Registration services in the Netherlands. VAT accounting
The Netherlands has a highly developed diversified economy and infrastructure. As of 2013, the country ranks 17th in the ranking of the most economically free countries (according to The Heritage Foundation) and 18th in the world in terms of GDP for 2012 (according to the World Bank). The Netherlands is one of the recognized jurisdictions for registering holding companies. The country hosts the head offices of a number of multinational and European corporations.
In international tax planning, Dutch companies are usually used to own assets (in particular, shares/interests in companies, real estate) and receive income from them or alienate them, as well as to issue loans, grant rights to intellectual property.
Dutch business company forms
The organizational and legal forms of legal entities are defined in Book 2 Dutch Civil Code 1992 (as amended 2012)
1. Private limited company(Dutch. Besloten Vennootschap, BV) - one of the most commonly used forms, an approximate analogue of the Russian CJSC or LLC. The minimum number of BV founders is one. The founder can have any citizenship or country of registration. The deed of incorporation, which includes the text of the company's articles of association (statuten), is completed in Dutch in the presence of a notary. When creating a company, the founders can be represented by persons by proxy.
There are no minimum paid-up capital requirements (previously the paid-up share capital at the time of incorporation had to be at least EUR 18,000). The capital of the BV is divided into shares with a nominal value expressed in euros or another currency. The shares are registered. Mandatory restrictions on the transfer of shares have been abolished, although they may be provided for by the charter.
In its day-to-day activities, the company is governed by a board of directors (if there are more than one shareholders). Large companies must have a supervisory board in addition to the board of directors. For some decisions of directors, the company's articles of association may require the approval of shareholders or the supervisory board (if there is one). Directors can be residents of any state, both individuals and legal entities. Information about directors is publicly available. Data on founders is available to the Dutch Ministry of Justice and is also open to interested parties.
The minimum number of shareholders is one (citizen or legal entity of any nationality). The accounting of shareholders is carried out in the form of a register of shareholders, which is maintained by the directors and kept at the company's office. If the company has a single shareholder, he may also be the only director.
The company must have a registered office in the Netherlands. Financial records must also be kept in the Netherlands.
Came into force on October 1, 2012 “Law on simplifying and increasing the flexibility of legal regulation of BV companies”(Dutch Wet vereenvoudiging en flexibilisering BV-recht, English Flex BV Act), amending Book 2 of the Dutch Civil Code (“Legal Entities”) and aimed at simplifying the process of registration and management of BV companies. In accordance with this law:
1) the requirement for the minimum amount of authorized capital (which was 18,000 euros) was canceled; when creating a company, it is allowed to issue one share worth 1 euro cent; upon incorporation, a bank statement on the contribution of the authorized capital is no longer required;
2) the authorized capital can now be denominated in a currency other than the euro;
3) the mechanism for making corporate decisions without a meeting of shareholders’ meetings has been simplified (for example, via e-mail), holding meetings of shareholders outside the Netherlands is allowed, mandatory annual meetings of shareholders have been cancelled;
4) the obligation to provide in the charter for restrictions on the alienation (transfer) of shares has been cancelled;
5) the procedure for making a decision on the distribution of dividends has been simplified: such a decision is now made at the discretion of the directors;
7) independent assessment of non-monetary contributions of participants has been cancelled.
In addition, at the stage of creating a company, a special procedure for the approval of directors and shareholders by the Ministry of Justice is no longer required, and the same applies to the procedure for changing shareholders. The Ministry, however, retained the functions of selective supervision over the activities of corporate structures throughout their existence.
2. Public limited company(joint stock company) (Dutch. Naamloze Vennootschap, NV). The minimum paid-up share capital for such a company is 45,000 euros. In addition to registered shares, NV can also issue bearer shares. NV shares can be freely alienated and listed on the stock exchange. The rules regarding company management are generally the same as those described above for BV.
3. Partnerships in the Netherlands they can be full (vennootschap onder firma, VOF) or limited (commanditaire vennootschap, CV). They can be created by two or more partners, both individuals and legal entities, by concluding a partnership agreement.
A limited liability partnership (CV) is a contractual entity that consists of two (or more) founders: one general partner (managing partner) and one limited liability partner. A limited partner can be either an individual or a legal entity of any residence (in practice, often an offshore company).
CV may carry out any professional or commercial activity not prohibited by law. Accounting and annual reporting are required.
The income of a CV is not subject to tax in the Netherlands, provided that the CV does not receive income from a source in the Netherlands and neither partner is tax resident in the Netherlands. CVs are transparent to the Dutch tax system, and the profits they receive are subject to taxation only at the partner level (in their country of incorporation). If the latter are offshore companies, then the CV profits are not taxed in the Netherlands.
