There is a reason why the Netherlands is the 4th largest exporter in the world. It offers various advantages and benefits to young and experienced entrepreneurs alike, making registering a company much more manageable.
The Netherlands is a distribution center for many European countries and has one of the largest trade centers in the European Union. As a result, many global and local entrepreneurs have considered registering a company in the Netherlands.
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This guide talks about why the process of registering a company in the Netherlands is easy and the various benefits the government offers to local businesses.
Starting a Business in the Netherlands? Here is Everything You Should Know:
Wondering why registering a company in the Netherlands is so accessible? It’s mainly because the country has a stable economy, free trade policy, low-income tax, minimum wage allowance, and much more.
There are various reasons why registering a company in Netherlands is an overall win-win process, all of which I will discuss below in detail.
Some key points to know about company formation in Netherlands.
- The Netherlands has one of the lowest corporate taxes in Europe, i.e., 16%.
- There are no VAT transaction charges for an EU state member.
- In 2018, Forbes labeled Netherlands the 4th best country for establishing a business.
- Holland is a founding member of the European Union.
- It has commendable representation worldwide, and other countries don’t find risk in doing business with local entities based in the Netherlands.
- The Netherlands also ranks 4th in WEF’s global report and is leading the most innovative economies of the European countries.
- There is an abundance of funding available for entrepreneurs if needed.
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Why Registering a Company in Netherlands is Easy
The Netherlands is a region having ideal tech and physical infrastructures. With little communication barrier and an accessible location, you can understand why starting a business in the Netherlands can hold so much promise.
Let’s discuss some of the significant advantages of doing business in Netherlands.
Legal Support
Forming a company in the Netherlands is advantageous, even from a legal standpoint. The Dutch government sees innovation’s importance, which is why they have created many tax breaks for entrepreneurs.
These tax breaks make it easy for people to start a business with minimal investment based on the busines you choose to start with. They have a solid incentive, and registering a company is relatively hassle-free.
Taxation
Another essential benefit of forming a company in the Netherlands is tax implications. A company in the Netherlands, whether a small enterprise or a multi-million-dollar company, has to pay a minimal tax to the government after sharing the profit with all its shareholders or other locally established companies in the Netherlands.
For multi-million-dollar companies, the tax stands at 25%, whereas for small enterprises, it’s 16%. This is incredible benefit for entrepreneurs.
They can also take advantage of the entrepreneur allowance so investors can pay less income tax. The Dutch government will let you pay a fixed amount from your annual profits only if you meet specific criteria.
Corporate Services
There are various corporate services that the Dutch government provides to a business established from inside and outside of the EU. As a result, you can have a flexible work schedule for all your employees. Moreover, according to the World Bank, 80% of the Netherlands workforce acquired advanced education in 2020.
The fact that Dutch nationals are multilinguals makes the language barrier the least of your concers and makes running a business relatively smoother. Moreover, if your business is conducting R&D research, the Dutch government sponsors your prospect while compensating for wages.
Research projects can include, but are not limited to:
- Developing an innovative product
- Researching on phenomenon
- Scientific research
- Providing a solution to a technical problem
Startups working on food production, sustainability, healthcare, energy transition, and so on may qualify for the Investment-ready SME Program.
How to Start a Business in Netherlands
There are several legal entities that you will take into consideration before starting a business in the Netherlands. But first, you must know your needs and choose a business structure that fulfills your requirements.
Do you wish to establish a company or expand via a Dutch branch? The following information will help you figure it out and make an informed decision.
Dutch BV
Setting up a private limited company or a Dutch Besloten Vennootschap is one option you can consider. It is the most common entity type for a foreign investor who wants to register a company in the Netherlands.
You don’t need a local shareholder, direct or capital share for this type of company. However, it will take a couple of days for the procedure to complete, and you must acquire the services of a Dutch notary.
Dutch NV
An alternate to Dutch BV is the Dutch Naamloze Vennootschap. Any investor who is starting a public limited company in the Netherlands will need a sum of €45,000 as the initial capital. Once you start a public limited company, it can be listed on the stock exchange.
Dutch Branch
The Dutch company branch is not considered a legal entity in the Netherlands. Therefore, to establish a brand of your business in the Netherlands, you must have a registered overseas company. It should be registered at the Chamber of Commerce of the region and doesn’t necessarily need paid-up capital.
Final Verdict
Forming a business in the Netherlands looks pretty lucrative. With low-income tax, legal support, entrepreneurship allowance, and government protection, launching your own company is a very smooth process.
You don’t have to go through complex legal procedures, and your company will be registered in 3 to 5 working days. The Netherlands promotes innovation and provides ample opportunities for people who want to make a living. It’s a hub for small businesses, and you can easily share your idea and maybe even get ample funds.
This is everything I gathered on launching a business in the Netherlands.
Some FAQs About Establishing a Business in the Netherlands
Can I set up a company in the Netherlands while living in another country?
Yes. Using their remote business incorporation services, you can set up a company in the Netherlands.
Do I need a Dutch address to register my company?
Yes, you need a Dutch address to register your company. Then, you can open a local office for your overseas business or start a private limited company in the Netherlands.
How many business days will it take to open a company in Netherlands?
Registering a company in the Netherlands typically takes 3-5 working days.
