Setting Up a Subsidiary in the Netherlands  – 2024 Guide

Although the Netherlands is relatively smaller than France and Germany, it plays a significant role in the world’s economy. It is considered one of the most competitive economies in Europe and worldwide. 

Its strategic location makes the Netherlands a lucrative choice for business expansion. Most European markets can be accessed from Amsterdam or Rotterdam by road. In fact, this country has a well-developed infrastructure of railways, airports, waterways, and ports that provides domestic and international connectivity. 

A thriving financial sector, pro-business government, and high quality of life further raise this country’s economic appeal. Hence, expanding into the Netherlands can be an ideal strategy to take your business to the next level. 

However, conducting business in a foreign country becomes frustrating if you don’t have the right knowledge. This blog post explains the process and requirements of setting up a subsidiary in the Netherlands and answers some frequently asked questions about the topic.

Choosing an Appropriate Legal Structure

Your subsidiary in the Netherlands doesn’t necessarily have to take on the same legal structure as its parent company. Here are some common legal structures for a business in the Netherlands. 

Sole Proprietorship

You can set up your subsidiary as a sole proprietorship if you don’t want to share the profits. But remember that sole proprietors are responsible for all business decisions, debts, and losses.

VOF (Vennootschap Onder Firma – Partnership)  

This is where you own the subsidiary in partnership with one or more people. All partners are jointly liable for the subsidiary’s operations, debts, and losses. The profits are shared based on mutual agreement. 

Each partner contributes to the business in terms of assets, capital, or workforce. Although Dutch Law doesn’t require a partnership contract, you must create one before a public notary to ensure the partners’ crucial information and agreements are in writing.

Private Limited Liability Company or Besloten Vennootschap (BV)

BV is the most prevalent legal structure of subsidiaries in the Netherlands. This is because it provides the benefit of unlimited liability; the shareholders are not liable for any losses made by the firm because the firm has a separate legal identity of its own. 

Plus, setting up a BV needs a 1 Euro minimum share capital. The share capital is allocated to registered shareholders, and the shares can’t be transferred to someone else. Moreover, a BV must be managed by at least one director appointed by the shareholders. A private limited company must also present financial statements showing how the capital is consumed. 

Public Limited Company/Naamloze Vennootschap (NV)

You can also set up a Public Limited Company or a Naamloze Vennootschap (NV) suitable for a large-scale business. Anyone can buy, sell, and transfer NV’s shares; no registration is required to hold shares of a public limited company. 

In fact, a public limited company’s shares can be listed on the Stock Exchange. The minimum share capital needed to set up an NV is 45000 Euro, divided into registered and bearer stocks. Shareholder liability is limited to the amount they invest in the company.

Steps to Set Up a Dutch Subsidiary

The steps involved in setting up a Dutch subsidiary are simple, but you may want to hire professionals like Start Company Formations to save the time and effort required to navigate the process. 

Before Registration

• Choose an appropriate legal structure to set up a subsidiary in the Netherlands. This involves considering essential factors like taxation, registration process, etc. You can check out the relevant business forms for each subsidiary type online.
• You will also need a valid business address to get registered. This can also be a residential address in some cases.
• Select a unique and valid name for your business. You can run the name through the Trade Register of the Chamber of Commerce site to see if it already exists in the Dutch Business Register.
• Draft Articles of Association that provide the details of your company and shareholders, including name, address, the purpose of business, amount of share capital, the capital contribution of shareholders, etc. You must also get the articles of association notarized (verified by a public notary).
• Obtain a ‘Declaration of Non-Objection’ from the Ministry of Justice. You will also have to pay a fee for that. 
• Open a bank account for your company and deposit the initial capital to receive the certificate of deposit. You will need this at the time of registration. Obtain a ‘Declaration of Non-Objection’ from the Ministry of Justice.

