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In the realm of international entrepreneurship, the Netherlands presents an attractive destination for business owners aiming to establish a corporation. One such structure that draws attention is the Public Limited Company, known locally as Naamloze Vennootschap (NV). Let’s delve into how you canstart an NV in the Netherlands, examining its structure, requirements, advantages, and the steps involved in its formation.
Understanding Public Limited Company (NV)
In Dutch business jurisprudence, an NV is a corporate structure with a legal personality, essentially implying that the entity can make autonomous decisions and actions.Share Capital forms the basis of an NV, where the capital is divided into shares held by shareholders. The power to make strategic decisions about the company rests with these shareholders, who can also appoint or dismiss the board.
An NV is managed by a board, also known as the management. It is the entrepreneurial entity and is liable for the company’s debts. Unlike a private limited company (bv), NV shares are easily transferable, making it an attractive investment for potential shareholders.
The Need for a Dutch Notary
To establish an NV, the involvement of a civil-law notary is essential. The notary drafts the notarial deed, which includes thearticles of association. These internal regulations encompass the purpose of the NV, its activities, the powers of the management, and the types and quantities of shares.
The notary also registers your NV and all the directors in the Dutch Business Register, also known as the “Handelsregister” at the Netherlands Chamber of Commerce (KVK).
Capital Requirement and Cost Implications
When planning tostart an NV in the Netherlands, it’s crucial to consider the costs associated. The formation of an NV requires a minimum starting capital of €45,000. This sum is a substantial financial commitment and must be considered in your business plan.
Additionally, setting up an NV incurs notary fees, which can range from €400 to €2200 for a standard NV. There’s also a one-time registration fee at KVK.
Public Limited Company in Formation
A unique aspect of Dutch business law allows for the commencement of business operations before the NV has been formally established. The notary declares to take care of setting up the NV and records this declaration in the Business Register.
During this phase, the NV is considered “in formation” and must clearly indicate to business partners that all contracts are established on behalf of the ‘NV in formation’. After its formation, the NV can ratify these actions, or take over the rights and obligations.
Tax Obligations
As a legal personality, an NV is subject to corporate income tax (vpb) on its profit. The tax on the profit is called corporate income tax (‘vennootschapsbelasting’, vpb). The NV pays a specific percentage of corporation tax on profits up to a certain limit.
If the NV decides to distribute profit to its shareholders, it must withhold a certain percentage of dividend tax from the distribution. This tax is then paid to the Tax and Customs Administration.
Administration
Maintaining business records is a legal obligation for an NV. This includes bookkeeping, or accounting, which forms an important part of the business records. The NV must prepare annual accounts every financial year and file them with KVK. These documents are publicly accessible.
Personnel
An NV can employ personnel. As an employer, the NV must pay payroll taxes and social contributions for its employees. If the NV is hiring employees for the first time, it must register as an employer with the Dutch Tax and Customs Authorities and KVK.
Easy Transfer of Shares
One of the key advantages of an NV structure over a private limited company (bv) is theeasy transfer of shares. The shares of an NV can be sold or transferred without major legal hurdles, making it an attractive option for potential investors.
Listing on Exchange
An NV has the option tolist on the exchange. By doing so, it can raise capital by issuing shares. However, certain conditions must be met for listing on the stock exchange. For instance, the company must have been in existence for more than five years, and the equity must be at least equal to 5 million euros.
Ending an NV
To dissolve an NV, a formal decision from the general meeting of shareholders is required. The NV ceases to exist only after all debts and benefits have been paid (liquidation).
The Dutch House of Companies: Your Guide to Starting an NV in the Netherlands
Starting a Public Limited Company (NV) in the Netherlands can be a complex process, requiring in-depth knowledge of Dutch business law and regulations. The good news is thatThe Dutch House of Companies provides a self-governance portal that simplifies this process.
With a fixed yearly fee, you can start your Dutch Public Company formation process without even having to visit the country. It’s time to take the next step in your entrepreneurial journey and start yourcompany formation in the Netherlands today!
Conclusion
Starting an NV in the Netherlands may seem complex, but with the right guidance, the process can be straightforward. Understanding the requirements, cost implications, tax obligations, and legalities can significantly smooth the path to establishing a successful NV. With The Dutch House of Companies as your partner, you can navigate this process with confidence and focus on what’s truly important – growing your business.
