians. In addition, the law does not apply to government-designated institutions and persons or institutions that stock such medicinal products for the exercise of medicine, dentistry or for their own medical use under Article 5 of the Opium Act.

What is the purpose?

Potential companies and their customers wishing to import and/or export cannabis for medicinal use should have one or more of the following purposes, in order to obtain an exemption. In accordance with Article 8(1)(a) to (c) and (2) of the Opium Act, the BMC grants an exemption for the following purposes:

The costs for applying for an Opium exemption

An application fee of €1,000.00 is payable for the processing of an application for an Opium exemption. This application fee is also payable for the application for an extension of an Opium exemption if, in the event of a granting, the application would result in a five-year period of granting being exceeded. Simply put; every five years the application fee must be paid once. In all cases, the following applies: there is no right to a refund of the application fee if the customer withdraws an application, if the customer decides not to process the application or if the application is rejected in whole or in part.

In addition to the application fee, an annual fee of € 700.00 is due. The obligation to pay the annual allowance for a new calendar year is always on the 1st of January of that year. If the customer no longer wants to make use of the exemption, the customer must have notified the BMC in writing before 1 January of the new calendar year. If this notification is omitted or occurs after 31 December of the previous year, the annual fee for the new calendar year needs to be paid.

Import of medicinal cannabis by Dutch companies

Importing cannabis (extracts) also requires an import permit. The customer receives this by filling an application form for an import permit. Upon receipt of the application form, the BMC draws up a contract in duplicate and an invoice for the delivery of the cannabis. The BMC then applies for an import permit. As soon as the import permit is received, the BMC sends it to the foreign company. With the import permit, the company owner can apply for an export permit from the government agency abroad. Once the export license has been issued and the signed contract has been returned, the cannabis (extracts) can be shipped via the BMC. The costs include the costs for applying for the import permit, the costs for the agreement and of course the costs for the transport.

Export of medicinal cannabis by Dutch companies

Exporting cannabis (extracts) requires the following actions and documents:

2.     Hemp fiber

When deciding on exemption applications for cannabis pursuant to Article 8(2) of the Opium Act, BMC will apply the following criteria:

Article 8i paragraph 1 of the Opium Act applies in that case: only if the BMC concludes a contract for the cultivation and supply of cannabis will an exemption be granted. Therefore, no exemptions will be granted for the cultivation of cannabis by growers who are going to supply directly to the market. The prohibitions laid down in Article 3(B) of the Opium Act shall not apply to hemp which is apparently intended for:

provided that the exception to the prohibition on the cultivation of hemp applies only to the extent that cultivation takes place in open ground and in the open air. These two goals are exhaustive. Hemp is naturally rich in CBD and contains relatively little THC. Therefore, it is legal in many EU countries, provided that the THC content remains below 0.2%.

3.     Pure substance CBD, without the presence of any form of Tetrahydrocannabinol (THC)

This follows from the e-mail from the Legal Affairs Department of the Ministry of Health, Welfare and Sports and Human Services: "The pure substance CBD is not banned in the Netherlands. The Opium Act prohibits the psychoactive component of the cannabis plant from THC. The sale of products without any form of THC is therefore not prohibited under the Opium Act."

So what is actually banned in the Netherlands? The production of cannabis to extract CBD. It is prohibited to do the following things with/to a substance referred to in List I and List II of this Law or designated pursuant to Article 3a(5):

The gray area in numbers

Within the EU, only hemp with a maximum percentage of 0.2% of the psychoactive substance THC may be grown. A number of species are authorized by the European Commission (EC). An overview of this can be found here. In theory, selling products without any form of THC should be possible without any problems.

Want to know more about the possibilities?

The CBD business is booming, but you need to know when, how and why you would like to enter this market. If you feel you have enough time to figure out all the rules and regulations and are passionate about the project, you can always contact us for in-depth information about the specifics. Intercompany Solutions is an established partner for foreign companies and investors who want to start a Dutch business. We can help you during every step along the way.

Sources:

The United Kingdom has left The European Union and European Economic zone since 1 January 2021.

How does it affect your business? Many companies in The United Kingdom had regulatory access to the European Economic Area. This means that licenses could often be easily passported from the United Kingdom to Europe. Logistics we’re kept relatively simple without extensive customs papers, tariffs or much other hassle.

Optimizing your logistics

Many trading companies and retailers are facing increasing administrative burdens, costs and shipping time for logistics to the European Union.

If you wish to optimize the logistics for your firm, it might suit you to open a European subsidiary or trading company.

This can be accomplished for example, by setting up a subsidiary in the Netherlands. The BV company is the UK Ltd. Equivalent. It’s shares may be held by UK private persons and corporations.

Brexit and The Netherlands

Amsterdam has had increased interest for UK based companies to relocate. The mainland access to Europe, the highly educated and bilingual staff (fluent in English) and high education levels of The Netherlands provide for an excellent home base.

