Planning to grow your company and enter the Dutch market?
For non-EU businesses hailing from countries like India, China, the UK, or the US, expanding into the European Union presents an incredibly enticing opportunity.
The EU market offers a unique combination of low expenses and ease of control, making it an ideal starting point for international growth.

By establishing a branch in the EU, you gain access to a massive consumer base of over 450 million people across 27 countries, all while benefiting from streamlined regulations and a single market system.

The relatively low cost of entry (also thanks to the eBranch portal powered by House of Companies), coupled with the EU's business-friendly policies, allows you to test your products or services in a diverse yet interconnected market without breaking the bank.

Moreover, modern technology and EU-wide standardization make it easier than ever to manage your branch remotely, ensuring you maintain control over operations while reaping the benefits of local presence.

Far from being a traditional number-cruncher, I can assure you that expanding into the European Union market is more than just a calculated business decision – it's a cost-effective gateway to exponential growth and global market entry.

For those considering investing in the Netherlands, understanding the intricacies of company formation is crucial.

This guide explains  the key aspects of setting up a business in this dynamic market, including the Dutch business culture, legal entities available to foreign investors, and the tax system.

It also explores the startup ecosystem, funding options, and government incentives that make the Netherlands an attractive destination to start or expand a business. 
 

 

So, why is the Netherlands the ideal Gateway to Europe?

When it comes to launching a business in Europe, the Netherlands stands head and shoulders above competitors like Belgium, France, Ireland and Germany. The cold, hard facts make it clear - for savvy entrepreneurs looking to maximize their chances of success, the Netherlands is the obvious choice.

Let's cut to the chase and look at the numbers:

Corporate Tax Rates:
 

• Netherlands: 15% on first €395,000, 25.8% above that

• Belgium: 25%

• France: 25%

• Ireland: 12.5%

• Germany: 15% (federal) corporate tax + 5.5% solidarity surcharge + State taxes

The Netherlands offers one of the lowest effective corporate tax rates, giving new businesses a crucial financial advantage right out of the gate.


Ease of Doing Business Ranking (World Bank):
 

• Netherlands: 42nd

• Belgium: 46th

• France: 32nd

• Ireland: 24th

• Germany: 22nd

While not the highest ranked, the Netherlands still outperforms Belgium and is competitive with the other countries. By the way, House of Companies does not share the view of the World Bank. Although Ireland has  relative easy formation process, the Netherlands is much simpler when it comes to company formation, or starting the business. It does not require translations, has a low government fee, and a branch office can be registered easily. 

Startup Ecosystem Ranking (StartupBlink):
 

• Netherlands: 5th globally

• Belgium: 40th

• France: 12th

• Ireland: 13th

• Germany: 9th

The Netherlands' startup scene is world-class, providing unparalleled support and opportunities for new ventures.

English Proficiency Index:
 

• Netherlands: 1st in Europe

• Belgium: 8th

• France: 31st

• Ireland: Native English

• Germany: 11th

With the highest English proficiency in Europe, the Netherlands offers seamless communication for international businesses.

The numbers don't lie - the Netherlands provides the ideal combination of low taxes, business-friendly policies, a thriving startup ecosystem, and widespread English fluency. For entrepreneurs serious about setting themselves up for success, the choice is clear.

But it's not just the statistics - the Netherlands also offers intangible benefits like:


- Strategic location as a gateway to Europe

- Highly educated and skilled workforce

- Culture of innovation and openness to new ideas

- Excellent digital infrastructure and technological capabilities

- High quality of life to attract and retain top talent


The bottom line is this: if you want to give your new business the best possible chance to thrive in Europe, the Netherlands should be at the top of your list. The facts speak for themselves - this small but mighty country punches well above its weight when it comes to fostering business success.

The Netherlands is where smart entrepreneurs go to turn their business dreams into reality. The numbers don't lie - it's simply the best place in Europe to start a company, period.

By choosing the Netherlands as your European base, you'll benefit from a business-friendly ecosystem, strategic location, and access to talent that can propel your company's growth across the continent. With its combination of practical advantages and innovative spirit, the Netherlands offers a unique proposition for non-EU businesses looking to establish a strong foothold in the European market.