However, several clarifications need to be made here. With respect to the general partner, a CV is always tax transparent: the partner's share of income derived from participation in the CV is taxed as if it had been received by the partner directly. For limited partners, their tax status depends on the status of the partnership itself. For tax purposes, two types of CVs can be distinguished: a) CVs, in which partners can freely transfer participation, enter or leave the partnership (so-called “open” CVs) and b) “closed” CVs, where these actions are not allowed. Open CVs are subject to corporate tax on income payable to the limited partner.
Whereas in a closed CV, the limited partner (like the general) pays tax on income from participation in the CV independently, and the CV itself does not pay tax (in this sense, the Dutch CV is similar to the English LLP). Consequently, the use of tax opportunities of a partnership depends on its legally correct organization (fixed in the partnership agreement).
4. Co-op(Dutch Cooperatief) is a form of joint business that combines the characteristics of a partnership and a limited liability company. The number of mandatory requirements for the charter of a cooperative is not large, which leaves significant freedom to organize the cooperative in accordance with the goals of the parties. A cooperative is a legal entity, can act as a holding company, and is widely used in international holding activities. The minimum number of participants in the cooperative is two (there can be both Dutch and foreign individuals or legal entities). There are no requirements for the size and payment of the authorized capital.
When a cooperative is used in a holding structure, its purpose is usually to generate profit through investment. To do this, the cooperative enters into a contribution agreement with its participants, according to which the participants contribute capital (money or other property) to the cooperative. The cooperative may distribute profits among its members, the amount of which usually depends on the size of the contribution made.
An important advantage of a cooperative is that the profits distributed by the cooperative are not subject to withholding tax in the Netherlands, since the cooperative does not have share capital and therefore the distributed profits are not considered dividends. In addition, cooperatives are subject to Dutch tax treaties. However, it is necessary to keep in mind that the main condition for using tax exemption is the real nature of the business of the cooperative itself, its members and subsidiaries, and the main stop factor is abuse of the tax exemption regime (for more details, see below).
5. In addition to the above forms, in the Netherlands it is also possible to create European Company(Societas Europaea, SE) in accordance with EU legislation. In particular, the creation of such a company is possible by merging two existing companies from different EU countries; by creating a holding company SE with two subsidiaries from different EU countries; by converting a Dutch NV into an SE, etc. The minimum share capital is 120,000 euros.
A foreign (i.e. non-Dutch) company must be registered as branch or representative office in the Trade Register (Handelsregister) of the local Chamber of Commerce (Kamer van Koophandel).
Dutch companies have general legal capacity, that is, they can carry out any activity not prohibited by law. A number of activities require licensing, including banking, insurance and other financial activities.
Reporting and audit
Accounting is mandatory. Financial statements must be prepared annually within 5 months after the end of the financial year and submitted to the Trade Register of the Chamber of Commerce within 8 days after their approval by the general meeting of shareholders or participants.
The audit is mandatory and must be carried out by a local certified auditor in cases where the company is medium or large in terms of its performance. Small companies that are not subject to the audit requirement are those that meet two or three of the following criteria: 1) whose assets are less than 4.4 million euros, 2) their net turnover is less than 8.8 million euros, 3) the number employees are less than 50.
Taxpaying companies are required to file a tax return within 6 months following the end of the financial year. The financial (tax) year usually coincides with the calendar year, unless otherwise provided by the company's charter. Penalties are provided for failure to file or late filing of a tax return, late payment or non-payment of taxes.
Taxation
Residents of the Netherlands for tax purposes are considered to be persons incorporated under the laws of the Netherlands (“incorporation criterion”). For persons not registered in the Netherlands, residence is determined based on circumstances indicating the actual connection of the person with the Netherlands or its absence (for example, depending on the place of effective management, residence of directors, etc.).
Companies resident in the Netherlands pay corporate income tax on their worldwide income. Non-resident companies are subject to this tax only on certain income received from sources in the Netherlands.
Company income tax is levied based on Corporation Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969). This tax is paid by all types of companies, with the exception of partnerships, in which each of the partners pays the tax independently at the place of their incorporation.
Corporate income tax rate in the Netherlands is 25%. A reduced rate of 20% applies to income not exceeding €200,000.
The Netherlands, like other EU countries, has a participation exemption regime, which allows Dutch companies receive dividends, without paying corporate income tax, subject to qualified participation in subsidiaries.
In other words, income received by a Dutch company from a foreign subsidiary (in the form of dividends or capital gains) is exempt from tax in the Netherlands if the Dutch company owns at least 5% of the subsidiary's share capital and the subsidiary:
1) is predominantly operating (that is, its assets do not consist of more than 50% of portfolio investments); or
2) is subject to tax at a reasonable effective tax rate calculated on the basis of Dutch tax principles (that is, the subsidiary must not be registered in a low-tax jurisdiction).
Capital gains resulting from the disposal of shares (as part of a qualified participation relationship) are also exempt from income tax.
Standard dividend withholding tax rate foreign shareholders is 15%. This rate may be reduced in accordance with double tax treaties concluded by the Netherlands.
