Loyens & Loeff New York regularly posts 'Snippets' on a range of EU tax and legal topics. In this snippet, we address Dutch corporate law considerations when incorporating a Dutch private company with limited liability (BV).
The Netherlands is often referred to as the 'Delaware of Europe' in terms of its flexible legislation combined with a well-established legal order.
The most commonly used form of legal entity in the Netherlands is the BV, which is often used as a holding entity. A BV is incorporated by way of execution of a notarial deed before a Dutch civil law notary. Provided all relevant documentation and information required is provided to the notary swiftly, it is usually feasible to complete the incorporation of a BV within two weeks. As of January 1, 2024, Dutch law allows for a BV to be incorporated by way of execution of a digital deed of incorporation.
The articles of association, which are included in the deed of incorporation, provide for the legal framework of the BV and allow for, inter alia, the following flexibility:
- There is no minimum capital requirement for the BV.
- It is possible to denominate the share capital of the BV in a currency other than euro. Each class of shares may have a different nominal value, although the nominal value of all classes of shares should be denominated in the same currency.
- It is possible to create different types and classes of shares, including shares without profit rights and/or shares without voting rights. The articles of association may also include a high/low voting share structure to allow for the majority of the voting rights to be held by one or a small group of shareholder(s).
Dutch law requires a BV to have at least a management board and a general meeting. The management board is the executive body of the BV and is charged with the day-to-day operations and decision-making of the company. The management board is also charged with determining the strategy of the company and outlining its policy. In general, a BV is not required to install a supervisory board. If it is desired to have a management structure with supervisors overseeing the management board and providing guidance, it is possible to choose between a "one-tier board structure" (with a management board comprised of executive and non-executive directors) and a "two-tier board structure" (with a separate management board and supervisory board), which must be reflected in the articles of association.
From a Dutch corporate law perspective, there are no requirements as to the nationality or residence of management board members or how often board meetings are to be held. Tax substance considerations may require that at least half of the directors are Dutch tax residents and, among other things, that management board meetings be convened from and held in the Netherlands.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.