The European Mobility Directive in the Netherlands

The European Mobility Directive, Directive (EU) 2019/2121, gives limited liability companies in the EU and the EEA a harmonised procedure for cross-border conversions, mergers and divisions. The Netherlands implemented it in the Act implementing the directive on cross-border conversions, mergers and divisions, which entered into force on 1 September 2023 and rewrote the relevant parts of Book 2 of the Dutch Civil Code. Since that date a Dutch BV or NV can move its registered office to another member state, merge with a company established there, or split off part of its business into one, using a single statutory route with fixed steps, fixed deadlines and a mandatory check by a Dutch civil-law notary.

Before the directive, only cross-border mergers had a harmonised regime. Conversions and divisions were left to national law and to the freedom of establishment as interpreted by the Court of Justice, which meant every project depended on whether two national systems happened to fit together. The directive closes that gap, and it pays for the new freedom with a detailed set of safeguards for minority shareholders, creditors and employees.

This article sets out what the directive covers, how the Dutch procedure runs from the first proposal to registration, what each protected group can do and by when, and where the process most often goes wrong.

What the directive covers

The directive applies to the limited liability company forms listed in EU company law, which for the Netherlands means the BV and the NV, and it operates within the European Union and the European Economic Area. It regulates three operations.

• Cross-border conversion (grensoverschrijdende omzetting): a company converts into a company form governed by the law of another member state and moves its registered office there, while keeping its legal personality. It does not dissolve, it does not transfer its assets one by one, and its contracts and permits in principle continue.
• Cross-border merger (grensoverschrijdende fusie): a company merges with a company governed by the law of another member state, either by absorption or by forming a new company. The assets and liabilities pass by universal succession.
• Cross-border division (grensoverschrijdende splitsing): a company splits its assets and liabilities off into one or more new companies governed by the law of another member state, either fully or partially.

Two limits are worth stating at the outset. The regime is closed to third countries: a Dutch BV cannot use it to convert into a company in the United Kingdom, the United States or any other state outside the EU and the EEA. And it does not apply to companies in liquidation that have started distributing assets, nor to companies subject to certain insolvency or resolution measures.

The directive is also frequently confused with the rules on the movement of workers. It is a company law instrument. Residence and work permits for staff are governed by entirely separate instruments, including the recast EU Blue Card Directive, and a cross-border merger does not by itself change the immigration position of a single employee. Where a restructuring moves people as well as entities, the two tracks have to be run in parallel, which is why cross-border employment law advice belongs in the project from the start.

How the Netherlands implemented the directive

The Dutch implementing act took effect on 1 September 2023 and placed the three operations in Book 2 of the Dutch Civil Code, alongside the existing rules on domestic mergers and divisions. The structure is deliberately familiar: a proposal, a report, an accountant’s statement, disclosure, a period for comments, a resolution of the general meeting, and execution by notarial deed. What the directive added is a set of hard protections and a gatekeeper.

Three features distinguish the cross-border procedure from a purely Dutch one. The first is the pre-transaction certificate, issued by a Dutch civil-law notary, without which the operation cannot be completed in the destination state. The second is the extended creditor protection: the period in which creditors can apply to the court for security runs for three months, where a domestic merger allows one. The third is the explicit exit right for shareholders who voted against, which Dutch domestic law does not grant in the same form.

The regime applies to procedures started on or after the date of entry into force. Projects that were prepared under the older cross-border merger rules therefore had to be reassessed, and any project designed on the basis of pre-2023 guidance should be checked against the current text before the proposal is filed.

The procedure step by step

The sequence below is the backbone of every cross-border conversion, merger or division. The deadlines are the part clients underestimate; a project that has not reserved roughly three to six months between the proposal and completion is not a realistic project.

Drawing up the proposal

The board draws up a written proposal with a statutory minimum content: the legal form, name and registered office of the company before and after the operation, the proposed instrument of incorporation or articles of association, the timetable, the rights offered to shareholders and creditors, any safeguards offered to creditors, the exchange ratio and any cash payment in a merger or division, the allocation of assets and liabilities in a division, the likely repercussions on employment, and details of any incentives or subsidies received in the previous five years. Omissions here surface later as objections, so the proposal deserves the time.

The report for shareholders and employees

The board also prepares an explanatory report. It has two sections, one addressed to shareholders and one to employees, and a company may prepare one document or two. The shareholders’ section explains the cash compensation offered to those who wish to exit and the method used to determine it. The employees’ section explains the implications for employment relationships, any material change in the terms of employment or in the location of the company’s places of business, and how those changes affect any subsidiaries. Employee representatives may deliver an opinion, which is attached to the report, and the report must reach them well before the general meeting decides.

The independent expert

An accountant, acting as an independent expert, examines the proposal and reports on the adequacy of the cash compensation and, in a merger or division, on the exchange ratio. The requirement can be waived where all shareholders agree, and micro and small companies are exempt. That exemption is attractive but should be used with care: the expert’s report is also the board’s best evidence that the terms were fair if a minority shareholder later disputes them.