Brexit has harmed UK Exports

According to a report from Baker Mckenzie in 2017. Some industries such as the automotive industry already faced severe decreases in exports to The European Union, of up to 16,5% in 2016. Shortly after the Brexit referendum. 

As of 6 February 2021 the Irishexaminer posted: ”Britain’s trade with the EU has been hit by higher costs, delayed shipments and reduced freight volumes since the new economic relationship started on January 1”

The economic impacts on export are clearly not favorable for exporting businesses in The United Kingdom who had a major customer base in Europe. 

Licensed activities

Many UK based financial service providers have to adapt by either choosing to forsake the European markets, to set up a local company with Europe licensing OR to service their clients under UK law*. (*Which may or may not be possible depending on the branch).

The healthcare sector and other highly regulated industries also may need additional licenses in Europe since Brexit. 

Intercompany Solutions

Ever since 2017, Intercompany Solutions has assisted hundreds of UK businesses and businessmen to set up shop in the Netherlands. Many of whom had concerns about the uncertainty of Brexit and how this may affect their businesses.

Want to explore the option of setting up a company or subsidiary in the Netherlands? Send us a request or give us a call. Our consultants will be happy to assist you with expanding your business to The Netherlands. 

Once you start a business in the Netherlands, you will soon experience that this country has a strictly regulated professional environment for corporations and businesses. The financial statement can be seen as the basis of the corporate regime in Holland, as well as audits and publications of audits. In this article we will offer you more information about specific Dutch accounting and audit requirements.

Preparing financial statements in the Netherlands

Every single corporate entity in the Netherlands is obligated to prepare (annual) financial statements, this requirement is stated in the law and generally also incorporated in the statutes of the corporate entity. Do you have a branch office in the Netherlands, or would you like to open one? Then you are also required to file a copy of your annual accounts with the Trade Register of the local Chamber of Commerce, in the region where your branch office is located. Then again, a branch office generally does not need to prepare its own financial statements. In all other cases you will need to.

Why is this necessary?

Financial statements can be seen as a capstone for the legal system in the Netherlands, since it offers transparency into your business activities. Next to that; financial statements are the basis of corporate governance. The primary reason financial statements are required is the fact that it serves as a report to your shareholders. The shareholders are then supposed to discharge the board once the financial statements are accepted, based on their performance.

There is also a second important reason for the necessity of preparing financial statements, namely that creditors are protected and know the state of your business. The Trade Register can be accessed by the public, generally for a small fee. It’s considered as a very important source of information and offers transparency for other corporations and potential investors and clients. Last but not least; financial statements are also crucial for taxation. The financial statement in essence serves as the basis.

Dutch accounting standards

All Dutch accounting rules and regulations are regulated by law. For example, The Dutch Generally Accepted Accounting Principles (GAAP) are mostly based on EU directives. The Dutch GAAP applies to all legal entities, such as the B.V. and N.V. Some partnerships also fall under the same scope. There are also some extra rules for companies that are stock listed, as well as insurance companies and certain financial institutions.

Although the Dutch GAAP is different from the International Financing Reporting Standards (IFRS), it is obligatory since 2005 to comply with the IFRS on a structural basis. This also applies to the aforementioned insurance companies and financial institutions. If you own a B.V. or an N.V., you can apply the IFRS if you wish to do so. Just keep in mind, that this will also mean an audit will be required.

What does a Dutch financial statement need to contain?

A standard Dutch financial statement needs to contain a certain minimum of information. This entails at least a balance sheet, but also a profit and loss account. Next to that, notes need to be added to the accounts in case of discrepancies or unclear information. Sometimes extra requirements will be applicable.

Information about Dutch accounting principles

Accounting in the Netherlands is ruled by certain principles. These formulate a set of rules, which ensure that the financial statement and information is clear and concise. The information provided needs to be:

In general, the financial information provided needs to reflect the corporation’s or company’s position honestly and clearly, in accordance with the principles. All the necessary documents such as the balance sheet, the notes and the profit and loss account need to present the shareholders’ equity at the balance sheet date consistently. Next to that, the profit that you made during the year should be an example of the corporation’s liquidity and solvability.

The balance sheet and profit and loss account together with the notes, should present fairly and consistently the shareholders’ equity at the balance sheet date and the profit for the year and if possible should present the company’s solvability and liquidity. These accounting principles need to be clearly represented in the financial statements, plus they can only be changed if there are solid reasons for any change (at all). In these cases, both the reasons for the specific change and the effect the changes will have on the financial position of the company need to be disclosed in the notes. This is exactly why the notes are so important. The Dutch law and legislation provides all the important disclosure and valuation requirements; it speaks for itself that every Dutch company needs to comply with these.

1.     Consolidation requirements in the Netherlands

If you own a parent company with one or more controlled subsidiaries in the Netherlands, you should be aware of the fact that you will need to include the financial data of these subsidiaries in the consolidated financial statements as well. What is a controlled subsidiary? According to Dutch law, it is a legal entity that allows the companies to exercise at least 50% or more of the voting rights in the shareholders meeting. Also, the legal entity is authorized to either dismiss or appoint more than half of the supervisory and managing directors. If you own a partnership and the legal entity is qualified as a full partner, then this also falls under the category subsidiary.

