Wednesday, June 19, 2024

How to Start a Business in the Netherlands

As one of Europe’s most prosperous countries, the Netherlands is an excellent place to start a business. A strong legal system, diverse and robust economy and international culture all make the Netherlands a good “base” for entrepreneurs, investors and business owners.

Like most countries in Europe, the Netherlands offers several different company types. These each offer different benefits and are intended for different types of businesses — some suit two partners, while others are the Dutch equivalent of a limited liability company.

In this guide, we’ll explain how you can start a business in the Netherlands using one of these options, either independently or through the use of a company formation agent.

Business Types in the Netherlands

There are five primary types of businesses that can be formed in the Netherlands. Of these, the Dutch “BV” is the most commonly used option for foreign entrepreneurs. We’ve listed all five of these company formation options below.

Dutch BV

The BV, or Besloten Vennootschap met beperkte aansprakelijkheid, is the Dutch equivalent of a private, limited liability company. It shares many legal characteristics with an LLC in the USA, or an Ltd. company in the UK.

A Dutch BV has a minimum share capital of 1 EUR, making it inexpensive to open and ideal for small businesses. The company is owned by its shareholders, making it suitable for companies with multiple investors or founders.

By law, a Dutch BV must have a local company headquarters and meet certain regulations with regards to its Board of Directors. These two issues that can be managed by using a company formation agent.

Because of the legal benefits this company type offers and the relatively low cost of setting up a company, the BV is the most common company type in the Netherlands.

General Partnership

A General Partnership is a business with two or more partners operating via the same business name. The two partners share ownership of the business and its profits. A general partnership is not a limited liability company — instead, the partners have unlimited liability for its debts.

Opening a general partnership has certain advantages, such as the fact that no share capital is required. However, it also has significant downsides, such as the risk of the partners’ personal assets potentially being used to repay creditors if the partnership becomes insolvent.

Limited Partnership

A limited partnership is a different type of partnership in which one partner is responsible for the partnership’s management and liabilities, while a second “silent partner” provides the business’s finances.

Limited partnerships are called ‘commanditaire vennootschap in Dutch. In this partnership, the managing partner is personally liable for the partnership’s debts, while the limited partner is only liable for their investment in the partnership, provided they do not act in a management role.

Professional Partnership

A professional partnership is an alternatively form of partnership in which several partners work alongside each other under one name. This type of business is called a “(maatschap)” in Dutch and is typically used by self-employed service providers such as lawyers or accountants.

Public Liability Company

As in other countries, a public liability company is a company that has shares freely available for the public to purchase and trade. This company structure is typically used by large companies in the Netherlands with significant investments.

How to Open a Business in the Netherlands

Starting a business in the Netherlands is a very transparent process. The Dutch government operates a complete online guide for would-be business owners, covering everything from the residency status requirements to selecting a trade name, paying taxes and more.

However, the easiest way to open a business in the Netherlands is to work with a Netherlands company formation agent. These agencies specialize in helping non-local entrepreneurs open and operate Dutch companies and can provide expert advice on the best options for you.

Elliot is the Editor at ABCMoney. He manages a team that writes and contributes to many leading publications across a number of industries.

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