As in every country, the identities and company structures of legal entities in the Netherlands are determined by Dutch company law. For entrepreneurs with different goals, it is important to determine the company type at the beginning of the journey. If you, as a foreign entrepreneur, are beginning your journey to establish a company in the Netherlands, you may be confused by the organisational structures and company types you encounter. However, you can make various inferences based on your country's laws and legal entity definitions. As Unusual Companies, which is positioned as a trusted service provider with services varying from Company Establishment to Dutch Startup Visa Consultancy, in this blog, we will explain the different types of company structures in the Netherlands and answer your question, “Which company structure should I choose?”
Why is choosing the right company structure important when establishing a company in the Netherlands?
Your legal personality and business organisation structure play a long-term role in your company's growth in the Netherlands. Chasing the incorrect company structure may lead to the need to change the company structure again in case of plan changes that may occur in the future, resulting in time and budget losses. Additionally, your company structure may affect your ability to benefit from government incentives offered for Startups in the Netherlands. Therefore, choosing the right organisational structure to establish a company in the Netherlands is important.
Dutch company structures
As the information on the business.gov.nl website, established by the Dutch government to provide employers and company owners with accurate information, indicates, there are business structures with and without corporate (legal) personality in the Netherlands.
1. Dutch business structures without a corporate (legal) personality
Business structures without legal personality that make the business owner personally responsible for the company's debts are listed as follows:
Sole proprietor, sole trader (eenmanszaak) General or commercial partnership (vof or vennootschap onder firma) Professional or public partnership (maatschap) Limited partnership (cv or commanditaire vennootschap) Shipping company (rederij)
Let us remind you that self-employed people or freelancers must also choose a legal structure when obtaining a KvK number from the Dutch Chamber of Commerce, and they are usually sole proprietors or private limited companies. Let us continue by stating that, for now, we are mostly interested in business structures with legal entities.
2. Legal business structures with Dutch corporate (legal) personality
According to Dutch labour law, organisational structures with legal personality are listed as follows:
Private Limited company (besloten vennootschap | BV): A limited company is a legal business structure with a legal entity that you can establish alone or with several partners. In this type of company, responsibilities for debts and obligations belong to your company, not you. Public Limited company (naamloze vennootschap | NV): It is a business structure with a legal entity that requires a minimum initial capital of € 45,000 for its establishment. The main difference between BV and NV is that NV is a structure preferred by larger companies with a requirement to have more than one director. Cooperative (coöperatie): A Cooperative legal entity, which can be understood literally, is a business structure established with more than one member, where the members share the profit and support the commercial interests of the members.
Apart from these three structures, legal entity opportunities are also offered in the Netherlands for the Association known as vereniging, the Foundation known as stichting, and the Religious Society structures known as kerkgenootschap.
Which legal company structure and organisation type should I choose when establishing a company in the Netherlands?
To establish a company structure with legal personality in the Netherlands, you must be registered with the KvK, and a notary must prepare the necessary documents. If your business is a legal entity, when you register with KvK, you will be given an RSIN number, the commercial equivalent of a citizen service number (BSN).
To choose the right legal entity according to Dutch business law, you must evaluate your company's goals and objectives, your Startup capital, whether you have a Co-Founder, and your tax planning. As an entrepreneur, you can ask yourself these questions when choosing your legal structure in the Netherlands:
Am I establishing the company alone, with a partner, or with more than one partner? Do I want to have the least administrative requirements possible and start my business as soon as possible, or do I want to grow quickly? Do I have enough capital to cover the risks? When considering € 150,000 as a reference point, do I aim to profit more or less than this value? Will I be hiring? Will I be employed in the Netherlands?
Answering these questions can help you choose the right company structure for you…
"Which legal structure in the Netherlands is suitable for my company?" If you want to find the answer to the question by answering these questions, fill out the form on this page prepared by the Dutch government and see the results.
Unusual Companies Recommends: Establishing a BV in the Netherlands
As Unusual Companies specializes in establishing and growing a business in the Netherlands, we recommend that entrepreneurs who want to start their business processes as soon as possible benefit from Dutch tax advantages and use their initial capital more wisely to establish a BV. This is because the BV company establishment process can be completed within 10 working days in the Netherlands. Entrepreneurs can have their Netherlands business up and running within 10 days when they use Unusual Companies services. If you are looking for information about the BV establishment process, which stands out as the most suitable option, especially for individuals or entrepreneurs with 2-3 founding partners, and if you are looking for a trusted service provider to accompany your growth journey in the Dutch market with cost-effective services, contact us today.