Disclosure and the period for comments

The proposal, the report and a notice are filed with the trade register of the Chamber of Commerce at least one month before the general meeting that is to decide. The notice tells shareholders, creditors and employee representatives that they may submit comments on the proposal, and those comments must be received no later than five working days before the meeting. The general meeting has to be informed of comments received before it votes.

The resolution and the notarial deed

The general meeting then resolves on the proposal. The majority required is set by national law within the limits of the directive, and the articles of association may impose more. After the resolution, the notary examines the file and, if everything is in order, issues the pre-transaction certificate. The authority in the destination member state carries out its own legality check, and the operation takes effect and becomes enforceable against third parties on registration there. The Dutch trade register entry is then updated or struck through accordingly.

Minority shareholders: the exit right

A shareholder who voted against the proposal may withdraw from the company against adequate cash compensation. The right has to be exercised promptly, within one month of the resolution of the general meeting, and the proposal must state the compensation on offer and how it was calculated. A shareholder who considers the offer too low can have it reviewed, and the operation is not held up while that review runs; only the amount remains open.

Two practical points follow. For the company, the exit right turns valuation into a live legal risk rather than a negotiating position, so the compensation should be supported by a defensible method before the proposal is filed. For the shareholder, the one-month window is short and starts running from the resolution, not from the moment the shareholder gets round to taking advice. Where an exit is being contemplated, the objection should be recorded in the minutes of the meeting, because the right belongs to those who voted against.

Shareholders who do not want to exit but consider the exchange ratio in a merger or division unfair can claim an additional cash payment instead. That claim likewise does not block completion. Minority protection under this regime is compensatory: it converts a governance objection into money, which is a deliberate design choice and a change of mindset for shareholders used to blocking transactions outright.

Creditors: security within three months

Creditors whose claims arose before the proposal was disclosed, and who are not satisfied with the safeguards the proposal offers, may apply to the court for adequate security. The application must be made within three months of the disclosure of the proposal. The creditor has to make it plausible that the satisfaction of the claim is at risk because of the operation and that the company has not provided adequate safeguards.

That three-month period is longer than the one-month objection period for a domestic merger, and it runs from disclosure, not from completion. It is one of the reasons a cross-border project takes longer than an internal reorganisation. A company that wants to keep the timetable tight should engage with its significant creditors, and in particular with its banks, before the proposal is filed, since a negotiated security package is faster than a court application on both sides.

The company also has to state in the proposal what safeguards it offers. Silence is not neutral: a proposal that offers nothing invites applications, and each application is a delay. Where a group guarantee or a bank guarantee can be given at limited cost, offering it in the proposal is usually cheaper than defending three court applications.

Employees, the works council and board-level participation

Three separate employee-related obligations run alongside each other, and they are regularly confused.

The first is the information duty under the directive itself: the employee section of the board’s report, the right of employee representatives to give an opinion that is annexed to it, and the right to submit comments on the proposal before the general meeting.

The second is the works council’s advisory right under the Works Councils Act. A cross-border merger, division or conversion, and the transfer of control that goes with it, is a decision on which the works council must be given the opportunity to advise at a time when its advice can still influence the outcome. Advice sought after the decision has effectively been taken is no advice at all, and the works council can challenge the decision before the Enterprise Chamber (Ondernemingskamer) on that ground. Employers should also check whether the SER Merger Code obliges them to notify the trade unions.

The third is board-level employee participation, the Dutch structuurregeling and its equivalents elsewhere. The directive contains a specific regime designed to stop a cross-border operation from being used to shed an existing participation system. Where the company has a participation system, or where its workforce reaches a proportion of the national threshold in the months before the proposal, negotiations with a special negotiating body may be required, and the resulting arrangement has to be maintained for a period after completion. This is the part of the process with the longest lead time and it should be assessed at the very beginning, not once the proposal is drafted. Our overview of an employer’s rights and obligations sets out the consultation duties in more detail.

The notary’s certificate and the anti-abuse test

In the Netherlands the civil-law notary is the competent authority that issues the pre-transaction certificate. The notary verifies that the proposal, the reports, the disclosure, the comment period, the resolution and the protection of shareholders, creditors and employees have all been dealt with correctly, and that any employee participation procedure has been completed.

The notary must also carry out an abuse and fraud check. If there are serious indications that the operation is being used for abusive or fraudulent purposes leading to evasion of Union or national law, or for criminal purposes, the certificate is refused. The notary may request additional information and may consult other authorities, and where that happens the assessment period is extended. The Royal Notarial Association has issued practical guidance on how this check is carried out, and notaries apply it seriously.

For a legitimate transaction this is a documentation exercise rather than a hurdle, but it is a documentation exercise that has to be planned for. The business rationale for the move should be recorded from the outset, and the file should show substance in the destination state, continuity of the workforce and creditor position, and consistency between what the proposal says and what the group actually intends.

What actually changes for contracts, permits and staff

The attraction of the cross-border regime is continuity, but continuity means different things in each of the three operations, and the difference decides how much work sits outside the company law procedure.