 

Strategic Location

 

The Netherlands' strategic position in Europe makes it an ideal gateway for businesses seeking to expand their reach. Located at Europe's front door, the country offers unparalleled access to lucrative consumer markets.

 

Within a 500 km radius of the Netherlands, companies can reach 170 million consumers, while doubling that radius extends the reach to 244 million consumers.

This strategic location allows businesses to tap into a vast European market of 450 million consumers and 22.5 million small and medium-sized enterprises, all accessible within 24 hours.

Infrastructure and Connectivity
The Netherlands boasts world-class infrastructure that facilitates seamless business operations. Amsterdam Airport Schiphol, one of Europe's best-connected airports, serves as a major hub for international travel and cargo [19].

The Port of Rotterdam, Europe's largest seaport, handles over 30,000 vessels annually, playing a crucial role in European manufacturing and distribution [20]. The country's extensive network of nearly 140,000 km of roads and 7,000 km of railways ensures efficient connectivity within the Netherlands and to neighboring nations [20].

Access to EU Market
As a member of the European Union, the Netherlands offers businesses significant advantages in accessing the EU market. The country benefits from free trade within the EU, which has led to a 3.1% increase in its gross domestic product (GDP).

This membership allows Dutch companies to leverage the power of the EU's internal market, creating more trade and investment opportunities [21]. The adoption of the euro further facilitates trade by eliminating currency exchange risks for businesses operating within the eurozone .

 

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Funding and Financial Support

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​Dutch Banks and Financial Institutions

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The Netherlands offers a robust financial ecosystem for entrepreneurs seeking to establish or expand their businesses.
Dutch banks and financial institutions provide various financing options tailored to the needs of startups and scale-ups. These include lending, working capital solutions, equipment leasing, car leasing, factoring, trade finance, and export finance .

The government has implemented schemes to promote finance for SMEs, aiming to generate around €2.5 billion in new funding .

Government Grants and Subsidies
The Dutch government actively supports entrepreneurship through various grants and subsidies. The Ambitious Entrepreneurship Action Plan allocates €75 million to improve access to capital, knowledge, innovation, and global markets.

 

Key initiatives include:

WBSO (Research and Development Promotion Act):
This scheme reduces wage costs for R&D staff and provides tax credits for entrepreneurs, including for prototypes and research equipment.

Innovation Credit: Designed for the development of new products, processes, or services, this loan supports innovative ideas in technical or clinical fields.

SME Loan Guarantee Scheme (BMKB): This program helps SMEs secure loans by having the government act as a guarantor for part of the loan.

Dutch Good Growth Fund (DGGF): This fund supports SMEs conducting business with developing countries and emerging markets.

Venture Capital and Angel Investors

The Netherlands boasts a thriving ecosystem of venture capital firms and angel investors. In 2022, over 300 venture capital deals were recorded, amounting to approximately €3 billion in investments .

rominent angel investors, such as Pieter van der Does and Jeroen Bertrams, typically contribute between €50,000 and €500,000 per deal, offering not only capital but also strategic guidance .

Leading venture capital firms like Prime Ventures, Inkef Capital, and henQ provide substantial investments in high-growth startups, particularly in technology, health, and fintech sectors .

Early-stage investments range from €50,000 to €2 million, while growth-stage funding can reach between €5 million and €50 million.

 

Innovation Ecosystem and R&D

Research Institutions and Universities
The Netherlands boasts a robust network of research institutions and universities that drive innovation. Amsterdam Science Park stands out as a hub for cutting-edge scientific research, housing eight research institutes of the University of Amsterdam .
These institutes cover diverse fields, including astronomy, computer science, biology, logic, language and computation, physics, mathematics, life sciences, and chemistry [27]. The park's collaborative environment bridges the gap between academic research and the marketplace, fostering innovation and growth.

Public-Private Partnerships
Public-private partnerships (PPPs) play a crucial role in the Dutch innovation landscape.
The Top Sector Life Sciences & Health (LSH) facilitates various PPPs to realize the central mission of improving public health.

