Foreign entrepreneurs interested in opening a business in the Netherlands have to decide on the Dutch company type to suit their needs. Our Netherlands-based company formation agents can assist you in selecting the correct company type. The Netherlands company act allows foreign and national businessmen to operate the following entities:
- Private limited company (BV)
- Public company (NV)
- Foundations (Stichting)
- Associations or Cooperatives
The Dutch Private Limited Company (BV)
Dutch: Besloten Vennootschap
Private limited liability companies are the most common form of companies within the Netherlands. It is similar to the German GmBH, the American LLC, or the English’s Ltd. Limited liability companies are businesses in which equity is divided by shares.
The private limited company Dutch BV is commonly employed by entrepreneurs investing in the Netherlands. The Dutch company act is renewed, therefore a Dutch BV no longer requires a minimum capital deposit. One shareholder is the minimum requirement for a Dutch BV, the liability is limited to the capital deposited. Making the Dutch limited company a competitor for the English Ltd. The shares of the Dutch BV are transferable by notary deed.
The Dutch Public Company (NV)
Dutch: Naamloze Vennootschap
The Netherlands public company or NV is the most popular legal form for companies who may be listed in a public Stock Exchange. The capital requirement for the NV is 45,000 euro.
Public companies are businesses in which a portion of the stock or share is available on the Dutch stock exchange for members of the general population. They can invest capital in order to garner shares in the business. The characteristic of the NV company is that shares are freely tradeable, as compared to the Dutch BV where the shares are privately tradeable and involve a notary deed.
The current largest public Dutch company title belongs to the oil industry giant, Royal Dutch Shell.
The Dutch Private Foundations
A Dutch foundation is a legal private entity with the sole intent to benefit a certain cause, whether for personal profit, social causes or charity. A notary deed finalizes the establishment of a Dutch Stichting.
Although this process is fairly straightforward and ideal for charities, small family businesses, and estate planning. There are many private foundations located in the Netherlands.
The Netherlands is an interesting destination for the opening of a foundation. A Dutch foundation is established in a relatively similar manner as a Dutch BV, a deed of incorporation at a public notary forms the legal entity. The Dutch Stichting may be used to minimise tax.
The Stak foundation allows for a unique type of purpose, it is commonly used for separating the economic ownership and the control of the company by certifying the shares. The certificates may be granted to an heir, while the board of the foundation is in charge of the management of the entity. This results in unique tax planning capabilities.
The Dutch law differentiates between a small variety of foundations with specific purposes, the ANBI and SBBI. The ANBI is commonly used for general purpose charitable foundations, the ANBI status may be granted by the tax authorities to charitable foundations, this may result in significant tax advantages for the ANBI. The SBBI is a foundation with the purpose of unifying members in a certain goal, such as an orchestra.
The Dutch Joint Ventures / Partnerships
Partnerships have two shareholders, or a group of investors equally liable and responsible for the actions or repercussions carried out by the enterprise. In the Netherlands, there are two categories of these partnerships, private and public.
The partners of a general partnership can be jointly held responsible for the full liabilities of the partnership, while severally accountability may apply under normal circumstances regarding the company’s obligations and debts. The limited partnerships in the Netherlands consist of a general partner and a silent one.
Dutch: Vennootschap onder firma
Private partnerships are when two or more individuals hold the same amount of equity stake in the corporation and therefore are equally liable for the actions, debt, and litigation accrued by the company.
The Limited Partnership (CV)
Dutch: Commanditaire vennootschap
The Dutch CV is a unique type of partnership, it consists of 2 or more partners. Whereas one assumes the role of the general partner who will manage the company, the general partner is not limited in liability. The other is referred to as ”silent partner”, the silent partner is limited only to his capital contribution. The silent partner may not be involved in the management of the company.
The Professional Partnership
The professional partnership includes two or more partners, each is responsible for his or her own claims. The professional partnership is suitable for exercising specific professions, such as dentists, lawyers, accountants and other self-employed occupations.
The Dutch Associations and Cooperatives
Dutch: Vereniging en coöperatie
Associations usually are established as non-profit entities, these type of entities are not required for registration at the Dutch chamber of commerce. Cooperatives are characterized as associations which pay directly to the members.