Paid Dutch company dividends are exempt from withholding tax if the relationship between the Dutch company and the company receiving the dividends (including offshore companies) satisfies the qualifying participation criteria (see above).
Exemption from withholding tax on dividend payments also applies in relations between companies from EU member states, when, firstly, each of the companies is a resident of the EU or the European Economic Area (EEA), and secondly, the company receiving the dividends owns in a Dutch company shares of at least 5%. In addition, the company receiving the dividends must belong to one of the legal forms listed in the annex to the EU Parent and Subsidiary Directive.
Withholding tax on interest payments absent, with the exception of so-called “hybrid” loans, in cases where the interest can be classified as a dividend for tax purposes. In the latter case, dividend rules will apply.
Withholding tax on royalty payments absent.
Withholding tax for cooperatives. As already mentioned, Dutch cooperatives are not subject to withholding tax on dividends. However, there are exceptions to this rule. A profit-distributing cooperative will be taxed at a rate of 15% if: a) there is a structure that “abuses” the tax regime (that is, the cooperative directly or indirectly owns shares in the company with the main purpose of avoiding Dutch withholding tax or foreign tax; b ) participation interest in a cooperative cannot be attributed to the “active business” of its participant.
Taxation of cooperative members. In some cases, the foreign co-operative member himself (non-Dutch resident) may become liable for corporate income tax (or personal income tax) on the income he receives from his membership in the Dutch co-operative. Under the Corporation Income Tax Act, non-resident corporations are subject to tax on income they derive from a “substantial interest” in a Dutch resident company (which includes cooperatives), unless such a “substantial interest” can be qualified as a share of a “business enterprise”. A “substantial” share is considered when a non-resident owns, directly or indirectly, at least 5% in a Dutch company. The concept of “business enterprise” (for the purposes of this rule) is not defined by law. In practice, a passive holding company registered in a classic offshore zone is not considered a “business enterprise”.
In these cases, especially if the member company of the cooperative is registered in a country that does not have a tax treaty with the Netherlands, it is recommended to obtain a preliminary tax opinion from the Dutch tax authority, which will explain: 1) whether the profits distributed by the cooperative to non-residents will be taxed withholding tax; 2) whether the “release due to participation” regime will apply; 3) whether foreign members of the cooperative will be required to pay Dutch corporate income tax. At the same time, it is important to show that all members of the cooperative are conducting active business and are sufficiently involved in the business of the cooperative, and the subsidiaries of the cooperative are also active (operational).
Standard VAT rate in the Netherlands is 21%. For certain categories of goods and services, reduced rates of 6% and 0% are provided. A zero VAT rate also applies to exports of goods and deliveries within the EU. The VAT report is submitted (depending on the tax amounts) monthly, quarterly or annually.
Income of individuals are taxed on a progressive scale. The maximum bet is 52 %.
The Dutch tax authorities can provide the taxpayer, upon request, with an advice (advance tax ruling) with information on the rates and other tax conditions that will be applied in the scheme or transaction proposed by the taxpayer (for example, on the issues of structuring holdings and applying the participation exemption regime to them, international loans, working conditions of a permanent representative office of a foreign company, etc.).
In the Netherlands, it is also possible to combine several Dutch companies into a consolidated group, which will be treated as a single taxpayer, and taxes will be calculated on the basis of consolidated accounting, which makes it possible to redistribute profits and losses within the group.
Dutch tax treaties
The Netherlands has more than 80 double tax treaties, in particular with countries such as Russia, Armenia, Azerbaijan, Austria, Belgium, Belarus, Great Britain, Hungary, Germany, Georgia, Denmark, Ireland, Spain, Kazakhstan, China (except Hong Kong and Macau), Latvia, Lithuania, Luxembourg, Moldova, Malta, Norway, New Zealand, USA, Singapore, Uzbekistan, France, Finland, Czech Republic, Sweden, Estonia, etc.
The Netherlands has also entered into tax information exchange agreements (TIEA) with the following states and territories: Andorra, Anguilla, Antigua and Barbuda, Bahamas, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Dominica, Gibraltar , Grenada, Guernsey, Isle of Man, Jersey, Liberia, Liechtenstein, Marshall Islands, Monaco, Montserrat, Samoa, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Turks and Caicos Islands.
Agreement with Russia on the avoidance of double taxation
The Agreement between the Governments of the Russian Federation and the Netherlands on the avoidance of double taxation and the prevention of tax evasion in relation to taxes on income and property was concluded in 1996 and came into force in 1998.
In accordance with this Agreement, the profits of an enterprise of one Contracting State are taxed only in that state, except in cases where the enterprise carries on activities in the other Contracting State through a permanent establishment located there (Article 7).
Profits from the operation of ships or aircraft in international traffic are taxed only in the Contracting State in which the enterprise receiving such profits is a resident (Article 8).
