Legal Forms For Doing Business in the Netherlands

In the Netherlands, a business can be performed through legal entities like the Dutch BV and through non-legal entities, like a partnership. The most important difference between these two legal forms for doing business in the Netherlands relate to liability, whereas your complete wealth may be exposed to creditors of a partnership instead of the invested amount as would be the case with a BV (although exceptions exist in case of e.g. negligence by the directors). Another essential difference is that a legal entity is regarded as a “person”, i.e. it can hold the legal title of property itself, can be party in agreements et cetera.

Next to Dutch legal forms, business can be conducted in the Netherlands through the usage of foreign legal forms, like the UK Ltd.

Furthermore, a foreign entity can perform its business in the Netherlands through a branch or a subsidiary, for which we refer to our section branch vs. subsidiary.

Below we outline the most commonly used legal forms for doing business in the Netherlands.

Dutch civil law makes distinction between the following legal forms:

Legal entities:

  • BV
  • NV
  • Cooperative
  • SE
  • SCE
  • Foundation
  • Association

Non-legal entities

  • One-man business
  • Partnership (maatschap)
  • Partnership under common firm (VOF / Vennootschap Onder Firma)
  • Limited partnership (CV)
  • Foreign legal forms active in the Netherlands through e.g. a branch


The Dutch BV  (which is an abbreviation of besloten vennootschap met beperkte aansprakelijkheid) is the most commonly used legal form by foreign investors for example for doing business, act as a holding company, IP licensing company, finance company et cetera. The BV is a private limited liability company with legal personality, of which risks are limited to the amounts invested by its shareholders. A BV’s capital is divided into one or more shares, whereas the holders are registered (in BV’s shareholders register). Since 1 October 2012 the BV regime has been made more flexible (hence its commonly used name “flex BV”). The following are some examples of changes regarding this new BV regime:

  • The minimum capital required is no longer € 18,000, an amount of € 0.01 is sufficient
  • BV’s capital can be divided into shares which have no voting power or profit rights attached to them, e.g. for the purpose of financiers;
  • A bank statement and an auditor’s statement in case of contributions in kind will no longer be required;
  • The shareholders’ meeting can be held outside the Netherlands; and
  • Option to limit the transferability of shares;

A Dutch BV is incorporated through a notarial deed before a Dutch civil-law notary and registered with the Dutch trade register (Chamber of Commerce). For more information about the incorporation procedure for a BV, we refer to the page How to incorporate a BV.

A BV is subject to Dutch corporate income tax for its profits made worldwide, although the Netherlands avail of unilateral and bilateral double taxation treaties and regulations to prevent that profits are taxed twice (see our corporate income tax section for more on this). Some income may be exempt from Dutch corporate income taxation under the so-called participation exemption, while Dutch law provides for tax consolidation with specific group companies. Dividends distributed may be subject to Dutch dividend withholding tax at a statutory rate of 15%, although in many cases an exemption or lower rate applies.

Furthermore, foreign legal entities owning shares in a BV may be subject to Dutch corporate income tax under the so-called substantial share tax regime, which has been amended as from 1st January 2012. Under the new rules, the shareholder is subject to Dutch corporate income tax at a rate of max 25% for dividends received and any capital gains derived in case:

  • The share interest is at least 5%;
  • there is abuse of Dutch or foreign law and;
  • the share interest is not attributable to the enterprise of the shareholder.

In any such case levy by the Netherlands may possibly be prevented by applicable tax treaties.

We have wide experience in dealing with situations in which there is no double taxation treaty and have obtained favorable rulings from the Dutch tax authorities, hence making the desired structure work. Contact us to discuss your specific situation.

Private individuals owning 5% or more shares in a BV can correspondingly be subject to Dutch income tax as well at a rate of 25% (in box 2) for capital gains realized or dividends received unless a double taxation treaty applies.

For more on how the BV can be used from a tax point of view, we refer to our tax regimes section.


