location for foreign entrepreneurs (2,000
subsidiaries in Amsterdam, 140,000
jobs). It is the gateway to densely
populated Western Europe and has a
well-developed logistic and technical
infrastructure. The highly skilled,
multilingual and flexible work force, its
favorable tax regulations for businesses,
its stable political climate and its high
standard of living make the Netherlands
the ideal place to start a business.
Dutch law is based on the continental
European civil law tradition and is the
Netherlands being a founding member of
the European Union highly influenced
means that the law is mostly written,
but one should not underestimate the
relevance of case law. Since the Dutch
Civil Code dates from 1992 and is
updated frequently with new case law,
the Dutch law has an advanced legal
system.
in the Netherlands are the Besloten
Vennootschap (BV: private company
with limited liability) and the Naamloze
Vennootschap (NV: public limited
company). Both entities have legal
personality, issue shares and provide
limited liability for their shareholders.
The main difference between NVs
and BVs is that a BV can only issue
registered shares, whereas as NV
can issue both registered and (freely
transferable) bearer shares. For this
reason, only the shares of an NV can
be listed on a stock exchange. Another
important difference is the paid-in
capital: a BV can be incorporated with
a paid-in capital of only EUR 0.01. The
incorporation of a NV requires a paid-in
capital of EUR 45,000.
The first step in the incorporation
process of a BV or NV is to draw up
a deed of incorporation. The deed of
incorporation is drawn up by a civil
notary and includes the (initial) articles
of association. The (minimum) costs
for these deeds are approximately
EUR 900 EUR 1,050 (excluding
19 percent VAT and dues) for a
number of shareholders. The articles
of association contain the regulations
regarding the (internal) organization
of the company and, among other
things, the name and the purpose of
the company. After the execution of the
deed of incorporation and the fulfilment
of the abovementioned minimum
capital requirements, the BV or NV
can be registered with the Chamber of
Commerce. This registration finalizes
the incorporation procedure. Before
the incorporation procedure is finalized
however, a BV or NV can already do
business independently. In that case,
the BV or NV has to register with the
Chamber of Commerce as a "company
in the process of incorporation." After
the incorporation procedure has been
finalized, the BV or NV will be able to
confirm the transactions made during
the process of incorporation. Without
that confirmation the founders or the first
directors appointed in the articles of the
BV or NV are jointly and severally liable
for potential damage arising from these
transactions.
Finally, it is recommended to
conduct a trade name search before
the final registration of the new BV or
NV. Because of intellectual property
regulations, an earlier registration of
the same or a similar trade name could
result in having to change the name of
the newly established company. This, of
course, would not be a good start.
However, the rules on BVs are less
complex and provide more flexibility.
the law firm of Russell Advocaten B.V. He is
an experienced outside corporate counsel to
both domestic and foreign businesses in the
Netherlands. He deals with business formation
and reorganization, corporate governance,
insolvency law, employment issues, real estate
issues and all aspects of liability and contract law.
Reimersbeek 2
Amsterdam
The Netherlands 1082 AG
+31.20.301.56.78 Fax
reinier.russell@russell.nl