A subsidiary operating in the Netherlands is a regular Dutch business with complete legal standing in the country, but with its share capital wholly or partly owned by a foreign company. There are many advantages for companies expanding by this route – the chance to explore a new market, enhancing their international credibility and, particularly in regards to the Netherlands, opening a gateway to mainland Europe.
But … beware. The checklist for setting up a subsidiary in the Netherlands is long and complex for foreign companies determined to handle the process themselves. Moving staff across the globe or sourcing them in a foreign country is just the beginning.
Add human resources consultation, payroll tax processing and filing, workforce management and compliance with every aspect of Dutch employment law and it is clear that establishing a foreign subsidiary eats up time and builds up costs. Hours or days spent online will not guarantee you will be in a winning position.
Using a Professional Employment Organisation (PEO) such as Bradford Jacobs, instead of going solo to set up a foreign subsidiary, means your company can be up-and-running in the Netherlands in a few days rather than in weeks, or even months. We can source your new staff and then our Employer of Record (EOR) services take over to handle all legal and compliance issues.
How to set up a Dutch Subsidiary
Setting up a subsidiary in the Netherlands? These are some of the boxes that need to be ticked at the outset:
- Submit an application to obtain a ‘certificate of non-objection’ from the Dutch Ministry of Justice in order to register a subsidiary
- Check the business name is valid and unique with the Dutch Chamber of Commerce and then register the name
- Register the company with the Dutch tax authorities
- Open a corporate bank account to deposit initial capital
- Have the Articles of Association and all relevant documents above notarised by a Dutch lawyer and then submitted to the Chamber of Commerce
- Then … draw up another list detailing all of the administration, legal and compliance matters you will have to deal with, including payroll, tax, national social insurance payments, health insurance, holiday entitlements.
- The sensible alternative? Make a call to Bradford Jacobs to learn how we will take on board all of the above, plus even more of the requirements needed to set up a subsidiary in the Netherlands.
Legal requirements for setting up Netherlands Subsidiary
All businesses and legal entities in the Netherlands are required to register in the Commercial Register at the Chamber of Commerce, including foreign companies. According to the law, you operate a business if it independently supplies goods or services to other parties in order to make a profit. Foreign companies that have an entity or structurally conduct business activities in the Netherlands are required to register in the Commercial Register.
Foreign company registration:
A permanent establishment in the Netherlands must be registered in the Commercial Register either in person or by submitting several documents and forms. The company can be registered by:
A director of the company
A manager of the Dutch office with power of attorney, in Dutch, with original signature of the director. The manager must also personally register
An official living abroad is not required to provide proof of identity in person, but must submit these documents.
- Registration of a non-resident legal entity (Form 6)
- Registration of an official of a legal entity (Form 11)
- Registration of an authorised representative business agent (Form 13)
- Only foreign legal entities can register in the Commercial Register. Opening a Dutch branch, for instance, necessitates setting up a new business. The documents you must submit in either Dutch, English, German or French are:
- Proof of company registration from the country where it was founded (no older than one month)
- Certified copy of the Memorandum of Association
- Certified copy of the Articles of Association
- Certificate of Incumbency, which clearly shows the appointed board of directors
- The documents must be certified as authentic copies or original documents.
Benefits of setting up a Netherlands Subsidiary
Among the legal advantages of setting up a subsidiary in the Netherlands is that the shareholders and directors of the parent company have limited liability and the parent company itself is not liable for the activities of the Dutch subsidiary. The subsidiary also has the freedom to engage in more types of business than the parent company. The move can also have tax advantages in offsetting the losses of one company against the profits of another.
In the wider commercial sense opening a subsidiary makes a statement of a company’s commitment to expanding into foreign markets. The Netherlands is a popular target for expansion with its internationally-focused economy, strong financial sector, quality of life, a pro-business government and geographical location as a gateway to the rest of mainland Europe and even farther east.
Setting up a Dutch subsidiary is also a way to assess the potential of the market without capital expenditure. Using a global PEO such as Bradford Jacobs means staff can be sourced, placed in their roles and be up-and-running within days, rather than months, and with all the difficulties of payroll, taxation and compliance under control thanks to our Employer of Record (EOR) services.
What you need to set up a Netherlands’ Subsidiary
The following documents are required to register a subsidiary in the Netherlands:
- Basic information about the parent company, including its address in the home country
- An extract from a trade register confirming the parent company’s existence in the home country
- The Articles of Association, notarised by a Dutch public notary
- A declaration through which a Dutch representative is assigned to the subsidiary
- A declaration of ‘no objection’ issued by the Ministry of Justice
Forms for registration of a variety of business set-ups can be found at:
Work with Bradford Jacobs
The cost-efficient and time-saving route to take is alongside a PEO such as Bradford Jacobs, without having to negotiate the potential pitfalls of establishing a subsidiary. Our global recruitment outsourcing know-how will have employees in place within days – avoiding penalties or fines for non-compliance with tax regulations and employment laws. Our Human Resources’ experts will also ensure a smooth transition into a new culture for your onboarded employees. There is no reason for borders or visas to stand in the way of your international expansion – call us.