In certain cases you won’t have to include the financial data of a group company or subsidiary. This applies only when:

Next to that, there is also a possibility of omitting consolidation, if:

2.     Audit requirements in the Netherlands

Only companies that are considered either medium or large are by Dutch law required to hire an independent, registered and qualified Dutch auditor to make up the annual report. This auditor also needs to be appointed by the general meeting of shareholders of your company, or the managing or supervisory board. The audit report always needs to contain the following points:

The auditor always needs to report to managing and/or supervisory boards. The competent body should take notice of the auditor’s report, before determining or approving the financial statements. Is an audit not obligatory for your company? Then you have the option of a voluntary audit.

3.     Publication requirements in the Netherlands

Next to the consolidation and audit requirements, there are also requirements concerning the publication of the financial statements. These must be prepared and also approved by the managing directors, within a maximum period of 5 months after the end of the financial year. After the managing directors approve the financial statements, the shareholders need to adopt these within a period of 2 months. Once this has also happened, the company needs to publish the annual report in a timeframe of 8 days. This entails filing a copy of the statements at the Dutch Chamber of Commerce, with the Trade Register.

The total preparation period for the financial statements can be extended in some cases, with a maximum of 5 months. The publication date then needs to fall within 12 months after the end of the financial year. Please keep in mind, that in the case of the shareholders also being the managing directors, the approval date will also be the adoption date. The deadline for publication will then be 5 months without an extension and 10 months with a maximum extension.

Intercompany Solutions can assist you with accounting and audit requirements

Would you like to know more about the specific requirements for your company? Please don’t hesitate to contact us, our professional team can assist you with any question you might have regarding setting up and running a business in the Netherlands.

If you choose to start or continue a business in the Netherlands, you are lucky enough to choose from several very successful industries. The Dutch are well known for their innovative spirit, their architectural prowess as well as their openness to new ideas. In short; the Netherlands are a true heaven for any starting entrepreneur.

Whether you are interested in establishing an e-commerce business, a design related service or just an extra branch of your business in Holland; you are sure to find the right market for your core business here. Below are some of the industries that the Dutch excel in, which means that you can find some common ground here to start your Dutch business.

1.     Service & design

Both the design sector and the service market are firmly rooted in the Dutch economy. It’s profitable to open an online business in the Netherlands, due to the high accessibility to many clients who are mostly bilingual. The design sector has also seen an expansion, since it now also encompasses strategic advice, policy development and combining already existing products and services. Amsterdam still holds one of the most advanced design industries in the world, excelling in branding and technology.

2.     Lifestyle market

Next to design, there is also a very active lifestyle sector in the Netherlands. This particular sector is very dynamic, since its foundation consists of rapidly changing customer behavior. This goes for both in-store purchases as well as online purchases, although the latter categorically falls under e-commerce. There is a multitude of fashion and lifestyle businesses in the Netherlands, meaning you can easily get your unique brand off the ground. Many small businesses focus on a very specific niche, making it easier to sell unique and handmade products.

3.     Education and technology

Dutch citizens in general have a high level of education, which is why they are amongst one of the world’s most skilled work forces. There is currently a lack in certain fields, such as part-time education and properly educated teachers. If you have always dreamt of progressing in the field of education, there are plenty of opportunities available. Next to that; education is becoming digitalized which means there are many interesting possibilities of digitalizing education further.

4.     E-commerce industry

The e-commerce sector has seen an enormous growth during the past few years. More and more people buy items online, from the comfort of their own houses. Although there are already some very successful big players such as Bol.com and Coolblue.nl, there are always opportunities available in unique niche markets, such as ecological or hand-made products. Combine this with a solid supporting tech industry, and you have a firm basis to establish your company upon.

5.     Digital transformation

The Netherlands is on the forefront of digital transformation. This sector covers many different digital experiences, such as digital handling, e-government services and e-commerce. It is also considered a key investment opportunity for many corporate and governmental organizations. Digital transformation substantially reduces the amount of raw materials used and hence, has a positive influence on our carbon footprint. Many industries are yet developing digital transformation processes, giving you a forefront position if you have a good business plan.

6.     Clean tech and clean energy

Especially in the Netherlands, the clean tech industry is highly innovative and developed. Due to the large demand for green energy and more conscious consumption, there is a massive need for more renewable energy and resources to support our current system. There are many interesting ideas, such as Smart City initiatives and other innovative possibilities to turn the world green again. The Netherlands also aims to quicken the transition from gas to CO2 natural resources by 2025. Sustainability as well as a highly reduced CO2 emissions are prime targets, meaning you can easily profit from many potential sectors to invest in. Of course interesting new ideas are very welcome.

