Starting a business in the Netherlands

As one of the largest economies in the European Union (EU), the Netherlands offers a solid foundation for starting your business.
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The country’s appeal extends far beyond its economic strength. This article will discuss the benefits of registering a company in the Netherlands and the common business structures for incorporation.

Why choose the Netherlands?

Highlighted below are some of the key advantages of doing business in the Netherlands: 

Proximity to major European economies

Flanked by Germany and Belgium, the Netherlands is strategically located in Western Europe, offering easy access to some of the EU’s most significant economies. With excellent road and rail infrastructure, nearly all locations in Western Europe can be reached within a day.

Additionally, Amsterdam Schiphol Airport, one of Europe’s busiest and most well-connected hubs, offers direct flights to many destinations around the globe, making the Netherlands an ideal gateway for international business.

The Netherlands also benefits from direct access to the North Sea, with major ports like the Port of Rotterdam. As one of the largest and most important ports in the world, it serves as a crucial link for international trade.

Manageable tax environment 

Another benefit is the ease of managing taxes, both locally and internationally. The Netherlands has an extensive tax treaty network, having agreements with more than 95 countries including China, Japan, India, the UK, Switzerland, Brazil, Singapore, and the UAE. If you are operating internationally, these treaties will reduce the risk of double taxation and ensure that income is taxed only once.

To help new and growing businesses, the government provides a reduced corporate income tax rate of 19% on the first EUR 200,000 of taxable income. For profits exceeding this threshold, the standard rate of 25.8% will apply.

Extensive investment treaties 

The Netherlands offers businesses an advantage through its extensive network of Bilateral Investment Treaties (BITs). With more than 70 BITs currently in force, these treaties provide a robust framework for protecting foreign investments, offering safeguards against risks such as expropriation and discriminatory practices.

Dutch companies can leverage these BITs to secure their investments abroad, ensuring stability and legal protection even in politically uncertain markets. Many businesses also use Dutch holding companies to structure their global operations. These entities benefit from the Netherlands' robust legal system and favourable tax regime, offering a secure base for international investments.

Strong business support 

Business support is available through a range of programmes. For example, the entrepreneur allowance enables you to deduct a portion of your profits before calculating your taxable income. This may then lower your tax burden during the initial stages of your business operation.

If you’re hiring foreign employees, you may apply for the 30% ruling to support them in managing the costs of relocating to the Netherlands. This is a tax advantage that allows eligible employees to receive up to 30% of their salary tax-free for a maximum of five years. This may make your offer of employment more appealing when attracting professionals from abroad.

Skilled workforce 

Ranking among the best education systems in the world, the quality of education in the Netherlands develops talent who are ready to contribute to various industries. In fact, eight Dutch universities are in the Global University Employability Ranking 2023-24, with Erasmus University Rotterdam and Delft University of Technology leading in graduate readiness.

Majority of the Dutch workforce speaks English. Additionally, the Netherlands retains a sizeable portion of its international graduates. Data from the Central Bureau of Statistics shows that more are living and working in the Netherlands after graduation. This growing trend is an advantage for businesses seeking a cosmopolitan workforce in a global market.

High quality of life 

Alongside a skilled workforce, the Netherlands offers a consistently high quality of life, matched by equally impressive productivity levels. In the World Happiness Report for 2024, the Netherlands is among the top happiest countries globally.

The country places a strong emphasis on having a healthy work-life balance, a value shared by both employers and employees. This balance is reflected in the adoption of flexible working hours and arrangements.

Yet, Dutch workers are among the most efficient in Europe. The draw of a high quality of life can play a key role in attracting and retaining top talent in your company.

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Business structures in the Netherlands

Before registering your company in the Netherlands, it is crucial to understand the various legal entities available. This decision should be guided by your business’ size, industry, and future plans.

Private limited company 

A private limited company (besloten vennootschap or BV) may match your needs if you are seeking to expand, attract investors, or minimise personal liability. Its flexible nature makes it a popular choice for both holding companies in international group structures as well as for operational purposes. Here, you can serve as the sole director and major shareholder or establish the BV with others.

Having its own legal personality, the BV will be responsible for its own debts. Being under the BV structure may also help when you are seeking external financing, such as investments from private investors or loans from banks. Financial institutions and investors generally prefer to invest in a BV because it offers them more security.

Moreover, Dutch law allows flexibility in drafting shareholder agreements, making the BV a preferred choice for joint ventures, particularly for foreign investors who value the ability to tailor arrangements.

Bear in mind to set up this business structure, you will need to engage a Dutch civil-law notary as part of the company incorporation process.

Cooperative 

Another option is forming a legal entity in the form of a cooperative (coöperatie) with at least two members. A key difference between a cooperative and a VOF is that members in a cooperative have more flexibility. Cooperative members can enter or exit without disrupting operations.

When establishing a cooperative in the Netherlands, you’ll need to decide how to handle your members' liability. This determines the extent of their financial responsibility for the cooperative's debts and obligations. As with the BV structure, a civil-law notary will be required to complete the business formation.

General partnership 

If you're considering opening a company with other individuals, one option is to establish a general or commercial partnership (vennootschap onder firma or VOF). In this structure, at least two people work together under a common business name, and everyone is considered a partner. Partners can contribute to the business in various forms like capital, goods, or labour.

However, because a VOF does not have a separate legal identity, partners are jointly liable for the company's debts. This means that each partner is accountable for the financial obligations of the VOF, even if the debts were incurred by another partner.

For a smooth collaboration, you may draft a partnership agreement during the company formation. While not required by law in the Netherlands, having this contract in place can provide clarity on how the business will be run and help prevent potential conflict.

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“We’ve been working with Hawksford since 2012 when we decided to set up our own entities in Asia. The team is very professional and helpful. They took care of every step of business formation, giving us advice and responding to our needs in a timely manner."

Sophia Zhou, APAC Finance Controller, Moleskine China

Next steps

If you are keen to set up a business in the Netherlands, Hawksford can offer tailored solutions and help you with the entire process. Through our range of corporate services, you can expect expert support that ensures your business formation is fully compliant with local regulations.

Simply reach out to our team to learn more about the various Dutch business structures and the documents you’ll need to get started.

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