Many entrepreneurs wait too long to establish a BV (private limited company), or they start without the proper legal foundation. This delay or oversight can lead to unnecessary personal liability, missed tax advantages, and a less professional appearance to clients and investors.
Your company’s legal structure matters more than you might think. It affects your personal liability, how others perceive your business, and how much tax you pay. Choosing the right structure from the start protects both you and your business as it grows.
After reading this guide, you’ll know exactly which steps to take when establishing your BV in the Netherlands. We’ll walk through the entire process, from preparation to ongoing obligations, so you can build your company on solid legal ground.
Why Choose a BV Over a Sole Proprietorship or Partnership?
The decision to establish a BV rather than operating as a sole proprietor (eenmanszaak) or general partnership (VOF) comes down to three key factors: liability, taxation, and credibility.
Personal liability vs. limited liability
As a sole proprietor, you’re personally liable for all business debts. If your company goes bankrupt, creditors can claim your personal assets—your home, savings, and other property. A BV creates a legal separation between you and your business. The company itself bears the liability, which means your personal assets remain protected in most situations.
Tax advantages at higher profit levels
When your business generates significant profits, a BV becomes more tax-efficient. Sole proprietors pay income tax (IB) on their profits, which can reach rates up to 49.5%. A BV pays corporate tax (vennootschapsbelasting) at much lower rates: 19% on the first €200,000 and 25.8% on profits above that threshold. The difference becomes substantial as your revenue grows.
Professional image for clients and investors
Clients, partners, and investors often view a BV as more established and trustworthy than a sole proprietorship. This perception matters when competing for contracts, seeking funding, or building strategic partnerships. A BV signals that you’re serious about your business and committed to its long-term success.
When a BV might not be the best choice
Not every business needs a BV structure. If you’re just starting out with minimal revenue, the costs and administrative requirements might outweigh the benefits. Sole proprietorships offer simplicity and lower overhead. Once your annual profit consistently exceeds €50,000–€75,000, or when you need to limit personal liability, it’s time to seriously consider establishing a BV.
Practical tip: Calculate your expected profits and liability exposure before deciding. A conversation with a lawyer or tax advisor can clarify which structure suits your specific situation.
Step 1: Preparation Before the Notary
Establishing a BV requires careful preparation before you ever visit a notary. Getting these foundational elements right prevents complications later.
Choosing and checking your company name
Your company name must be unique and available. Check the Dutch Chamber of Commerce (KvK) database to ensure no other business uses an identical or confusingly similar name. Consider trademark protection if your brand will be central to your business. The name you choose becomes part of your official articles of association and changing it later involves additional costs and paperwork.
Determining your share structure
Decide who will own shares in your BV and what percentage each shareholder receives. This decision affects control, profit distribution, and decision-making power. If you’re the sole founder, you’ll own 100% of the shares. With multiple founders, negotiate ownership percentages based on each person’s contribution, whether financial, intellectual, or operational.
Considering a holding structure
Many entrepreneurs establish a holding company (holding BV) that owns the operating company (working BV). This structure offers several advantages: it protects accumulated profits, provides flexibility when selling part of your business, and can offer tax benefits. The holding receives dividends from the operating company and shields those assets from operational risks.
For example, if your operating company faces a lawsuit, creditors cannot access the profits already transferred to your holding company. This separation creates an additional layer of protection for your wealth.
Drafting concept articles of association
Work with a lawyer to draft your articles of association (statuten) before visiting the notary. These articles establish your company’s governance rules, including how decisions are made, how shares can be transferred, and what powers the board of directors holds. Well-drafted articles prevent conflicts and provide clarity as your business grows.
Practical tip: Don’t rush the preparation phase. Mistakes made during setup often prove expensive and time-consuming to correct later.
Step 2: The Notary Visit—Formalizing Your BV
The notary plays a crucial role in officially establishing your BV. This step transforms your business from an idea into a legal entity.
The notarial deed of incorporation
The notary prepares a notarial deed (notariële akte) that formally establishes your BV. This document includes your company name, registered address, business purpose, share capital, and the articles of association. The notary verifies the identity of all founding shareholders and ensures the deed complies with Dutch law.
Minimum capital requirements
The Netherlands abolished the minimum capital requirement of €18,000 in 2012. You can now establish a BV with as little as €0.01 in share capital. However, starting with minimal capital carries risks. If your BV becomes insolvent shortly after formation and had insufficient capital to operate properly, directors can be held personally liable for mismanagement.
Most lawyers recommend capitalizing your BV with enough funds to cover at least your initial operating expenses. This demonstrates good faith and reduces personal liability risk.