These partnerships involve collaboration between quadruple helix organizations, focusing on societal relevance, scientific quality, and economic potential. The Dutch government actively promotes PPPs to increase market brainpower and innovative strength.

These collaborations contribute to sustainable development goals and address challenges in water security, food security, and private sector development [29].

Innovation Hubs and Incubators
The Netherlands has cultivated a thriving startup culture, supported by numerous innovation hubs and incubators. Notable examples include:

1. AMS Institute: Focuses on reinventing cities through sustainable solutions .
2. ACE Incubator: Bridges the gap between science and entrepreneurship .
3. YES!Delft: A European digital incubator integrating specialists, mentors, and investors .
4. UtrechtInc: Assists first-time entrepreneurs, students, and researchers in bringing concepts to market [30].

These hubs provide critical tools and support for companies to grow within and beyond the Dutch ecosystem, contributing to the country's position as one of Europe's most fascinating and lucrative startup environments [.
 

 

Corporate Income Tax

 

Based on the information provided in the web search results, here's an overview of the 5 lowest corporate tax rates in Europe in 2023, including the Netherlands, along with an explanation.

Surely, there are some lower taxed countries in the East, but they have far less to offer from an economic point of view.

Hungary: 9%
Bulgaria: 10%
Ireland: 12.5%
Cyprus: 12.5%
Lithuania: 15%

The Netherlands has a tiered corporate tax rate structure:

- 15% for income up to €395,000

- 25.8% for income above €395,000 

Competitive Rates: These countries offer some of the lowest corporate tax rates in Europe, making them attractive destinations for businesses looking to optimize their tax liabiliti.


Economic Strategy: Low corporate tax rates are often used as a strategy to attract foreign investment and stimulate economic growth. Countries like Hungary, Ireland, and the Netherlands have successfully used this approach to boost their economie.


Tiered Structure: The Netherlands, while not among the five lowest overall, employs a tiered structure that benefits smaller businesses and startups.
This approach allows the country to maintain competitiveness while still generating substantial tax revenue from larger corporations.


Innovation Incentives: The Netherlands also offers an attractive "innovation box" regime, which allows profits derived from self-developed intangible assets to be taxed at a reduced effective rate of 9%.
This incentive encourages research and development activities, making the Netherlands an appealing destination for technology-driven enterprises.


Attracting Investment: By offering competitive tax rates and incentives for innovation, these countries aim to attract foreign investment, foster entrepreneurship, and create a favorable environment for business growth. This can lead to job creation, increased economic activity, and a more vibrant business landsca.


Global Competitiveness: With global competition for investment intensifying, maintaining competitive corporate tax rates is crucial for these countries to remain attractive destinations for businesses seeking to establish or expand their operations in Europe.

In summary, the Netherlands and the other countries with low corporate tax rates
in Europe have strategically designed their tax systems to attract investment, promote innovation, and stimulate economic growth, positioning themselves as competitive and appealing locations for businesses of various sizes and industries.

The Netherlands has a competitive corporate income tax (CIT) system for foreign investors. Dutch resident companies are subject to CIT on their worldwide income, while non-resident entities have a limited tax liability on Dutch-source income.

For innovative companies, the Netherlands offers an attractive "innovation box" regime. Under this system, profits derived from self-developed intangible assets can be taxed at a reduced effective rate of 9% [1]. This incentive encourages research and development activities, making the Netherlands an appealing destination for technology-driven enterprises.

 

Withholding Taxes

 

Dividends from Dutch companies are generally subject to a 15% withholding tax [3]. However, exemptions exist for qualifying corporate dividends, particularly within the EU or treaty countries [4]. The Netherlands has implemented a conditional withholding tax on interest and royalty payments to low-tax jurisdictions and in certain abuse situations, with a rate matching the highest CIT rate (25.8% in 2023).

 

Key Industries and Sectors
 

The Netherlands has established itself as a hub for various thriving industries, offering entrepreneurs a fertile ground for innovation and growth.