Dividends paid by a company from one state to a resident of another state may be subject to taxes in both of those states. However, the tax levied in the state of the company paying the dividends (i.e. withholding tax) must not exceed:
a) 5% of the total amount of dividends, if the recipient of the dividends is a company (other than a partnership) whose direct participation in the capital of the company paying the dividends is at least 25% and which has invested in it at least 75 thousand euros or an equivalent amount in the national currency of the Contracting Parties states;
b) 15% of the total amount of dividends in other cases (Article 10).
The Agreement also establishes the rules for the exchange of information and assistance in collecting taxes by the competent authorities of Russia and the Netherlands.
Application of Dutch companies in holding schemes
There are various options for building holding structures with the participation of Dutch companies. Taking into account the provisions of the tax agreement between the Russian Federation and the Netherlands, as well as the Euro Directive on parent and subsidiary companies, it is possible to construct the following dividend payment structure.
A Russian company pays dividends to a Dutch company (withholding tax in the Russian Federation will be 5 or 15%). The Dutch company distributes dividends to the Cyprus company (without withholding tax based on the EU Directive). Dividends received by a Cyprus company are exempt from income tax in Cyprus. In turn, the Cyprus company, also without withholding tax at source, pays dividends to its shareholder - an offshore company (where there is no income tax).
Another option would be to use the following ownership chain: Maltese holding company - Dutch company - Russian company. A Russian company pays dividends to a Dutch company, withholding tax at source at 5% (according to Article 10 of the Tax Treaty). A Dutch company is exempt from tax on dividends received if it owns at least 5% of a foreign company - not offshore or passive, in this case - Russian. In the Netherlands, dividends paid to Malta will be subject to 0% withholding tax if there is a qualified participation in accordance with EU rules. Dividends received by a Maltese holding company from a qualified participation in a Dutch company are exempt from tax in Malta.
Companies for royalty purposes
In the Netherlands there is no withholding tax on outgoing royalties. Based on this, a traditional royalty payment scheme is built with the participation of a Dutch company. The owner of the trademark is a foreign (for example, offshore) company, which, on the basis of a license agreement, transfers to the Dutch company the rights to use the trademark, including the conclusion of sublicensing agreements. A sublicense agreement is concluded between the Dutch and Russian company (the end user of the trademark), according to which the Russian company transfers royalties to the Dutch company. The Dutch company then pays the royalty to the ultimate rights holder (in this case, the offshore company).
In Russia, paid royalties are not subject to withholding tax in accordance with Art. 12 of the tax agreement between the Russian Federation and the Netherlands. In the Netherlands, only the difference between royalties received and royalties paid is taxed at the standard rate. There is also no withholding tax when paying royalties to an offshore company. In the latter, income is not subject to income tax.
Please note that the described scheme has a number of restrictions and conditions of application established in order to combat abuse and the use of the Dutch company solely as a transit element.
Dutch companies for financing purposes
A scheme involving a Dutch transit company might look like this. A Dutch company receives a loan from one foreign company and then issues a loan to another foreign company. There is no withholding tax on interest payments to a non-resident in the Netherlands. Income tax at the standard rate in the Netherlands is levied only on the difference between the interest received and the interest paid.
However, when using Dutch companies for financing purposes, it is important to remember the regulatory restrictions on the expense of interest paid, as well as the requirements for the size of the difference between interest income received and paid. Interest paid may not be deductible as an expense in some cases (based on thin capitalization rules).
Use of Dutch companies in trading schemes
When receiving active income (for example, from trading) from profits, companies of the BV and NV type pay tax at the usual rate, therefore, in trading schemes, it is advisable to use agency schemes or partnership structures (partnerships with the rights of a legal entity), which are characterized by the principle of “tax transparency” .
Partnerships can be used instead of classic offshore companies in most popular schemes for international trade transactions. The partnership can operate as a trading company interacting with counterparties from jurisdictions with regular taxation (EU, USA, Canada, Russia, etc.).
The classic (“English”) agency scheme is also applicable to Dutch companies. Thus, a Dutch company can act as an agent carrying out its activities (supply of goods, provision of services) on the basis of an agreement with the principal - an offshore company. For example, a Dutch trading company acts as an agent, while the principal company is located in a jurisdiction with low or zero taxation, where the main profit is concentrated. In this case, clients interact with the Dutch company.
Let’s summarize by identifying the main advantages of Dutch companies in international tax planning:
1) The Netherlands is a respectable European jurisdiction with regular taxation (not offshore);
2) There are various options for tax exemption or tax reduction provided for by domestic and EU legislation, as well as international tax treaties;
3) Special taxation regime for holding companies;
4) No withholding tax on payments of interest and royalties to non-residents;
5) The procedure for registering and managing private limited liability companies (BV) has been significantly simplified;
6) Availability of flexible corporate instruments for various purposes (eg partnerships, cooperatives).