7.     Sustainability and smart buildings

Next to overall sustainability, the Netherlands also focuses greatly on smart buildings. Smart buildings are aimed at making the best usage of a building possible; whether it’s linked to energy, data or IoT related devices. Initiatives are aimed at factors such as climate control, comfort and utilization whilst also holding sustainability in high regard. There is currently a high demand in constructional, mechanical and digital professionals, who want to contribute to this ideal with their own experience and knowledge.

8.     Sustainable and smart farming

Next to the digital world, Holland also excels in sustainable and smart farming. The Netherlands currently holds a position within the top 5 of food producers in the world, by focusing on a combination of technology and optimization of production facilities. The Netherlands also has a very active ecological farming movement, in general focusing on self-sustainability and progress towards a healthier and cleaner environment. The farming business will definitely see an evolution in the next decade, so you are sure to find a niche market that suits your preferences.

9.     Hospital solutions and healthcare

The hospital and healthcare business is also being improved, with a staggering amount of 100 million euro being used to implement innovative hospital care. In this story, digitalization also takes a great part. Digitalization leads to reduced costs, whilst efficiency is greatly improved. If you are interested in a healthcare business that offers unique solutions to existing problems, you can find a lot of common ground in the Netherlands.

10.     Architecture

The Netherlands is known for its splendid architecture, which shows its efficiency next to a very natural environment. The way the Dutch are able to form a symbiosis between nature and man-made structures is impressive, which means you have almost total freedom here as an architect. Rotterdam is a prime example of a variety of architectural buildings existing together in unison.

Want to know more? Or do you have an interesting business idea that you would like to discuss? Please feel free to contact Intercompany Solutions anytime. We can assist you during the entire process of company establishment, next to that we also offer you advice on the best way to implement your business.

The e-commerce business has seen an extremely rapid worldwide increase during the past decades. Since the beginning of global internet access, an almost infinite amount of doorways has opened for entrepreneurs to sell and make money online. Of course this also means the retail business has seen a massive overhaul, as many products and services are nowadays bought online. For example; in the Netherlands the e-commerce business has seen a growth from 16 billion to 26 billion in 2018 alone.

It has also seen a growth of almost 25% during the past four years. Some companies like Bol.com and Coolblue.nl are almost a staple nowadays, as a large portion of the population orders many daily products and appliances via these channels. All in all your chances of starting a successful e-commerce business in the Netherlands are very high, provided you come up with a solid business plan and idea.

The Netherlands: entrepreneurs in e-commerce

Next to web shops that sell products and appliances, the Netherlands also created some interesting niches within this sector. In 2016 the Dutch company Takeaway.com did an IPO and the result was a valuation of the staggering amount of 1.3 billion euro. Ordering food via the internet has become a normalcy since then, which is quite an accomplishment.

Since the past few years cross-border shopping has also seen an increase. The Dutch have an extremely high internet and e-commerce penetration coverage, because 97% of the Dutch have internet access and almost 95% uses a direct payment option like iDeal. Which means you can sell your goods to almost anyone and you will also get paid immediately. The Netherlands can therefore be considered somewhat of an e-commerce heaven.

Upcoming trend in the Dutch e-commerce market

Since the e-commerce business especially is continuously changing, your chances to dive right in with your idea are always fluid. Here are some trends that are foreseeable in the near future:

Intercompany Solutions can offer you advice every step of the way

Do you have a good business idea and would you like to know how you can implement this in the Netherlands? Feel free to contact us anytime. Our experienced advisors can assist you in finding the right information for your company, as well as setting up your company in the Netherlands. We also offer many extra services, which will essentially provide you with the solid foundation your company needs.

Our accounting department is specialized in the accounting for E-commerce and webshops. We have experience with Amazon, Shopify, Bol.com and many more platforms.

If you are an innovative entrepreneur and would like to pilot your ideas in a welcoming and innovative atmosphere, the Netherlands might just be the place for you. Some of the high tech industries in this country are amongst the leading in the world, mostly due to cutting-edge research and development and highly modern facilities. Dutch technological products are highly sought after and in general exported worldwide, which makes the Netherlands a perfect base for your tech start-up.

The Dutch have proven their worth in the tech sector

The High-Tech Systems and Materials (HTSM) sector thrives in the Netherlands. Due to the creative, pragmatic and open approach of the Dutch towards high-tech innovation, many interesting inventions and solutions have been known to come from the Netherlands. This includes innovative solutions in sectors such as renewable energy, mobility, security, health and climate change. Solution in such sectors are often found via collaboration and cross-over research, which is exactly one of the traits the Dutch excel in.

Teamwork and constant collaboration are necessary elements in any rapidly changing sector, which are often encouraged by setting up specialist centers of research. One such example is the ‘Brainport region’ in and around Eindhoven, where experts in multiple fields meet to find original solutions to persistent issues. This region was even voted the World’s Most Innovative Region in 2015, and up until today the Netherlands holds the current 4th position of the world’s most innovative countries according to the World Economic Forum.

Highlights in the Netherlands are collaborations between universities such as the TU Delft, Universiteit Twente and the Breda University of Applied sciences, which are actively involved in many high-tech business endeavors and sectors. In general, it is moderately easy to find skilled specialists as well as many interesting investment opportunities in the Dutch high-tech sector.