Technology and Innovation
The Dutch tech sector has emerged as a European powerhouse, with cities like Amsterdam, Eindhoven, and Rotterdam becoming hotbeds of innovation. The government's investment in research and development, coupled with a highly educated workforce, has paved the way for advancements in AI, data science, cybersecurity, and green tech solutions [5].

Life Sciences and Health
The Netherlands is Europe's most connected Life Sciences and Health (LSH) metropolis, home to top health and biotech companies like Merck, Amgen, and Philips [6]. The country invests over €2 billion annually in R&D, fostering a thriving ecosystem of 3,100 R&D companies, 420 biopharmaceutical companies, and a €4.7-billion MedTech market [7]. This sector benefits from 26 campuses, 16 science parks, and 13 universities focused on life sciences research [7].

Logistics and Distribution
Consistently ranking at the top of the World Bank Logistics Performance Index, the Netherlands is a leading logistics hotspot in Europe [8]. The country boasts world-class seaports and the highest quality air transport in the EU, providing unparalleled access to Europe [8]. The Port of Rotterdam, Europe's largest seaport, facilitates 14.5 million TEU per year and creates 385,000 jobs [8]. Amsterdam Airport Schiphol, Europe's third-largest cargo airport, connects to 97 countries and 332 direct destinations.

Government Incentives and Support

Tax Incentives
The Netherlands offers a competitive tax environment to attract foreign investors.

Corporate income tax rates are set at 19% for the first €200,000 of taxable profits and 25.8% for profits exceeding this amount [9]. The country provides a special optional tax rate for profits resulting from patented intangible assets through the innovation box .

Additionally, the Netherlands has a broad participation exemption, offering 100% exemption for qualifying dividends and capital gains .

For companies investing in energy-efficient technologies, the Energy Investment Allowance (EIA) allows deduction of 45.5% of investment costs from taxable profits .

Similarly, the Environmental Investment Deduction (MIA) permits deductions of up to 45% for environmentally friendly investments [9].

Innovation Subsidies
To foster innovation, the Dutch government has implemented various subsidies. The WBSO (R&D tax credit) incentivizes research investment by reducing wage tax for employees engaged in R&D activities [10]. The Innovation Credit scheme supports companies developing challenging innovations, offering loans for projects that contribute to the Dutch economy and lead to marketable products within five years [11].

Startup Visa Program
The Netherlands has introduced a Startup Visa Program to attract international entrepreneurs. This program grants a one-year residence permit for non-EU/EEA/Swiss entrepreneurs to launch innovative businesses [12].
Key requirements include collaboration with an experienced facilitator, demonstrating product or service innovation, and having an active role in the startup [12].

Entrepreneurs must register with the Netherlands Chamber of Commerce and show sufficient financial means to reside and establish their business [12].

Workforce and Talent Acquisition
The Netherlands offers attractive opportunities for companies to acquire and retain top talent from around the world. With its innovative approach to workforce development and favorable policies for highly skilled migrants, the country has established itself as a hub for international talent.

Highly Skilled Migrant Visa
The Netherlands has implemented a streamlined immigration process for highly skilled employees from outside the EU/EEA or Switzerland. This residence permit allows individuals with specialized skills to live and work in the country [13]. To qualify, applicants must meet specific conditions, including having an employment contract with a recognized sponsor and earning a competitive income that meets the minimum salary requirements .

The application process for the highly skilled migrant visa is efficient, with the Immigration and Naturalization Service (IND) aiming to make a decision within 2 weeks for recognized sponsors [14]. This fast-track procedure enhances the Netherlands' appeal to international talent and companies seeking to recruit globally.
 

30% Ruling for Expats

 

To further attract and retain highly skilled international workers, the Netherlands offers the 30% ruling, a tax advantage for employees hired from abroad [15]. Under this scheme, employers can pay up to 30% of the employee's salary as a tax-free allowance for up to 60 months [15]. This benefit helps cover additional costs associated with working in the Netherlands, such as travel expenses and housing [16].

