As the 7th largest economy of the EU, The Netherlands has confirmed its role of pillar of the European Union, the OECD and the World Trade Organisation. With a stable and successful economy, its trade and investment policy is one of the most liberal in the world. A population that is 95% is well versed with English language demonstrates its international focus.
The Netherlands has a liberal tax regime including an extensive network of double-taxation treaties. The marginal rate is 20-25% however the effective corporate tax rate can be much lower.
What are the main types of company in the Netherlands?
There are four major kinds of business entity, and they are as follows:
- public limited company (NV)
- private limited company (BV)
Main features of a BV
- the minimum share capital for a BV company is €1 (reduced from €18,000 in 2012)
- shareholders' liability is restricted to capital contribution
- the most common form of business enterprise in The Netherlands
- no nationality requirement for shareholders
- audited accounts must be filed with Chamber of Commerce
With a very low unemployment rate compared to other EU member states (approx. 6%), recruitment is a challenge. The Dutch are famously multi-lingual and their education and workplace skills are high.
Reasonably easy-going with regard to foreign investment and taxation, but certainly not when it comes to labour laws. The Dutch labour market is heavily regulated and generally favours the employee. Companies employing more than 35 workers are legally required to establish a works council.
The Dutch government and local authorities offer incentives to foreign investors based on a number of factors, most particularly the region where the new company is to be based. EU funds are also available.
A Dutch BV is required to file an annual return together with its financial statements with the Registrar of Companies by 31st July each year.
A Dutch BV should file a tax return with the Tax Authorities within six months from its tax year-end.
A Dutch BV is required to audit its annual financial statements unless it meets the following three criteria:
- The company’s total assets are less than €6,000,000.
- The company’s annual turnover is less than €12,000,000.
- The company’s average number of employees is less than 49.
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