For entrepreneurs seeking a stable, tax-efficient, and business-friendly environment in Europe, the Dutch Besloten Vennootschap (BV) is often the best choice when considering starting a company in the Netherlands. The Dutch BV, or private limited company, is the most popular business structure in the country and is a prime option for international entrepreneurs looking to set up a business in one of Europe’s most economically dynamic regions.
In this article, we will explore what a Dutch BV is, its benefits, the registration process, and why it is an ideal choice for foreign entrepreneurs. Additionally, we will dive into the taxation system and highlight some of the industries that benefit from this business structure.
What is a Dutch Besloten Vennootschap (BV)?
A Besloten Vennootschap (BV) or a private limited company is a business structure that is widely used by both Dutch and international entrepreneurs to run a business in the Netherlands.
The key features of a Dutch BV include:
- Limited Liability: As a separate legal entity, the BV protects shareholders from personal liability. This implies that owners’ private assets are protected from the obligations and liabilities of the business.
- Shares: The BV can issue shares, but these shares are not publicly traded. They are privately owned by shareholders, making the BV a closed or private company.
- Capital Requirements: The minimum share capital requirement for setting up a Dutch BV is very low, which makes it a desirable choice for new businesses. As of 2012, the minimum share capital is €1, though it is advised to have more capital to cover initial business expenses and create a positive financial outlook.
This flexible and protected structure has made the Dutch BV an attractive option for entrepreneurs across the globe.
Why Choose a Dutch BV?
If you are an international entrepreneur or startup looking to establish a presence in Europe, the Dutch BV offers several compelling advantages:
1. Attractive Tax System
One of the main reasons international entrepreneurs opt for the Dutch BV is the Netherlands’ business-friendly tax system. The Dutch government has implemented policies that encourage entrepreneurship and make it easier for foreign businesses to thrive.
Here’s how:
- Corporate Tax Rate: The Netherlands has a relatively lower rate of corporate taxation in comparison to other European countries. The corporate tax rate in 2024 will be 19% for profits under €200,000 and 25.8% for profits over that amount. This makes the Netherlands one of the more tax-efficient jurisdictions for business owners in Europe.
- Innovation Box Regime: The Netherlands offers an Innovation Box, which allows businesses to benefit from reduced tax rates on profits derived from innovative activities (such as patents and R&D). This is an attractive tax advantage for startups and companies operating in high-tech and research-driven industries.
- Double Taxation Treaties: In order to prevent foreign business owners from paying taxes twice on the same revenue, the Netherlands has ratified double taxation accords with more than 90 nations. For entrepreneurs wishing to grow their company internationally, this is a major advantage.
- VAT: The standard VAT rate in the Netherlands is 21%, which is in line with the EU average. The Netherlands also has favourable VAT refund schemes for businesses operating internationally.
2. Ease of Doing Business
The Netherlands is consistently ranked among the easiest nations to do business in. Its transparent legal and regulatory framework makes it a desirable location for international businesspeople. The Dutch Chamber of Commerce (KvK) provides comprehensive support for starting and running a business, making the registration process straightforward.
3. Access to a Highly Skilled Workforce
The Netherlands boasts a well-educated, multilingual workforce with a strong focus on technological innovation. International entrepreneurs benefit from this highly skilled talent pool, especially in sectors such as technology, engineering, and finance.
4. Strategic Location in Europe
Situated in the heart of Western Europe, the Netherlands provides easy access to the EU market and serves as a hub for trade and logistics. Dutch ports, particularly the Port of Rotterdam, are among the largest and busiest in the world, making the Netherlands a strategic location for businesses in the import-export, logistics, and e-commerce sectors.
Read more about the reasons for registering a BV company in the Netherlands in our latest blog.
Process of Registering a Dutch Besloten Vennootschap
Setting up a Dutch BV is relatively simple compared to other countries.
Below is an overview of the process:
Step 1: Select a Name for Your Company
Choosing a distinctive business name for your Dutch BV is the first step. The name must adhere to Dutch naming rules and not be the same as any already-existing company. Checking the name’s availability with the Dutch Chamber of Commerce (KvK) or using their internet resources is advised.
Step 2: Create the Articles of Association
The company’s operating laws and regulations are outlined in the Articles of Association. These consist of the management structure, shareholder rights and obligations, and the company’s goals. It is highly recommended to have these drafted by a Dutch notary, as they must comply with local laws.
