Foreign companies doing business in the Netherlands run into the same handful of legal pitfalls: choosing a branch when a BV was needed, applying a home-country employment template to Dutch staff, underestimating the two-year obligation to continue paying a sick employee, and using general terms that were never validly incorporated. Dutch law is codified and accessible, but a good deal of it is mandatory law from which contracts cannot deviate, and that is where imported documents fail.
This article sets out the pitfalls that matter most in practice, with the Dutch rules behind them: the choice of legal form, the registration duties, employment obligations, contract law, language and forum, intellectual property, and data protection. It is written for foreign companies opening a Dutch operation and for their advisers abroad.
Branch or Dutch BV: the first decision, and the one with the most consequences
A foreign company can trade in the Netherlands through a branch (a registered establishment of the foreign entity) or through a Dutch subsidiary, usually a besloten vennootschap. A branch is faster to open and needs no notary, but it is not a separate legal person: the foreign parent is directly liable for everything the branch does, and creditors, employees and regulators deal with the parent itself. A BV is incorporated by notarial deed before a Dutch civil-law notary, is a legal person from that moment, and confines liability to its own assets, subject to the rules on directors liability.
The choice therefore turns on risk rather than on speed. A sales office with a handful of staff and no local contracting may function well as a branch. A business that will hire, lease premises, contract with Dutch customers and hold intellectual property is better served by a BV, which also makes it easier to sell or restructure the Dutch activity later. Note that acting in the name of a BV before it exists binds the person who acts, personally, until the incorporated company ratifies the transaction, which is the subject of our guide to the BV in formation. The practical sequence of incorporation is set out in our article on the legal steps you cannot skip.
Whether the Dutch activity creates a taxable presence is a separate question with its own rules, and it does not follow the civil law choice automatically. That assessment belongs with a tax adviser; the legal structure should be settled first, on liability and governance grounds.
Registration, ultimate owners and ongoing filings
Both a branch and a BV must be entered in the Handelsregister at the Kamer van Koophandel, with the details of the entity, its address and the persons authorised to represent it. Registering the right authority to sign matters more than it looks: third parties may rely on what the register says, so an outdated entry can bind the company to a contract signed by someone who no longer has power to do so.
Legal entities must also register their ultimate beneficial owners in the UBO register. Registration remains compulsory; what changed after the judgment of the Court of Justice of the European Union of November 2022 is that the register is no longer open to the general public, and access is now limited to authorities and to parties with a legitimate interest. Banks will ask for the UBO extract when the Dutch account is opened, so this is usually on the critical path for market entry.
After that come the filings that foreign parents tend to forget. A BV must keep records from which its rights and obligations can be known at any time and retain them for seven years, and must file its annual accounts with the Handelsregister within the statutory period. Late filing is not a small administrative matter: if the company later becomes insolvent, it creates a statutory presumption that the board managed the company improperly and that this caused the bankruptcy, which is the usual route to personal liability of directors.
Employment law: the obligations foreign employers underestimate
Dutch employment law is largely mandatory and cannot be contracted away, whatever the parent company handbook says. Three obligations account for most of the unpleasant surprises.
The first is sickness. An employer must continue to pay a sick employee for up to 104 weeks, at least seventy per cent of the wage, and must work with the employee on reintegration under the Wet verbetering poortwachter, with fixed moments for a problem analysis and a plan of action. If the UWV concludes at the end of that period that the employer did too little, it can extend the payment obligation by up to a further year. This is the single most expensive difference between Dutch employment law and that of most other countries.
The second is dismissal. An employer cannot simply terminate. Either the employee agrees in a settlement agreement (vaststellingsovereenkomst), or permission is needed: from the UWV for redundancy and long-term incapacity, and from the kantonrechter for personal grounds such as underperformance, a disturbed working relationship or culpable conduct. The permitted grounds are listed exhaustively in article 7:669 BW, and a file that does not support the ground chosen simply fails. A transition payment is due on termination at the employer initiative and accrues from the first day of employment, so it can already be payable during the probationary period.