To qualify for the 30% ruling, employees must meet specific criteria, including having expertise that is scarce or unavailable in the Dutch labor market. The ruling also offers additional benefits, such as the option for partial non-resident taxpayer status and the ability to exchange foreign driving licenses without retaking tests .
 

 

Education and Training

 

The Netherlands recognizes the importance of continuous learning and development for its workforce. The government supports various initiatives to enhance skills and knowledge across industries.
For instance, the Incentive scheme learning and development within SMEs (SLIM subsidy) encourages small and medium-sized enterprises to invest in their personnel's expertise and growth .

Companies can also benefit from in-company training programs that offer tailored content to meet specific organizational needs . These programs often utilize blended learning approaches, combining online education with face-to-face methods to provide flexible and impactful learning experiences .

By fostering a culture of continuous learning and offering attractive incentives for international talent, the Netherlands has created a dynamic environment for workforce development and talent acquisition.

 

Understanding Dutch Labor Laws

Employment Contracts

 

In the Netherlands, employment contracts are agreements between employers and employees that outline the conditions of employment .

 

These contracts can be fixed-term (temporary) or indefinite (permanent) [31]. Employers must provide clear information on key employment conditions, including job description, working hours, salary, and leave entitlements. The contract should also specify any training requirements, pension arrangements, and non-compete clauses .

Working Hours and Leave
The standard Dutch working week is 38 hours, with most full-time jobs ranging from 36-40 hours [32]. Employees are entitled to various types of leave, including pregnancy and maternity leave, partner/paternity leave, and parental leave .
Pregnant employees have the right to 16 weeks of leave, while partners can take 1 week of paid leave and 5 weeks of unpaid leave.
The Netherlands also provides for short-term and long-term care leave, as well as emergency leave for unforeseen personal circumstances .

Social Security and Benefits
The Dutch social security system consists of national insurance and employee insurance. Employees contribute around 27.65% of their salary towards social security. Benefits include unemployment payments, maternity and paternity leave, and sick leave .

EU and EEA citizens generally have the same rights as Dutch nationals, while non-EU nationals with residency permits may have some restrictions . Self-employed individuals must make social security contributions towards national insurance but are not required to take out compulsory insurance against illness, invalidity, or unemployment.

 

Legal Framework for Foreign Investment

Foreign Investment Laws
The Netherlands maintains an open and welcoming stance towards foreign direct investment (FDI), offering a stable political climate and a developed economy.
However, recent developments have led to increased scrutiny of FDI inflows, particularly in sectors vital to national security.

The Vifo Act, introduced on June 1, 2023, establishes a general FDI screening mechanism for investments in companies involved in vital processes, sensitive technologies, or business campus management.

Intellectual Property Protection

 

The Netherlands has a robust system for protecting intellectual property rights. Various forms of protection are available, including patents, trademarks, copyrights, and design rights.
Patents safeguard inventions and technical processes, while trademarks protect product names, logos, and packaging designs.
 

Copyright automatically protects literary, artistic, and scientific works, including software and databases [.

The country also offers plant breeders' rights and semiconductor topography rights for specific innovations.
 

Dispute Resolution

The Dutch legal system provides efficient and accessible dispute resolution mechanisms. Civil proceedings follow the Dutch Code of Civil Procedure, with three levels of judicial instances: district courts, appellate courts, and the Supreme Court.

For international commercial disputes, the Netherlands Commercial Court offers specialized judges and English-language proceedings. Alternative dispute resolution methods, such as mediation and arbitration, are widely used and encouraged, with only about 5% of disputes reaching the courts .


Office Space and Industrial Parks

 

The Netherlands offers diverse options for businesses seeking office space and industrial parks. Regional Development Agencies (ROMs) play a crucial role in stimulating local economies and assisting businesses in finding suitable locations .
These agencies help companies secure funding, employees, and build business networks through organized events and meetings.
WeWork provides flexible office space solutions that cater to various business sizes, from startups to global corporations.

Their offerings include standard private offices, office suites, and full floor offices, all designed to meet specific company needs.
 