The Dutch high tech industry vs. the global challenges of today

The Netherlands might be a small country in terms of acreage, but don’t be misled by this. The Dutch are well-known for many world-famous inventions, ranging from the submarine and Bluetooth to the microscope, 4-wheel drive and the telescope. Next to that, the Dutch company Philips is responsible for the invention of cassettes, CD’s and even DVD’s. These are everyday objects that everyday people use, meaning there already is a rich national history regarding many entrepreneurial innovations and inventions.

Nowadays you can find a wealth of interesting companies and start-ups that focus on sustainability, cleaner and renewable energy and solutions that deal with waste. Therefore tech start-ups from all over the globe are highly sought after, simply because the Dutch believe in a collaborative effort to constantly find original solutions to new world problems. The tech market generally focuses on smaller niche markets and stands apart from the rest by focusing on technological excellence.

High quality infrastructure and computer-savvy multilingual employees

A very large portion of innovation in Holland is IT-related, pushing the boundaries in various sectors such as multimedia technologies, virtual laboratories, parallel computing and modeling. The Dutch IT-infrastructure is one of the most developed in the entire world. This enables every start-up to choose from a large pool of professionals, making it easy for you to grow your business fast. Next to Dutch natives, you can also expect a large amount of expats from various fields that can provide you with necessary personnel and assistance.

If you are interested in starting up a company in a country that excels in the development of new technologies and communication systems of the future, the Netherlands is a safe bet. Almost every sector provides room for improvement, making it easy for you to realize your ideas and plans. Intercompany Solutions can provide you with assistance from A to Z during the whole process of setting up a business in the Netherlands. Simply contact us for more information, and we will provide you with a clear quote and ample information.

On 27th September 2020 the Netherlands has introduced new regulations regarding the Ultimate Beneficiary Owner. The regulations are a required change due to new EU regulations related to anti tax avoidance and corporate transparency.

What is an UBO?

A UBO is an ‘Ultimate Beneficiary Owner’, meaning: The person that is actually in control, ownership or in a position of authority over the company. The UBO can be qualified as follows:

The last criteria is meant to include scenarios in which a person has control without having any of the shares. Think of a business investor that has provided financing to the company, but under strict conditions that important decisions will be only made with the approval of this investor.

Another example could be in the scenario of a nominee shareholder. A nominee shareholder is often seen in offshore tax havens, in which a lawyer or company agent holds the shares for the client (the ‘actual’ owner). The Dutch legislation does not allow such type of nominee structures.

What is the goal of the new legislation

Under the new legislation, it is a requirement to have public insight in the share structures and control of companies.  The ultimate goal is to combat tax avoidance, fraud, money laundering and corruption.

Which companies are required to register under the new UBO registration?

With the exemption of

The data that will be ‘public’ or can be requested is as follows

The public part of the UBO register is only searchable on the name of the company. It is not possible to search the UBO register by name of the person. Requesting data from the register will cost money.

The UBO register will make sure to follow the guidelines of the GDPR European data protection act as well as the more strict Dutch General Data protection act.

When you plan to set up a business in a foreign country, one of the choices you will have to make concerns the legal entity type. For some solo entrepreneurs like freelancers or artists the sole trader business might be the appropriate and cheapest option. But in nearly all other cases we advise start-ups as well as already existing businesses looking for a foreign branch or subsidiary, to start a Dutch BV company. The benefits of this business type outweigh most other business types, plus your personal assets are protected. Read on if you like to know more about what limited liability exactly means and how a Dutch BV might be just what you need.

Separating risks and assets with a Dutch BV

One of the main benefits of a Dutch BV is the fact, that you can set up a so-called holding structure. This means that you have a BV holding company and one or multiple subsidiary companies. By setting up a holding structure (two or more BV’s stacked on top of each other) you separate assets and risks. In addition, a future sale of your shares is untaxed under the participation exemption. We will explain the distinction between these two BV’s shortly below.

The BV as a holding company

A holding BV is a type of BV in which you can “store” your assets or other items that are valuable to your company (such as patents). You can do business with these assets, or you can save them for your pension. In addition to all kinds of valuable assets, you can also hold shares in a holding BV. Next to holding assets, the holding BV is also the company that will pay your salary as the owner of the subsidiary BV’s.

The BV as an subsidiary company

You can establish one or more subsidiary BV’s under your holding BV. These will be the BV’s in which all your daily business activities take place. For example, all invoices are sent from the subsidiary company plus it’s where income is received and costs are paid. Next to that, if the holding company holds 95% of the shares in the subsidiary BV, you can enter into a fiscal group. The tax group means that the Dutch tax authorities see both BV’s for tax purposes as one. As such, you can offset the profits and losses of the different BV’s against each other for tax purposes and save taxes this way. Most larger scale BV’s operate via a holding structure, simply because it makes it easier to reap the largest amount of benefits from your Dutch company.

