The gateway to the EU
Before going into detail about “how”, let’s first have a look at “why” it is attractive to do business in the Netherlands?
The Netherlands has a century-long history of international trading and business, which has resulted in a very open economy. The country itself has a wealthy and highly-educated population, which is more often than not multi-lingual, as well.
Key to the international role in trade and business is its geographical location in North-Western Europe and its strong transport infrastructure. This includes the large seaport of Rotterdam and Schiphol Amsterdam airport. However, the Dutch have also adapted to more recent developments, and IT companies value the Netherlands for its digital infrastructure, offering almost 100% coverage of fast broadband. The Amsterdam Internet Exchange (AMS-IX) offers worldwide internet connectivity.
The stable political system, modern, business-friendly legislation and fiscal system are further reasons why it is favourable to do business and invest in the Netherlands.
A branch or a subsidiary
To start doing business in the Netherlands, it is important to distinguish between two options: setting up a branch or incorporating a company.
In general, registering a branch may be seen as a ‘light-touch’ way of getting started. It should be noted, however, that registering a branch also involves certain necessary formalities and may be less appropriate once the business grows.
On the other hand, incorporating a Dutch company (a BV), is a relatively easy procedure, even if it will involve a civil-law notary. With the right assistance, a good notary (and providing the right documents on time), incorporation is possible within a week.
Regardless of our client’s choice, Maprima will assist in a smooth registration / incorporation process and handle all formalities including KYC processes of the notary, tax registrations, registrations at the trade register and UBO register.
If applicable Maprima will also be able to coordinate an advance tax ruling, giving certainty about how profits will be taxed. This may be of particular relevance when considering inter-company relations.
Office or other facilities
At a minimum, a company must have a registered address.
What the client intends to do will determine whether more is needed. If staff need to be employed, it may be more appropriate to have a physical office, even if some employees will work from home. Depending on the client’s activity, a warehouse, laboratory, or even production facilities may be needed.
Maprima is able to provide a registered address and can assist in your search for other facilities if needed.
Dutch companies are not obligated to have a local director.
A foreign individual or even a foreign legal entity can be the director of a Dutch company. However, for tax purposes, a minimum connection to the Netherlands may be needed. Especially for holding or financing companies, the need of a Dutch (co-) director is imperative.
Maprima is licensed by the Dutch Central Bank to offer this service in case the client does not have a local candidate of its own. In cases where a business has organised to hire local staff and have a physical presence imminently, a local director may not be required, but still advisable.
Staffing and Human resource matters
The Netherlands, in line with other European countries, is employeefriendly.
There is some flexibility in the way that Dutch payroll can be set up, but some planning and thought should go into its preparation. With the right preparation, setting up a payroll in the Netherlands can be done efficiently and at short notice. And, even while the company is still waiting for the authorities to issue their payroll tax registrations, the employees can already be hired and actively work for the company.
Setting up the desired benefits, ranging from pensions or specific insurance policies to company cars and expense management: these can all be handled at short notice as well, and almost fully tailored to the needs and wishes of the employers and employees – if the minimum requirements are respected.
Apart from hiring Dutch citizens on payroll, it can also be attractive to move staff from abroad to the Netherlands, as they will be able to use the ‘30% ruling’ that allows the company to pay them up to 30% of their total tax-free. To qualify for this, the employee has to meet a few requirements.
Both parties will need to file an application in which they demonstrate that the employee:
- Was hired from abroad.
- Lived at least 150 kilometres from the Dutch border in the period before moving to the Netherlands
- Meets the minimum salary thresholds.
- Maprima can advise in the hiring stage, and also coordinates the monthly payroll process on an ongoing basis.
For all formal obligations, such as filings, annual meetings and drafting all kinds of resolutions, it is important to be sure you meet all legal and statutory obligations: particularly in the area of AML, where legislation is evolving rapidly.
Think, for example, about (public) UBO registers or KYC questions asked by banks. Complicated terminology and documentation can make assistance by qualified local professionals a necessity - Maprima is aware of the latest local requirements and can assist here as well.
Bookkeeping, fiscal compliance, accounting
Typically, companies must file annual accounts. The level of detail depends on the size of the company.
Corporate income taxes are due annually and VAT returns are due every quarter. Depending on the client’s organisation and existing relations of accountants/advisers, Maprima is happy to fill the gap and assist where needed.
For international clients, Maprima is a trusted partner and central point of contact – offering assistance where and when you need it. For more information please don’t hesitate to contact us.
Hub van Grinsven: email@example.com
Justin Ramakers: firstname.lastname@example.org
This article was published in the March 2023 IR Global Meet the Members Guide, Europe edition. The full guide, including the published article, can be downloaded here.