The Netherlands (BV) LLC
Formation of Limited Liability Company (BV Besloten Vennootschap) in the Netherlands
The name of Netherlands BV Company must end with the words “Besloten Venootschaap” or suffix “BV”. Company names containing restricted words such as “Bank”, “Insurance”, “Trust”, etc. will not be permitted unless an appropriate national operating license has been obtained by the company.
A minimum of one shareholder is required which may be an individual or a corporate body. A BV Company may be incorporated by one or more ‘incorporators’, being either individuals and/or legal entities. One single individual or entity alone, whether Dutch or foreign, may be the only incorporator and full management board at the same time. If there is only one shareholder, this fact will not entail personal liability, but his name will be registered as such in the certificates of registration of the BV issued by the trade register. A company is required to keep a shareholder register which must be kept in the company’s office.
The minimum capital requirement for a Dutch BV has been abolished per 1 October 2012. The minimum authorized share capital can be EUR 0.01 and the share capital can be denominated in any currency. The most evident benefit of this increased flexibility is the entrepreneur’s newfound ability to incorporate a Dutch BV without having to sacrifice its resources, which may be limited when starting its new venture.
Director And Secretary
Netherlands BV companies require a minimum of one director, who may be a natural person or a corporate body of any nationality. The Board of Management (at least one (1) Managing Director) is responsible for the management and administration of the Dutch limited liability company, its day-to-day affairs, and the operations of its business.
There is no statutory requirement for a Company Secretary to be appointed.
Meetings of the board of directors may be held outside the Netherlands.
The whole procedure will take between 1 and 3 weeks.
In general, a Dutch resident company is subject to Corporate Income Tax on its worldwide income. However, certain income can be exempted or excluded from the tax base. Non-resident entities only have a limited tax liability with regard to income from Dutch sources.
The standard Corporate Income Tax rate is 25%. There are two taxable income brackets. A lower rate of 20% applies to the first income bracket, for taxable income up to EUR 200,000. A special regime applies with respect to profits, including royalties, derived from a self-developed intangible asset (developed after 31 December 2006). In this so-called innovation box, the taxpayer may opt, under certain conditions, for the application of a lower effective rate on taxable profits derived from these intangible assets. The effective tax rate of the innovation box is 5%. The innovation box is applicable if at least 30% of the profits have been originated by the patent.
There are no provincial or municipal corporate income taxes in the Netherlands. In the Netherlands, corporate residence is determined by each corporation’s facts and circumstances. Management and control are important factors in this respect. Companies incorporated under Dutch law are deemed to be residents of the Netherlands (although not with respect to certain provisions, such as the participation exemption and fiscal unity).
Financial Statements And Audit/Annual Return
Dutch limited liability companies are obligated to prepare a financial statement of their activities and transactions, according to specific rules reflected in the Dutch Commercial Code. This Code stipulates that each Dutch limited liability company must prepare a financial statement, in a defined format, and have it signed by the Board of Management members of the Dutch limited liability company and, if appropriate, by the Supervisory Board as well.
All Dutch limited liability companies, except those that qualify as small companies must appoint an auditor to examine the annual report and to express an opinion.
Annual tax returns must be filed electronically within five (5) months from the closing date of the financial year. An extension for the filing period with a maximum of eleven (11) months can be applied for, if needed. Tax losses may be carried back one (1) year and carried forward for nine (9) years.