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A Dutch BV Company is similar to a Limited Liability Company (LLC) in the United States and a German GmbH. The BV stands for “Besloten Vennootschap”. It is a very popular type of company in the Netherlands and with foreigners who can own 100% of the company shares.
BV’s are controlled by the Netherlands Commercial Code of 2012 which made registration much simpler. Foreigners can own all of the shares in a BV.
Holland is centrally located in Europe and a member of the European Union (EU). A politically stable with a strong economy with English spoken by most Dutch make it attractive for foreign investors.
A Dutch BV Company can utilize these benefits:
• Complete foreign ownership: Foreigners can own 100% of the shares.
• One Shareholder: Only one shareholder is required to incorporate a BV.
• One Director: A minimum of one director is required.
• No Minimum Share Capital: There is no minimum share capital requirement.
• Privacy: Nominee shareholders can be appointed for privacy. Only the registered agent knows who the beneficial owners are which remain private and confidential.
• Limited Liability: Shareholders’ liabilities are limited to their subscribed share capital.
• English: Most Dutch speak and understand English.
• European Union: The Netherlands are full members of the European Union (EU) and centrally located in Europe for easier access and opportunities to do business with other EU members.
Dutch BV Company Name
Company names cannot be identical or similar to existing company names in the Netherlands.
The BV company name can be in any language using the Latin alphabet. However, a Dutch and/or English translation may be required.
BV companies’ names must end with the words “Besloten Venootschaap” or its suffix “BV”.
Prior to registering with the Dutch government, the Articles of Association and a Deed of Incorporation (in Dutch) must be prepared and signed in front of a public notary. These instruments provide the details regarding the shareholders, management, authorized share capital, registered office address, and a description of the types of business activities.
Then the company name needs to be reserved. After name reservation, file the Articles of Association and the Deed of Incorporation with the Registrar of Companies who will issue a Certificate of Incorporation with a registration number.
Finally, register with the tax authorities and the social security authorities.
The founders are the ones who apply for incorporation with the government. They can be natural persons or companies. Founders are required to have at least one share issued with voting rights for incorporation.
A minimum of one shareholder is required to incorporate. There is no maximum limit on the number of shareholders. Shareholders can be citizens and reside in any country. If the BV only has one shareholder, that name will become part of the public records. However by having two or more shareholders will keep all their names private. Nominee shareholders are permissible allowing for further privacy.
Only registered shares can be issued. Bearer shares are prohibited.
Only one director to manage the company is required who can be the sole shareholder. Directors can be citizens of any country and reside anywhere in the world. In addition, directors can either be natural persons or corporate bodies.
If there are more than one shareholder, at least one of the directors must be a local resident.
Registered Address and Registered Agent
The company must have a local registered office address. In addition, the company must appoint a local registered agent. The local agent must know who the ultimate beneficial owners are, but that information remains private and is never submitted to any public records.
Shareholders in a BV company are liable to lose the value of their subscribed share capital.
Minimum Share Capital
There are no requirements for an authorized minimum share capital. However, in order to incorporate, the founders must each have at least one share with voting rights issued to them. However, that could only be 1 Euro per share.
The corporate tax rate is 20% to 25%. The sliding scale rate is applied as follows:
• 20% for profits up to 200,000 Euro; and
• 25% on profits over 200,000 Euro.
The dividends tax can be 0% up to 15%. For natural persons, the withholding tax on dividends is 15%. For dividends paid to other companies who are shareholders, it can be 0%.
The Value Added Tax (VAT) can be from 6% up to 21%.
Holland taxes worldwide income on their resident companies. Non-resident companies only pay taxes on certain income earned in Holland.
A BV must file annual returns with financial statements with the Registrar of Companies. Normally, the financial statements must be audited. However, an exception exists when a BV can meet two of these three criteria:
1. The BV’s average number of employees is less than 50;
2. The BV’s total assets are fewer than 6 million Euro; or
3. The BV’s annual turnover is less than 12 million Euro.
Annual tax returns must be filed with the tax authorities.
The Chamber of Commerce keeps files on the names of all company directors which are available for public inspection. Only single shareholder companies have their name available to the public as multi-shareholders names will be kept private. Nominee shareholders are permitted for privacy.
Time for Incorporation
After submitting all required documents to the Chamber of Commerce, expect approval to take five business days.
Shelf companies are available in Holland for faster incorporation.
A Dutch BV Company can enjoy these benefits: foreign ownership, privacy, limited liability, one shareholder, one director, no minimum share capital, English is spoken by most Dutch, and EU membership.