What is a private limited company or bv?
A private limited company, or in Dutch a besloten vennootschap (bv), is a business structure with legal personality. This means that the bv is generally speaking liable for any debts, rather than you as an individual. As a director, you are an employee of the bv and you act on its behalf. You can set up a Dutch bv with yourself as the only director/major shareholder (DGA) or with other individuals and/or legal entities.
A private limited company's equity is divided into shares that are owned by shareholders. They also hold ultimate power, but the company directors run the business on a day-to-day basis. A private limited company may appoint a supervisory board to monitor its board of directors (two-tier board), or the supervisors may be part of the board of directors (single-tier board).
In smaller bvs, the director is often also the only shareholder. In which case, he or she is then director and major shareholder, in Dutch directeur en grootaandeelhouder (DGA). You can also opt to have more directors, to share the responsibilities. There is no legal requirement to the number of directors for bvs.
Tool for choosing a Dutch legal structure
If you want to set up a business, but you are in two minds about which legal structure to choose, use our Tool for choosing a Dutch legal structure. It will guide you through some of the main considerations, such as liability, staff and taxes, and give you advice suited to your needs and wishes.
Setting up a bv
You cannot set up a bv yourself. You have to enlist the services of a civil-law notary, as there are legal requirements for setting up a private limited company. There are essentially four elements:
- Drawing up the statutes in a notarial deed: this is called incorporation;
- Making a deposit of €0.01 starting capital – cash or in kind;
- Registration in the KVK's Business Register (Handelsregister) – usually carried out by a civil-law notary (you remain personally liable until the registration is complete);
- Registration at the Dutch Tax and Customs Administration (Belastingdienst) - this also is usually taken care of by the civil-law notary.
Formation phase: bv in oprichting
It is possible to start trading before you have set up your private limited company, provided you are registered in the KVK's Business Register and a civil-law notary certifies to be handling the incorporation on your behalf. You may then operate as a 'private limited company under incorporation' (in Dutch: BV in oprichting or BV io).
Make sure you clearly state that you are acting on behalf of a 'BV io' when entering into any agreements with business partners. Any contracts are entered into as a legal entity in formation. You are personally liable for your actions on behalf of the BV io. Once the BV has been established, you can transfer contracts to your BV, subject to agreement from the other party.
Sometimes sole proprietorships append 'BV io' to their name because they're in the process of incorporating their business. Be aware that you are entering into an agreement as a sole proprietorship or eenmanszaak when you sign a contract in this phase.
Costs
The costs for starting and running a Dutch bv are:
- One-off registration fee for the KVK's Business Register
- €0.01 starting capital
- Civil-law notary’s fee (varies; could be anything between €500 and €1,000)
- Bookkeeping / accounting fee (varies; usually between €600 and €1,800 per year)
Like any business, bvs have to keep records. Bvs also have to produce annual accounts and deposit them with the KVK. Which data you have to submit depends on the company size.
UBO register: report your UBOs
Most businesses that register in the Dutch Business Register (including several European legal structures) have to include their 'ultimate beneficial owner(s)' or UBOs in the UBO register. See for more information the article The UBO register: questions and answers (KVK website).
Taxes and the private limited company
If you own at least 5% of your company's shares, then you have a 'substantial interest' (aanmerkelijk belang) and are referred to as a 'director and major shareholder' (DGA).
As a DGA, you'll have to pay income tax (inkomstenbelasting) on your salary and perhaps Dutch dividend tax (dividendbelasting). Paying yourself a salary from your BV is a relatively expensive option. A less expensive option (fiscally) is to pay out a dividend. Your BV will also have to pay corporation tax (vennootschapsbelasting, VPB) over its profits.
If the BV has an annual turnover of up to €20,000, you can make use of the small businesses scheme (KOR). Read more about the scheme here.
In 2022, the cabinet will adjust the first bracket for corporate income tax. As a result, a larger part of your profit falls under the low corporate income tax rate. Read more.
See additional information about paying taxes in the Netherlands.
Customary salary scheme
If you are a director or major shareholder, the Tax and Customs Administration will not allow you to pay yourself an excessively low or zero salary. In Dutch, this is referred to as the gebruikelijkloonregeling or 'customary salary scheme' for directors and major shareholders. Your salary has to be in line with market levels, which is why the Ministry of Finance has set a number of criteria. You must pay yourself the highest of these amounts:
- 75% of the wages earned in the employment most similar to this one
- the pay earned by the best-payed employee in the company, or a company closely linked to your company
- a minimum gross annual salary of €48,000 (reference year: 2022).