Contribution in cash vs. contribution in kind
You can capitalize your BV through cash contributions or contributions in kind (inbreng in natura). Contributions in kind include assets like equipment, inventory, intellectual property, or even an existing sole proprietorship. Each type of contribution has different legal and tax implications.
Cash contributions are straightforward—you transfer money to the BV’s bank account. Contributions in kind require valuation and may trigger tax consequences. If you’re converting a sole proprietorship to a BV, you can often do this tax-neutral through a “silent contribution” (geruisloze inbreng), but this requires proper structuring.
Cost of establishing a BV
Expect to pay between €500 and €2,000 to establish a BV, depending on complexity. This includes notary fees, Chamber of Commerce registration, and legal assistance. Complex share structures or holding constructions increase costs. While this might seem expensive, proper setup prevents far costlier problems down the road.
Practical tip: Bring all required identification and documentation to your notary appointment. Missing documents cause delays in registration and activation of your BV.
Step 3: Registration with the Chamber of Commerce
After the notary formalizes your BV, you must register with the Dutch Chamber of Commerce (KvK). This registration makes your company officially active.
Required documents for KvK registration
The notary typically handles your KvK registration as part of their service. You’ll need valid identification for all directors and ultimate beneficial owners (UBOs), the signed notarial deed, and your chosen business activities (based on SBI codes).
UBO register—who must be reported and why
The Ultimate Beneficial Owner (UBO) register aims to prevent money laundering and increase transparency. You must report anyone who directly or indirectly owns more than 25% of the shares or voting rights in your BV. This information becomes part of the public register, though certain details remain restricted.
Failing to properly register UBOs can result in fines up to €21,750 for the company and €4,350 for individual directors. Accuracy matters—verify that all reported information is correct and complete.
Obtaining your RSIN and VAT number
During KvK registration, your BV receives an RSIN number (Rechtspersonen en Samenwerkingsverbanden Identificatienummer). This unique identifier is used for tax purposes. If your business activities require VAT registration, you’ll also receive a VAT number (BTW-nummer) from the tax authorities.
Timeline—how quickly is your BV active?
Most BV registrations complete within 1–2 weeks after the notary receives all required documents. Once registered, you can officially conduct business under your BV name. However, you cannot use your BV until the registration is complete—any contracts signed before then may be your personal responsibility rather than the company’s.
Practical tip: Request a KvK extract (uittreksel) as soon as registration completes. You’ll need this document to open a business bank account and for many other business transactions.
Step 4: The Shareholders’ Agreement
The articles of association establish your BV’s basic governance, but they’re not enough to fully protect shareholder interests. A shareholders’ agreement (aandeelhoudersovereenkomst or SHA) fills critical gaps.
Why articles of association alone aren’t sufficient
Articles of association are public documents filed with the KvK. They must follow legal requirements and cannot include every agreement between shareholders. Many important arrangements—especially those involving personal relationships, confidential information, or complex exit scenarios—belong in a private shareholders’ agreement.
Essential provisions in a strong shareholders’ agreement
A comprehensive SHA should address:
- Voting rights and decision-making: Which decisions require unanimous consent? What happens when shareholders disagree?
- Transfer restrictions: Can shareholders freely sell their shares, or do other shareholders have a right of first refusal?
- Veto rights: Which major decisions (like taking on debt, hiring key employees, or changing business direction) require specific shareholder approval?
- Anti-dilution protection: How are existing shareholders protected if new shares are issued?
- Drag-along and tag-along rights: If one shareholder wants to sell, can they force others to sell too (drag-along)? Can minority shareholders join a sale (tag-along)?
- Deadlock resolution: What happens if shareholders cannot agree on important decisions?
- Exit scenarios: How can shareholders leave the company? At what price are shares valued?
The importance of clear agreements with multiple shareholders
Most business relationships start with optimism and trust. Partners believe they’ll always agree and work well together. Reality often differs. Business conditions change, personal circumstances shift, and disagreements arise.
Without a shareholders’ agreement, these conflicts can paralyze your business or end in expensive litigation. Courts must apply default legal rules that might not suit your situation. A well-drafted SHA provides a roadmap for handling conflicts before they escalate.
What goes wrong without a shareholders’ agreement?
Consider this scenario: Two founders each own 50% of a BV. After two years, they disagree fundamentally about the company’s direction. One wants to accept a buyout offer, the other wants to keep growing. Without an SHA, they’re stuck. Neither can force a sale, neither can buy out the other, and neither can make major decisions without the other’s consent. The business stagnates while they fight.
