Legal

Which legal structure can I choose?

For entrepreneurs in the Netherlands there are the following forms of companies:

Sole trader/individual business owner/sole proprietorship (Eenmanszaak)
General partnership (Vennootschap Onder Firma, VOF)
Limited Partnership ( Commanditaire Vennootschap, CV)
Private Limited Liability Company (Besloten Vennootschap, BV)
Public Limited Liability Company (Naamloze Vennootschap, NV)
Branch Office
Foundation (Stichting)
Association (Vereniging)
Cooperative (Coöperatie)
Freelance (Zelfstandige Zonder Personeel, ZZP)

Sole trader/Sole proprietorship (Eenmanszaak)

Owned by the owner itself (1 person)
No distinct existence from owner, so profit regarded as income of owner
Sole traders can be personally liable for business obligations, as can their spouse
Owner is accountable for company’s debts and may affect properties of owner (personal possessions may be used as a guarantee in case of financial difficulty)
Can be established without a notarial deed
A private individual can only register one ‘eenmanszaak’, however, you can have more trade names and carry out various business activities under different trade

General Partnership (Vennootschap Onder Firma, VOF)

Owned by two or more persons
Partnership agreements will determine contributions, liability and entitlement.
For tax purposes, each partner is usually considered a self-employed entrepreneur
All partners (and their spouses) are jointly, personally liable for business debts and obligations, though a marriage contract can protect spousal assets.

Limited Partnership (Commanditaire Vennootschap, CV)

Owned and run by two or more persons
It has two kinds of partners: active and limited
limited partner tends to be the financial backer for the company
limited partner tends to allow the active partner to make the day-to-day decisions and is only at legally at risk of losing their financial investment if they are not involved in managing the company in any way
Active partners are liable to third parties and personal assets (including those of a spouse) are not protected from creditors (though a marriage contract can protect spousal assets)

Private Limited Liability Company (Besloten Vennootschap, BV)

The most common company to be registered
May not offer shares to the public and restrictions are placed on the transferability of their shares
Can be incorporated by 1 or more persons
Only EUR 0.01 start up capital required (the minimum start up capital required was reduced from €18,000 to €0.01 in 2012)
Most frequently used legal form by foreign investors

Public Limited Liability Company (Naamloze Vennootschap, NV)

Can be incorporated by 1 or more persons
Issued and paid-up share capital must be at least €45.000
Shares are offered to the public and are freely transferrable

Foundation (Stichting)

Legal entity with no members
Allowed to make money, however profit distribution is very limited
Any profits are subject to corporate tax and possibly turnover tax
Managers are generally not personally liable for foundation obligations, though it is sometimes possible

Association (Vereniging)

Legal entity with members
Associations may earn money, but the money must be used for the association goal and may not be distributed to members
There are two ways to organise an association:
1. Establish the Deed of Association without the use of a notary and optionally sign-up with the Chamber of Commerce Trade Register. This will result in an association with limited legal rights.
2. Establish the Deed of Association with the use of a notary and register with the Chamber of Commerce Trade Register. This will result in an association with legal rights

For more information on the various forms of businesses and their establishment, please click here.

How do I set up a company in the Netherlands?

After deciding on the type of business that you want to start, the next step is to have it registered with the Kamer van Koophandel (KvK) which is also known as the Dutch Chamber of Commerce. Registration with the KvK is possible anywhere from one week before you start doing business to one week after you have started. It is crucial to come up with a trade or company name which is unique within the Netherlands. By checking the Benelux Office for Intellectual Property you can make sure the name you chosen has not already been taken. In order to register with KvK you need to bring the following:

A valid form of ID
The rental contract if your business is not conducted from your home address

The registration forms can be downloaded from the Chamber of Commerce website. As a statutory requirement, all forms are in Dutch and have to be completed in Dutch. When an enterprise is registered at the Chamber of Commerce, it is of the utmost importance that the registration forms which are submitted have been signed by the right person.

After finalizing the registration process, a unique number for the business will be provided which is commonly known as the ‘KvK nummer’. This number has to be used on all invoices and outgoing post which deals with the company.

Below is a quick summary of steps of setting up a company in the Netherlands, provided by Doing Business of World Bank:

Decide which form of business is most suitable for you. For a schematic overview of the different forms, click here
Check the company name for appropriateness and validity with the Kamer van Koophandel (KvK)
Draft and sign the company’s deed of incorporation that is executed by a civil law notary (not required for ‘Eenmanszaak’, VOF, Maatschap or CV)
Register the company at the local chamber of commerce and obtain a registration number
Register with the local tax authorities and at the same office register for social security authorities

For detailed information on the various steps, please click here.

Starting or running a business?