A PWC report highlights some interesting insights about doing business in the Netherlands. One of the most significant is the stable business environment. Despite the political, economic, and social shifts in the world, the country is stable. There is excellent infrastructure, technology, and innovation. The corporate tax rate (Netherlands) is favorable. It features plenty of incentives to stimulate business.
So why should you consider relocating your business to the Netherlands? Well, the country is very welcoming of foreign investment. It is a significant recipient and source of foreign direct investment. The Netherlands also has a very competitive economy.
The Netherlands also has many investor protections for investment treaties. You will find many foreign direct investments in various sectors like manufacturing, IT, and logistics.
To register a company in the Netherlands, it helps to know about the law and taxation system. Read on to uncover salient points to note.
Business Support for Foreign Investors in the Netherlands
As we indicated above, relocating your business to the Netherlands makes a lot of sense. The country is welcoming of foreign investment. This is because it is a heavy contributor to the country’s economy. The Dutch government has even established an agency to support foreign investors. The role falls in the office of the Netherlands Foreign Investment Agency (NFIA).
NFIA operates under the Dutch Ministry of Economic Affairs and Climate Policy. The agency has been working for about 40 years. Its core role is to provide help and advice for foreign companies on establishing, rollout, and expansion of their companies. To date, more than 5,000 companies from over 50 countries have been beneficiaries.
NFIA actively partners with other bodies in the completion of their duties. These include consulates general, Dutch embassies, and other representative bodies. The same applies to domestic partner networks.
The headquarters of the agency is in the Hague. But it also has 28 officers in other countries, including the United States of America, France, and Canada. Others are India, Japan, the United Arab Emirates, and Malaysia.
As of 2021, there were over 423 foreign companies in the Netherlands. Roughly a third of the total number of foreign companies came from Europe, while 30% were from Asia. Another 30% came from North and South America.
One of the most significant reasons for this was the Brexit disruption. Many companies chose the Netherlands as their destination.
Registering a Company in Netherlands
You have options when it comes to registering a company in Netherlands. The most common and popular are through a Private Limited Company (B.V.) or a Public Limited Company (N.V.). Other company registration in Netherlands are:
- Sole proprietorship
- Commercial partnerships
- Limited partnerships
- Association with notarial deeds, etc.
What if you decide to set up a branch of your company instead of a full relocation? In the short term, a branch may seem like a viable, more convenient solution. But in practice, you will have the same responsibilities as a B.V.
A branch may also impact the success of your business. Some clients would rather work with a company that has a European business structure. Also, the logistics of managing the business will end up being tedious. You must, for instance, have a co-director working in the Netherlands. They will keep watch on liabilities and other local affairs.
You can hire company relocation experts when opening a company in Netherlands. The professionals will walk you through the intricacies of the processes. You get all-around support from registering a company in Netherlands to its launch. Further, you get ongoing administrative and management support when you need it.
Understanding Netherlands Re-Domiciliation Laws
Please note there are applicable company re-domiciliation laws if relocating a business. To keep operating your business, you must:
- Incorporate and register the business in compliance with Netherlands laws. The paper filing happens at the Netherlands Chamber of Commerce, Commercial Register.
- The country you are relocating the business from must have similar regulations as those in the Netherlands.
- The originating country should allow the business continuation.
- After six months, there must be proof that the business no longer exists in the original country. You must deregister the company from the country you are operating in. For instance, if you are entering the financial sector, this is especially critical. The Dutch laws stipulate that you have your headquarters in Europe.
Document Requirements for Registering a Company in Netherlands
Documents you will need for Netherlands business registration include:
- Company resolution documents
- Certificate of good standing
- Signed declarations
- Formal notice of intention, etc.
Once you register with the Chamber of Commerce, you get automatic registration to the Tax and Customs Administration.
Do check out the KVK online portal and start the process by filling out the online form. You will need a valid I.D. and a signed lease or rental contract for your physical address. You must also pay a one-time card payment registration fee.
Understanding the Netherlands Tax System
As we stated in the introduction, the Netherlands tax system is quite friendly. That is one of the reasons why the country attracts so many international businesses.
Both public and private companies must pay corporate tax on their profits. The same is applicable to associations and foundations, under special circumstances.
The standard corporate income tax rate is 25%. But there are two applicable corporate tax Netherlands rates as of 2021.
- Profits of up to €245,000 attract a corporate income tax (CIT) rate of 15%.
- Anything above €245,000 attracts a 25% corporate income tax.
You are also liable for other business taxes, including the following discussed below.
Dutch Dividend Tax
As a private or public company in Netherlands, you may have shareholders. That means you distribute profits as necessary to them. It makes you liable for the Dutch dividend tax.
Other Business Taxes to Note
Other applicable taxes include environmental, provincial, waterboard and municipal taxes. These will depend on factors like business type and location. The best advice we can give is to seek the services of tax advisors Netherlands. For a company relocating to a new region, learning all there is to know is important.
Notable Advantages of the Dutch Taxation System
So, what are some notable advantages of the Dutch taxation system? The Netherlands is quite accommodating to businesses in this respect. The reasons include:
- Low, sometimes zero, taxes on interest, royalties, and dividends.
- 0% withholding for companies that qualify for E.U. corporate dividends.
- Avoidance of double taxation under the Unilateral Decree.
- Cash or in-kind capital levy tax avoidance for any such contributions.
- Conditional tax-free reimbursement under the 30% rule, and more.
Please note that navigating the tax system can be difficult. As someone relocating a company, you need all the help you can get. Your tax advisors (Netherlands) will be able to guide you through the many tax benefits you can enjoy.
Final Thoughts
There are many reasons why relocating your company to the Netherlands makes sense. The business environment and tax system are quite conducive, even for non-residents. But, the process can be difficult if you do not have the necessary help.
You will need a team of advisors to help with Netherlands company registration. The same applies to tax advisors Netherlands. You will need their guidance on the Netherlands tax systems.
FAQs on Registering a Company in the Netherlands
Why is the Netherlands an attractive destination for foreign investors?
The reasons are numerous, including strategic location and a good business climate.
Others are good infrastructure, a multilingual workforce, tax incentives, good quality of life, and a thriving sector. We also can’t forget the stability of the country.
How Hard Is It to Register a Business in the Netherlands in terms of Compliance Services?
Relocating your business to the Netherlands should not be a problem. The country, when compared to others, is quite liberal and flexible. Setting up a business is pretty straightforward.
But there could be complexities for foreigners as most paperwork must be in Dutch. Seek professional help from company service providers to make the process easier.
Do I need a physical office?
You do not have to set up a physical office. But, if you want free movement within the European single market, you will need to do so. And that requires registering the business at the Netherlands Chamber of Commerce KVK.
Am I liable for taxation?
Yes, you are. These include corporate income tax, VAT, Dutch dividend tax, etc. Your tax advisor Netherlands can provide the necessary guidance.
What does it mean to be a foreign business owner?
A foreign business owner is a non-resident or individual who is not established in the country. Your business also doesn’t have a permanent location in the Netherlands. That means you operate without a workshop, factory, retail outlet, or permanent point of sale.
But, you may have a goods depot or storage space. You could use such for support services like communications, research, or advertising.