If you can prove that the customary salary in your business sector is lower, you may ask the Tax Administration to set a lower salary requirement for you.
The 'payment test' – withdrawing equity from a Dutch bv
Directors have to perform a 'payment test' (uitkeringstoets) if they plan to withdraw equity from their BV. Doing so is only permitted if there are sufficient funds in the bv. This helps safeguard the business's financial position and helps ensure that creditors will be paid. An example of such a withdrawal is the payment of a dividend to the bv's shareholders.
The bv's board of directors has to protect its creditors' interests by assessing whether the bv will still be able to meet its financial obligations (accounts payable) for a period of approximately one year after the withdrawal. If so, the board of directors has to formally approve the withdrawal. If not, the board of directors is not authorised to proceed.
Directors who in hindsight make improper withdrawals can be held jointly and severally liable.
Not ditributing profit
The meeting of shareholders can decide not to distribute profits because it wants to strengthen the financial position of the bv. The profit then goes to the (general) reserve. If there is also a separate shareholders' agreement, it may contain provisions that deviate from the articles of association with regard to profit distribution.
Liability
Running a private limited company, you are in theory not personally liable for your business debts. However, banks generally ask that as a director and major shareholder you co-sign for loans as a private individual. In which case, you're then personally liable for repaying any loans.
You can also be held personally liable in the following instances if:
- You entered into overly ambitious agreements and knew (or could reasonably foresee) that the bv would be unable to fulfil its commitments.
- You failed to inform the Dutch Tax and Customs Administration in time that you were unable to pay your taxes and social security contributions.
- You were unable to pay your taxes and social security contributions as a result of mismanagement or negligence in the three years before reporting this to the Tax and Customs Administration.
- Your bv was declared bankrupt due to mismanagement or negligence in the three years leading up to this event. An example of 'mismanagement' is failure to file annual reports and accounts.
- You made payments that you knew could potentially jeopardize the bv's financial position.
If you have appointed another legal entity as director, for instance another private limited company, this does not exempt you from personal liability. All directors share who were involved in setting up the bv share personal liability for repaying loans, or the consequences of mismanagement.
Are you a director and major shareholder (DGA)? In this case banks often allow you to take out a private loan. This makes you personally liable. As a shareholder, your liability is only limited to the amount of your participation in the bv.
No more unlimited borrowing from 2023
From 2023 you can no longer borrow unlimited from your own BV. If the debts are higher than € 700,000, you will pay 26.9% income tax in box 2. There is an exception for financing your owner-occupied home. Read more.
Issuing new shares
In order to get extra money, the bv can issue more shares. The person who receives the shares must pay the bv for this. Please note: the articles of association of the bv may contain a so-called authorised capital. If so, this share capital indicates the maximum amount up to which additional shares can be issued.
Holding companies
A holding company is a private limited company (bv) that owns shares in another bv. You can structure bvs in this way to protect equity, for example profits or your pension provisions, from your business risk.
Signing authority
Directors may either jointly or individually sign contracts or perform certain legal acts on behalf of the company. This is stated in the articles of association. Directors can also give someone else power of attorney. This person may then also act on behalf of the company. It is not mandatory to register this person with the Business Register, however, it can be useful. For example, it is a way to inform your business partners about who is allowed to act on behalf of the company.
Personnel in the Netherlands
A bv can hire personnel. You have to pay Dutch payroll taxes and social contributions for your employees. If you are hiring employees for the first time, you must register as an employer with the Dutch Tax and Customs Authorities. You must also report this to KVK.
Dutch insurances and pension
As a director you are employed by the bv and covered by social insurance. There are exceptions, namely if you:
- Have 50% or more of the votes at the shareholders' meeting (possibly together with your spouse)
- and your immediate family members own two thirds or more of the shares
- cannot be fired against your will
In this case you can take out insurance yourself. Read more about insurances and pension as a sole proprietor.
Ending a Dutch bv
If you want to sell your company, then you can either sell your shares or divest the business from the bv by selling off its equipment, inventory, etc. As a DGA, you have to pay income tax on the proceeds of the sale of your shares. If you divest your business, then you have to pay corporation tax on the profit.
If a shareholder in the divesting bv is itself a bv, then this holding company theoretically pays no tax on the proceeds if it owns 5% or more of the shares. If you want to end the bv, a formal decision from the general meeting of shareholders is required. The bv then needs to pay off debts and dividend before it ceases to exist.
