Complete Guide to Netherlands Company Formation: Eligibility & Advantages

• One of the reasons you should consider Dutch company registration is because the Netherlands has one of the lowest corporate income tax rate of 19% to 25.8% in the EU.
• It is the EU’s most dynamic center for investment and trade.
• The Netherlands holds a top position in the EF English Proficiency Index.
• The Netherlands has one of the largest seaport in Europe, the Rotterdam Port which makes registering a company in Rotterdam an ideal choice for your business expansion .
• Additionally, it boasts the fourth-largest freight airport in Europe.
• According to the IMC Competitive Index report, the Netherlands has the fifth most competitive economy in the world.
• Regarding the world’s largest economy, the Netherlands is ranked among the top 20.

Procedure for Company Registration in the Netherlands

Here is the process of Dutch Company Formation:

• Verify the availability of the company name and submit an application for Dutch business name registration. 
• Select the type of business structure in the Netherlands you wish to incorporate.
• Collect all the required documents for Dutch business registration
• Draft the Deed of Incorporation of the company
• Proceed with Dutch company formation with the commercial registry in the Netherlands
• Complete registrations for employers and taxation in the Netherlands
• Acquire the required Netherlands business permits and licenses
• Open a corporate bank account to manage the business finances.

Step-By-Step Procedure for Netherlands Company Registration

If you are looking to register a company in the Netherlands, then this section will cover the step-by-step procedure for Netherlands company registration.

Here is a step-by-step process of Dutch company formation:

Step 1: Select the Legal Structure

Step 2: Choose a Business Name

After selecting the business structure, the next step involves choosing a name for your business. The name of your proposed entity should be unique, relevant, and appropriate. You need to ensure that the services advertised via your business name are the ones that you provide. Once the name is finalized, we check with the local Chamber of Commerce unit for the availability of the name. If available, we submit an application for Dutch business name registration.

Step 2: Prepare necessary documentation

Gather the necessary documentation for Dutch company registration, such as the name reservation application, share capital details, application form, articles of association and other necessary documentation.

Our experts can assist you gather all the required documents needed to register your business in the Netherlands. We can further help you notarize the documents.

Step 3: Submit the application to Chamber of Commerce

Once the documents are notarized, you need to fill out Form 8 and submit the formal Dutch business registration application to the Chamber of Commerce of the city.

Step 4: Tax Registration

Once the company is registered, you need to submit an application for tax and VAT registration with the Tax Administration. You can also file for Employer Registration at the same time.

Step 5: Opening a Corporate Bank Account

The next step is to open a bank account for your company in order to manage your business finances. As soon as the bank account is opened, you need to deposit the initial share capital of the company. Some banks also allow you to open online bank account in the Netherlands. 

At OnDemand International, our business experts will set up your business in the Netherlands within a period of 3 weeks. In addition to that, you will not be required to visit the Netherlands to complete any formalities as our team will do the necessary legal work for you. 

Documents Required For Dutch Company Formation

The following documents are essential to register a company in the Netherlands:

• License approval and name reservation application.
• Copies of the current trade license.
• Details about the company business area.
• Form for business registration that has been completed.
• Power of attorney granted to the firm’s director or supervisor.
• Share capital details.
  
• Memorandum of Association & Articles of Association of the company.
• Board Resolution for employing the Director or the executives.

Eligibility Requirement to Register a Company in the Netherlands

The following qualifying requirements must be met in order to register a Dutch company:

1. Minimum one shareholder

For a limited company, a minimum of 1 shareholder is necessary to register a company in the Netherlands.

2. Minimum capital requirement of at least EUR1

With a share capital of EUR1, an LTD Company can be formed in the Netherlands.

3. Minimum one director

A minimum of one director from any nationality is required to form a company in the Netherlands. Also, a local Dutch director is not necessary for company setup in the Netherlands.

4. Registered Address

A registered company address is required for company formation Netherlands.

Types of Companies in The Netherlands

There are a variety of Dutch company types that can be formed in the nation. Before you begin with the Netherlands Company Registration process, it is important to identify the best structure for your business.

