Legal and tax affairs

Do you want to start a business across the border? If so, it's essential you get advice on which legal form is best suited to your situation. If you already have an (international) business structure, you need to find out through which entity you can best set up the new activities and whether your existing activities are housed in the right companies. To make the right choices, you should be aware of the fiscal and legal advantages and disadvantages that are associated with the various possibilities.

A competitive fiscal climate

Apart from this, there are several tax benefits from which (foreign) companies always profit in the Netherlands, no matter what legal form they choose. For example, the Netherlands has a competitive statutory corporate income tax rate in Europe; 20% on the first € 200,000 and 25% on taxable profit higher than € 200,000.

The Dutch tax system has several attractive functionalities for international companies, which of course also apply to the Zeeland region. For a clear outline go to the Invest in Holland website (link https://investinholland.com/incentives-and-taxes/fiscal-climate/) and discover what benefits you can achieve.

Legal forms in the Netherlands

An important question is whether to choose a legal form with or without legal personality. This determines whether or not you are liable with your private equity. The most common legal forms under Dutch legislation with legal personality are:

  • Limited liability company (LLC): the capital is divided into shares held by shareholders. These shareholders have the highest power in an LLC. The shares are listed and only transferable via a notary. This legal form is most common with international companies operating in the Netherlands.
  • Public company (plc): As with an LLC, the capital is divided into shares. An important difference in this legal form is that in addition to shares in its name, a public limited company also has freely negotiable shares on the stock exchange.
  • Cooperative and mutual insurance company: a cooperative is an association in which the members enter into agreements. Within this legal form you can benefit from a collective. This form of cooperative is often chosen when an entrepreneur cannot easily achieve a particular goal, but can do so together with others.

The most common legal forms under Dutch law without legal personality are:

  • One-man business: A one-man business is easy to set up. No start-up capital is required and you can register for free with the Chamber of Commerce. As sole proprietor, you pay income tax, but there are a fair number of arrangements that can be used to reduce your net profit (taxable income). Examples of this are the self-employed tax-deduction, the start-up tax-deduction for new entrepreneurs and the partnership tax-deduction. You fully own the company.
  • General partnerships (VOF): is suitable if you want to establish a company with multiple associates - partners. All partners make a contribution. This contribution may consist of money, labor or goods. A minimum start-up capital is not required.
  • Limited partnership: is a variation on a VOF. If you do not have sufficient capital to start a business then this legal form is an interesting option. A silent partner can bring in the required capital, while the managing partners are responsible for day-to-day management.

Registering your business

Are you ready to officially start up your company in the Netherlands? All companies and legal entities in the Netherlands must be registered in the Trade Register. The Trade Register is a public register. This is important for legal certainty in trade. Addresses and other general factual data of companies in the Trade Register are therefore visible to all.

Invest in Zeeland has an extensive network of consultants and will be happy to introduce you to the right specialists who offer you guidance and advice on legal and tax issues such as which business structure is best for your company.

Would you like to know more? If so, please contact us. All Invest in Zeeland services are nonbinding, free and confidential.