Changing the legal structure
You can change a Dutch bv to an nv, for example, if you want to be able to attract more capital. To change a bv into an nv, you must amend the articles of association and have a deed of conversion drawn up by a civil-law notary. Check with the civil-law notary what other steps you need to take. You can also change your bv into a sole proprietorship or general partnership (vof). For example, in case of disappointing profits.
Note: Be aware that for tax purposes, the Dutch Tax Administration views changes in legal structure as ending one business and starting another.
Good to know
A flex bv is a regular Dutch bv. The term became trending in 2012, when the process of starting a private limited company was simplified.
Do you still have questions about starting or running your private limited company in the Netherlands? Call KVK for help and advice: 0800-2117, or consult a financial adviser.
FAQs
What type of company is BV in Netherlands? ›
A private limited company, or in Dutch a besloten vennootschap (bv), is a business structure with legal personality. This means that the bv is generally speaking liable for any debts, rather than you as an individual. As a director, you are an employee of the bv and you act on its behalf.
Does a Dutch BV have limited liability? ›More Definitions of Dutch BV
Dutch BV means the limited liability company formed under the laws of the Netherlands as a subsidiary of Dutch Coop.
On average, it takes about a week to incorporate a Dutch limited liability company (BV). In order to establish a Dutch business or company in the Netherlands, it is a requirement to check the company name for appropriateness and validity. This takes less than one day.
What does BV stand for in Dutch companies? ›The Netherlands offers two options for registering a company with limited liability (LLC) of the shareholders: a public LLC or Naamloze Venootschap abbreviated as NV, and a private LLC, Besloten Vennootschap, abbreviated as BV. Both the NV and the BV represent separate legal entities.
Is A BV the same as a LLC? ›The BV is broadly comparable with the limited liability company (LLC) in the US, the private limited liability company (Ltd.) in the UK, the German Gesellschaft mit beschrankter Haftung (GmbH) and the French société a responsabilité limitée (SARL).
Is a Dutch BV a corporation for US tax purposes? ›For federal classification purposes, the federal check-the-box regulation treats Netherlands BVs in approximately the same manner as LLCs. Like an LLC, a Netherlands BV is eligible to elect to be treated as a partnership (if it has more than one owner) or a disregarded entity (if it has only one owner).
What type of entity is a BV? ›bv) or société à responsabilité limitée (SRL) is the Dutch and Belgian version of a private limited liability company. The company is owned by shareholders; the company's shares are privately registered and not freely transferable. It is the most common form of limited company in the Netherlands and Belgium.
What is the Dutch 30% rule? ›The 30% facility is available to employees who are recruited from outside the Netherlands to work here temporarily. If they satisfy conditions for the 30% facility, they are exempt from paying tax on up to 30% of their salary.
What does it mean when a private company has limited liabilities? ›limited liability, condition under which the losses that owners (shareholders) of a business firm may incur are limited to the amount of capital invested by them in the business and do not extend to their personal assets.
What is the difference between NV and BV? ›A public limited company, or in Dutch a naamloze venootschap (nv), is a company with legal personality. The main difference between a bv and an nv is usually the size: an nv tends to be a larger company, with several directors. The capital of a public limited is divided into shares, which are held by the shareholders.
Does a Dutch company need a Dutch director? ›
No, it is not a requirement to have a local Dutch director to set up a Dutch BV. In fact, most of our clients are non-Dutch residents. If you are a small or medium company, or you have a clear goal for your Netherlands business activities.
How much does it cost to open a company in the Netherlands? ›To register a new company or organisation in the Dutch Business Register (Handelsregister), you pay a non-recurring fee of € 75. You can only pay digitally, using your mobile, debit or credit card. You pay when visiting the KVK office to complete your registration. Note: new prices were introduced on 1 January 2023.
Is BV a big deal? ›Left untreated, BV is associated with serious adverse sequelae including; an increased risk of transmitting and acquiring HIV [8], pelvic inflammatory disease, miscarriage, pre-term delivery and low birthweight [9].
What country is BV company? ›The BV (besloten vennootschap), a closed corporation or private company with limited liability, is the most common form of incorporated business in the Netherlands. You can set up a BV as an individual or with others, in which case the ownership is divided into shares.
Is BV same as BVBA? ›BV is the new short form for "besloten vennootschap", which was previously called BVBA. The shareholders of a BV have limited liability, i.e. they only commit to their contribution.