Here are the different Dutch company types that can be incorporated in the country:

Advantages of Dutch Company Formation

The following benefits of Dutch company formation are:

• One of the lowest tax rates in the EU, currently set at 19% for income up to €200,000 and going up to 25% for higher-income brackets. 
• Value Added Tax not charged for transaction with other EU member states
• Ranks among the top ten countries for business around the world
• An English-speaking population (93%)
• Highest number of double-tax treaties in the world
• One of the most competitive and innovative economies in Europe
• The founding member of the European Union
• Availability of a highly educated workforce and ranks third globally in terms of education levels.
• The government provides various incentives to foreign entrepreneurs and minimizes its intervention in foreign investment within the country.
• The high-speed railways systems in Netherland make transportation quite convenient. Rotterdam is the largest seaport in the EU. Due to this, there is the ease of conducting commercial trade in areas related to fisheries and cargo goods.
• Does not need to go through an annual audit if the following conditions are met
  If the business’s annual turnover is below EUR 8.80 million and the firm employs fewer than 50 individuals.

Government Bodies Involved In The Netherlands Company Formation

The following government bodies will be involved in the Netherlands company registration process:

• The Dutch Notary
• Dutch Chamber of Commerce or KvK (Kamer van Koophandel)
• The IND (Immigration Office)
• The Dutch Tax & Customs Administration
• City Council for a BSN (if needed)

Compliances For Companies Incorporated In The Netherlands

While every company has to comply with the Dutch laws, there are certain corporate compliances to keep in mind:

• Shareholder meetings must be conducted at least once a year
• Depending on the legal structure registered by you, there might be a requirement to conduct Board Meetings
• In the Netherlands, all companies must file annual tax returns with the authorities
• Within eight days of incorporation, your company needs to be registered with the Dutch Trade Register

Dutch Corporate Taxation Policy

The Netherlands Ministry of Finance governs the Dutch Tax Office. You will be subject to taxation in the Netherlands on your wealth, assets, and income. A company registered in the Netherlands is liable to pay Corporate Income Tax (CIT) on its worldwide income with certain exemptions.

• The standard CIT rate is 25.8%.
• Tax rate on taxable income is up to 200,000 euros is 10%
• Tax rate on taxable income above 200,000 euros is 25.8%
• The CIT rate for fiscal investment funds is 0 provided the company makes the profits available to shareholders within eight months of the year-end.
• A special tax regime exists for profits derived from a self-developed intangible asset, called the Innovation Box regime, the effective tax rate is 9 percent.
• A special Tonnage regime exists for certain shipping companies in the Netherlands.
• Around 100 bilateral tax treaties to avoid double taxation
• If you are hiring employees from abroad, you can offer 30% of the employee salaries tax-free.
• There are three VAT (Value Added Tax) rates in the Netherlands: 0%, 9%, and 21%, depending on the goods or services you offer.

Tax Calendar in The Netherlands

You need to file corporate tax returns annually. The last date for filing returns is five months after the end of the fiscal year. While a fiscal year is usually the same as the calendar year, there are deviations available from this.

You can choose to file your VAT returns monthly, quarterly, or annually.

• Monthly VAT returns are due within two months of the end of the month
• Quarterly VAT returns are due within two months of the end of the quarter
• Annual VAT returns are due within three months of the end of the fiscal year

The return period for payroll tax is based on how you pay your employees.

Cost To Incorporate a Company in The Netherlands

When starting a business in the Netherlands, the general cost to incorporation is around 4000-6000 euros which comprises numerous services such as company registration, name reservation, preparing the articles of association, assistance with opening a bank account and numerous other services. 

Speak with our business formation experts to register your business in the Netherlands today and get complete assistance in your business setup.

Conclusion

The Netherlands, one of the founding members of the EU, is regarded as an excellent location for starting a business. Over the years, the country has established itself and has presented a strong reputation in the world of trade and commerce. The well-educated and skilled population of the Netherlands provides businesses with a desirable labor pool. Additionally, the Netherlands has a secure corporate environment as the country ranks among the top ten countries with the lowest levels of corruption worldwide.

If you wish to register a company in the Netherlands, you can reach out to our business expansion experts at OnDemand International. Our team of experts will assist you with all the necessary details required for company registration in the Netherlands. Contact us today for company formation in the Netherlands.