The NV (which is an abbreviation of naamloze vennootschap) is a public limited liability company and is prescribed for companies that are listed on stock exchanges. Although not common, an NV can be used as a non-listed company as well. Unlike the BV, shares in an NV are not registered by name and can be freely traded. The NV requires a minimum capital of € 45,000. Its tax features are highly comparable to that of the BV as described above.


The Dutch cooperative (“Coop”) is a Dutch legal entity that has no holders of shares in capital, but instead has members owning (membership) interests. Being a specific form of an association, the Coop has at least two members on the moment of incorporation. The Coop is being more and more deployed in international structures, mostly as a holding company due to its characteristic that its distributions are not subject to Dutch dividend withholding tax if certain criteria are met.

As from January 1st, 2012 the legislation with regard to such taxable income derived from (a membership interest in) a Coop has been amended. If (1) the interest in the Coop is held with the main purpose or one of the main purposes to avoid dividend withholding tax or levy of foreign taxation for another person and (2) the Coop-interest is not part of a business enterprise at the level of the member, the Dutch Coop is required to withhold tax in case of dividend distributions.

Depending on the existing structure, additional limited structuring therefore may be necessary to comply with these new rules. Obtaining a ruling from the Dutch tax authorities in this respect is possible, which provides certainty in advance. We have wide experience in dealing with these new rules and obtaining favorable rulings from the Dutch tax authorities, with which we can assist as well.

Like a BV/NV, a cooperative is subject to Dutch corporate income tax for its worldwide profits and –fortunately- has access to the wide Dutch tax treaty network and unilateral regulations that prevent profits from being taxed twice (see our corporate income tax section for more on this). A coop’s income may be exempt from Dutch corporate income tax under the so-called participation exemption regime.

Furthermore, Coop’s members (a Coop is an association) may be subject to Dutch corporate income tax under substantial tax regime, which has been amended as from 1st January 2012 as well. Under the new rules, the members are subject to Dutch corporate income tax for dividends received and any capital gains derived in case:

  • their membership interest is at least 5%;
  • there is abuse of Dutch or foreign law and;
  • the membership interest is not attributable to the enterprise of Coop’s members.

We note however, that in any such case relief may be provided by applicable double taxation agreements, which would prevent the Netherlands from exercising its levy rights. If not, additional restructuring may be possible, in which we are highly experienced. In any case, a ruling from the Dutch tax authorities is possible and highly recommended, with which we have vast experience as well and can assist you with.

Being an association, the Coop must have at least two members incorporating it. For more information, we refer to the page how to incorporate a co-operative.


The SE (Societas Europaea) is a public limited company that can be incorporated in any one of the Member States of the EU. Member States must treat an SE as if it is a public limited company that has been incorporated in accordance with the law of the EU member state in which it has its registered office. This means that an SE incorporated under Dutch law can be used to conduct a business and is subject to Dutch corporate income tax. Like a BV, an SE has capital divided in shares, while the liability of its shareholders is limited. An SE can register in any member state of the European Union and transfer to other member states. The use of SE’s in Dutch structuring is limited.

There are de facto three ways to incorporate an SE:

  • Through incorporation;
  • Through a legal merger between two entities located in different EU Member States;
  • Through conversion of a public limited company previously formed under an EU Member State’s national law (e.g. NV into an SE)

Being a Dutch corporate income tax subject and Dutch tax resident, an SE has like a BV access to the wide Dutch tax treaty network and tax features that a BV has as well, like the participation exemption. We refer to the BV section for more on this.


The SCE an EU directed co-operative type of company that is related to the SE. SCE’s may be established and operated throughout the EU. An SEC removes the need for cooperatives to establish a subsidiary in each EU Member State in which they operate. It furthermore enables moving registered offices freely from one Member State to another without having to register or wind up any legal person. The principal object of an SCE needs to be the satisfaction of its members’ needs and/or the development of their economic and/or social activities.

SCEs are equated to SEs in the Netherlands as regards to tax treatment. In this respect provisions in the Dutch corporate income tax act that apply to cooperatives may be extended to apply to SCEs, e.g. in relation to a cooperative’s profits.


