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How to Incorporate a Company in Netherland?

incorporate a company in Netherland

The Netherlands formally known as Holland is located in Western Europe and has a developed economy consisting of a high level of economic freedom. The corporate structure and formation of Dutch Company are quite flexible and convenient which often attracts the investors to invest in the Netherlands. Many investors that are International companies find the Netherlands to be an excellent country for the optimization of their global tax rates. This can be seen as primary because of its interesting regulations and tax benefits for international companies. In the case of non-European Union investors, starting a business in the Netherlands and obtaining a residency visa is possible through business immigration. In this article, we will discuss how to Incorporate a Company in Netherland?

What are Market Opportunities?

The investors from outside choose to start the business in the Netherlands because of the Country’s stable industry and economy. The main and foremost activity carried on in the Netherlands is the food industry. There are millions of foreign traders who come up in the Netherlands to open a company contributing to a great amount of economic growth in the country. There is almost one-third of the foreign investors who have set up their companies in the Netherlands in the private sector and particularly in the manufacturing sector. Netherlands is also very attractive for the Company formation due to its favorable relations with countries all over the world, and particularly with Germany, France UK.

What is the type of Companies can be Incorporated in Netherland?

There are various types of Corporations in the Netherlands such as:

  • Dutch BV (Limited Liability Company) – It is a kind of Company which is registered with a minimum share capital of 1 Euro, in accordance with the Company Law. There is a series of requirements relating to the headquarters of the Board of Directors. In case the investors are opening Dutch BV they need to set up this in a Dutch Holding Company there is a requirement of assistance from local trust Company or Corporate Secretary services.
  • Public Liability Company: This is a form of business where there is considerably a large investment that is the need to share capital of 45,000 Euros. In this, the functioning of the company is in the hands of shareholders. The management decisions of the company are held through the general meeting of the shareholders of the Company, whereas the board of managers shall be responsible for the daily decisions.
  • Subsidiaries/Branches: subsidiaries/branches of the foreign companies are yet again an innovative type of company formation. The representatives of foreign firms who are willing to open a branch or subsidiary in the Netherlands are supposed to deliver the newly formed entity’s capital (in case of the Dutch’s subsidiary) and hold liability for the newly formed company’s activity (in case of Dutch branch).
  1. Incorporation process of A Company in the Netherlands: if one needs to incorporate a company in the Netherlands, then they are supposed to draw up the Articles of Association and specimen signatures and fill up certain forms and present the copies such as identity documents of the directors and shareholders who are supposed to manage the firm. Dutch Company requires public Notary for signing and analyzing the acts. There is a requirement of mandatorily having the registered office in the Netherlands and set up a bank account for the Company.
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The Necessary Information needs to be Supplied for the Company Incorporation such as:

  • Full information of Directors/shareholders of the Company
  • Passport copies of the shareholders and the Directors.
  • Apostilled company trade register Extracts.
  • The share capital of a minimum of 1 Euro.
  • Pay a visit to the Dutch public notary in order to sign company incorporation documents and filing the documents to the Dutch Registry.
  • The name of the new Dutch firm needs to be checked at the Chamber of Commerce and also see the acceptance in accordance with the Dutch law. After this, the name can be reserved in the records and the investor shall receive the certificate in respect of the same.
  • The company then must open a bank account and deposit the minimum capital share in that particular account
  • After this, the next step is to notarize the Company’s deed of incorporation which is signed and drafted by the notary.
  • The announcement of such is made in the Netherlands Official Gazette and the process is performed by the Chamber.
  • Thereafter a tax number is obtained and the investors submit a registration form at the local tax authorities.
  1. AdvantagesCompany incorporation in the Netherlands is beneficial in many ways such as:
  • The corporate tax rate is as less to 20% which is considered to be one of the lowest in Europe.
  • The Netherlands is the core member of the European
  • It has a high tech infrastructure with qualified professionals.
  • 0% Vat for the business held between European Union members.
  • It has the possibility of business immigration.
  • Stable and business-friendly government
  • Strategic location for business
  • Competitive fiscal climate for business
  • International business climate
  • Highly educated, multilingual workforce
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What will be the Taxation Aspect?

In the Netherlands taxes the corporate on their worldwide income, irrespective of whether it is accrued onshore or offshore. This leads to the high corporate income tax rate for income earned abroad which may lead to around 25%. Netherlands ranks as 103rd overall in regard to CIT globally. The value-added tax is Nil in the Netherlands. The dividends received are considered as taxable income in the Netherlands however they may become exempt if the recipient holds at least 5% of the shares of the subsidiary. The capital gain tax is levied on the profits that a corporation or a natural person realizes when they sell a capital asset[1] higher than the purchase price.

What are the Mandatory Requirements?

S. NoCharacteristics 
1Corporate LegislationThe Dutch Corporate Law
2Confidentialityhigh level of anonymity and privacy.
3Accounting requirementYes, accounts need to be maintained on an annual basis
4TaxationNo taxes
5LegislationModern offshore legislation
6Standard currencyEuros
7Time taken for formationfast and time efficient takes about 3-4 days for incorporation one the documents are submitted to the registrar.
8Company SecretaryOptional
9Paid up capital requirementNo paid up capital requirement
10Legal system basisCivil Law
11Minimum number of DirectorsMinimum of 1 director
12Minimum number of shareholdersMinimum of 1 Shareholder
13Registered officeThe registered office has to be in Netherland
14Bearer SharesBearer shares are not permitted
15Filing of Annual ReturnsNot required
16E-signature optionAllowed
17Directors, shareholders disclosure on a public forumNo
18Re-domiciliation permittedYes
19Annual Meetings of shareholdersYes
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Conclusion

The Netherlands possesses a stable position being a core member of the European Union. The Netherlands offers opportunities to new trade routes and investments that are beyond the Netherlands which invites the investors to actively invest in the Netherlands. It is a place known for large markets and has effectively maintained a 20th position as the largest economy in the world. The Dutch trade mentality is strong with a backup of excellent transportation infrastructure. The workforce is also stable, well educated and dully bilingual making it ideal for starting up a new business. The Dutch holding regime is renowned and probably one of the most popular holding regimes because of its flexibility and effectiveness.

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