In conclusion, it should be noted that the construction of any schemes with the participation of Dutch companies aimed at minimizing the tax burden should be carried out taking into account the rather complex provisions of Dutch tax legislation and existing practice, in particular, the rules on “thin capitalization”, “hybrid” debt instruments , restrictions on interest deductions, transfer pricing, etc.
The Netherlands or Holland is a small state in Europe. The area does not exceed 41.5 thousand square meters. km. The country has a population of less than 16 million. The official language is Dutch. Currency - EURO.
The official government system is a constitutional monarchy. The Constitution is written on the basis of.
The main types of state income: tourism, mechanical engineering, agricultural products, the banking sector with significant capital, the ability to borrow at low interest rates. The sources of funds are not controlled, with rare exceptions.
In Holland there is an established legislation and political system, there are no revolutions, and there is minimal risk of changing the economic direction of development. This makes the Netherlands one of the most attractive destinations.
The UraFinance company invites everyone to register or buy a company to do business internationally while paying minimal taxes and fees.
Offshore in the Netherlands: main factors
UraFinance draws attention to the following key points that need to be taken into account when opening a representative office in the country:
- Only 2 types of organizations are legally permitted: a limited liability company (BV) and a limited liability partnership (CV).
Private limited company
You can register a company with type BV if the following conditions are met:
- the minimum authorized capital is 0.01 EURO; - the company must have an office in the country where registration is carried out;
- The issue of shares is permitted: ordinary, preferred, with and without voting rights;
- The sole founder or shareholder can decide to create a company. The director must be a resident of any EU country. Nominee directors and shareholders can be appointed. A general power of attorney is signed with the nominee director, regulating the list of permitted actions with the property and shares of the company owner;
- The location of shareholder meetings is not regulated by law. There is no need to provide reporting regarding company decisions, hiring of directors, development or curtailment of activities.
Buy a company in the Netherlands: Income tax
Offshore companies in the Netherlands usually pay up to 25% of the profit received to the budget. If the amount of income does not exceed 200,000 EUROS, the tax rate is reduced to 20%. VAT rate is 21%. You can get a tax exemption in the following situations:
- the company owns at least 5% of another company, provided that it pays at least 10% tax on the profit received at the place of registration;
- investments in other enterprises make up no more than 50% of the total assets of a company registered as an offshore company.
Using the Dutch tax system is only possible if the director of the company is a resident or citizen of this country.
Business owners who are residents of the European Union do not pay tax on dividends. All others are required to pay 15% of the total amount of dividends received to the country's budget.
The rate can only be reduced if an agreement has been concluded between the Netherlands and the country where the owner of the shares is resident to avoid double taxation. Double taxation agreements have been signed with most countries in the world.
In 1996, a similar agreement was signed between the Russian Government and the Kingdom of the Netherlands.
Features of accounting and document flow
- UraFinance specialists are required to provide clients who decide to open a company in the Netherlands with the following information: Information about business owners is not provided to third parties under any circumstances.
- accounting and reporting is mandatory for all forms of ownership and types of activity;
- Documents can be stored in any country in the world at the discretion of the owner.
Registration of a company in the Netherlands: Information on legislation
Royal House | www.koninklijkhuis.nl |
Government | www.government.nl |
Prime Minister | www.rijksoverheid.nl/ministries/az#ref-az |
Cabinet of Ministers | www.rijksoverheid.nl/regering#ref-regering |
Parliament | www.parlement.nl |
Ministry of Finance | www.rijksoverheid.nl/ministries/fin#ref-minfin |
Ministry of Economics | www.rijksoverheid.nl/ministries/ez#ref-ez |
Ministry of Justice | www.rijksoverheid.nl/ministries/venj#ref-justitie |
Tax | www.belastingdienst.nl |
Supreme Court | www.rechtspraak.nl |
Chamber of Commerce | www.kvk.nl |
Bar Association | www.advocatenorde.nl |
Company registration in the Netherlands with UraFinance
UraFinance invites business owners to take advantage of all the advantages of working in the best European markets and gain access to the capital of the largest banks in the world. To do this, just contact the specialists of our company and register an offshore company in the Netherlands. You can legally reduce your tax burden.
Contact UraFinance and in 1-2 weeks you will receive a package of documents allowing you to work in a country with legislation that is optimal for business. This will allow you to legally hold capital in European banks, make payments with minimal delays, and use the best credit products and programs.
The Netherlands, also known to the world as Holland, is a state located in northwestern Europe, washed by the North Sea and covering an area of 41.5 thousand km 2. Among the official possessions of the Netherlands are the island of Aruba (Caribbean Sea) and the Antilles.
The central part of the Netherlands is crossed by a waterway - the Rhine.
Given the fact that the Netherlands is a constitutional monarchy, the country is ruled by a monarch. But his power is nominal, his main functions are representative. Political and legislative decisions are made by the parliament and government of the Netherlands.
