Business structures in the Netherlands

Business structures in the Netherlands

When you start a business in the Netherlands, it is mandatory to choose a legal business structure. Without selecting a legal structure, you cannot start your business operations and be an entrepreneur in the Netherlands. If you are planning to start a business but are confused about the business structures in the Netherlands, this article is for you.

What are the types of legal structures in the Netherlands?

The business structures in the Netherlands are divided into two major segments that include:

  • Unincorporated business structure
  • Incorporated business structure 

All business owners are required to choose a business structure at the time of registration at the Netherlands Chamber of Commerce (KVK). Many business structures in the Netherlands exist with or without a corporate personality.

Unincorporated business structure

An unincorporated business structure with no legal form is a business structure that doesn’t require a legal form, for example, a notarial deed. This indicates that you are not financially covered by the business debts. Let’s first discuss the legal structures without personality. Legal structures without legal personality include:

  • Sole proprietorship
  • Professional or public partnership
  • Limited partnership
  • General or commercial partnership

Selecting a business structure without a business personality makes you liable for the debt of the company with the belongings and private capital.

Incorporated business structure

An incorporated business structure in the Netherlands is a structure that requires a legal form known as a corporate personality or legal entity in the shape of a notarial deed. The legal form protects the owner from potential debt that the business may incur over time. Here we will discuss both legal structures to help you understand them better. Let’s now learn about business structures in the Netherlands with a corporate personality. Legal structures with corporate personality include:

  • Private limited company
  • Public limited company
  • Association
  • Cooperative
  • Foundation

While setting up a business structure with a corporate personality, a civil law notary will draw up relevant documents, including the registration at KVK. This makes a business equivalent of the BSN (Citizen Service Number). When your business is a partnership or legal entity and registered at KVK, you will receive a unique RSIN number.

Tips for choosing a business structure in the Netherlands

When deciding your business structure in the Netherlands, there are a few things that you must keep in mind. Determine the bracket that suits your business appropriately.

  • If you are looking to run a micro-business or a small business, it is recommended that you select a business structure as a sole proprietorship, general partnership, private limited company, or cooperative.
  • If you wish to start a business as a freelancer, select sole proprietorship or private limited company. Registering a business structure as cooperative for your freelancing business will require you to file corporate tax over profit margins.
  • If you are planning to start your business on your own, register as a private limited company or a sole proprietorship. Registering as a sole proprietorship allows you to start your business immediately, as early as possible.
  • If you have plans for business expansion in the future, you must start as a private limited company. As a private limited company, you are liable to pay Dutch dividend tax and corporate tax.
  • When you are looking to set up your business in partnership, you can go with a private limited company or a cooperative business structure.
  • If you are looking to involve investors or banking institutions, you will need to register your business as a private limited firm. You can decide to offer your partner a genuine share in the business in the form of equity.

How to register a company in the Netherlands?

After you finalize your business structure, you need to fulfill other administrative elements of the business registration process. Here’s a step-by-step guide to registering a business in the Netherlands.

  • Register with the Chamber of Commerce
  • Register with the local municipality
  • Select a business name by checking existing business names on Dutch
  • Fill out the KVK online registration form and print it in Dutch and English
  • Book an appointment with KVK
  • Keep the registration form, valid ID proof, and registration fee handy

Filing annual accounts

Business owners have multiple potential options to start a company in the Netherlands. They can even transfer their existing business to the Netherlands or establish a new branch office. When setting up a business in this country, seek expert guidance for registering under the right business structure, as it impacts your taxation and other payments. Different companies have different requirements when it comes to filing annual accounts with the Netherlands Chamber of Commerce. The size of the business determines how you need to submit the account.

Is it possible to put your company in the Netherlands on hold?

No, you cannot put your company on hold. According to the Tax Administration and the KVK, running a business means handling business activities proactively. In the absence of business activities, you need to de-register your company via a proper channel. If the company is considered a legal entity, you need to dissolve it before de-registration. Your legal liabilities continue as long as you have a business that is registered with KVK. You need to file tax returns, file annual accounts with KVK, and keep business records. You will also have to handle contracts with customers and suppliers you have entered into. So, it is necessary that you move step by step when you plan to de-register your company to avoid facing legal and tax liabilities.

Register your business in the Netherlands with Workhy

Entrepreneurs who are planning to start a business in the Netherlands must carefully select a business structure that best defines their business activities. If you are new to business structures in the Netherlands and wondering which structure will fit your business responsibilities, seek professional guidance.

Workhy provides company formation services for entrepreneurs from all over the world and helps them establish their companies online without having to travel to the Netherlands. The team can also assist you with VAT & EORI registration, financial services, opening online bank accounts, and providing registered addresses so that you can operate your business swiftly in the Netherlands from any part of the world.

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