Free Trade Zones

 

In the Netherlands, Free Trade Zones (FTZs) differ significantly from their counterparts in locations such as Dubai or the Dutch Antilles. The Dutch FTZs are more accurately described as Bonded Warehouses, primarily serving the needs of importers and exporters.

These specialized zones offer substantial benefits for businesses operating within the Dutch market. GEODIS customs specialists oversee FTZ operations across various facilities, including warehouses, manufacturing sites, and service centers. The advantages of utilizing Dutch FTZs encompass:


1. Enhanced flexibility for end-distribution

2. Improved inventory visibility

3. Minimized buffer stock requirements

4. Reduced product costs


Furthermore, Dutch FTZs facilitate seamless re-exportation to other countries. This feature contributes to:


1. Optimized cash flow

2. Decreased compliance risk

3. Accelerated supply chain velocity

By leveraging these strategic zones, businesses can streamline their operations and gain a competitive edge in the global marketplace.

Regional Development Initiatives
The Netherlands has implemented various regional development initiatives to support businesses. There are nine ROMs collaborating through the ROM Nederland platform .

These agencies invest in funding innovative, fast-growing regional businesses and develop industrial estates and business parks [39]. They provide venture capital to business owners, sometimes in exchange for equity ownership [39]. Each ROM focuses on specific regions and sectors, offering tailored support for businesses.

For example, Brabant Development Agency (BOM) assists innovative businesses in accelerating growth and helps startups apply for funding.

Should your firm require funding in Brabant for your Dutch business or startup, House of Companies can connect you to BOM, or another regional business facilitator.
 

 

Why Invest in the Netherlands?

Economic Stability
The Netherlands exemplifies economic stability, boasting a robust GDP and high per capita income [42]. Despite a slowdown in 2023, the Dutch economy is forecast to grow by 0.8% in 2024 and 1.5% in 2025 [43]. This growth is driven by increasing real wage growth, supporting private consumption and expanding government spending. The country's strong sectors, including technology and logistics, contribute significantly to its economic prowess .

Innovation-Driven Economy
The Netherlands is a thriving hub for innovation and entrepreneurship, with approximately 1,000 startups launched annually. The government actively supports innovation through initiatives like the Top Sector Alliance for Knowledge and Innovation (TKI) and the National Icons Competition.
The country's nine top sectors, including life sciences, high tech, and creative industries, are among the world's best. The Dutch IT sector is particularly strong, ranking third globally for ease of conducting digital business.

Quality of Life
The Netherlands consistently ranks high in quality of life indices. In 2023, it claimed the top spot in Numbeo's quality of life ranking, outperforming countries like Denmark and Switzerland.

The country excels in areas such as purchasing power, healthcare, and average commute times [44]. Dutch cities, including The Hague and Eindhoven, also perform exceptionally well in city rankings. The Netherlands ranks in the top 5 for work-life balance according to the OECD, contributing to high job satisfaction and productivity.

Understanding Dutch Business Culture

Egalitarian Approach
The Netherlands boasts an egalitarian society where status and respect are earned through hard work and study, not family ties or age. This approach extends to the business world, where hierarchy is often challenged. Dutch employees are known for their directness, which can be perceived as a lack of respect by foreign managers.
However, this egalitarian culture fosters proactivity among workers. Nearly 70% of Dutch temporary workers attempt to solve problems independently, compared to a global average of 43%.

Consensus-Based Decision Making
The Dutch business culture is characterized by the "polder model," a system of consensus-oriented decision-making.

This approach involves cooperation among employers' organizations, labor unions, and the government, embodied in the Social-Economic Council (SER) .

Meetings are a crucial part of Dutch business life, with everyone's opinion being heard before reaching a compromise.
This process, while time-consuming, ensures steady progress once decisions are made.

International Outlook
The Netherlands' strategic location and advanced infrastructure make it a key center within the global business network. The country consistently ranks highly in international indexes, including fifth in the 2022 IMD Competitive Index and Global Innovation Index .