Personal liability for business debts and commitments: BV versus sole trader company

The separation of risks and assets had another major advantage when looking at a BV, as opposed to a sole trader company.  There is a difference in liability for the owner of the company. Owners of a sole trader company are 100% personally liable for debts they might make with their company. This means that these funds can be directly recovered from the personal assets of said owner. In essence, a sole trader company is really person with a VAT number since there is no real distinction between the person and the company.

If you however decide to start a Dutch BV, this is different. The BV is then seen as a legal entity with its own rights and obligations. When the owner of the BV signs a contract, the BV itself is responsible for the fulfillment of that contract and not the person behind it. A BV is represented by its board of directors, but they are not personally bound by the legal acts that the BV enters into. Creditors can recover debts from the assets of the BV, but in general cannot touch the personal assets of the directors or shareholders. Directors can only be held liable in the event of deliberate recklessness.

The Netherlands are further lowering the corporation tax rate

The corporation tax rate in the Netherlands has always been one of the lowest in comparison to many neighboring countries.

A previously announced reduction of the top rate to 21.7% will no longer take place right now, but this might be revised once the current situation in the world settles down a bit.

A Dutch BV makes it easy to attract new investors and clients

In general, investors are not eager to invest in a sole trader company. This is due to the fact that by investing, the sole trader company becomes a general partnership. The investors thus become personally liable for debts incurred by another partner. A BV is a so-called capital company. This means that a BV issues shares that represent a value. By issuing these shares, a BV can attract capital from new investors.

Next to that, a Dutch BV has a more professional feel to it. This is mainly because the requirements for establishing a BV are more extensive than for starting a sole trader company, for example. The formation of a BV is effected through a notary. In addition, the BV has an extensive administration obligation. For example, it is legally required to submit annual financial statements to the Chamber of Commerce. An annual account consists of various parts. The larger a company, the more financial information it has to disclose. This gives creditors and other parties a good overview of what is going on in the BV. The stricter incorporation requirements and extensive administrative duty contribute to the professional image of the BV.

A Dutch BV is quick to set up with low capital

Until October 2012 it was mandatory to bring a share capital of 18,000 euros. This threshold has disappeared with the introduction of the Flex-BV. A Flex-BV can be set up with a capital as low as 0.10 eurocent per share. A BV can also be set up in just a few business days, if you partner up with a professional. Intercompany Solutions can help you in every step of the way; feel free to contact us for information or a personal quote.

What you need to know about the flex-bv

Since October 1, 2012, it has been easier to set up a private limited company. Due to the simplification of the rules, a BV is also referred to as a ‘Flex BV’. Here is our overview of what has changed since the introduction of flex-bv and what the benefits could mean for you.

Are you going to start your own company? You can choose different legal forms. In the past, many start-up entrepreneurs were excluded from starting a private limited company (BV) due to the stringent set-up requirements. Fortunately, this is no longer necessary after the amendment of the law of 1 October 2012.

The advantages of a flex-bv

The BV is a legal entity. This means that in the case of debts you are not personally liable for these costs (such as in the case of bankruptcy), but that they remain with the BV unless you acted negligently or fraudulently. Shareholders are only liable for the amount they have invested in the BV. The BV stands on its own: there is continuity. If something happens to you, your company can simply continue to exist. However, a new director must be appointed. If you want to sell your company or retire, you simply sell your shares to the new owner.

If your company has a high profit, the corporation tax that you have to pay if you have a BV is lower than if you pay tax if you have a sole proprietorship or partnership (VOF). A BV has a clear organizational structure.

Applying for a loan:
Note: if you are a director-major shareholder (dga), you often also have to sign for private liability when taking out any loans. As a result, you are still privately liable for the repayment of the loan.

How to convert your company into a bv:
Have you been turning a profit with your sole trader, VOF or partnership for some time? Then it can be beneficial to convert it to a BV. This process has also become simpler since the arrival of Flex BV.

You use the services of a notary for a deed of incorporation. They will draw up your articles of association and let the Chamber of Commerce and the Tax Authorities know that your legal form has changed. It can be that simple. The new year is a good time to do this. You can then close your financial year with, for example, a sole proprietorship and continue with a company. There are no two legal forms mixed up.

Minimum Salary directors / owners 

If you are the owner of a BV, you are most likely also the director of a major shareholder (DGA) (unless one of the other shareholders in the BV is). You are then obliged to give yourself a usual salary of € 45,000 (in 2018). This can be reduced if you can demonstrate as a starter that you do not have the resources to pay such an amount to yourself. Submit this application to the tax authorities. You can often reduce your salary to the minimum wage. In practice, it often comes down to taking a wage for a certain amount of the profits.

This rule is only applicable to persons who are both a shareholder, of relatives of a major shareholder in combination with being a director.

What do you need for a flex-bv?
A notarial deed of incorporation;
Registration of the BV in the Trade Register of the Chamber of Commerce (KvK).

