The Netherlands
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For foreign investors, the Dutch private limited liability company (besloten vennootschap met beperkte aansprakelijkheid, or BV) is the most commonly used corporate vehicle. A BV has separate legal personality and its shareholders are, in principle, not personally liable for its debts. A BV is incorporated by notarial deed and subsequently registered with the Dutch Trade Register. Incorporation can also be completed entirely digitally through a civil-law notary.
Less expensive alternatives include a sole proprietorship (eenmanszaak) or general partnership (vennootschap onder firma, or VOF), neither of which requires a notarial deed of incorporation. However, these do not provide the same separation between business and personal assets. Therefore, a BV is generally the preferred vehicle for foreign investors wishing to conduct business in the Netherlands through a separate legal entity.
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A Dutch BV requires only one shareholder. It may therefore be wholly owned by a single foreign individual or foreign legal entity. In principle, the nationality or residence of the shareholder does not prevent such ownership.
Since the introduction of the Dutch Flex-BV regime, the former minimum capital requirement of EUR 18,000 no longer applies. At least one share carrying voting rights must, however, be held by a person other than the BV itself. Shares may, for example, have a nominal value of EUR 0.01. There is therefore no material minimum capital requirement, although upon the issuance of a share, the shareholder is generally required to pay up the nominal value of that share.
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Both individuals and legal entities may incorporate and hold shares in a Dutch BV. Accordingly, a foreign company may be the sole shareholder of a Dutch subsidiary.
There is no general Dutch corporate law restriction on foreign shareholders. However, additional identification, UBO, KYC and sanctions screening requirements may apply. For foreign legal entities, their existence and the authority of their representatives must also be established, and foreign corporate documents may be subject to additional formalities.
Depending on the relevant sector or transaction, specific licensing requirements, sanctions regulations or foreign investment screening rules may also apply. Whether additional requirements must be satisfied should therefore be assessed on a case-by-case basis.
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Generally, directors of a Dutch BV are not subject to Dutch nationality or residence requirements. Therefore, a foreign individual may act as director. However, the company’s actual management and organisation may be relevant for tax purposes. In determining tax residence, the Dutch Tax Administration considers, among other factors, where key management decisions are made, where directors work and hold meetings, and where the company’s administration is maintained.
Sufficient Dutch substance may therefore be relevant in international structures, but it is not a general corporate law requirement for incorporation. Local director or registered office services may be provided by service providers. Where such activities qualify as trust services, for example professionally acting as a director or providing certain combinations of domiciliation services, the Dutch Trust Offices Supervision Act 2018 may apply and a licence from the Dutch Central Bank may be required.
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Within Certa, Robin de Jong (dejong@certa.nl) , Ernst-Paul Pandelitschka (pandelitschka@certa.nl) and Cedric de Breet (debreet@certa.nl) are the relevant contacts.