Or consider a founder who contributed capital but no longer works for the company. Without an SHA, they may retain equal ownership and voting rights despite not contributing to the business anymore. This creates resentment and practical difficulties.
Practical tip: Draft your shareholders’ agreement when everyone still gets along and has aligned interests. Once conflicts arise, reaching agreement becomes exponentially harder. Don’t view the SHA as a sign of distrust—it’s a sign of professionalism and realistic planning.
Step 5: Ongoing Obligations After Establishment
Establishing your BV is just the beginning. Several ongoing legal and administrative obligations keep your company compliant and properly structured.
Opening a business bank account
Your BV needs its own bank account, separate from your personal accounts. Banks require specific documents to open a business account: your KvK extract, articles of association, identification for all authorized signatories, and sometimes the shareholders’ agreement.
Never mix personal and business finances. Doing so can “pierce the corporate veil,” meaning courts might disregard the BV structure and hold you personally liable for business debts.
Management agreement between director-major shareholder and BV
If you’re both a director and majority shareholder (directeur-grootaandeelhouder or DGA), you’re technically an employee of your own BV. This requires a management agreement (managementovereenkomst) that defines your role, responsibilities, and compensation.
This agreement should specify your salary, any bonuses or profit sharing, expense reimbursements, and termination conditions. While it might seem odd to contract with yourself, this document proves to tax authorities that your compensation is legitimate and properly structured.
Customary salary for DGA
The Dutch Tax Authority requires DGAs to pay themselves at least a “customary salary” (gebruikelijk loon). This minimum is currently €58,000 annually (2026) or 75% of the salary for a comparable position if that’s higher. This requirement prevents tax avoidance through artificially low salaries.
Paying below the customary salary can trigger additional tax assessments and penalties. Calculate this obligation carefully and adjust your salary accordingly.
Bookkeeping and filing annual accounts
Your BV must maintain proper bookkeeping records and prepare annual accounts. Within five months after the end of your financial year, you must deposit these accounts with the Chamber of Commerce. Small companies can file abbreviated accounts, while larger companies must file more detailed information.
Failing to file annual accounts results in fines and, eventually, the possibility of forced dissolution of your BV. Set reminders and work with a qualified accountant to ensure timely compliance.
Insurance for director liability
Despite limited liability protection, directors can still be held personally liable in specific situations: gross negligence, intentional wrongdoing, failure to pay taxes, or violation of publication requirements. Directors’ and officers’ liability insurance (D&O insurance) protects against these risks.
D&O insurance covers legal defense costs and potential damages if you’re sued personally for decisions made in your capacity as director. Given the serious financial consequences of personal liability, this insurance provides valuable protection.
Practical tip: Create a compliance calendar tracking all your BV’s recurring obligations. Missing deadlines can result in fines, personal liability, or damage to your company’s reputation.
Common Legal Mistakes When Establishing a BV
Even experienced entrepreneurs make mistakes when establishing their BV. Awareness of common pitfalls helps you avoid them.
No shareholders’ agreement or a poorly drafted one
We’ve emphasized this already, but it bears repeating: skipping the shareholders’ agreement is the single most common and costly mistake. Standard template agreements downloaded from the internet rarely address your specific situation. Invest in a properly drafted SHA tailored to your business and relationships.
Wrong holding structure or no holding at all
Entrepreneurs often establish just a working BV without considering a holding structure. Later, when they want to sell part of their business, restructure, or protect accumulated profits, they realize a holding would have been beneficial. Restructuring after the fact can be complex and may trigger unwanted tax consequences.
Conversely, some entrepreneurs create unnecessarily complex holding structures when a simpler setup would suffice. Discuss your specific situation, growth plans, and risk profile with a lawyer before deciding on your structure.
Failing to separate personal and business assets
Treating your BV’s bank account like your personal wallet destroys the legal separation that protects you. Pay yourself a proper salary, document all transactions between you and the BV, and maintain clear records. Commingling funds can lead to personal liability and tax problems.
Not planning for exit scenarios and succession
Most entrepreneurs focus on launching their business, not ending it. However, every business eventually faces an exit: sale to a third party, transfer to family members, acquisition by a competitor, or closure. Without proper planning in your SHA and articles of association, these transitions become complicated and expensive.
Consider questions like: How will shares be valued if someone wants to exit? What happens if a shareholder dies or becomes incapacitated? Can shareholders work for competitors after leaving? Planning for these scenarios in advance prevents chaos when they occur.
