Business structures in the Netherlands: 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.

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Legal structures without legal personality

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.

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.

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.

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.

Shipping company

Are you going into business with an ocean-going vessel or inland waterway vessel? If the ocean vessel or inland vessel belongs to 2 or more parties, the legal structure of you and your partner(s) is a shipping company (rederij). You must register the ocean vessel or inland vessel with the Land Registry Office (in Dutch). And you must register the shipping company in the Business Register. Do you work together under a common company name? Then your legal structure is a general partnership (VOF), unless you and your partner(s) clearly agree in a document (notarial deed) that you form a shipping company. You must register the shipping company and the document in which you agree this with the Business Register.

Legal structures with corporate (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 (the General Meeting of Shareholders, AGM) have the ultimate say in the business. The (managing) 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).

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.

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.

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.

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.

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.

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 public legal entity 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.

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)

Determine how you want to be liable

In a sole proprietorship and general partnership (vof), you are also liable with your private assets for any debts of your business. Creditors can then seize your private assets and those of your partner, for example. 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 is advantageous for your taxes?

As the owner of a sole proprietorship or general partnership (vof), you pay income tax on profits. As owner of a sole proprietorship or partner in a general partnership (vof), you are often entitled to additional tax benefits, such as the private business ownership allowance (zelfstandigaftrek). Especially in the start-up phase, when your business makes relatively little profit, you are usually better off fiscally with a sole proprietorship or general partnership (vof).

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).

From a profit of €150,000, you pay less tax on average with a bv than with a sole proprietorship or general partnership (vof). But the costs of a bv are higher. These include annual accounting obligations and auditor fees. A manager-director shareholder is not entitled to the private business ownership allowance.

You cannot put your company on hold

It is not possible to put your company on hold. When it is necessary to temporarily stop working less than 6 months on your business, for example, to study, travel, or for a period of paid employment, you can keep your business registration. But if it takes longer, you should deregister. Read more about your options. If your company is a legal personality, you must dissolve it before you can de-register. If you want to continue with your business later, you need to register again. You will then get a new KVK number, VAT identification number and VAT tax number.

So long as your business is registered, your legal obligations continue. Depending on your legal structure, you have to file tax returns, keep business records, and file financial statements with KVK. You also have to honour any contracts with suppliers and customers you have entered into.

Formation requirements per legal structure

If you start a business, there are requirements you must meet. The requirements differ per legal structure. For sole proprietorships and general partnerships (vof) there are no incorporation requirements. And you do not need any start-up capital. You register the legal structure at KVK yourself. Other legal structures are set up through a civil-law notary. Like a bv, nv or cv. For an nv you need a starting capital of € 45,000.