Step 3: Notarize the Deed of Incorporation
After the Articles of Association have been drafted, a Dutch notary must execute the deed of incorporation. This legal process involves the signing of the incorporation documents in front of a notary, and it’s essential to finalize the registration.
Step 4: Register with the Dutch Chamber of Commerce (KvK)
Once the deed of incorporation is signed, the next phase is to register your BV with the Dutch Chamber of Commerce (KvK). During registration, your company will be assigned a unique KvK number, and your business will be entered into the Dutch Business Register. At this point, you will also need to provide a business address in the Netherlands.
Step 5: Open a Dutch Business Bank Account
To manage your business finances, you’ll need to open a business bank account in the Netherlands. The bank will typically require proof of the incorporation documents, identification, and business plan.
Step 6: Register for Taxes
Upon registration with the KvK, you must also register for taxes with the Dutch Tax and Customs Administration (Belastingdienst). You will need to register for corporate income tax and Value Added Tax (VAT). If your business is involved in hiring employees, you must also register for payroll taxes.
Want to set up and grow your business in the Netherlands? Get in touch with our business experts right away.
Speak with an Expert
Book free end-to-end expert consultation with OnDemand International business experts
Contact Us
Taxation for Dutch BVs
One of the main factors luring entrepreneurs to the Netherlands is the tax structure.
The following are some advantages of registering a Dutch BV:
- Corporate Tax Rate: The Dutch corporate tax rate is 19% for profits up to €200,000 and 25.8% for profits over that amount, as was previously noted. In Europe, this is among the most affordable rates.
- Dividend Withholding Tax: Distributions to shareholders are subject to a 15% dividend withholding tax in the Netherlands. However, this rate may be reduced under certain conditions, such as if the recipient is based in a country with a tax treaty with the Netherlands.
- R&D Tax Incentives: The Netherlands offers numerous tax incentives for firms involved in research and development. This includes the WBSO scheme, which allows companies to receive tax deductions on R&D expenses.
Best Industries Where a Dutch BV is Ideal for Business Success
Several industries benefit greatly from the flexibility and advantages offered by a Dutch BV.
Some of the key sectors where international entrepreneurs can thrive include:
1. Technology and IT Startups
The Netherlands is a technology hub, and many tech companies choose to establish their operations here due to the country’s favorable tax environment, skilled workforce, and access to the European market.
2. Logistics and Trade
With access to major European ports, the Netherlands is a prime location for businesses involved in logistics, supply chain management, and import-export.
3. Finance and Fintech
The Netherlands has a thriving fintech ecosystem, with Amsterdam being a key financial center in Europe. The country’s stable legal environment and tax advantages make it an ideal location for financial services and fintech startups.
Want to set up a fintech business in the Netherlands?
4. Agribusiness
The Netherlands is a global leader in agribusiness and agriculture-related technologies. Entrepreneurs in the food production, farming, and agri-tech sectors will benefit from the country’s innovation-driven policies and access to international markets.
5. E-Commerce
E-commerce businesses can take advantage of the Netherlands’ central location, efficient logistics infrastructure, and low administrative barriers to entry.
Conclusion
The Dutch Besloten Vennootschap (BV) is an ideal choice for international entrepreneurs looking to start a business in the Netherlands. With its attractive tax regime, business-friendly environment, and access to global markets, the Dutch BV provides the ideal platform for launching and expanding a business in Europe. Whether you are in tech, logistics, finance, or any other sector, the Netherlands offers the tools, resources, and advantages you need to succeed.
If you’re ready to set up your Dutch BV, OnDemand International can assist you with the entire process, from registration to navigating tax and legal requirements. Connect with our experts right away and a4llow us to assist you in starting your company in one of the liveliest and most welcoming business environments in Europe.
FAQ’s
A Dutch Besloten Vennootschap (BV) is a private limited company in the Netherlands. Because of its tax benefits, flexible capital requirements, and limited liability, it is a popular business structure among both domestic and foreign entrepreneurs. It enables shareholders to shield their private assets from the debts of the business.
Yes, international entrepreneurs can establish a Dutch BV. There are no nationality restrictions on shareholders or directors. The process is straightforward, and non-resident directors can manage the company. However, a Dutch business address and a local representative (for tax registration purposes) are required.
The minimum share capital required to establish a Dutch BV is €1. However, it is advisable to have a higher capital amount to cover initial business expenses and create a solid financial foundation.
Yes, a Dutch BV must have a business bank account in the Netherlands. You will need to provide your incorporation documents, proof of identity, and potentially a business plan to open this account.