In a conversion the legal person survives. The company keeps its identity, its contracts, its claims and its debts; what changes is the law that governs it, its legal form and its registered office. Employment contracts continue with the same employer, because there is no change of employer. That does not make the operation invisible to counterparties: financing agreements, leases and long-term supply contracts routinely contain change-of-control, jurisdiction or governing-law clauses that a conversion can trigger, and permits are usually granted by a national authority and do not travel across the border. A contract review is therefore part of the preparation, not an afterthought.

In a merger the assets and liabilities of the disappearing company pass to the acquiring company by universal succession at the moment the merger takes effect. Individual assignment and creditor consent are not needed, which is precisely the point of merging rather than selling. Employees transfer with the undertaking and keep their terms of employment; where the acquiring company is governed by another legal system, the applicable law of the individual employment contract is determined by the European conflict-of-law rules and does not simply become the law of the destination state.

In a division the allocation is what the proposal says it is. Assets and liabilities are assigned item by item in the proposal, and anything the proposal fails to allocate is dealt with by the residual rules, which creditors do not enjoy discovering after the event. Where the divided part is a going concern, the transfer of undertaking rules apply to the staff attached to it. Divisions are the most demanding of the three operations to document and the least suitable for a compressed timetable.

Conversion, merger, or simply a new subsidiary

The statutory route is not always the right one. Setting up a subsidiary in the destination state and transferring the business to it is often faster, avoids the notary’s certificate and the three-month creditor window entirely, and keeps the Dutch entity available. It costs the universal succession: every contract has to be assigned, every permit reapplied for, and every counterparty asked. A merger buys succession at the price of procedure. A conversion buys continuity of the legal person at the price of leaving the Dutch legal system behind, with everything that means for the articles of association, governance and the position of any structural regime. The choice should be made explicitly and recorded, because it is also the first thing the notary will ask about.

Tax is a separate track

The directive harmonises company law, not tax law. A cross-border conversion, merger or division has consequences for corporate income tax, dividend withholding tax, transfer tax and the position of the shareholders, and those consequences are governed by Dutch tax legislation, by the tax law of the destination state and by the applicable double taxation treaty. Whether a reorganisation can be carried out without an immediate settlement of unrealised gains depends on the facts, in particular on whether the Dutch tax claim remains secured, and it has to be assessed case by case.

Law & More does not provide tax structuring advice, and no article should be read as a substitute for it. The practical point is one of sequencing: obtain the tax analysis, and where appropriate the position of the Dutch tax authorities, before the proposal is drawn up. The proposal fixes the structure, the timetable and the terms offered to shareholders, and a tax objection that surfaces afterwards usually means starting again. Involve a tax adviser at the same moment you involve the notary.

A practical checklist

The table below maps the phases of a cross-border operation to the actions that have to be completed and the point that most often causes delay.

Companies that run this process regularly benefit from writing it down as an internal procedure, with named owners for each step and a standard document set. Our corporate compliance checklist covers the wider governance obligations that sit around it.

Where these projects go wrong

The failures repeat themselves, and almost all of them are timetable failures dressed up as legal problems.

• Starting the employee participation assessment after the proposal has been drafted, when negotiations with a special negotiating body can take months.
• Treating the works council as a party to be informed rather than consulted, which exposes the decision to challenge before the Enterprise Chamber.
• Filing a proposal that omits part of the statutory content, which the notary cannot repair afterwards.
• Offering no creditor safeguards at all, and then spending the saved time on court applications instead.
• Setting the cash compensation for exiting shareholders by reference to book value with no supporting analysis.
• Assuming the destination state will accept the Dutch file as it stands; the second legality check has its own requirements and they should be confirmed at the start.
• Leaving tax until the structure is fixed.

A cross-border operation is not primarily a drafting exercise. It is a coordination exercise between two jurisdictions, a notary, an accountant, a works council and a tax adviser, and the legal risk is concentrated in the joints between them.

What to do now

If a cross-border move is on the table, start with three questions. Does the intended operation fit one of the three statutory forms, or is what you actually need an asset transfer or a new subsidiary? Does the company have, or is it approaching, an employee participation system? And what does the destination state require of a company arriving from the Netherlands, in terms of substance, management and registration?

Answering them honestly sometimes ends the project, which is a better outcome than discovering the obstacle after the proposal has been filed and the creditor clock has started.

Only when those answers are on paper does it make sense to draft. Set the timetable backwards from the intended completion date, allowing one month between disclosure and the general meeting, three months of creditor exposure from disclosure, and time for the certificate and the foreign legality check. Then decide who owns each step, and agree in advance who speaks to the works council, who speaks to the banks and who instructs counsel in the destination state. Cross-border projects rarely fail on the law; they fail because two of those conversations happened in the wrong order.

Frequently asked questions

When you start digging into the European mobility framework, a lot of practical questions tend to pop up. Here, we tackle some of the most common queries we hear from businesses and individuals trying to make sense of the new rules.

Law & More advises Dutch and international companies on cross-border conversions, mergers and divisions under the European Mobility Directive, from the first structuring question to the notarial certificate. We draft the proposal and the reports, run the works council and creditor track, and coordinate with the notary, the accountant and counsel in the destination state. Contact our corporate team to discuss your project, its timetable and the protections you will need to offer.