Netherlands

The most frequently used company for doing business in the Netherlands both national and foreign investors is private company with limited liability (BV).


The minimum number of directors and shareholders is one director and one shareholder who can be both individual person or legal entity, resident or non-resident but 50 % or more of the directors of the company should be residents if the company management is in the Netherlands.


There isn’t requirement to minimum paid up capital since October 1, 2012 as consistent with Flex BV Act (previously paid up authorized capital at time of registration should be at least € 18 000).


Taxation:

  • Profit tax is 20 % when amount of profit till € 200 000 or 25% if the profit exceed € 200 000;
  • Capital gain tax – 0 %;
  • Stamp duty – 0 %;
  • Tax on interest from royalties – 0 %;
  • VAT – 19 % (general rate), 6 % and 0 % (preferential rates);
  • Dividend tax is paid at the rate of 15 %.


Double taxation avoidance agreement will further reduce the rate. This tax can be accepted at source by resident shareholder on account of the personal and corporate tax liabilities. The tax at source for non-resident shareholders is final.


Accounting and audit.


Submission of financial statements is a requirement. Financial statements should be prepared annually for 5 months after the end of the financial year and should be submitted to the Commercial Register of the Chamber of Commerce for 8 days after its approval by the General Meeting of shareholders or members. Accounting reports includes:

  • Balance and statement of loss and profit with notice;
  • Statement of cash flows;
  • Director's report (with the exception of cases where is lawful liberation);
  • Incident reports which had an effect on the financial condition of the company.


The audit is mandatory and should be performed by local certified auditor in the case if the company belongs to medium or large. Small companies are not subject to audit if these companies meet two or three of the following criteria:

  • Assets are less than € 4 400 000;
  • Net turnover is less than € 8 800 000;
  • Number of employees is less than 50.


There isn’t a public register of companies. Information about the owners is not disclosed.


Advantages:

  • High international standing as a member of the EU;
  • There is low tax rate compared to other European countries;
  • BV can be used for getting royalties, financial transactions, international trade; as a holding company, intermediary company and etc.


Disadvantages:

  • Rate of tax on profit from 20 %;
  • In order to use the taxation system of the Netherlands, the director of the company must be resident of the Netherlands;
  • Necessarily to prepare and submit annually the financial statements.