Consulting a lawyer too late
Many entrepreneurs try to save money by handling their BV establishment themselves or using the cheapest possible service. They only consult a lawyer after problems arise. This approach is penny-wise and pound-foolish.
Legal mistakes made during establishment can cost tens of thousands of euros to fix later—far more than the cost of proper legal guidance from the start. A qualified business lawyer ensures your structure suits your specific needs, your documents protect your interests, and you avoid common pitfalls.
Practical tip: View legal costs as an investment in your company’s foundation, not an expense to minimize. The cheapest option is rarely the best option when establishing a BV.
Frequently Asked Questions
What does it cost to establish a BV in the Netherlands?
Expect to pay between €500 and €2,000 depending on the complexity of your situation. This includes notary fees (typically €350–€750), Chamber of Commerce registration (around €50), and legal assistance (€500–€1,500). Complex share structures, holding constructions, or custom shareholders’ agreements increase costs. While this may seem expensive for a starting business, proper setup prevents far more costly problems later.
Do I still need minimum capital for a BV?
No, the €18,000 minimum capital requirement was abolished in 2012. You can establish a BV with as little as €0.01 in share capital. However, starting with minimal capital carries risks. If your BV becomes insolvent shortly after formation with insufficient capital to operate properly, directors may be held personally liable for mismanagement. Most lawyers recommend capitalizing your BV with enough funds to cover at least initial operating expenses.
What’s the difference between articles of association and a shareholders’ agreement?
Articles of association (statuten) are public, legally required documents that establish your BV’s basic governance structure. They’re filed with the Chamber of Commerce and anyone can access them. A shareholders’ agreement (SHA) is a private contract between shareholders that addresses additional arrangements you don’t want public. The SHA can include provisions about voting rights, transfer restrictions, exit scenarios, and conflict resolution that go beyond what’s in the articles of association.
Should I establish a holding company alongside my operating company?
A holding structure isn’t legally required, but it’s often fiscally and legally advantageous. A holding BV that owns your operating BV (working company) protects accumulated profits, provides flexibility when selling part of your business, and can offer tax benefits. The holding receives dividends from the operating company and shields those assets from operational risks. If your operating company faces a lawsuit, creditors cannot access profits already transferred to your holding. Discuss your specific situation with a lawyer or tax advisor to determine whether a holding structure makes sense for your business.
Can I convert my sole proprietorship into a BV?
Yes, you can convert a sole proprietorship to a BV through either a tax-neutral (geruisloze inbreng) or taxable contribution (ruisende inbreng). A tax-neutral contribution allows you to transfer your business to a BV without immediately triggering income tax, though certain conditions must be met. A taxable contribution triggers tax on any hidden reserves (the difference between book value and market value of your assets). Each approach has different fiscal consequences. Consult with a lawyer and tax advisor to determine the best method for your situation and ensure proper structuring.
How long does establishing a BV take?
The entire process typically takes 1–2 weeks after the notary receives all required documents. Preparation before visiting the notary—choosing a name, determining share structure, drafting articles of association—can take several weeks depending on complexity. Once the notary files your incorporation deed, Chamber of Commerce registration usually completes within a few business days. Your BV becomes officially active once registered with the KvK, at which point you can conduct business under your company name.
Am I still personally liable as a director-major shareholder (DGA)?
Generally, no. The BV structure limits your liability to the amount you invested in the company. However, important exceptions exist. Directors can be held personally liable for: gross negligence or intentional misconduct, failure to pay employee taxes or VAT, serious violation of publication requirements, continuing business while knowing the company is insolvent, and certain other situations involving mismanagement. Proper bookkeeping, timely filing of annual accounts, and payment of all taxes reduces personal liability risk. Directors’ and officers’ liability insurance provides additional protection.
Building Your Business on Solid Legal Ground
Establishing a BV involves much more than a single visit to the notary. The legal foundation you create determines how stable your business stands as it grows, faces challenges, and eventually transitions to new ownership or closes.
Each step in this process—from choosing your structure to drafting your shareholders’ agreement to maintaining ongoing compliance—protects your interests, minimizes your risks, and positions your business for success. Cutting corners to save time or money during establishment often leads to expensive problems later.
Don’t navigate these complex legal requirements alone. The decisions you make now affect your business for years to come. Professional guidance ensures your BV is structured correctly, your documents protect your interests, and you avoid common pitfalls that trap less-prepared entrepreneurs.
Ready to establish your BV the right way? Contact Law & More today. Our business law specialists guide you through every step, from initial planning to final registration. We’ll ensure your company is built on solid legal ground so you can focus on what matters most: growing your business.