How do I set up a BV in the Netherlands? ›The BV must be incorporated with a notarial deed of incorporation, so you have to go to the notary. However, we provide a quick and affordable process, so you don't have to worry about the paperwork and can quickly start your business. You can set up a BV for as little as €549 (all notarial costs are included here).
What are examples of private limited companies? ›A private limited company can be used as a structure for any type of business, for example, a plumber, hairdresser salon, photographer, law firm, dental practice, accountant, or restaurant.
Do US citizens pay taxes in the Netherlands? ›But how are your taxes affected if you are living within the Netherlands? US citizens, as well as permanent residents, are required to file expatriate tax returns with the federal government every year regardless of where they reside.
Can I work for a US company and live in the Netherlands? ›In some countries it's perfectly legal to just arrive on a tourist visa, open your laptop and work remotely for your foreign-based company, but in the Netherlands, it's not. In the Netherlands, you need to have the proper visa, including the “right to work,” even if you are working remotely for a foreign company.
Is there a tax treaty between US and Netherlands? ›The U.S.- Netherlands Income Tax Treaty provides a number of planning opportunities for cross-border tax planning. The U.S.- Netherlands Tax Treaty also permits individuals working in one of the two countries to deduct or exclude their contributions to a pension or other retirement plans for taxation.
What is private limited company? ›
What is a private limited company? A private limited company is a type of organisation you can set up to run your business. Company ownership is split into shares owned by shareholders. A company must pay corporation tax out of any profits and can then distribute the remaining profits among shareholders.
How do I set up a limited company in the Netherlands? ›- Check whether you fulfil the conditions for staying in the Netherlands. ...
- Write a business plan. ...
- Different starting points. ...
- Select a legal business structure (rechtsvorm) ...
- Choose a trade name for your company. ...
- Register with the Dutch Business Register and Dutch Tax Administration.
Limited Liability
Running your business as a limited company means you have the reassurance of 'limited liability'. Assuming no fraud has taken place, your 'limited liability' means you will not be personally liable for any financial losses made by your business.
You may have to file two tax returns but you will not pay tax twice on the same income. The Netherlands makes agreements with other countries to determine which country can tax what income. The agreements are laid down in a tax treaty so that you do not pay double taxation.
How do the Dutch negotiate? ›Dutch negotiators are straightforward: Most of the time Dutch businesspeople say exactly what they think. Therefore, yes means yes and no means no. This makes the negotiation process easier because Dutch people clearly state what they want or think.
Who can claim 30% ruling in Netherlands? ›This is possible if you start working for your new employer within 3 months after leaving your old job. Submit your application within 4 months after you started working for your new employer. Then you can use the 30% facility from the first working day at your new employer.
What are 3 features of a private limited company? ›...
Definition of a Private Limited Company
- Restricts the right to transfer shares.
- Excluding One Person Company (OPC) limits the number of its members to 200.
- Restricts any invitation to the public to subscribe to any company securities.
- Private companies cannot freely transfer shares to the public.
- They find it more difficult than public companies to access external financial support.
- Shareholders have greater risks and liabilities.
The company is a separate legal person from its shareholders and the directors. The company incurs debts in the course of its business and only the company is liable for those. In a company limited by shares, the shareholders' obligation is to pay the company for the shares they have taken in it.
What does NV stand for in Dutch? ›What Is an N.V.? The term N.V. refers to an acronym for the Dutch phrase Naamloze Vennootschap. An N.V. is a public limited liability company or an open corporation that sells shares to the public in order to generate income.
Are bearer shares allowed in the Netherlands? ›
Individual bearer shares in Dutch NVs to be abolished
The Dutch Parliament recently adopted legislation allowing holders of bearer shares in NV companies to be identified.
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.
Can a foreigner register a company in Netherlands? ›Yes, you can start your own business in the Netherlands as a foreigner, you can also bring your business from abroad. There are certain conditions that need to be fulfilled, the primary being legal residence, and 'permission' to work in the Netherlands.
Why do companies have headquarters in Netherlands? ›The Netherlands is strategically located at Europe's front door, with 95% of Europe's most lucrative markets just 24 hours away from Amsterdam or Rotterdam. It also offers a business-friendly regulatory environment, multilingual workforce and top infrastructure, which contribute to pan-European success.
Why do companies set up holding companies in Netherlands? ›With a holding company it is usually easier to transfer or sell parts of the business. They are also tax advantages: The profit of the operating company can be transferred tax-free to the holding company, because of the participation exemption (in Dutch).