A Dutch foundation (in Dutch: “stichting”) is a legal person without members or a capital divided in shares and is established for a certain purpose, which tend to be idealistic or social of nature. The entity’s equity is separated from its owners, whereas voting power remains with its statutory directors. The Dutch foundation can issue “certificates” that assign the proceeds that follow from the Dutch foundation’s assets and/or activities to the holders of these certificates. The Dutch foundation is the most commonly used entity for protecting Dutch based assets.

A Dutch foundation in principle is allowed to make profits from business activities, although its profits cannot be allotted as may be required. A Dutch foundation is only subject to Dutch corporate income tax insofar it conducts entrepreneurial activities. As regards the latter, Dutch case law indicates that activities exceeding the level of a normally active management of portfolio investment is to be considered to constitute an enterprise. Whether or not a foundation is subject to VAT depends on the facts and circumstances.


Another Dutch vehicle with legal personality is the Dutch association. A Dutch association is incorporated for the purpose of two or more people (members) with a common purpose, i.e., the association’s objectives, as stated in its articles. Like the Dutch foundation, a Dutch association can make profits, although these should be used for the association’s objectives. A Dutch association can also be formed without legal personality, in which case its directors are responsible for the association’s liabilities.

Like the Dutch foundation, the Dutch association can be subject to Dutch corporate income tax insofar it conducts entrepreneurial activities. Whether or not an association is subject to VAT depends on the facts and circumstances.

One-man business

Although the one-man business (or sole trader, independent contractor) is what it sounds like -a one man business-, it may employ personnel. It has, however, only one owner, which is its founder. The owner is entitled to the profits of the business but is also responsible for everything concerning the liabilities of the business. In other words, there is no distinction between private and business property. This also means that if the owner is married in a community of property regime, the partner’s belongings may also be claimed by creditors. There are ways to avoid this (e.g. a prenuptial or a postnuptial agreement drafted by a civil-law notary).

A one man business is not liable to Dutch income taxation, but its owner is. The owner is taxed for its income derived from business (in box 1). In case the owner is considered as entrepreneur and some other criteria are met, several tax benefits apply to the owner, like the entrepreneur’s allowance, investment allowance et cetera. The beneficial fiscal treatment makes the one-man business one of the most used forms for startups to do business.

General partnership (VOF)

The general partnership (in Dutch: Vennootschap Onder Firma, or just VOF) is an entity without legal personality to conduct a business by one or more partners, which could be natural persons or legal persons. Although it has no capital divided in shares, in this business form, each partner makes a contribution to the business, which can be anything from efforts to capital and goodwill.

In a general partnership the partners are jointly and severally liable for all obligations of the partnership. This means that each partner can be held fully liable with its complete (private) property if the general partnership fails to meet its obligations, also in case those obligations were the result of acts by another partner, unless restrictions in this respect have been agreed that are officially registered. In this respect, reference is made to our remarks above on married one-man business owners, which apply to married partners (if natural persons) in a general partnership as well.

A general partnership exists pursuant to a (form free) agreement between the partners. Obviously, it is recommendable to let a civil law notary produce an agreement, in which amongst other things the partnership’s name, objective(s), contributions by the partners, profit allotment and the assignment of powers are to be arranged.

For Dutch income tax purposes the general partnership is transparent. This means that not the partnership will be subject to income tax, but its partners, whereas any partner-BV will be liable to Dutch corporate income tax and a partner-natural person to personal income tax. In case the partner-natural person is to be considered as an entrepreneur, he may be entitled to tax allowances, likewise the one-man business owner (see above). The latter also applies to the general partnership between a husband and his wife or registered partner (in Dutch: man-vrouw firma), which means that each one of them has to perform tasks that are not auxiliary to the other partner’s tasks. Note that partners in a husband-wife partnership are jointly and severally liable, despite being married in a community of property regime. Also for social security purposes the rules for the one man-business owner apply to the partner in a general partnership.

