The move to branch out business into new territory requires lots of time, money, and research. Especially in the Netherlands, commencing a company requires patience and time as the process can be tricky if timely assistance is not available. Firstly, the business must assess and decide what type of company they wish to operate. This decision depends on the available finances, human resources, and competency of the individual/group.
There are a number of options available for established and new entrants to choose from regarding the structure of the business. Each structure caters to the specific needs of the business, the requirements of the owners, and the origin of the business. Similarly, the legal and financial requirements for each type depend upon the type of business structure opted for.
Types of corporate structures
A business structure is the foundation on which all business operations are constructed. Businesses may evolve over time and the operational needs may vary accordingly, knowing the current operational needs and forecasting the future before settling for a business structure is essential.
Here is a list of permissible business structures in the Netherlands:
| Type of business structure | Local name | Required paid-up capital | |
| 1. | Private Limited Company (PVT Ltd.) | Besloten Vennootschap (BV) | €0.01 |
| 2. | Public Limited Company (PLC) | Namlooze Venootshcap (NV) | €45,000 |
| 3. | Limited Liability Partnership (LLP) | Commanditaire Venootschap (CV) | No minimum capital requirement |
The minimum amount of share capital (paid-up capital) must be credited to a temporary bank account before the documents are submitted to the authorities.
Private Limited Company
A Pvt. Ltd. company is one where the owners have no personal responsibility in case the company defaults or files bankruptcy. Instead, the company will compensate to the maximum extent possible by selling assets, bankroll, etc., and nothing beyond.
Public Limited Company
In a public limited company, the stocks of the company are available in the form of shares to the general public. Capital raised from the sales of shares is called paid-in capital, and the shareholders are paid annual dividends from the company’s profits.
Limited Partnership
Lastly, a limited partnership company is one where the financiers of the company assume the role of silent/sleeping partners while the working partners are responsible for managing the company. Limited Partnership is best for experienced and seasoned people who wish to start their own company but lack the finances to do so. Whereas, PLC suits established businesses or startups that require tons of money to take off.
Company incorporation costs
Incorporating and registering are two means to legalize a business. The difference between the two is that by incorporation, the business is recognized as a separate entity and as such protects the business owners from personal liabilities in case of losses in the business. A simple registration of business does not offer this protection.
In the Netherlands, the concerned authority is called the ‘Handelsregister’ or the Business Register.
The total state fees (on average) for incorporating various types of companies is tabulated below:
| Type | Fee | |
| 1. | Private limited (Pvt.Ltd) (BV) | €1500 |
| 2. | Public Limited (PLC) (NV) | €1850 – €3100 |
| 3. | Limited Partnership (LLC) (CV) | €1250 |
| 4. | Cooperative company | €1850 |
| 5. | Foundation (NGO/Non-Profit/Trust) | €1450 |
Cost of company registration
The registration process of any type of company in the Netherlands begins with the membership of the Chamber of Commerce of the country. Note that only a permanent resident or a citizen can become a member. The fee for registration is €51.95. The other requirements are listed below:
- Citizen service number
- Dutch business address
- Trade name (company name/brand name)
- Legal structure (LLC, Pvt. ltd, PLC)
- Declaring UBOs (ultimate beneficiary owners)
- Duly filled form (online)
- Meeting with KVK (subject to prior appointment)
- Business premise lease (if applicable)
A three-month time period is allotted after the registration to complete documentation, pay taxes, and comply with other legal requirements. The approximate cost for the entire process may cost around €3000.
Legal fees
Though the Dutch business environment is conducive to progress, however, the tax regime may pose a complication. It is mandatory for all companies regardless of their structure to be registered with the Dutch Tax Administration; the business has to bear the €799 cost of registering with the said department. Other costs involved at the registration phase are:
- €50 as fees for the appointment with the chamber of commerce
- €500 for setting up a business account (amount may vary on the type of business structure)
During the course of business, enterprises are subject to a 15% tax on their annual income. If the business imports foreign goods or raw materials, that too will be taxed at around 25% of the invoiced price. Furthermore, businesses are bound to meet the prevailing minimum wage requirement which can be costly for small and medium businesses.
Local business costs
Needless to say, setting up a registered business anywhere will involve fees at many stages during the process. One must also consider the fee charged other than the state; notary, lawyer, court fee, etc.
Here is a list of such fees that may be factored in while budgeting:
- €1000 – €1500: Notary fee charged while notarizing documents including the fee charged by the consulting company
- €250: Fee charged while registering ultimate beneficiary owner (charged per person)
- €60 – €150: fee charged in case the business registers a virtual office
- €125: Fee charged by outsourced accountants. It will vary between accountants and firms
- €125: Fee charged by consultants or individuals providing secretarial support to the business
Overall, an amount of no less than €2000 must be budgeted in the plan to cover any augmented fees to secure against any last-minute surprises.
Working hours & wages
The Dutch lifestyle and working environment are human-centric; well-being is prioritized over excessive work hours and disturbed work-life balance. An average employee in the Netherlands usually works no more than 35 hours a week; making employees work more will cost over time. And over time in the Netherlands comes at a high price, probably 1.5 times the wage.
Additionally, the minimum wage for an employee set by the Dutch authorities is approximately €3000 a month; the minimum wage rate is periodically revised and adjusted according to the economic conditions and inflation in the country.
You may also find these articles helpful
Guide on company registration in the Netherlands
Guide on obtaining EORI number in the Netherlands
Guide on Private Limited Liability company registration in the Netherlands