The main changes

The rules for a flex-bv

The flex-bv deletes several measures that were intended to protect creditors, including the minimum starting capital of eighteen thousand euros. It has been replaced by provisions that still protect creditors.
If you threaten to no longer be able to pay your due debts, you may not pay a dividend.
If you act carelessly, you can be held personally liable for the debts incurred. In addition, the laws to combat bankruptcy fraud are being tightened.

Read here for more information on incorporating a Dutch BV.

Entrepreneurs are invaluable. They are the engine of the Dutch economy. We owe our jobs, prosperity and opportunities for development to a large extent to creative self-employed persons, innovative startups, proud family businesses, global companies and a large, varied and robust small and medium-sized company.

Space for entrepreneurs

Legislation and regulations are being modernized so that companies can better respond to social and technological changes with their services and products. Regulatory pressure and administrative burdens are limited, for example by expanding the current business effects test with an SME test.

The various inspections will cooperate better so that better enforcement is associated with fewer administrative and supervisory burdens. Appropriate rules and more space will be created for companies with social or societal goals while maintaining a level playing field. The possibilities for regional and sectoral pilot projects, legal experimental space, test locations (for example for drones) and rule-free zones will be increased. Minimum requirements and appropriate supervision apply.

In order to take advantage of regional opportunities, the national government seals 'deals' with decentralized authorities, in which the parties undertake to work together on new solutions.

Strengthening innovation

In vocational education, professionals, technology and craft are given priority, revaluation and a new impulse. The Technology Pact and the Beta Technology Platform will be continued.
The cabinet invests 200 million euros a year in fundamental research. In addition, 200 million euros per year will become available for applied research. This includes an extra investment at large technological institutes that demonstrably meet market needs and public-private partnerships at universities and colleges with a focus on beta and technology.

Credit and banking sector

The cabinet is continuing the establishment of a Dutch financing and development institution, InvestNL, in accordance with the set-up that has already been started with three main objectives (see Parliamentary Paper 28165-nr266) and is making 2.5 billion euros available as equity.
Financial technological innovations (Fintech) contribute to innovation and competition in the financial sector. The entry of these innovative companies is simplified by introducing lighter banking and other licenses while ensuring sufficient protection of the customers.
Well-capitalized banks are crucial for lending. As soon as the stricter requirements of Basel IV come into force, the requirement for the leverage ratio is brought into line with European requirements.

A level playing field for entrepreneurs

An open economy is difficult to relate to the barriers that Dutch entrepreneurs too often encounter in other countries outside the European Union. This also applies to foreign companies that are (partly) state-owned or that benefit from state aid. The Netherlands wants to make agreements at European level and with third countries for a better balance.

To prevent improper and unwanted competition between governments and private parties, the general interest provision in the Market and Government Act is being tightened. For activities that are developed by governments and that are otherwise not or insufficiently offered by market parties, such as sports, culture, welfare and reintegration services, there remains a possibility to provide these by governments.
Additional franchise legislation will be introduced to strengthen the position of franchisees in the pre-competitive phase.

A competitive business climate

We want the Netherlands to be a country where it is attractive for companies to settle and from which Dutch companies can trade all over the world. The Netherlands benefits from this because these companies add employment, innovation and strength to our economy. Many people work at internationally operating companies and at companies that supply them. The Netherlands is an attractive country of residence for many internationally operating companies. Measures are needed to keep it that way in an increasingly globalizing world.

Read here for more information on registering a company in the Netherlands.

The first thing you need to do is to register your company with the Trade Register via the Chamber of Commerce. Your company information will be automatically transferred to the tax authorities.

When registering the BV with the Chamber of Commerce you will receive an RSIN number. This number is also on the extract of the Chamber of Commerce. This RSIN number becomes the fiscal number of the BV. The VAT number is derived from this number, namely with the addition NL and B01 at the end. However, this number must be activated, and we can perform this process for you.

To assess whether the BV is an entrepreneur for VAT, the following matters are taken into account:

A taxable person for VAT is any person who, in the pursuit of economic activity, provides, regularly and independently, for-profit or not, a supply of goods or services, wherever the economic activity is carried on.

The definition includes 4 essential elements:

Everyone:
Natural person, legal person or associations insofar as they carry out economic activities

Economic activity:
All activities of the producer, trader or service provider are envisaged (except for exempt transactions).

Regularly exercised activity:
To be a taxable person, the transactions listed in the Code must be performed by him/her regularly. Only through succession do actions become an activity. The regular occurrence of the actions in the form of an activity is not clearly defined.
Determining whether an action is part of a regular activity or of an accidental nature is assessed on the basis of the facts.

Independent:
The activity must be carried out on an independent basis and not in employment. There should be no bond of subordination to another person.

The criteria the tax office uses for VAT assessment can include:

If the BV meets the tax inspector assessment, there is a tax liability for VAT, and the Tax and Customs Administration will issue a VAT number. This international VAT number is crucial for international transactions with other legal entities within the EU since a valid number leads to an invoice without VAT. (a so-called intra-community transaction). It is also important to always check the validity of the VAT number of your counterparty since the normal VAT rate applies if the number is invalid. The VAT number can be checked using the European Vies VAT number validation website.