Dutch workers are known for their international outlook, with 90% of the population fluent in English. This multicultural environment, combined with the country's strong ties to the European Union, positions the Netherlands as an attractive destination for international businesses seeking to expand their horizons .
 

 

Legal Entities for Foreign Investors

 

 

BV vs. NV
Foreign investors in the Netherlands can choose between two main types of limited liability companies: the Besloten Vennootschap (BV) and the Naamloze Vennootschap (NV).
The BV, similar to a private limited company, requires a minimum starting capital of €0.01.

In contrast, the NV, comparable to a public limited company, demands a minimum starting capital of €45,000. Both entities offer limited liability protection, but the BV is generally more suitable for small and medium-sized enterprises .

Branch Office
Establishing a branch office in the Netherlands is a straightforward process for foreign companies. A branch, while not a separate legal entity, must register with the Dutch Business Register (Handelsregister) at the Netherlands Chamber of Commerce (KVK registration).

If the branch's activities meet the criteria of a permanent establishment, it becomes subject to Dutch corporate income tax and may have VAT obligations.

Partnership Structures
For entrepreneurs seeking more flexible structures, partnership options include the general partnership (VOF) and the limited partnership (CV).
In a VOF, all partners are personally liable for the company's debts .

A CV consists of managing partners who run the business and limited partners who are primarily involved in financial affairs . These structures offer different levels of liability and management involvement, catering to various business needs.

 

Step-by-Step Company Formation Guide

Name Reservation
Entrepreneurs must choose a unique business name that complies with the Trade Name Act. The name should not be misleading or similar to existing companies in the same sector and region . Utilizing the KVK Name Check tool helps verify the availability of the chosen name and checks for trademark conflicts . It's advisable to register the domain name with SIDN before registering with the Chamber of Commerce to protect online presence .

Notarial Deed
Establishing a private limited company (BV) requires a notarial deed, which can be done digitally. The notary plays a crucial role in legally recording agreements and declarations . The notarial act becomes valid upon the notary's signature, providing legal certainty for all parties involved. For certain agreements, such as incorporating a BV or transferring shares, a notarial act is compulsory by law.

Bank Account Setup
Opening a business bank account is essential for most companies operating in the Netherlands [60]. Entrepreneurs can choose between traditional banks like ABN AMRO, ING, and Rabobank, or online options such as Bunq .

The application process typically requires providing company documents, proof of identity, and business registration. While the duration varies, some banks may offer same-day account numbers for fully Dutch companies.

 

Taxation and Financial Considerations

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Corporate Income Tax
Dutch resident companies are subject to Corporate Income Tax (CIT) on their worldwide income. The standard CIT rate is 25.8%, with a lower rate of 19% applying to the first income bracket of EUR 200,000 [1]. This tiered structure benefits smaller businesses and startups. For innovative companies, the Netherlands offers an attractive "innovation box" regime, allowing profits derived from self-developed intangible assets to be taxed at a reduced effective rate of 9% .

Participation Exemption
The participation exemption is a key feature of the Dutch tax regime, exempting parent companies from paying tax on dividends received from qualifying subsidiaries [2]. This exemption applies to shareholdings of at least 5% in both resident and non-resident companies, preventing double taxation within the same group [2]. The exemption covers cash dividends, dividends in kind, bonus shares, hidden profit distributions, capital gains, and currency exchange results.

Transfer Pricing Rules
The Netherlands follows the OECD Transfer Pricing Guidelines, adhering to the arm's length principle [62]. Companies must prepare transfer pricing documentation describing how prices have been established and substantiating their arm's length nature [62]. The Dutch Tax Administration accepts various transfer pricing methods, including comparable uncontrolled price, resale price, cost plus, transactional net margin, and profit split methods.

Government Support for Foreign Investors

NFIA Services
The Netherlands Foreign Investment Agency (NFIA), an operational unit of the Dutch Ministry of Economic Affairs, offers comprehensive support to foreign investors . NFIA provides customized information on Dutch legislation, tax regulations, and business locations. Their personalized assistance extends across various sectors, including agrifood, IT & Tech, and life sciences . With 26 offices worldwide, NFIA facilitates global outreach .

