Limited liability company in the Netherlands
A limited liability company in the Netherlands, also known as a “besloten vennootschap” (bv), is a popular business structure for entrepreneurs. It provides a separate legal entity, ensuring that shareholders’ personal assets are protected from any business liabilities. This structure offers a high level of security, making it an attractive option for those looking to minimize personal risk while operating a business.
Benefits of a limited liability company in the Netherlands
One of the main reasons entrepreneurs choose a limited liability company in the Netherlands is the limited liability protection. Shareholders of a bv are only responsible for the amount of capital they have invested, which protects their personal finances in the event of the company facing financial difficulties or legal issues.
Additionally, a bv offers flexibility in terms of ownership and profit distribution. A bv can have multiple shareholders, and the profits can be distributed in the form of dividends. Furthermore, a limited liability company in the Netherlands allows for tax benefits such as eligibility for the 30% tax ruling, which is especially advantageous for expatriates.
How to set up a limited liability company in the Netherlands
Setting up a limited liability company in the Netherlands involves a few essential steps. The first step is to create the company’s articles of association, which outline its purpose, shareholder structure, and rights. A notary is required to officially sign the incorporation documents.
The bv must also meet the minimum share capital requirement. But the minimum capital for a bv has been reduced to just €1.
Your limited liability company in the Netherlands will be registered with the Dutch Chamber of Commerce (KvK). After registration, your bv is officially established, and you can start operating your business.
Taxation for a limited liability company in the Netherlands
A limited liability company in the Netherlands is subject to corporate income tax. In 2025, the tax rate is 15% on profits up to €200,000 and 25.8% on profits exceeding that threshold. This structure allows smaller businesses to benefit from a lower tax rate on initial profits.
Dividends paid out to shareholders of a bv are subject to a 15% withholding tax. Additionally, dividends are taxed at a rate of 26.9% in Box 2 of the personal income tax return. The total tax burden on dividends can be relatively high, so it is crucial to plan tax strategies effectively.
The 30% tax ruling and a limited liability company in the Netherlands
A significant benefit for expatriates running a limited liability company in the Netherlands is the 30% tax ruling. This tax advantage allows highly skilled migrants to receive 30% of their salary tax-free, reducing their taxable income. To qualify for the ruling, you must meet specific criteria, including having a qualifying job and meeting minimum salary requirements.
Is a limited liability company in the Netherlands the right choice for you?
Choosing a limited liability company in the Netherlands can be a great option if you’re looking for liability protection and flexibility in ownership and profit distribution. It is especially beneficial for those looking to expand internationally, generate significant income, or take advantage of tax benefits like the 30% ruling. However, it’s important to carefully consider setup costs, ongoing administrative responsibilities, and tax implications before making your decision.
Checklist
We can advise from the beginning with the establishment of your limited liability company in the Netherlands. This includes the necessary steps for registration, the required share capital, and legal considerations. Ensuring that each step is completed properly guarantees a smooth and efficient incorporation process for your business.
We optimize your tax return
We will assess your limited liability company’s tax situation to ensure you benefit from available deductions. Our team will identify tax-saving opportunities and determine if you qualify for relief under double taxation agreements. This approach minimizes your tax burden and maximizes your company’s financial benefits.
Process
Starting a limited liability company (bv) in the Netherlands involves several key steps to ensure legal compliance and tax efficiency.
Company formation
The process of establishing a limited liability company (bv) in the Netherlands begins by drafting the articles of incorporation and the company’s statutes. These documents must be notarized. Afterward, you register the bv with the Dutch Chamber of Commerce (KvK) and deposit the required starting capital. This registration makes the bv officially recognized, allowing it to operate legally in the Netherlands.
Tax registration
Once registered, you must set up the bv’s administrative structure, including bookkeeping and annual reports. Additionally, your bv needs to register for VAT and corporate taxes. This ensures your company complies with Dutch tax laws and maintains proper financial records for reporting purposes.