Administratively, the state is divided into provinces, there are 12 of them in total. As you know, the capital of the country is the city of Amsterdam. But the location of the main government bodies and representative offices is The Hague.
About 16 million people live in the Netherlands. Of these, more than 80% are Dutch. The share of other representatives from Europe is 5%.
As for the official language, there are two of them in Holland - Dutch and Frisian. The latter is used only by residents of the province of Friesland.
Christianity is the predominant religion in the Netherlands.
The official currency in the Netherlands is the euro.
Visitors to the Netherlands note the general feeling of comfort and friendliness of the local people as fundamental features of the image of this beautiful state.
Holland today is also very attractive in terms of investment. Many entrepreneurs seek to register a company in the Netherlands.
Company registration in the Netherlands. Main advantages.
Registering or buying a company in the Netherlands has become especially profitable since October 2012. The reason for this was changes in tax policy, as well as measures to simplify the registration procedure.
Let us highlight the main advantages that opening a company in the Netherlands (Holland) will bring.
- Attractive tax policy. For example, there is no tax on the profit of the holding, on income from royalties and from the payment of dividends. To obtain the right to work under such conditions, a special procedure is required.
- Advantageous location in Europe. Business in the Netherlands has access to European markets. And this is additional opportunity to expand the volume of imports and exports.
- The international authority of the Netherlands, which obviously guarantees your company in Holland lasting trust from potential partners and consumers. It is significant that the world's most famous brands register their subsidiaries in the Netherlands.
- Constant introduction of innovations into the economy. Improvement of the Dutch economy, including technological ones, makes it possible to increase the efficiency of doing business in the Netherlands office.
- Beneficial cooperation with banks. Banks offer special terms of cooperation to company owners. The Dutch banking system is characterized by the assignment of a network of banks to a specific area, for example, activities in agriculture.
- Reliability of the legal system. The owner of a company in the Netherlands is reliably protected legally. The management of the company and its work are clearly stated in the laws. Therefore, a “foggy” reading of company documents is excluded.
- Convenience of concluding transactions with foreign investors.
- Possibility of avoiding double taxation.
- Availability of IP-Box service. Thus, the manufacturer of intellectual property products that are produced in the Netherlands has the opportunity to benefit from preferential tax treatment.
- Low size of the authorized capital. This advantage resulted from simplifications in the requirements for company registration in the Netherlands.
Forms of doing business. Business in Holland.
The following types of companies in the Netherlands are most interesting for an entrepreneur:
- Private limited company, BV;
- Public limited liability company, NV.
Company in Holland: features of registration and conduct of activities.
- The company name cannot be identical or similar to an existing one. It must not be misleading as to the scope of its activities, and cannot demonstrate affiliation with the Royal Family or the Dutch Government. It is necessary to include the abbreviations BV, NV or their full forms in the name.
- The minimum capital for BV is € 0.01. And at the time of registration you must pay at least one share. In the future, it is planned to increase the authorized capital.
- The minimum capital for NV is from € 225,000, € 45,000 (20%) must be paid upon registration.
- Issue of shares. BV and NV have the right to issue only registered shares. Possible release:
Priority shares vested with certain rights (they are indicated in the charter);
Preferred shares (give the shareholder the right to receive fixed dividends). The deed of transfer of shares must be notarized. A register of shareholders is maintained, and the directors are responsible for this. The register must contain information about the names, addresses of shareholders, the number of shares, sums paid, as well as information about the transfer, pledge, and use of shares.
- The number of directors and shareholders is at least one. Their citizenship and residency does not matter. The sole shareholder may also be a director.
- The personal presence of the founder at the document signing procedure is not required. It is enough to have your own representative who has been issued a power of attorney. You can also act through the service of a nominee holder.
- Information about the directors and shareholders of the company is contained in the act of incorporation of the company in the Netherlands, such data is available to third parties.
- A company with more than one shareholder is governed by a Board of Directors.
- Nominee shareholders and directors are permitted.
- All changes occurring in the shareholder structure must be notarized.
- Nominee directors issue powers of attorney only for specific transactions.
- No secretary required.
- The registered address must be in the Netherlands.
- It is possible to transform an NV company into a BV, as well as vice versa. To do this, you need to amend the charter in the form of a notarial deed, which must be certified by a Dutch notary.
Taxes in the Netherlands.
A company in Holland (Netherlands) pays income tax in the amount of:
20% (for profits up to € 200,000),
25% (if profit exceeds €200,000).
Tax on dividends is paid at a rate of 15%, it does not matter whether they are received by a resident or a non-resident. The conclusion of an agreement on the avoidance of double taxation will further reduce the rate. This tax can be offset at source by the resident shareholder against personal as well as corporate tax liabilities. Withholding tax for non-resident shareholders is final.
Capital gains tax – 0%.
Stamp duty – 0%.
Interest tax on dividends and royalties is 0%.
VAT – 21% (general rate), 6% and 0% (preferential rates).
Accounting in the Netherlands.