At the Time of Registration

Your company must be registered with the Dutch Chamber of Commerce. You will require the following documents at the time of registration: 

• Necessary details of the parent company, including contact information and address
• A confirmation by the Trade Registrar to verify the existence of the parent company in the foreign country
• Notarized Articles of Association
• A declaration assigning a local representative to the subsidiary
• Declaration of No Objection by the Dutch Ministry of Justice
• Certificate of Bank Deposit to prove that the initial share capital has been paid

Once your documents are verified, you will automatically be registered at the Chamber of Commerce. After the registration, the details of your newly registered company will be forwarded to the Dutch Tax and Customs Administration (Belastingdienst). They will issue your company a VAT number if it’s eligible. 

After Registration

Once registered with the Chamber of Commerce and the tax authorities, you will want to hire employees to run your subsidiary. For that, you will have to take care of the following. 

• Register with the Social Security Bank (SVB), an entity responsible for coordinating social insurance systems. They handle national insurance for individuals legally residing in the Netherlands and employee insurance for those working there.
• Register with the Employee Insurance Agency (UWV), an organization operating under the Ministry of Social Affairs and Employment (SZW). It handles benefits covering such as unemployment and sickness.
• Get the Citizen Service Number (BSN) for all employees so they can deal with national, regional, and municipal authorities

The Chamber of Commerce (KVK) or the Tax Administration treats a subsidiary of a foreign company the same as an independent company in the Netherlands. It means your subsidiary is subject to all liabilities and duties of an independent company in the Netherlands. 

Your subsidiary must file VAT returns and corporate taxes if it’s registered as a private limited company (BV), a public limited company (NV), mutual insurance society, or a cooperative association. Subsidiaries registered by sole proprietors (eenmanszaak) or partners must file VAT and income tax returns. You may benefit from the double tax treaties signed by the Netherlands with your country. 

Foreign legal entities with subsidiaries in the Netherlands are also required to annually publish financial statements in the same form as in the country of origin, along with an extract from the foreign register. (You don’t have to do that if your subsidiary is registered as a sole proprietorship). 

Frequently Asked Questions

I Am A Foreigner. Can I Open A Company In The Netherlands?

Yes, organizations from all over the world can set up a subsidiary in the Netherlands by following the incorporation requirements.

What Are The Benefits Of Setting Up A Subsidiary In The Netherlands?

The Netherlands offers various advantages for setting up a subsidiary, including a favorable tax environment, well-developed infrastructure, skilled workforce, and a business-friendly culture. 

Is It Possible To Set Up A Subsidiary Remotely, Or Is Physical Presence Necessary?

You can set up a subsidiary remotely, but you may have to hire a local representative or agent to act on your behalf in the Netherlands. It is also essential for your subsidiary to have a physical presence in the Netherlands, such as a registered office or a local branch, to comply with Dutch legal requirements.

How Long Does The Formation Of A Subsidiary Take In The Netherlands?

Depending on the legal structure you are registering for and how soon you get the documents ready, it may take weeks to months. Hiring professionals like Start Company Formations can help you complete the process faster. You can also read some top tips about starting a company in the Netherlands.

Can I Register My Company at a Residential Address in the Netherlands?

Generally, it is possible to register a subsidiary at a residential address, like the home of someone you know or work with. We suggest you create a formal rental agreement in such cases.

 Also, your address should reflect the subsidiary’s activities to a certain extent. For example, it may not be a problem if your subsidiary is a marketing firm and register at a residential address. But you can’t do the same if you want to establish a large industrial company. 

Check with the local municipality whether home-based businesses are permitted in the area of the residential address. Some municipalities levy zoning regulations, restricting or prohibiting commercial activities in residential areas.

Moreover, the residential address used as the company’s registered office must comply with the legal regulations for company registration in the Netherlands. This includes having a physical address suitable for business purposes, like a dedicated office space and a separate entrance.

Suppose the residential address is also the place of business. In that case, the subsidiary must comply with the Dutch rules on home-based businesses, like obtaining necessary permits and licenses and following the health and safety regulations.

Finally, it is important to consider the potential impact on the residents’ privacy at the registered address. The Dutch Commercial Register is a public record, meaning the company’s registered address will be publicly available.