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Rules governing incorporation of a limited company in the Netherlands simplified from 1 October 2012

Entrepreneurs who want to do business in the Netherlands often opt for a limited company, officially called a private limited liability company or in Dutch "besloten vennootschap met beperkte aansprakelijkheid, abbreviated to "B.V.”. The fact that the company involves limited liability for the shareholders is one of the main reasons why this type of legal entity is popular. However, the rules governing the incorporation and the on-going business were always very strict. There were several barriers which had to be overcome before a company could be incorporated. Besides that EU legislation made it possible to use foreign entities, which were set up in another EU country, to do business in the Netherlands whereby the Dutch incorporation rules could be avoided.

On 15 December 2009, the bill for the Act on the Simplification and Flexibilisation of the B.V. (also referred to as the "Flex Act") was passed by the lower chamber of the Dutch Parliament. The bill, which was first submitted on 31 May 2007, was (finally) approved by the upper chamber on 30 June 2012. The Flex Act entered into force on 1 October 2012.

Easier incorporation

The requirement of a minimum share capital of € 18.000,- is abolished. This means that any capital amount is possible, even 1 Eurocent. The mandatory capital contribution statements drawn up by the bank (cash contributions) disappeared as well. This will speed up the establishment of the company since it is no longer required that a bank account is opened before the limited company can be set up. The same applies to the mandatory audit in case of a contribution in kind. It has also become possible for the B.V. to offer financial assistance to third parties for the purchase of shares in the company’s own capital.

Better protection of creditors

An important reason to abolish the € 18,000 minimum capital is that this amount is, in many cases, not related to the size of the company’s business in terms of its turnover and balance sheets, and often bears no relevance when it comes to creditor protection. The focus has therefore changed to the payment of dividend to shareholders. In order to protect creditors, the B.V. will not be entitled to pay dividends if it is clear that the B.V. will not be able to continue paying its debts after the dividend has been paid. Directors and shareholders that have acted negligently can be held liable in person. This will be monitored for a period of a year after payment of the dividend.

More freedom of organization and decision-making

Companies are given more freedom with regard to the organization of their structure. There are much more possibilities to derogate from the law in the articles of associations. It is for example possible to issue shares without voting rights or shares that do not entitle the holder to any profit. The articles can also determine that each shareholder may appoint a director. It is easier to pass resolutions without a meeting being held and it is possible to hold shareholder meetings outside the Netherlands.

Abolishment of restriction of share transfers

The old law governing B.V.'s provided for mandatory restrictions on the transfer of shares in a B.V. These restrictions safeguarded the private character of the B.V. One of these rules was that a shareholder who intended to sell his shares first had to offer his shares to the other shareholders. Under the Flex Act, the share transfer restrictions are no longer mandatory. The transferability of shares may be free or can for example be entirely excluded in the articles of association for a specific period of time.

Conclusion - questions

The overall point of view is that the legislative changes form a solid basis for a more flexible BV and, as a result, the B.V. can compete with any comparable foreign flexible entity. Above the most important changes have been mentioned, but there are more changes which can benefit you or your company too. If you have any questions about (the incorporation of) a B.V. in the Netherlands, do not hesitate to contact us. We can also review your current articles of association and inform you where changes can be made with respect to the new rules.


