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 Dennis Vermeulen

By Dennis Vermeulen | July 15, 2016 |

Company Law in Netherlands


Business Law

The Netherlands is well known for its open economy. It is in favor of international trade without national and/or
regional barriers and it welcomes foreign investments. Therefore, an indispensable feature of Dutch legislation is
that, among other things, company law does not make a difference between Dutch nationals and foreigners.
Additionally, companies created under foreign law are free to operate in the Netherlands. For instance, they can be
party to a contract, they can participate in partnerships and they can establish a Dutch legal entity. Also, it should
be noted that there are usually no objections to the employment of skilled foreign managers or specialist staff in
the Netherlands.

Dutch legal entities are internationally regarded as sound and generally respected. This reputation is ensured by
Dutch corporate law, which governs the institution, running and liquidation of legal entities. For foreign investors
the most important types of entities include a private limited liability company (Besloten Vennootschap or BV), and
a public limited liability company (Naamloze Vennootschap or NV), both forms of legal persons. On 1 October 2012
the bill concerning flexibilization of BV legislation (“Flex BV Act”) has entered into force. The new legislation
drastically changed the rules regarding the share capital of the BV, the shares, creditors protection, voting rights
and profit entitlement. The new legislation gives more flexibility to tailor the articles of association of the BV and
as such will fit the needs of the current practice.

Business activities within the Netherlands can also be conducted in a branch. A branch is a long-lasting business
operation that is owned by a foreign entity that resides outside the Netherlands. All new businesses should be
registered with the Trade Register at the Chamber of Commerce (“Trade Register”). This registration will have to
be accompanied by specific information, the nature of which depends on the type of the selected business entity.

Registration of companies at the Trade Register can only be done using Dutch forms. However, for foreign
companies these forms are translated in English. The English forms will provide you with the correct information in
order to fill in the Dutch ones. The NFIA can provide these forms upon request. All subsequent changes in the
company must be filed with the Trade Register. The Trade Register charges fees to cover registration costs.

A special way for a foreign company to carry out activities in the Netherlands or in Europe with the Netherlands as
its base, is the formation of a joint venture with a Dutch party. Another possibility is to merge with or acquire a
Dutch company. A joint venture can take the form of a partnership or a BV. The selection of a potential joint
venture partner and the structuring of a joint venture is a very complicated process. Therefore, it would be
advisable to contact one of the competent advisors in this field, which are available in The Netherlands.

The Dutch corporate governance code

To strengthen the international image of Dutch companies and to restore public confidence in the honesty,
integrity and transparency of the conduct of affairs within Dutch listed companies a Dutch corporate governance
code has been implemented. For more in-depth information on the code please visit: www.corpgov.nl

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