Regional Development Agencies
Nine Regional Development Agencies (ROMs) collaborate through the ROM Nederland platform to stimulate regional economies [39]. These agencies invest in innovative businesses, develop industrial estates, and provide venture capital . Each ROM focuses on regional strengths, such as Limburg's strategic location for trade and Noord-Brabant's innovative tech campus.

Investment Incentives
The Netherlands offers attractive tax incentives for foreign investors. These include a 30% tax-free allowance for qualifying expat employees. R&D tax credits with up to 32% wage cost deduction, and environmental investment deductions of up to 45% . The country also provides clarity on tax consequences for major investments and maintains a wide network of bilateral tax treaties.

Regulatory Compliance and Reporting

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Annual Accounts
Dutch law requires most corporate entities to prepare financial statements. These statements form the basis for corporate governance and serve as a crucial source of information in the Dutch marketplace [1]. Companies must file their annual accounts with the Netherlands Chamber of Commerce within 8 days of adoption [61]. The board of directors has 5 months after the financial year's end to draw up the accounts, with a possible 5-month extension in exceptional circumstances .

Audit Requirements
Only medium and large companies are legally obliged to have their annual report audited by an independent, qualified, and registered Dutch auditor. The auditor's report must assess whether the financial statements accurately represent the company's financial position and comply with Dutch accounting principles [65]. The audit requirements vary depending on the company's size, which is determined by criteria such as balance sheet assets, net turnover, and number of employees.

Corporate Governance Code
The Dutch Corporate Governance Code, updated in December 2022, sets out principles and best practices for listed companies . It focuses on sustainable long-term value creation, stakeholder engagement, computerization, and diversity . While mandatory for listed companies, many businesses voluntarily apply the Code [66]. Companies must account for their compliance with the Code in their management report, following the 'comply-or-explain' principle.

So are you ready to branch out to the Netherlands?

The Netherlands stands out as a prime destination for entrepreneurs and investors looking to expand their horizons. While House of Companies stands out as the ideal partner to facilitate your company formation. 

The Dutch entrepreneurial scene continues to thrive, attracting foreign investment and fostering breakthroughs across various sectors.

From cutting-edge startups to established multinationals, the Netherlands provides a strong foundation to start or grow a business. Its competitive tax system, highly skilled workforce, and world-class infrastructure create an ideal ecosystem for success.

Not convinced that you can expand your business and profits in the Dutch market? Join our weekly webinar or schedule a consult with Houseofcompanies.io! By tapping into the opportunities the Netherlands offers, companies can position themselves for long-term growth and success in the European market and beyond.
 

FAQ on Business Formation Netherlands

What are the expenses involved in establishing a BV in the Netherlands?
The cost of setting up a BV (Besloten Vennootschap) in the Netherlands typically ranges from €2,500 to €4,000. This estimate includes essential costs such as securing a Dutch business address, which may involve renting or purchasing a business location or shared workspace. Additionally, budgeting for tax and legal advice is advisable.


Is the Netherlands a favorable environment for launching a business?
Yes, the Netherlands is highly regarded for business due to its extensive network of tax treaties globally, placing it within the top 5 countries in this aspect. This network makes it an ideal location for managing international business operations.


What is the financial requirement to start a business in the Netherlands?
Starting a business in the Netherlands requires a budget of approximately €1,500 to €2,200. The total cost can vary based on several factors, including the number of shareholders and directors involved in the business.
 

What steps are needed to establish a company in the Netherlands?
 

• Choose the type of company to form

• Secure a business address

• Compile all necessary documents for registration

• Determine the nominal share capital for the BV

• Engage a company incorporation specialist

• Obtain a VAT number

• Open a bank account.

Start your local online marketing campaign to get your name known in the Netherlands!

The registration of the branch in the Netherlands is becoming more popular then the formation of a local entity, such as the BV.

House of Companies is one of the frontrunners to facilitate this empowerement for global entrepreneurs.
Be less dependent on notaries and expensive consultants, and set up your Dutch business with House of Companies!

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