How much is company tax in Netherlands? ›Standard corporate income tax (CIT) rate
The standard CIT rate stands at 25.8% as of 1 January 2022 (25% in 2021). There are two taxable income brackets. A lower rate of 15% applies to the first income bracket. This bracket has been extended and consists of taxable income up to EUR 395,000 (EUR 245,000 in 2021).
You'll need to present proof that you have the financial means to provide for yourself during your visit. For the Netherlands, you can expect to have around €34/day. For this, I provided my bank statements for the previous 3 months.
How much do I need to invest in Netherlands for citizenship? ›Are you a foreign investor, and are you considering residing in the Netherlands, and making a contribution to the Dutch economy? To enter the Netherlands as a foreign investor, you need to invest (at least) €1.25 million. Certain conditions apply to investing in the Netherlands.
Should I be ashamed of BV? ›BV is a common condition and nothing to feel embarrassed about. If you're looking for more information, here's what we wrote about vaginal discharge and Bacterial Vaginosis symptoms and treatment. If you notice any unusual smell or discharge, check with your healthcare provider.
What problems can BV lead to? ›Most often, BV does not cause other health problems. However, if left untreated, BV may increase your risk for: Sexually transmitted diseases (STDs) like herpes, chlamydia, gonorrhea, and HIV. Pelvic inflammatory disease where BV bacteria infect the uterus or fallopian tubes.
Does BV ever go away for good? ›
At times, BV will go away without treatment. However, treatment can help avoid the increased chance of some serious health risks associated with BV, including: Getting or transmitting HIV; Delivering your baby too early if you have BV while pregnant; and.
What is a BV entity Netherlands? ›A private limited company, or in Dutch a besloten vennootschap (bv), is a business structure with legal personality. This means that the bv is generally speaking liable for any debts, rather than you as an individual. As a director, you are an employee of the bv and you act on its behalf.
Is a BV an LLC? ›The BV is an LLC; a limited liability company. One of the main purposes is keeping liability for the owner limited. It is broadly comparable with the private limited liability company in the United Kingdom, the German Gesellschaft mit beschrankter Haftung (GmbH) and the French société a responsabilité limitée (SARL).
What does BV stand for in Europe? ›BV stands for Besloten vennootschap met beperkte aansprakelijkheid. This is the Dutch and Belgian version of a private limited liability company. GmbH. GmbH stands for Gesellschaft mit beschränkter Haftung, meaning a company with limited liability. It's used in German-speaking countries.
What is BV and NV in Netherlands? ›The main difference between a bv and an nv is usually the size: an nv tends to be a larger company, with several directors. The capital of a public limited is divided into shares, which are held by the shareholders. The ultimate power lies with these shareholders. They are allowed to make decisions about the company.
What is the difference between BV and BVBA? ›A BV is a legal entity with equity that is separate from the shareholders' private equity. BV is the new short form for "besloten vennootschap", which was previously called BVBA. The shareholders of a BV have limited liability, i.e. they only commit to their contribution.
What are the different strains of BV? ›The organisms most commonly associated with BV are G. vaginalis, Bacteroides (Prevotella) spp., Mobiluncus spp., and Mycoplasma hominis.
Is NV short for Netherlands? ›N.V. is an acronym for Naamloze Vennootschap, a public limited liability company in the Netherlands and other Dutch-influenced nations. An N.V. issues shares to shareholders who have the power to make decisions about the company.
Is BV legal form? ›The Dutch BV (“besloten vennootschap met beperkte aansprakelijkheid”) is the most commonly used legal form for doing business, act as a holding company, IP licensing company, finance company et cetera.
What does BV stand for country? ›bv is the Internet country code top-level domain (ccTLD) reserved for the uninhabited Norwegian dependent territory of Bouvet Island. The domain name registry and sponsor is Norid, but . bv is not open for registration. .
How is BV confirmed? ›
A bacterial vaginosis test is a way to diagnose bacterial vaginal infection, a common condition. A healthcare provider will take a sample of vaginal discharge. Then they'll look at the sample under a microscope, identify a specific odor or measure the sample's pH.
What country has the abbreviation BV? ›| Country | ISO 3166-1 alpha2 | ISO 3166-1 alpha3 |
|---|---|---|
| Botswana | BW | BWA |
| Bouvet Island | BV | BVT |
| Brazil | BR | BRA |
| British Indian Ocean Territory | IO | IOT |