Company Formation in the Netherlands

Company Formation in the Netherlands: Advantages

1. Promising Country for Trade Development
   The Netherlands is well-known for its tulips, and for good reason. Dutch entrepreneurs account for 70% of the world’s tulip exports and hold one of the highest positions in the Doing Business ranking for international trade. The country offers vast opportunities for business growth, and the trade sector is an excellent option for startups. Additionally, company formation in the Netherlands provides convenient access to major European markets due to the Netherlands’ geographical location.
2. Active Support for Startups
   There are numerous platforms, business accelerators, and funds in the Netherlands designed to finance businesses. These platforms are highly popular, and many entrepreneurs rely on them for support. Recently, the major business accelerator Rockstart successfully closed a new investment round for an agrifood fund that invests internationally in agrifood tech startups. Similar news is frequently published on Dutch business portals.
3. Attractive Tax System
   The Netherlands offers favorable tax rates. For 2025, corporate income tax is 19% on taxable profits up to EUR 20000 and 25.8% on profits above EUR 200000, while the standard VAT rate is 21%, considered low by European standards. Since 2020, the list of goods and services taxed at a reduced VAT rate of 9% has expanded, and the trend is toward further easing business conditions.
4. Fast and Affordable Company Registration
   Company formation in the Netherlands is straightforward. The registration procedure involves standard, uncomplicated steps, typically taking no more than five days. Registration can be reduced to a single day if the founders are present in person. Once the company is registered and receives the appropriate identification and tax numbers, business operations can begin. Low registration fees and no residency requirements for shareholders (and often directors) significantly reduce the cost of registration.
5. Established Practice of Business Immigration
   Entrepreneurs in the Netherlands actively use startup visas to obtain residence permits. Business facilitates relocation to the country and, if requirements are met, allows obtaining residence rights and eventually eligibility for citizenship.
6. Openness to Foreign Investment
   The Netherlands is one of the most business-friendly European countries. Registration requirements are minimal. Investors worldwide direct investment flows to the Netherlands, and their projects are often successful.
7. Minimal Share Capital Requirements
   For registering the most popular type of company among entrepreneurs – the BV – no minimum share capital. But it may be set up as EUR 0.01 if necessary.

Main Legal Forms of Companies in the Netherlands

Company formation in the Netherlands can be carried out in several legal forms. The most common are:

Private Limited Company (Besloten Vennootschap – BV)
Shareholders’ liability is limited to their contribution to the company’s share capital. Shareholders are not personally liable for the company’s obligations. No minimum share capital is required; but it may be set up as EUR 0.01 if necessary.

Public Limited Company (Naamloze Vennootschap – NV)
No restrictions on the number of shareholders. Suitable for large businesses. Minimum share capital: €45,000.

General Partnership (Vennootschap Onder Firma – VOF)
Partners have personal liability for the partnership’s obligations. A partnership agreement is essential to regulate internal relations.

Limited Partnership (Commanditaire Vennootschap – CV)
A CV must have at least one general partner and one limited partner. General partners manage the partnership and are liable for its obligations, while limited partners do not participate in management and are liable only to the extent of their contribution.

Professional Partnership (Maatschap)
The primary purpose of a Maatschap is collaboration among professionals, unlike general and limited partnerships, which focus on profit generation.

Company Registration Procedure in the Netherlands

Company formation in the Netherlands is carried out through the Dutch Chamber of Commerce (Kamer van Koophandel). All companies must be registered in the Dutch Commercial Register.

To start company registration, a standard set of identification documents for founders and participants is required, which can be verified with our specialists, along with the following information:

• 2–3 preferred company names in order of priority;
• Company structure (directors, shareholders, beneficiaries);
• Type of business activity.

Once all necessary documents and information are provided, registration can begin. The full process from receiving the documents to preparing the final corporate package includes the following steps:

1. Check and select a company name. Name verification takes a few hours, and the name must be reserved.
2. Prepare the required documents, powers of attorney, complete the forms, and submit them to the Dutch Commercial Register. At this stage, the Articles of Association are drafted. Each company type in the Netherlands has a specific registration form.
3. Company registration procedure. Registration takes 1 to 6 business days from the submission of all forms, documents, and information to the Register.

4. Preparation of the company’s articles of association and corporate documents, and production of a company seal if required.
5. Notarization and apostille of documents. Notarization takes 1–3 days, while apostille processing can take up to 7 days. The Netherlands is a participant in the 1961 Hague Apostille Convention, making apostille services highly in demand.

