Understanding the Dutch Bankruptcy Laws: What You Need to Know

Intercompany Solutions aims at providing foreign entrepreneurs with a wide array of excellent services, aimed at establishing a Dutch business and making it flourish at the same time. We have assisted entrepreneurs and business owners from all over the world, helping them to start a company in the Netherlands and expand their global business activities. Our goal is to help you navigate the Dutch business culture, grow your company, and make sure you conform to all applicable laws and regulations.

Not only can we incorporate your company in just a few business days; we can also help you out with tax returns, many administrative tasks and apply for specific registrations such as EORI and Article 23 and tax incentives. We have built a solid network in the field over the years, which makes it possible to tailor our services to all your specific needs. If you ever want to consider establishing a Dutch business, feel free to contact us for professional advice and all the help you might need. If you want to know more about what we do, take a look at our website and the testimonials of entrepreneurs that came before you.

Starting a company means you will have to manage your finances well

Most entrepreneurs who start a business in the Netherlands manage to build a strong and successful presence. If you already own a foreign company, taking it overseas can help in gaining more clients, broaden your network and offer your products or services internationally. The Netherlands is known for its innovative spirit, welcoming attitude towards foreigners and business-friendly climate. This, in itself, is a very good basis for success and growth. But it does mean you will have to work hard, as there is also a lot of competition out there. 

Next to that, it is imperative that you take care of your finances and file your tax returns in time. The Dutch laws covering taxes are pretty strict and if you don’t adhere to all these regulations, you can get into trouble at some point. Next to that, you should always make sure you have a healthy budget to spend and don’t spend more than your actual income. Sometimes, entrepreneurs take risks and this can lead to failure in the end. In the worst case scenario, your company might even become bankrupt. Even though this is not a subject many business owners like to talk about, we have dedicated this article to bankruptcy, so you know what you will face when you don’t manage to keep your company afloat. Please keep in mind that this does not always mean it’s the end for you; there might still be a shot at a second change. We will also explore this option later in the article. 

What is bankruptcy, and when can this happen?

Bankruptcy is a legal process that happens when a person or company can no longer pay their debts. In the Netherlands, a company can be declared bankrupt when it has at least two creditors and can’t pay what it owes to them. This doesn’t just mean being late on a bill, it means the company is truly out of money and unable to meet its financial obligations. Bankruptcy can happen due to many reasons. For example, a business might lose important customers, face unexpected costs, or simply not earn enough money to keep on running. There are also examples in which a company simply grows too fast and takes on more debt than it can handle. Other times, economic changes (like inflation or supply chain problems) can play a role.

In most cases, the company itself then asks the Dutch court to be declared bankrupt. But creditors, such as suppliers, banks, or even the Dutch tax authorities, can also request this. Once the court agrees, a legal process begins to handle the remaining debts and assets. Bankruptcy is serious, but it doesn’t always mean the end. In some cases, parts of the business can be saved or restarted in a new way. Understanding how bankruptcy works can help business owners spot problems early and take action before it’s too late.

Ways to prevent your Dutch company from going bankrupt

No business owner wants to go bankrupt, but luckily, there are steps you can take to reduce the risk. The key is to stay alert, plan ahead, and act early when things aren’t going all too well anymore. Firstly, always make sure to keep a close eye on your finances. So this means you need to know exactly how much money is coming in and going out. If you notice that bills are piling up or income is dropping, never ignore this, but take action right away. Secondly, try to build up a financial buffer. Having some savings can help you survive slower periods, times with less income or unexpected costs. Also, please make sure to avoid taking on too much debt. Borrowing can help in the short term, but it can become a big problem if sales don’t improve.

Thirdly, be honest and transparent to your creditors. If you’re struggling to pay them, don’t wait until it’s too late. Many suppliers, banks, or the tax office may be open to creating a realistic payment plan if you’re honest and proactive. We can help you create a recovery plan, look for cost savings, or even coordinate administrative support and refer to specialized legal or debt-restructuring partners. Finally, don’t be afraid to adapt your business. If something’s not working, like your pricing, product, or strategy, changing course might be what keeps your company alive. These steps can at least ensure that you stay in the safe zone. And one more tip: make sure you establish a limited liability company. This makes sure that you won’t be held liable personally for any debts your company makes. This will save you a lot of problems. This is also the reason that almost every foreign entrepreneur chooses the Dutch BV (private limited liability company) as the preferred company type to establish. 

What happens if your company does go bankrupt?

If your company goes bankrupt in the Netherlands, it means the court has decided that your business can’t pay its debts anymore and needs help sorting things out. Once bankruptcy is declared, control of the company usually passes from the owners or directors to a court-appointed person called a trustee (or curator in Dutch). The trustee’s job is to manage the company’s assets and try to pay back as much money as possible to the creditors. The bankruptcy process starts with the trustee taking stock of everything your company owns, including money, equipment, and property. Then, the trustee sells these assets and uses the money they acquire to pay back creditors in the order that is set by law. This means that some debts, like wages owed to employees or taxes, get paid first.

