Dutch business legal structure

Dutch business legal structure

July 17, 2019 Off By biz-runner

When it is decided to start up activities in the Netherlands, one should consider an appropriate legal structure for the business. It is possible to start a business in the Netherlands through a branch or through a legal form, like a corporation or partnership.

A corporation can have a Dutch legal form, but also can have a foreign legal form.

Dutch legal forms

Dutch civil law provides a variety of legal forms that may be used. Which legal form is the best for your particular venture will depend on the specific demands of your business. As stated above, it is also possible to use a foreign legal form for your Dutch business.

Dutch law contains the following legal forms:


The Dutch BV (private limited liability company) is the most frequently used legal form by foreign investors (for example: to carry out a business, for direct investments, as holding company, IP company, finance company, etc.) The Dutch BV has the advantage that the shareholders are – in general – not personally liable for legal acts of the B.V. Furthermore, the BV is easy to incorporate and it has no minimum capital requirement.

In order to incorporate a BV, a notarial deed should be executed before a Dutch civil-law notary.  Finally, the BV should be registered with the Chamber of Commerce (Trade Register). If this is not done properly, the directors of the company can be held personally liable.


Alternatively, one may decide to establish a NV (a public limited liability company), which is the obligatory legal form for stock listed companies, but which can also be used for non-listed companies. The NV requires a minimum capital of € 45,000.


Over the last couple of years the legal form of cooperative has become a very popular legal form for international holding companies. This was mainly caused by the fact that a cooperative was not subject to Dutch dividend withholding tax up to 31 December 2011.

As of 1 January 2012, the Dutch dividend withholding tax is changed. As of that date, the Dutch cooperative becomes subject to a 15% dividend withholding tax to the extent that (i) there is an “abuse structure” and (ii) the interest cannot be allocated to an active business of the member (“active enterprise test”) The Dutch Government qualifies a structure as an “abuse structure”, if a Dutch cooperative directly or indirectly holds shares in a company with the main purposes to avoid Dutch dividend withholding tax or foreign tax. With regard to the “active enterprise test” we note that this is the same test as in the corporate income tax with regard to substantial shareholders.

As such, it is possible that a cooperative is subject to Dutch dividend withholding tax. This should always be checked by a tax advisor. If you have any questions about the tax consequences of cooperatives, we are happy to assist you further.

With respect to the incorporate procedure of a cooperative, it should be noted that the cooperative must have at least two members.


The so-called European company, better known as “Societas Europaea” or “SE” (a new Pan-European company form which can be incorporated within the EU) can also be used as a legal form for your business. There are basically three ways to incorporate a SE:

Through a legal merger between two companies located in different EU Member States;Through incorporation;Through a change of the legal form (convert for instance a NV into a SE).


The features of the European cooperative Company (SCE) are comparable to the SE, in Dutch law the SCE is made equal to the SE. However, certain regulations that specifically apply to Dutch cooperative can also apply to SCE’s.


Dutch law distinguishes two types of partnerships, either the general partnership (VOF) or the limited partnership (CV). The partnership may be formed by two or more partners that may be either individuals or legal entities (like for instance a BV). The partnership should be registered at the Chamber of Commerce (Trade Register). The partners in a general partnership are jointly and severally liable for all obligations of the partnership. However, the limited partnership has two types of partners, e.g. the limited liability partner (also ‘silent’ partner, which has the same features as a shareholder of a BV) and the general partner. The limited liability partner is liable only up to its capital contribution in the CV.

Foreign legal forms in the Netherlands

As stated above, it is also possible to use a foreign legal form for your Dutch Business. For this purpose, it is required to register the company at the Dutch Chamber of Commerce (Trade Register). Companies created under foreign law are in general (certain government linked lines of business excepted) free to operate in the Netherlands, can be party to a contract, can participate in partnerships, can conclude a joint venture, or establish a legal entity, etc.


if it is not desired to set up a legal entity, you may decide to set up a Dutch branch of your foreign company. In that case, it is also required to register the branch at the Chamber of Commerce (Trade Register).