Setting up a business in the Netherlands

As a foreign entrepreneur, it can be interesting to start a business in the Netherlands - for multiple reasons. The first step is choosing the right business structure. This is an important decision, with far-reaching consequences for your liability, tax obligations, insurance and control.

Partnerships versus legal entities
There are two main types of business structures in the Netherlands: partnerships and legal entities. Partnerships do not have their own legal identity. This means that the owners of the company are personally liable for the company's debts.
Legal entities do have their own legal identity, meaning that this is separate from its owners. This means that the legal entity is liable for the debts of the company, not the owners. Please note, however: under certain circumstances, the directors may be liable in privately.

Examples of both business structures and their main features are set out in the article on setting up a company in the Netherlands.

Factors to consider when selecting a business structure

• Liability: how much risk do you want to take? Do you want to protect your private assets?
• Tax obligations: different business structures fall under different tax regimes.
• Formalities: some business structures require more formalities than others. Examples include a minimum start-up capital and notarised deed of incorporation (articles of association).
• Growth plans: if you intend to scale up quickly and/or enter the international market, choose a business structure that offers flexibility and is investment-friendly.
• Earnings forecasts: do you expect annual profits of more or less than €150,000?
• Control: how much governance do you want to have over the company?

Changing your business structure is possible
‍You may have already chosen a business structure. Some business structures you can change yourself. For other business structures, involving a public notary is mandatory. Your Dutch business licences are often no longer valid if the business structure of your company changes. In such cases, you must convert your licences.

Your business’ contracts of must be in the name of the new business structure. To do that, you need to contact the other parties to the contract. Think of insurances, for example, but also your utility contracts (electricity, gas and water). In addition, you have to decide whether you wish to take stocks and inventory with you. To change the lease of your business premises, you need the tenant's approval.

Help in choosing the right business structure
It is important to seek professional advice before choosing a business structure. If you select the right business structure, you will lay a solid foundation for your corporate success in the Netherlands. Heron Legal's specialised lawyers will be happy to help you make the best choice for your unique position. Feel free to get in touch – no strings attached.