Where to use the VAT number?

Foreign citizens and businesses, as well as local citizens who apply for a VAT number with the Dutch authorities, must display this number on every invoice they provide. They must also file VAT reports with the local tax office. All invoices are required to include certain information about the VAT, such as:

The VAT number of the client;
The VAT ID number of the seller;
Information about the items/services sold;
The amount of VAT (net);
The VAT rate;
The amount of VAT charged;
The total amount including VAT.

In conclusion

The whole process of applying for a VAT number can be completed within 5 working days. Our accounting and VAT specialists file- and consult hundreds of such VAT requests per year. Our specialists ensure the best possible service to represent your company with the tax authorities.

You should also be aware that if your company is dissolved, you must also contact the tax authorities as the VAT number must be deleted and the company will be de-registered.

Would you like to start a business as an expat? The Netherlands is an ideal place for entrepreneurs. There are numerous market opportunities and a healthy economy with plenty of potential investors open to new ideas.

However, the Netherlands is also known for the a number of administrative procedures that you have to consider when starting your own company. To set up a business in the Netherlands, for example, one of the first things you need to decide is if you want to register and operate the company remotely. Or if you want to work and reside in the country.

If you are from a country not from the EU, EEA, Visa free travel country, you might need to apply for a business visa to come by. For long term residency you might need to apply for an Authorization for Provisional Residence, and possibly even a work permit or TWV. When completing the application, keep in mind that your proposed business must benefit the Netherlands in some way.

Legal forms

The next step is to decide which legal form is right for your company. It is essential to choose a structure with the appropriate legal form as this determines liability for tax purposes. ICS can help you with this process. Generally foreign entrepreneurs are best suited to start a Dutch BV company.

BV or Sole Trader (eenmanszaak)

Freelancers living in the Netherlands, often choose the sole trader structure. However, the most frequent option for professional small and middle sized businesses is a the BV, which is a limited liability company. The advantages of the Dutch BV for foreign entrepreneurs are:

For the Sole Trader (Eenmanszaak)

Registering your company at the Chamber of Commerce

Once you have decided the kind of business you wish to set up, the next thing you need to do is to register the company with the Chamber of Commerce, which is mandatory. Registration must occur from one week before the start of business to one week after work has commenced.
Very soon after your business is registered with the Chamber of Commerce, you will be issued with a unique company number or the Chamber of Commerce number. It is a statutory requirement to include this number on all company invoices and mail.

Dutch Corporate Tax

As well as registering with the Chamber of Commerce, your fledgling business must additionally be registered with the Tax Authorities. We recommend registering as soon as you can in order to claim a VAT deduction. ICS is specialized in tax registration for foreign business owners.

What about Dutch VAT?

When customers are invoiced for your services or when they pay you for your products, you will need to add an extra 21% VAT tax to your rate.
The VAT return must be calculated every quarter and paid directly to the tax authorities. However, VAT may be deducted from VAT spent. VAT is not a cost for the entrepreneur, it is only a cost for the end consumer.

Vat is not the only tax.
Entrepreneurs in the Netherlands will at least encounter some of the following taxes.

Why does the Netherlands have Payroll tax?
With the payroll tax, costs such as health insurance and unemployment benefits for every resident is covered. Every tax paying resident of the Netherlands has the right to these benefits.

Business Administration

In the Netherlands, businesses must keep business records. Every business owner is legally obliged to keep them for at least 7 years. If you close your company, your accountant or bookkeeper is required to hold the documents for you. The bookkeeper will be legally appointed as the custodian for your records.

The business Administration includes:

Dormant company accounting

The Netherlands does not have a type of dormant company. If your firm is inactive (little or no invoices), you can request your accountant for the VAT filings and Payroll tax to be halted. However, you are still legally required to file the end-of-year corporate tax filing, the board to sign off on the numbers in an official declaration and depositing of the annual statement in the Chamber of Commerce. ICS does offer special accounting prices for firms with no activities. Please ask one of our accounting specialists for more information.

Insurance and pensions

As an entrepreneur, you are prepared to take risks and you may have plenty of responsibilities.
It is advisable to take out insurance to protect you against risks and to guarantee an income if you are unable to work in the future.

In the Netherlands, entrepreneurs are liable for personal injury and material damage that you, your employees or your product cause on your behalf. Business liability insurance is, therefore in some more risky type of business categories (construction and so on), essential to reimburse the damage that your company may cause to others. Another frequently used insurance is disability insurance which assures you of an income if you are unable to work because of ill-health.

Health insurance is mandatory for everyone in the Netherlands. As an entrepreneur, your contributions are based on your taxable income. Legal assistance insurance is also recommended as conflicts may occur, whether with clients, employees or suppliers. This type of insurance guarantees help and advice on legal issues.

Dedicated to support entrepreneurs with starting and growing business in the Netherlands.

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