Filing financial statements is a mandatory requirement. All financial reports are kept in the company's Dutch office.
In general, companies in the Netherlands rent out:
Balance sheet and income statement with notes;
Cash flow report;
Directors' report (unless there is a statutory exemption);
Reports on incidents that could or have affected the financial condition of the company.
Registering or buying a company in the Netherlands (Holland) is now easy. Registration of companies (including offshore companies) is one of the main activities of our company. With us, registering a company in the Netherlands (Holland) will be quick and efficient!
General information about companies in Holland
Difference between Dutch company NV and BV
Below is a brief overview of the main differences between a private limited company (Besloten Vennootschap met beperkte aansprakelijkheid, or BV) and a private limited company (Naamloze Vennootschap, or NV).
As of 1 October 2012, Dutch BV legislation has changed significantly. Until this time, BV and NV were quite similar to each other. Currently the main differences are as follows:
(Minimum) share capital:
- NV: minimum capital EUR 45,000, shares must be issued and paid.
- BV: minimum capital EUR 0.01 and can even be denominated in any other foreign currency. Shares can be issued and paid for at a later stage (for example, when the company requests it).
Bank account statement upon registration:
NV: To register an NV, a bank statement is required confirming that EUR 45,000 was transferred to a bank account in the name of NV.
- BV: no bank statement required.
Contribution to shares in kind upon registration:
NV: Founders must prepare a description of the contribution, indicating the value assigned to it and the valuation methods used. The description refers to the state of the deposit as of a date no earlier than five months before registration. The description must be signed by all founders and will be attached to the registration act. The auditor must provide a statement to the description, which is also attached to the registration certificate.
- BV: founders must prepare a description of the contribution, stating the value attributed to it and the valuation methods applied. The description refers to the deposit condition as of a date not earlier than five months before registration. The description must be signed by all founders. An auditor of the application is not required.
Stock:
NV: may have bearer shares as well as registered shares. Bearer shares can be transferred by physical delivery, while registered shares must be transferred in the form of a notarial deed executed before a Dutch notary. Only shares in an NV company can be listed on the stock exchange.
- BV: can issue registered shares only. Registered shares must be transferred in the form of a notarial deed executed in the presence of a Dutch notary. Shares of BV companies cannot be listed on the stock exchange. Unlike an NV, a BV can have either (i), non-voting shares, although with the right to share in profits, or (ii) shares with voting rights, although without the right to share in profits.
Restrictions on transfer of shares:
NV: The transfer of shares may be restricted by the articles of association, although it may also be provided that the shares are freely transferable.
- BV: the transfer of shares may be limited by the articles of association, although it may also be provided that the shares are freely transferable. (previously the transfer of shares in BV companies had to be restricted).
Profit distribution:
NV: NV profits must be at the disposal of the general meeting. NV may distribute profits only if and to the extent that the shareholders' equity is greater than the sum of the paid-up and callable portions of the issued capital and the reserves required to be maintained by law; dividends can be paid only after the approval of annual reports that show that they are justified.
- BV: the general meeting can appropriate profits and can decide on distribution. The BV may distribute profits only if and to the extent that the shareholders' equity is greater than the reserves that must be maintained by law or the articles of association; distribution can only be made when the board has given its approval. The Board may withhold such approval only if it is known or reasonably foreseeable that following such distribution, BV will be unable to continue making payments on its debts.
Finally, keep in mind that an NV company can be converted quite easily into a BV company and vice versa. This requires amendments to the charter in the form of a notarial deed executed in the presence of a Dutch notary.
Advantages of a Dutch holding company
The main advantages of a Dutch holding company:
- Full exemption from taxes on dividends and capital gains on shares for subsidiaries;
- Favorable tax regime compared to regimes in other EU countries;
- Minimum tax burden on profit repatriation;
- Tax deduction for confirmed expenses and losses;
- Tax treaty benefits, in particular the reduction of taxes on dividends (in many cases to zero) based on tax treaties concluded in the Netherlands with more than 80 countries around the world;
- EU tax benefits, in particular 0% tax rate on dividends, interest and royalties received from subsidiaries located in other EU member states;
- Possibility of obtaining taxation on a preliminary basis;
- There are no restrictions on the exchange of foreign currencies;
- Recognized, albeit flexible, corporate law;
- Possibility of applying for a tax refund in foreign currency;
- Excellent infrastructure and easy access to financial markets;
- Relatively low registration costs and annual operating costs.
Requirements
Audit
If a company qualifies as "medium" or "large", the company is required to produce consolidated financial statements audited by an external accountant.
