Are you an entrepreneur ready to start a business in the Netherlands? You might be considering company incorporation in the Netherlands or Dutch branch registration. So how do you decide which option is better for you?
In many cases, it’s better to go with company incorporation when starting a business in the Netherlands than registering for a Dutch branch for your overseas company. Ultimately, this depends on your situation and priorities.
For example, consider this question: Do you urgently need a Dutch company registration number, in order to deal with the Dutch government or maybe even a Dutch (online) marketplace like Amazon or Bol.com?
In this case, you typically do not worry about the long term considerations for your corporate structure, and maybe not even worry about any potential liabilities in the company.
A similar mindset would be relevant if you would need to open a Dutch bank account for practical purposes, for example, to be able to deal with a certain Dutch partner or client.
In such cases, the main goal is to comply with the requirement. Such as getting a company number, or opening a bank account. You will probably want to keep the costs down, bureaucracy at a minimum, and get results as fast as possible.
The registration of a Dutch branch of your existing company could be the best solution in this case; especially if your current company is incorporated in countries like the United Kingdom, Cyprus or Germany, which do not require any translation of your statutory documents. In these countries, it’s also easier to obtain a legalised extract from the Companies Registrar.
The statutory documents and company extract are required for the registration of your Dutch branch at the Chamber of Commerce. This registration process of the branch can be fast. In fact, it can be ready within one or two working days.
The advantage when registering a Dutch branch registration is that a public notary doesn’t have to be involved. This saves you time.
Another example: Let’s say you want to employ staff in the Netherlands, while you don’t have a Dutch business yet. This could be the case when you have a customer in the Netherlands who requires your resources for an IT project, let’s say. In that case, you are outsourcing staff, and a local branch registration in the Netherlands is required. You would also have to register as Employer of Record.
But, company incorporation in the Netherlands would also be a great option!
So, what to do?
If you expect the project to be relatively short-term, and you are not planning to have an ongoing presence in the Netherlands, it might make sense to go with a Dutch branch registration than incorporating a Dutch company. This is simpler. It would also avoid the requirement of drafting a Financial Statement based on Dutch laws.
Furthermore, your Dutch customer expects your overseas company to be liable for any shortcomings, anyway, so the branch will not necessarily expose you to bigger risks, than when you would form a local company (which would limit the liabilities of the overseas company).
Company incorporation in the Netherlands: when to do it
Company incorporation in the Netherlands would make sense if you are planning to have an ongoing presence in the Netherlands. This will require a local image for your potential market as a Dutch company. if it fails, it will not affect your existing business.
Another reason to incorporate a Dutch company is there will be local shareholders or investors involved, who would not share in the total group’s profits.
If you’re still thinking about which option suits your needs better, our Bolder Launch crew can direct you to the right decision. We will provide you with full cost overviews, tax calculations and break down the pros and cons of company incorporation in the Netherlands and Dutch branch registration.
Give us a call for a free consultation.
This guide is part of Company Formation in our Launch Guide.
