Dutch legal business formsHave Broadstreet inform you about the various Dutch business forms.
In the Netherlands, there are various business forms in which you can start a business. It can be performed through legal and non-legal entities. Keep in mind the biggest difference between these two legal forms is regarding the liability.
Business can also be conducted through the use of foreign legal forms. For foreign based business, it is possible to be based in the Netherlands through a branch or subsidairy.
The most common Dutch business forms
This is the most commonly used business form in the Netherlands. This is classed as a legal business form, which limits the risks for the owner(s). The BV is seen as an entrepreneur, the director simply acts on behalf of the BV and cannot be held personally liable.
- Vereniging or association
A vereniging is an association of members with an appointed committee which includes a chair, secretary and treasurer. There are two kinds of associations; with full or limited legal capacity, which means members are either personally or not at all legally liable for its obligations. There is no capital required to set up an association.
- Stichting or foundation
As opposed to the other business forms, the board of directors or a foundation may not be in paid employment by the foundation. A foundation may choose to operate as a commercial business, in which case it needs to pay corporation tax and BTW. In case of a non-commercial business, it is exempt from these taxes. All profits must go to the cause of the foundation and no capital is required. Also, a foundation does not offer social security benefits as the board is not in paid employment.
Non-legal business forms
- Sole trader or freelancer
In this non-legal business form there is one fully independent founder, although you may employ employees. As a founder, you are fully liable for obligations. A freelancer is also known as a ZZP-er.
- Partnership (maatschap)
The partnership known as a maatschap differs from the general or limited partnership in the way that it is a form of cooperation established by professionals rather than a cooperation established for doing business. All partners write down their agreements and all pay income tax on the profit share.
- Partnership under common form (VOF)
A general partnership is a business structure with one or multiple partners. All partners are seen as self-employed entrepreneurs and are individually liable for business and financial obligations. Each partner pays income tax on the profit share.
- Limited partnership (CV)
This is a business structure that has both general and limited partners. Limited partners are usually financial investors, while general partners are active in the day-to-day operations and decisions.
A contract should arrange the distribution of profit between general and limited partners. A limited partner can only be held liable for the maximum amount contributed for the partnership.
- Foreign legal forms to be based in the Netherlands through a branche or subsidairy.
Have Broadstreet help you select and register for best suitable business entity
Broadstreet is happy to inform you about the best suitable business form for your business case. We have helped many (foreign) entrepreneurs start up their own business in the Netherlands and are here to help you register and handle the necessary paperwork. Get in contact with Broadstreet through the contact form below.