Limited partnership (CV)

Like the general partnership, the limited partnership (in Dutch: commanditaire vennootschap or just CV) has no legal personality and can be formed by two or more (natural/legal) persons. The CV is a widely used vehicle to collectively fund real estate, Dutch movies, more recently wind mill parks and the like. In international structuring it is a common vehicle used by US multinationals to defer US. tax on foreign profits and eventually repatriate such profits in a tax‐efficient manner (more commonly known as CV-BV structures”), although the widely use of the Dutch cooperative see above in the last 10 years has shown to be an alternative to these structures in some aspects.

The limited partnership or CV is a special form of the general partnership and has two sorts of partners. Firstly, the active partner, which in practice often is a legal entity like a BV, which performs the partnership’s entrepreneurial activities and has a liability status like that of a partner in a general partnership or the owner of the one-man business, so in principle is fully liable with all its (private) wealth. The other type of partner in the CV is the limited (or silent) partner, which participates only by funding the partnership, is not actively involved in the enterprise, whose identity is not disclosed to the public through the Dutch trade registry (hence is “silent”) and is only liable for the amounts contributed. Furthermore, a CV is “open” if a partner can be added without the consent of all other partners and “closed” otherwise.

As is the case with a general partnership, a limited partnership exists pursuant to a (form free) agreement between the partners, so in this respect we refer to our above remarks on general partnerships. A difference is that the contract should arrange the distribution of profit between general and limited partners and matters like the resignation of the two sorts of partners.

For tax purposes there is a distinction to be made between the open and closed CV. Although the CV has no legal personality, it is subject to Dutch corporate income tax if it is open. The open CV’s profits after tax in principle are taxed at the level of the partners as income. If the CV is closed, it will be considered to be transparent, hence its partners are taxed for the income derived from the closed CV. If the general partner (of the closed/open CV) is a natural person he/she normally is treated as an entrepreneur (like the owner of a one man-business or the partner in a general partnership). As such, he/she has access to tax allowances for personal income tax purposes if some conditions are met. If the limited partner is no natural person, in principle he/she is not considered to be an entrepreneur

Professional partnership (maatschap)

Dutch law makes a distinction between partnerships for business activities, like the general partnership, and partnerships existing between professionals like doctors, lawyers, accountants and dentists, referred to as the “maatschap”, albeit that the latter’s activities normally qualify as a business from a pure economic sense as well.

The maatschap’s “maten” can bind the maatschap, just like partners in a general partnership. A big difference with the partnership lies in the fact that maten can be held responsible for the liabilities of the maatschap only for an equal part instead of jointly or severally. And again, a maat married in common property should have a prenuptial or postnuptial agreement drafted by a civil law notary to prevent that his/her wife/husband is held responsible by creditors as well for the maatschap’s liabilities.

Like partnerships, the maatschap is constituted by way of a (form-free) agreement between professionals, whereas a notarial / written contract again is recommended. The maatschap agreement could arrange for the contributions to be made by the maten and the distribution of profits (note that the distribution should correspond with the contributed amounts, i.e. distribution to one partner is not allowed).

Finally, for (corporate/personal) income tax purposes the maatschap is treated like the general partnership, which means that the maatschap itself is not liable to income tax, but its maten are. Maten –natural persons are normally taxed for their income from the maatschap as entrepreneurs and as such may be eligible for various tax allowances (see the one man-business section).

Foreign legal forms

In the Netherlands a business can also be formed through a foreign legal form, like a foreign partnership or corporation. The entity should be registered in the Dutch Trade Register (Chamber of Commerce). In case the legal form has legal personality, it can in principle be party in the Netherlands to an agreement, hold legal title of assets, incorporate a Dutch BV et cetera. A commonly used foreign legal entity by legal professionals in the Netherlands is the LLP under the laws of Wales and England, due to its characteristic of being a fiscally transparent partnership (like the Dutch maatschap) but with legal personality, which makes the LLP a legal form that (currently) is not provided by Dutch law.