Are you expanding your business to the Netherlands? Then you should consider the option to set up a Dutch representative office or a liaison office.
What is a Dutch representative office? Your company’s representative office in the Netherlands acts on your overseas company’s behalf in a new market (like the Dutch country).
Many entrepreneurs set up a Dutch representative office to expand their business into a new market by focusing on sales or representation activities. Is it the same as a sales office? Well, no. The main distinction between a Dutch liaison office and a sales office is that the former provides information on behalf of its head office. It is not typically authorized to close business deals itself.
How do you set up a Dutch representative office? The easiest way to establish a liaison office in the Netherlands is through Dutch branch registration. Starting a Dutch BV is also another popular option.
If you wish to set up a Dutch representative office, keep in mind that its function is normally limited to providing information to prospective customers or business partners. It cannot perform any independent sales activities as a sales office does.
The business owner or shareholders decide the exact restrictions and purpose of the representative office in the Netherlands. With restrictions, the office has limited liabilities and formalities of running a full-on operation.
Consider also the legal or tax restrictions and conditions when you want to set up a Dutch representative office.
The representative office typically does not require a full registration, as would be the case with a permanent establishment in the Netherlands that performs activities. Therefore, it’s important to understand how the Dutch liaison office compares to other types of business structures.
Quick facts you need to know to set up a Dutch representative office
- You can structure or set up a Dutch representative office in different forms
- You don’t need a local director or shareholder to establish a representative office in the Netherlands
- You don’t need to register a Dutch liaison office at the Chamber of Commerce and other tax authorities
- In case you appoint local staff members in the Netherlands, the representative office must be registered as an employer
- The branch registration is the most popular way to set up a Dutch representative office
- A representative office, structured as a branch, would not require to involve a notary or prepare financial statements in the Netherlands
Choosing the legal entity for your Dutch liaison office
The representative office, by definition, refers to the type of operations of a business structure. It does not necessarily mean that a specific kind of company form is used. A representative office could be structured via a Dutch BV (private limited), or via a branch registration. In fact, a representative office in the Netherlands could even be structured in such a manner that there would be no requirement at all to register the Dutch liaison office at the Chamber of Commerce (or tax authorities).
BV or Branch?
A Dutch representative office is typically structured as a branch office, as a Limited Company (in the form of a subsidiary). For European companies (especially if it has English statutory documents in place), it might be easiest to register a branch. A representative office in the Netherlands will not likely encounter any serious liabilities. Therefore, from that perspective, branch registration has no downside. The advantage when you start a Dutch representative office via a branch registration is that the process is cheaper. What’s more, you are not required to prepare financial statements.
In case you start a representative office in the Netherlands, in which you have payroll staff, normally, you should register the Dutch liaison office at the Chamber of Commerce.
Why set up a Dutch representative office?
The main reason that companies decide to start a representative office in the Netherlands is to improve their local reputation and the way they can interact with the Dutch market.
The Dutch liaison office allows companies to use a local phone number, and address, as well as involve a local sales agent that can represent the company under certain conditions.