Notable Features of the Netherlands Worth Knowing

• At the end of 2019, changes to the tax legislation (Tax Plan 2020) were published on the Dutch Government website. The Parliamentary Letter outlines key innovations aimed at improving the investment and business climate, reducing taxes, and combating tax evasion. Effective January 1, 2020, the following changes were introduced:

• • Corporate income tax: for 2025, the rate is 19% on taxable profits up to EUR 20000 and 25.8% on profits above EUR 200000.
  • The list of goods subject to the reduced VAT rate of 9% instead of the standard 21% has been expanded – including e-books, sheet music, educational materials, and more.
  • Under certain circumstances, entrepreneurs can receive a discount if they pay the full corporate tax amount upfront.
  • Entrepreneurs earning income from innovative activities now pay a lower corporate tax on that portion of their profits. The tax rate for innovation-related profits is currently 7%.
  • To combat tax evasion, a withholding tax is introduced for income routed through the Netherlands to tax havens. The rate will match the corporate tax rate. According to the government, this measure helps prevent the use of the Netherlands as a channel for shifting profits to low-tax jurisdictions.

• In the Netherlands, small and medium-sized businesses generally do not require a resident director. However, some online sources may mention a requirement for 50% resident directors in Dutch companies. This usually relates to meeting Tax Substance requirements, primarily for companies used as holdings to benefit from the Netherlands’ extensive network of tax treaties. Resident director requirements are intended to prevent misuse of Dutch companies for illegitimate purposes. A resident director can also assist in obtaining a VAT number or opening a local bank account. In everyday operations, many small and medium enterprises operate fully without resident directors.

• Under Dutch tax law, individuals and companies that are not resident in the Netherlands may still be subject to Dutch taxation on income or assets derived from Dutch sources: for example, employment in the Netherlands, business activities through a permanent establishment or ownership of Dutch real estate.
  Such persons are classified as non-resident taxpayers. They are taxed only on their Dutch-source income, not on their worldwide income.
  Residents of EU and EEA countries (including Liechtenstein, Norway, Iceland, and Switzerland) may, under certain conditions, qualify as “qualifying non-resident taxpayers.” To meet this condition, at least 90% of their worldwide income must be subject to Dutch taxation. Those who qualify are entitled to the same personal deductions and tax credits as Dutch residents.

Corporate Taxation in the Netherlands

Taxation in the Netherlands is administered by the Tax and Customs Administration.

Resident companies in the Netherlands are required to pay tax on their worldwide profits, while non-resident companies pay tax only on profits generated within the Netherlands.

A company is considered resident if it is registered in the Netherlands and managed from within the country. For tax purposes, the following factors are also considered:

• Place of effective management;
• Location of the head office;
• Location of shareholder meetings.

Corporate Income Tax

For 2025, the rates for corporate income tax (CIT) in the Netherlands are:

• 19% on taxable profits up to EUR 20000;
• 25.8% on profits above EUR 200000.

Value Added Tax (VAT)
VAT rates vary depending on the category of goods and services: 21%, 9%, and 0%.

• 21% – for most goods and services.
• 9% – for special categories such as food, medicine, and others. Under Tax Plan 2020, effective January 1, 2020, the reduced 9% VAT rate was extended to include e-books, newspapers, magazines, educational resources, etc.
• 0% – for goods exported to EU countries.

Capital Gains Tax
Capital gains are included in the corporate income tax base.

Reporting and Filing Requirements in the Netherlands

All businesses in the Netherlands are required to regularly submit tax reports for one or more types of taxation.

The reporting period generally aligns with the calendar year, lasting 12 months.

The Tax and Customs Administration determines which taxes apply after the company is registered. For example, private and public companies must prepare and submit an annual corporate income tax return (VPB – Corporate Income Tax Return).

From January 1, 2020, no interest is charged on corporate income tax if the Corporate Income Tax Return is submitted by the first day of the sixth month (June 1) and the submission is confirmed.

VAT returns, on the other hand, must be filed annually, quarterly, or monthly. Even zero VAT returns are required to be submitted.

Occasionally, an extension for filing reports may be granted, but the request must be submitted in advance and supported by valid reasons. Missing deadlines or failing to submit reports without justification can result in fines.

Conclusion

Company formation in the Netherlands is an attractive option in the international business landscape for establishing and running a business, as well as attracting investment. The combination of a simple and fast registration process, low tax rates, a business-friendly environment, and European prestige creates the ideal conditions sought by entrepreneurs.