A company falls into one of the categories below in the table if it meets at least 2 of the 3 criteria, also taking into account the consolidated figures for the branches for the last 2 years (or from the very beginning)
Small Medium Large
Assets< 4,4 млн 4,4 - 17,5 млн >17.5 million
Net turnover< 8,8 млн 8,8 - 35 млн >35 million
Employees< 50 млн 50 – 250 млн >250 million
For more detailed information please contact our office in the Netherlands: +31207147478
If you are interested in opening a company in the Netherlands, fill out
Opening a company in Holland traditionally serves as a means of tax planning for respectable international structures, primarily European ones. As you know, there are no completely tax-free or offshore companies in the Netherlands. The tax rate is the same for all companies and is 34.5%.
However, some features of the tax system of this country in certain situations make it possible to use Dutch companies to reduce the tax burden. First of all, we are talking about Dutch holdings.
Main features of tax legislation
- No withholding tax on royalties.
- Possibility of obtaining a preliminary opinion on a specific scheme from the tax authorities.
- No withholding tax on interest.
- Extensive network of double tax treaties.
- Exemption from tax on income from participation in capital.
- No withholding tax on dividends within the EU (if the EU Subsidiary Directive applies).
Incorporation
The notarial deed of incorporation is performed in Dutch in the presence of a Dutch notary, who can then provide the statutory documents with an English translation.
Immediately before incorporation, you must obtain a Statement of No Objection from the Ministry of Justice.
Statement of No Objection is a declaration of the Ministry of Justice, which is issued after appropriate verification of the status of the incorporators, managing director(s), ultimate beneficiary, official(s). The Ministry of Justice verifies the personal information of individuals and legal entities that will be appointed managing director(s) and/or shareholders. To do this, the Ministry of Justice will provide the necessary questionnaires, in which the following information will be required: (i) the name and addresses of the ultimate beneficiary(ies); (ii) latest financial information (if the Dutch offshore company acts as an incorporator); and (iii) a declaration from the incorporators - a document confirming that the incorporating company will not change shareholders or issue new shares within one year from the date of incorporation.
Currently, Statements of No Objection are issued by the Ministry of Justice in approximately 2 weeks. However, during the registration process, a Dutch LLC can carry out its activities provided that it adds the abbreviation “i.o.” to its name. (meaning “in oprichting”, i.e. “in the process of registration”). During the pre-incorporation period, business registration in Holland can be carried out, and the former B.V. i.o. may be registered and entered into the trade register at the Chamber of Commerce. In such a case, persons acting on behalf of the B.V.i.o. are personally liable for all actions taken during the pre-registration period while the relevant B.V.i.o. does not ratify these actions immediately after the completion of company registration in Holland.
Capital
A Dutch company (N.V. or B.V.) must have an authorized share capital divided into shares, each of which has a nominal value in Euros. Shares without par value are not permitted.
Registration of companies in Holland (B.V. or N.V.) requires that at least 20 percent of the capital must be issued and at least 25 percent of the par value of each issued share must be paid up. In accordance with the requirements of Dutch law, the minimum issued and paid-up capital in Euro must be 45,000 for N.V.
Dutch company law does not require a minimum debt to equity ratio. The identities of shareholders who have not paid for their shares in full must be indicated in the Commercial Register.
Managing or supervising directors of Dutch companies are not required to be shareholders. There is also no requirement that shareholders be Dutch residents.
Transfer of shares
Bearer shares are freely transferable upon delivery of the corresponding original share certificates. Only N.V. may issue bearer shares. Registered shares issued by N.V. are also freely transferable, subject to restrictions that may be contained in the company's articles of association.
B.V. can only issue registered shares, and the company's charter must provide for restrictions on their transfer. Such restrictions require the person transferring shares to do one of the following:
- offered its shares to other shareholders (“right of first refusal”);
- received preliminary consent for the transfer (assignment) of shares at the General Meeting of Shareholders, or from any other management body of the company, as specified in the charter.
Articles of Association of B.V. must state that, at the request of the seller, the sale price of the shares will be determined by one or more independent experts in the event that the seller and buyer cannot agree on the value of the shares being transferred. Transfer of registered shares in N.V. companies and B.V. requires the execution of a notarized deed of transfer by a Dutch notary.
Register of shareholders
Managing directors of the Dutch company B.V. (and N.V. if it issues registered shares) must keep a register of shareholders at the registered office of the company. The register contains the numbers of all registered shares, the names and addresses of all shareholders, the amount in which the par value of the shares has been paid, as well as details of any transfer of shares, pledge, seizure or usufruct (use of shares with subsequent extraction of income). Each shareholder, pledgor, usufruct has the right of access to the register of shareholders and the right to receive a certified extract indicating the details of the registration of his shares. Any changes or amendments made to the register of shareholders require the signature of one of the managing directors.
Control
The management of Dutch companies (N.V. or B.V.) is carried out by a Board of Managing Directors, consisting of one or more members (bestuurders), who are appointed and removed by the shareholders. From the point of view of Dutch corporate law, none of the managing directors of the Dutch company B.V. does not have to be a Dutch resident. However, for Dutch tax purposes, it is still recommended that at least half of the appointed directors be resident in the Netherlands.