Netherlands: Five steps to integrating in the Netherlands
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For the third consecutive year, the Netherlands is among the 10 least complex jurisdictions in our annual Global Business Complexity Index (GBCI).
With its open economy, the Netherlands is recognized as one of the world’s leading financial centers and a jurisdiction that hosts a large international business community. The country has sophisticated infrastructure and a well-educated population widely seen as pragmatic, tolerant and open-minded. The country’s competitive tax climate and friendly business environment make it an attractive location for multinationals to set up their European or global headquarters here.
Steps to incorporate in the Netherlands
Setting up a business in the Netherlands is a relatively simple process and can usually be done in a few days.
The most common types of business entities when entering the Dutch market include a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid, or BV) and a public limited liability company (naamloze vennootschap, or NV), among other kinds.
For a BV, no minimum initial capital investment is required at the time of incorporation. Shareholders and directors can be Dutch or non-Dutch or even legal persons.
The steps required for incorporation in the Netherlands are as follows:
- In the case of a public limited company (SA), deposit the minimum capital required in a bank
- Checking the suitability and validity of the company name on the website of the Dutch Chamber of Commerce (KvK)
- Drafting and signing of the deed of incorporation of the company, including the articles of association, executed by a notary
- Registering the company in the commercial register with the local chamber of commerce and obtaining a registration number
- Registration with local tax authorities and social security authorities
Within five days of filing the incorporation documents, the Chamber of Commerce will send an official copy of your extract from the commercial register, which certifies that the company has been officially registered as a legal person.
The challenges of opening a bank account
As in many jurisdictions, opening a bank account in the Netherlands is necessary to do business in the country, but can present challenges.
To do business in the Netherlands, an IBAN, or International Bank Account Number, is required.
If a relationship with a bank in the Netherlands already exists, opening a bank account may be less complex; However, if there is not yet a relationship, opening an account can take anywhere from a few weeks to two months as banks can review an applicant’s funding sources and business plans.
As an alternative, a bank account can be opened with one of the various fintech banks based in the Netherlands. TMF Group partners with a number of fintech banks and can help with the client acceptance process.
As shown in our Global Business Complexity Index, the Netherlands is a highly digitized business environment. The recently introduced Ultimate Beneficial Owner (UBO) register is already digitized, with affected individuals only needing to submit a scanned copy of the passport to be identified – a process that can also be done from abroad. Board meetings are permitted digitally and physically. This digital ecosystem has enabled the Dutch authorities to cope well throughout the pandemic, with entities incorporated and operating largely in “business as usual” mode.
That said, upon incorporation, shareholders must appear in person or provide a power of attorney to a notary in person. Registration of company directors is also done through forms which must be provided to the Chamber of Commerce, in wet ink.
Overall, the Netherlands offers a stable, internationally oriented business environment and a sophisticated infrastructure for investors and companies looking to expand both in Europe and beyond.
For businesses operating in the Netherlands, it is essential to keep up with changing regulatory requirements and take the necessary steps to remain fully compliant.
TMF Group helps international companies comply with Dutch compliance requirements through a comprehensive range of services. In addition to our global portfolio of services, our Dutch office provides additional support, tailored to specific local needs.
Contact our experts today to find out how we can help you grow your business.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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