General Information

The Dutch United Provinces declared their independence from Spain in 1579; during the 17th century, they became a leading seafaring and commercial power, with settlements and colonies around the world. After a 20-year French occupation, a Kingdom of the Netherlands was formed in 1815. In 1830 Belgium seceded and formed a separate kingdom. The Netherlands remained neutral in World War I, but suffered invasion and occupation by Germany in World War II. A modern, industrialized nation, the Netherlands is also a large exporter of agricultural products. The country was a founding member of NATO and the EEC (now the EU).

The Netherlands is situated in North West Europe and is bordered by Germany in the East and Belgium in the South. The country is small and just 37,000 square Kilometres and extremely flat, the highest point only being 320 meters above sea level. The population of the Netherlands is approximately 16.5 million, with the majority of these living in the west of the country. The Netherlands is a constitutional monarchy, but political power rests with a democratically elected parliament and is based on a written constitution safeguarding individual liberties.

The Netherlands has a prosperous and open economy, which depends heavily on foreign trade. The economy is noted for stable industrial relations, moderate unemployment and inflation, a sizable current account surplus, and an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs no more than 2% of the labor force but provides large surpluses for the food-processing industry and for exports. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. The country continues to be one of the leading European nations for attracting foreign direct investment. Economic growth slowed considerably in 2001-06, as part of the global economic slowdown, but for the four years before that, annual growth averaged nearly 4%, well above the EU average. The type of law is Civil Law. The principal corporate legislation is the Commercial Code of the Netherlands.

Company Information

The most popular types of company are the Private (BV) or Public Limited Company (NV).

The most common form of enterprise is the Besloten Vernnootschap (BV), an private limited liability company, limited by shares. Similar to GmbH, LLC, Ltd., BVBA, SPRL. In its articles or corporation it may forbid public trading of its shares. However, it is the only type of company in the Netherlands that may allow public trading of its shares.

The term Naamloze Vennootschap (NV) is the Dutch terminology for a public limited liability corporation. The company is owned by shareholders, and the company's shares are not registered to certain owners, so that they may be traded on the public stock market. The phrase literally means "Nameless Partnership" and comes from the fact that the partners (the shareholders) are not directly known.

A BV may be incorporated by one or more incorporators, being either individuals and/or legal entities. One single individual or entity alone, whether Dutch of foreign, may be the only incorporator and full Board of Management at the same time - no Secretary is needed. Each incorporator shall contribute to the initial capital for a number of shares, at least 25% of each contribution must be paid upon incorporation. No share certificates may be issued, shareholdings are registered in the shareholders register, that must be kept in the office of the company.

A certificate of no objection must be obtained from the Justice Department upon presentation of full details of the incorporators and directors with a letter of recommendation, thereafter, the deed of incorporation will be executed before a notary public and filed at the Trade Register.

There are restrictions on trading: specified groups, which include for example banking, insurance, financial services, consumer credit related services and employment agencies. A Company incorporated in the Netherlands has the same powers as a natural person.

The language of legislation and corporate documents is Dutch. Shelf companies are available. The average time to incorporate is eight to twelve weeks.

Name restrictions apply on names similar to or identical to an existing company; on well-known names known to exist elsewhere; on names implying illegal activities; on names, which in the opinion of the Registrar are considered undesirable, obscene or offensive and on names that imply royal or government patronage.

The name of the company can be expressed in any language using the Latin alphabet. The Registrar may request a Dutch or English translation to ensure that the proposed name does not contravene name restrictions.

The following names require consent or a licence: bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, co-operation, council, municipal or their foreign language equivalents or any name in English or a foreign language that may suggest association with the banking or insurance industries.

A registered office is required, it must be maintained in the Netherlands and may be provided by us. There is no disclosure of beneficial ownership to authorities, although if the company has a single shareholder this is a matter of public record.

Compliance

The minimum authorised share capital for a BV is € 90.000 of which 20% (€ 18.000) must be issued and fully paid. The minimum authorised share capital for a public company (NV) is € 225.000 of which € 45.000 must be paid up.

The following classes of shares are permitted: ordinary shares, preference shares, deferred shares, redeemable shares and shares with or without voting rights.

Taxation is paid by companies in the Netherlands based upon annual accounts, which are submitted to the Dutch tax authorities at the end of the company's financial year. A company is free to choose its own year-end. The current tax rate is max. 34,8%. The Netherlands is party to more than 90 double tax treaties. There are no licence fees as such.

All Dutch companies are required to file accounts with the Chamber of Commerce. There is a requirement for Dutch private limited companies to be audited if it meets two of the following three requirements; assets greater than € 2,8 million, turnover greater than € 2,8 million, and average number of employees greater than 49. A public limited company must always be audited.

The minimum number of directors for private companies (BV) is one. They may be natural persons or bodies corporate. They may be of any nationality and need not reside in the Netherlands. Public Companies (NV): There is a two-tier management structure required for public companies and large private companies. This consists of a supervisory board and a management board. The powers of the supervisory board is set forth in the statutes and is usually advisory. The management board is responsible for the day-to-day running of the company.