During this time, the company usually stops its normal business activities. Employees may lose their jobs, and contracts might be ended. The goal is to collect and distribute as much money as possible to those who are owed any money. Bankruptcy can be tough for business owners, but it doesn’t always mean the company is completely finished. Sometimes parts of the business are saved or sold to new owners. If you own a holding company, it might be that the holding BV still stays afloat, whilst only one of its subsidiaries goes bankrupt. In this case, the money held in the holding is generally safe. After the process ends, the company will usually be closed, but in some cases, it can restart in a new form. It’s important to understand bankruptcy isn’t just about money, because it can also affect your reputation and your ability to start new businesses in the future. That’s why it’s best to act early and get professional advice if your company is in trouble.

1. Filing for bankruptcy: who can do it and how it starts

The bankruptcy process begins when someone files a request with the court asking to declare a company bankrupt. This request can come from different people. Usually, the company itself may realize it cannot pay its debts anymore and asks for bankruptcy protection. This is called a “voluntary bankruptcy.” But creditors, like suppliers or banks who are owed money, can also file a request if they believe the company won’t pay them back. Even the public prosecutor can get involved in some cases. Once the court receives the request, it looks at the company’s financial situation: the court then checks if the company is indeed unable to pay its debts. This means the company has at least two creditors and cannot meet its payment obligations on time. If the court agrees, it will declare the company bankrupt.

This declaration is important because it officially starts the legal process of bankruptcy. From this moment on, the company’s owners and directors lose control over the business, and a trustee will be appointed to manage everything, as we already stated above. It also means the company can no longer make decisions about selling assets or paying debts without permission. Filing for bankruptcy is a serious step, but sometimes it’s the best way to handle a business’s financial troubles. It provides a legal framework to fairly deal with creditors and try to make the best of a difficult situation.

2. Role of the court and the trustee (curator)

After the court declares bankruptcy, it appoints a trustee, known as a curator in Dutch. This person is usually a lawyer or financial expert who takes over control of the company’s affairs. The trustee’s job is to protect the interests of the creditors and manage the company’s assets carefully. The trustee reviews the company’s books and records to understand its financial state. They look for assets like cash, property, equipment, and anything else that has value. The trustee also investigates if the company’s directors acted properly or if there were mistakes or wrongdoing before bankruptcy.

During this time, the trustee stops the company’s normal operations, if necessary, to avoid wasting any remaining value. They may decide to sell parts of the business or assets to raise money. The trustee also informs all the creditors about the bankruptcy and keeps them updated. The court supervises the trustee and makes sure the process follows the law. The trustee must act fairly and transparently while trying to recover as much money as possible to pay creditors. The trustee’s work is very important in the sense that they ensure that the bankruptcy process is fair and orderly for everyone involved.

3. Selling assets and paying debts

One of the main tasks of the trustee is to sell the company’s assets. This can include things like buildings, machines, vehicles, stock, or intellectual property. The goal is to convert these assets into cash to pay off debts. This process is also known as “liquidation”. The trustee tries to get the best possible price for each item, but must also act quickly and fairly, which can be tricky sometimes. Once the assets are sold, the trustee distributes the money to the company’s creditors. But not all creditors get paid equally. Dutch law sets a strict order for who gets money first. For example, employees are usually first in line to get paid their wages. Taxes owed to the government also have priority. Other creditors, like suppliers or banks, get paid only after these so-called priority debts are covered.

If there isn’t enough money to pay all creditors, they will receive only a part of what they are owed. This is called a partial payment or a “pro rata” distribution. The trustee also handles claims from creditors, making sure their requests for payment are valid. Creditors usually must register their claims in the bankruptcy process to get paid. This part of the bankruptcy is often complex and can take months or even years, depending on the size and complexity of the company. But in general, the aim is to finalize the process as fast and smoothly as possible. 

4. Closing the bankruptcy: what comes next?

When the trustee has sold as many assets as possible and has distributed the money, the bankruptcy process comes to an end. The trustee then prepares a final report for the court, explaining everything that was done and how the money was distributed. In most cases, the company itself will be closed and removed from the business register. This means it no longer exists as a legal entity. However, sometimes parts of the company or its business can be saved. For example, the trustee may find a buyer interested in continuing part of the business or restarting it under new ownership. This can save jobs and keep the business going in a new form.

For the company’s owners and directors, bankruptcy can have consequences beyond the closure. They might face personal financial liability if they acted wrongly, for example. In some cases, directors can even be disqualified from running a company for a certain period. Bankruptcy also affects the owner’s reputation and future business opportunities. That’s why almost everyone tries to avoid bankruptcy by acting early or finding alternatives. Even though bankruptcy is difficult, it provides a clear legal path to deal with debts and allows creditors to be treated fairly.