Expatax can help you with the incorporation of a limited company in the Netherlands. Check your for more information.
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Comments (18)
Comment by ad on Tue, Aug 21st, 2012 at 10:28 AM
hi! nice article. i was wondering if the flex act will apply to companies that were incorporated before 1 oct 2012?
Comment by arjan enneman on Fri, Aug 31st, 2012 at 11:25 PM
yes, the new rules will indeed be applicable on existing companies after 1 october. however, rules are optional, so you can decide to continue working under the current rules or decide to adjust the articles of association based on the possibilities the new legislation gives you. you can implement the new options which you prefer, you don‘t have to go for all new options.
Comment by s3r9i0 on Thu, Nov 29th, 2012 at 4:02 PM
good news. i was going to registrate b.v. next year and now see that this will be more easy to do.
Comment by peter on Sat, Dec 29th, 2012 at 8:08 PM
can a non dutch citizen apply to open a bv in the netherlands. i currently am employed by a bv but this arrangement may stop in the next few months. therefore i may have to establish a bv in order to contract for this mother company
Comment by arjan enneman on Wed, Jan 9th, 2013 at 12:50 AM
yes, nationality is irrelevant. so you don‘t have to be dutch to set up a limited company. but be aware that if you are non eu you will require a work/residence permit if you want to work in the netherlands for the bv. and the director must live in the netherlands.
Comment by se murad on Sun, Feb 3rd, 2013 at 12:01 PM
is it possible to buy a dutch bv company that is aged (ie 3 years old)?
Comment by arjan enneman on Thu, Feb 7th, 2013 at 7:48 AM
it is possible to buy an existing bv. but you will have to be sure that there are no hidden (tax) claims in the bv. since setting up a new bv should not take a lot of time it may be better to follow that procedure.
Comment by prithvi on Wed, Feb 27th, 2013 at 3:30 PM
i want to open a b.v and work as a freelancer in netherlands using the new bv. will that affect my 30% ruling?
Comment by arjan enneman on Thu, Feb 28th, 2013 at 9:13 AM
if you are employed by your own bv it can be possible to have the 30% ruling transfered to your bv. an employment contract will be created between yourself and your bv. see also the questions under the 30% ruling section.
Comment by nbd on Fri, Mar 15th, 2013 at 3:21 PM
hi, is it true that yearly report (aka annual accounting report) does not require ?accounting audit? and hence does not require sign-off from qualified accountant. thus allowing an individual to prepare and submit if s/he chooses to do so?thanks.
Comment by arjan enneman on Thu, Mar 21st, 2013 at 8:55 AM
The annual accounts of "small" limited companies do not have to be audited by an accountant. But it can be good to have an accountant involved. If it concerns a stamrecht bv it is advisable to involve a tax advisor. Be advised that a limited company also needs to file a corporate tax return and don
Comment by luca on Mon, Sep 23rd, 2013 at 1:33 PM
hello,i am considering to open a bv for a business together with my brother, half shares to each of us. i would like to know if my shares quota can be in the name of my minor son. basically, i should be an administrator of my son shares until he will be 18 years old. is that possible? thank you, kind regards.
Comment by claudia on Thu, Oct 3rd, 2013 at 2:38 PM
I own a stamrecht BV where I received my gouden handdruk 3 years ago. I am temporarily living abroad which used to be a problem. Does the new legislation allow the "managing director" to live abroad but within the EU?
Comment by arjan enneman on Sat, Nov 9th, 2013 at 11:33 PM
@claudia: The rules with respect to a director in the Netherlands haven
Comment by rob on Sat, Mar 1st, 2014 at 5:07 AM
I own a BV from overseas, but my local managing director recently resigned without prior notice and I do not have a replacement option yet. Is it going to be a serious problem? How long do I have to find and appoint a new md?
Comment by arjan enneman on Sun, Mar 2nd, 2014 at 9:34 PM
@rob Losing your director in the Netherlands will not directly affect your BV. You can keep doing business in NL and keep the BV alive, even without a separate Dutch director. You can appoint yourself as director. This will need to be updated in the trade register. In case contracts need to be signed the person who signs on behalf of the BV should be registered in the Dutch trade register. Make sure that all post will still arive at your desk, especially if the address of the old director was used as address for the BV. In the mean time you can look for another director if you want.
Comment by rob on Tue, Mar 4th, 2014 at 7:38 AM
@arjan, thanks for your reply. As you suspected, I also lost address for the BV, and I am not a Dutch resident. So the BV is flying without local address or director. I am hoping that it is not a serious problem for the time being.
Comment by arjan enneman on Sat, Mar 8th, 2014 at 2:16 AM
@rob, a Dutch address is very important for the BV. I advise you to arrange one as soon as possible. If mail sent by the tax authorities or chamber of commerce returns undelivered they can decide that the BV is no longer active and deregister the company. Also other parties may start an investigation if they can
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