Business legal structures in the Netherlands: an overview

Choose a legal structure: with or without legal personality

A legal structure is the legal form you choose for your business. You have to choose one when you start a business. There are legal structures with and without legal personality. If you choose a legal structure without legal personality, you remain personally liable for any debts your business has. Find out which legal structures exist in the Netherlands. And use the tool for choosing a Dutch legal structure to find the legal form that best suits your situation.

Legal structures without legal personality

Sole proprietorship

Most starting entrepreneurs choose the sole proprietorship, the eenmanszaak. You can set one up quickly and easily. In most cases, the eenmanszaak offers more tax advantages than a BV when you are starting. A disadvantage of a sole proprietorship is that you are personally liable for any debts the business has.

Read more about the sole proprietorship

General partnership (VOF)

Do you want to start a business with one or more partners? Then the general partnership (VOF or vennootschap onder firma) is an option. All the partners bring something to the partnership. For example: money, goods, or labour. You do not need a minimum starting capital.

Read more about the general partnership

Limited partnership (CV)

Do you want to set up a VOF, but do you not have enough money? Or are you looking for an investor who is involved in the business? You can set up a limited partnership (CV or commanditaire vennootschap). The investor becomes a silent partner, and so is linked to your business directly.

Read more about the limited partnership

Professional partnership (maatschap)

Do you want to practice your profession together with others? For example, as a dentist, architect, physical therapist, or lawyer? Then you can choose the professional partnership (maatschap) as your legal structure. In a maatschap you and your partners practice together as partners (maten) under a common name.

Read more about the professional partnership

Shipping company

Are you going into business with a seagoing vessel or inland waterway vessel? If the vessel is owned by 2 or more parties, you are operating a shipping company (rederij). You must register the vessel with the Land Registry Office (in Dutch).

Do you operate under a common business name? If so, you must clearly set out in a notarial deed that you are forming a shipping company. You must also register this notarial deed with the Land Registry Office. You also need this notarial deed for the registration of the shipping company in the Business Register. If you do not have a notarial deed but do operate under the same business name, then you have a general partnership or another legal structure.

Legal structures with legal personality

Private limited company (BV)

The capital of a private limited company (BV or besloten vennootschap) is divided into shares, which are owned by shareholders. These shareholders have the ultimate say in the business. The directors manage the business on a day-to-day basis. A BV may also have a board of supervisors, which oversees the board. You can also choose a one-tier board as supervision. In small BVs, the director is often also the sole shareholder and is then director and major shareholder (DGA).

Read more about the private limited company

Public limited company (NV)

A public limited company (NV, naamloze vennootschap) is a business that has divided its capital into shares, just like a BV. The differences? An NV has registered shares and shares that are freely tradable on the stock exchange (bearer shares). For a BV, you can transfer registered shares only through a civil-law notary. To set up a BV, there is virtually no minimum value for the share capital you must issue (€0.01). With an NV, there is a minimum amount: €45,000.

Read more about the public limited company

Association (vereniging)

Do you have a wish or goal and want to work with others to achieve it? For example, to improve your shopping area, play sports, or make music together? Then you can choose an association (vereniging) as your legal structure. An association consists of members (at least 2). The highest power lies with the members' meeting. This means that decisions about the organisation are made at the members' meeting.

Read more about the association

Cooperative and mutual insurance association

Would you like to benefit from the advantages of a collective while remaining an individual business owner? For example, from joint purchasing or marketing? Then perhaps the legal structure of cooperative (coöperatie) and mutual insurance association (onderlinge waarborgmaatschappij) is for you. This form may also be suitable if your customers increasingly make demands on your services. As an individual entrepreneur, for example, you may run into problems if you fall ill. With a cooperative, other members can take over your work.

Read more about the cooperative

Foundation (stichting)

Do you want to realise a particular social, societal, or idealistic goal, such as nature conservation, helping other people, or spreading culture? And do you have assets available for this purpose? Then you can choose the foundation (stichting) as your legal structure.

Read more about the foundation

Religious organisation (kerkgenootschap)

Are you setting up a new church or faith community? This can take the form of a religious organisation (kerkgenootschap). You can also use the legal structures of a foundation or association for this purpose. A religious organisation has legal personality, just like a foundation and an association. But starting a religious organisation does not require a civil-law notary. Nor do you need to go to the civil-law notary to amend the articles of association. Other legal persons have to. You must register the religious organisation in the Business Register.

Foreign legal structures

Some Dutch entrepreneurs opt for a foreign legal structure. For example, if your parent company is based abroad. Read more about the advantages and disadvantages of a foreign legal structure.

European legal structures

European legal structures offer you the option to work together across borders with companies from other Member States of the European Union. There are 3 European legal structures:

• European Economic Interest Grouping (EEIG)
• European company (Societas Europaea, SE)
• European cooperative society (SCE)

Other legal structures

The legal structures mentioned in this article are the ones most commonly used by entrepreneurs in the Netherlands. Other legal structures exist, for example a legal entity under public law or a legal entity under private law, such as a guild. To find a full overview of all Dutch legal structures, go to the KVK website.

Liability and choosing a legal structure

In a sole proprietorship and general partnership, you are also liable with your private assets for any debts of your business. For example, creditors can then seize your private assets and those of your partner. You can avoid your partner's liability with a prenuptial or partnership agreement. With a legal personality, such as a private limited company, you are only privately liable for the debts of your business in exceptional cases.

What impact does the legal structure have on your taxes?

As the owner of a sole proprietorship or general partnership, you pay income tax on profits. You are often also entitled to additional tax benefits, such as the private business ownership allowance (zelfstandigaftrek).

A BV pays corporate income tax and possibly dividend tax. The director-major shareholder (DGA) also pays income tax on their salary and on dividends paid. The BV must pay the director-major shareholder a salary in line with the market (in Dutch).

In certain cases, BVs pay less tax than sole proprietorships or VOFs. This depends on the business's profits, the amount you re-invest in the business, and several other factors. But the costs of a BV are also higher. These include annual accounting obligations and auditor fees. A manager-director shareholder is also not entitled to the private business ownership allowance, for example. To be certain about the impact of your legal structure on your taxes, talk to your accountant or a financial expert.