Intercompany Solutions can assist you during this process and come up with ways to start over

Going through bankruptcy can feel overwhelming, but it doesn’t have to be the end of your business journey. Many entrepreneurs and companies use bankruptcy as a fresh start, meaning a chance to learn, rebuild, and come back stronger. Starting over after bankruptcy takes careful planning, patience, and support, but it’s definitely possible. Below, we will outline some important steps and ideas to consider when rebuilding your business after bankruptcy.

Assess what went wrong and learn from it

Before jumping into something new, take time to review what caused the bankruptcy. Were there financial mistakes, market changes, or management problems? Were some things avoidable? Was there any foul play by one of the directors? Understanding these issues helps you avoid making the same errors again.

Create a realistic business plan

A clear plan with achievable goals is crucial. If you really want to start over, make sure you create a business plan that includes a budget, timeline, and strategies for growth. Make sure your plan considers possible future risks and how to manage them. Learn from the past and make sure you don’t make the same mistake twice.

Seek financial backing

After bankruptcy, banks and investors might be hesitant to offer funds. However, there are still options:

• Look for specialized lenders who support businesses rebuilding after bankruptcy
• Consider bringing in partners who can provide capital and share the risks
• Explore government grants or subsidies aimed at supporting new business initiatives

Even though this part may be tricky, there are generally possibilities that you just need to uncover, and we can assist administratively with applicable subsidy or incentive applications and refer you to financing partners where needed. 

Use resources from other holdings or businesses

If you own multiple companies or have a holding structure, you might be able to use funds or assets from these to support your new venture. This can provide a stronger financial foundation and improve your chances of success. You can start over, but with a better and more solid plan this time, and the experience of how to not do things. 

Build strong partnerships and networks

Partnering with other companies, suppliers, or advisors can provide valuable support. They can offer resources, knowledge, or customer connections that make rebuilding easier. They can also make you feel stronger and more capable, since you have people that have your back. This can make you feel more comfortable and secure about the future.

Focus on your cash flow and manage debt carefully

Always keep a close eye on cash flow, and avoid taking on unnecessary debt early on. Paying bills on time and maintaining good relationships with suppliers helps build trust. Make sure your budget is realistic, and you spend your money only on truly necessary things. It can de easy to fall into the same trap again, so manage your money well from now on. 

Consider new markets or business models

Sometimes starting over means trying something different. Explore new products, services, or customer groups that might offer better opportunities. Just because your previous ideas didn’t work out, doesn’t mean new ones won’t. Using your expertise and knowledge in new ways may open up interesting opportunities. 

Stay positive and patient

This is one of the most important tips. Please know that recovery always takes time. Setbacks may happen, but persistence and a positive attitude are key to long-term success. If you truly have an entrepreneurial spirit, you will see the problems as stepping stones into a new future, in which success is still a possibility. 

Get professional advice

Work with accountants, lawyers, or business coaches who understand bankruptcy and recovery. Their guidance can help you navigate challenges and make smart decisions. Intercompany Solutions has many experienced financial and tax advisors, who can help you out through the entire process. Remember, many successful companies have bounced back from bankruptcy by using these steps. It’s not just about fixing what went wrong; it’s about building something better. With the right support and planning, your business can thrive again.

What other services can we offer you?

Intercompany Solutions has assisted hundreds of foreign entrepreneurs from over 50 different nationalities. Our clients range from small one-person startups to multinational corporations, and everything in between. Our processes are aimed at foreign entrepreneurs and, as such, we know the most practical ways to assist with your company registration. We can assist with the full package of company registration in the Netherlands:

• Company establishment in the Netherlands
• Application for VAT or EORI number
• Startup assistance
• Accounting services
• Secretarial services
• Legal assistance
• Tax and accounting services
• General business advice

We are constantly improving our quality standards to continually deliver impeccable services. 

Intercompany Solutions can help you re-establish a Dutch company

Even though our main focus is on Dutch company establishment, we are also very aware of the risks of business ownership. Unfortunately, a small percentage of Dutch companies simply doesn’t make it in the end. But this doesn’t mean it’s actually the end for you, on the contrary. If you have financial problems, please feel free to reach out to us in an early stage. Together, we can look for ways to save your company and avoid bankruptcy. 

In the case that bankruptcy is unavoidable, we can coordinate the process and provide administrative support, with legal handling via our partners. Once the process is finished, we can assist you in finding new ways to start over. Maybe we can help you with restarting a business, or establish an entirely new company with funds from your holding. There are often more solutions than you think, you just need to know about them. And that’s what we are here for in the end: to help any foreign entrepreneur or investor find their own solutions and make their ideas and dreams come true, even after setbacks. Please contact us for personal advice, we will always gladly assist you in any way we can.