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 Dennis Vermeulen

By Dennis Vermeulen | July 16, 2016 |

IinH Business Law

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.

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