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Types of structures in the Netherlands

Types of structures in the Netherlands

Updated on Friday 15th January 2016

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A wide range of types of structures in Netherlands, along with the national developed economy, make Netherlands an interesting place to incorporate a new business.

An investor may choose to open in Netherlands either a sole proprietorship, either a partnership (VOF), a private company or a public company. These operating modes are all different from each other and each have their advantages and less attractive parts.

We invite you to watch a short video about the main types of companies in the Netherlands

If you start a business in Netherlands you may choose to open a Sole Proprietorship, being the most common type of structure in Netherlands. You must be aware that, by opening a sole proprietorship, as the single owner, you have unlimited liability. This means that the owner is liable for all debts of the company. The owner is also the one that provides the capital for the company. The advantage of this type of business is that the the company's decisions can be taken only by it's owner, being also the single person who can benefit from the company's profit .

 

A Partnership (VOF) is a bit more secure type of structure in Netherlands. Here there are two or more persons that own the business. In this structure, the business owners are jointly and severally liable for the company's activities, including debts.

Each partner must bring his contribution in the company either in money, goods and/or manpower. The Dutch law does not require a partnership contract, but drawing up this contract before a public notary can become an essential action for your company as it offers relevant information about the company's partners, including information on the contribution of each one in the company's capital.

 

If you want security, choose to open a Private Limited Liability Company (BV). In this Dutch type of structure you are not jointly and severally liable for any debts made by the company. This is because the BV is a legal entity under the provisions of the Commercial Law. Because the money (share capital) comes from different persons, they can only lose the money invested. They buy a certain amount of shares and are therefore become the company's owners. The disadvantage of a limited company is that a higher amount of tax should be paid, and that every year there must be drawn up a list with the company's consume of money/capital. Therefor, when you own more than 5% from the company's shares, you own a substantial interest in the company and you must pay tax on profit of 25%.

 

A Public Limited Company (NV) is very much similar to a private company. For this type of structure in Netherlands, the names of the shareholders need not be stored in a register. The shares may even be bought by anyone or sold. This allows anyone own a NV. The only risk you run as a shareholder is that you lose the invested money. The disadvantage of a NV is that the company can be easily acquired, because the shares are not registered and can be sold to anyone else.

 

Contact us for further information about the types of structures available in Netherlands and you will benefit from customized advice and support, provided by specialized Dutch lawyers.

 

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