The third is collective agreements. A sector collective labour agreement (CAO) can be declared universally binding, in which case it applies to the employer whether or not it is a member of anything, and it sets pay scales, allowances and often pension obligations. Checking whether a CAO applies is a first step, not an afterthought. Foreign employers posting workers to the Netherlands have an additional duty to notify the posting in advance through the Dutch posted workers portal and to observe the Dutch core employment conditions. Companies that supply labour should also note the new licensing regime for the temporary staffing sector: registration with the admission authority runs from 1 November to 31 December 2026, the Wet toelating terbeschikkingstelling van arbeidskrachten enters into force on 1 January 2027 and enforcement follows from 1 January 2028. Our overview of employee rights in the Netherlands sets out the employee side of these rules.
Contracts: the Dutch rules that override an imported template
Dutch contract law starts from freedom of contract, but several regimes contain mandatory law from which the parties cannot deviate, and a foreign template that ignores them is unenforceable exactly where it is needed.
Commercial agency is the clearest example. Where a Dutch intermediary negotiates contracts for a principal on a continuing basis, the statutory agency regime in Book 7 BW applies: minimum notice periods that lengthen with the duration of the relationship, and a goodwill payment on termination where the agent has brought in customers from whom the principal continues to benefit. Distribution agreements are not covered by that regime, which is precisely why the distinction between an agent and a distributor has to be made deliberately rather than by accident. Consumer contracts bring their own mandatory rules, including a fourteen-day right of withdrawal for distance selling and a statutory conformity standard that cannot be reduced. Commercial lease of retail or catering premises is another regime with protective, largely mandatory rules.
General terms and conditions are where imported documents most often fail. Under Book 6 BW the user must give the other party a reasonable opportunity to take note of the terms, in principle by providing them before or when the contract is concluded; terms that were not properly provided can be annulled, taking the liability cap with them. And where both parties refer to their own terms, the first reference prevails unless the other side expressly rejects it, so the order of the exchange determines whose conditions govern the contract. Our overview of the types of commercial agreement under Dutch law sets out which regime attaches to which form.
Language, applicable law and the competent court
There is no rule requiring commercial contracts to be in Dutch. Parties are free to contract in English, and most international agreements in the Netherlands are. Two practical limits apply. Employment information owed to an employee must be provided in a way the employee can understand, and documents that go to a Dutch court will normally need a translation because proceedings are conducted in Dutch.
The exception is the Netherlands Commercial Court in Amsterdam, which since 2019 hears international commercial disputes in English, on the basis of an express choice by the parties, with a separate fee structure. Whether that court, an ordinary Dutch court or arbitration is the right forum is a decision to take when drafting, not when the dispute arises. Without a choice, the applicable law follows the Rome I Regulation and jurisdiction the Brussels I bis Regulation, and the result is frequently not the forum either party would have chosen.
Intellectual property: register for the Benelux, not for the Netherlands
There is no national Dutch trade mark. Trade marks and design rights covering the Netherlands are registered either with the Benelux Office for Intellectual Property, which grants protection for Belgium, the Netherlands and Luxembourg together, or as an EU trade mark or registered Community design with the EU Intellectual Property Office. A registration can be revoked if the mark has not been genuinely used within five years, so filing broadly and using narrowly carries its own risk.
Patents are granted nationally by Octrooicentrum Nederland or by the European Patent Office, and since June 2023 a European patent with unitary effect can be enforced centrally before the Unified Patent Court, which has a local division in The Hague. Copyright arises without registration, but ownership does not: work commissioned from a Dutch freelancer or agency stays with the maker unless it is transferred by a signed deed, because the statutory rule that gives the employer the copyright applies only to employees. Trade secrets are protected under the Wet bescherming bedrijfsgeheimen where the information is genuinely kept secret and reasonable protective measures are in place. Our guide to intellectual property law in the Netherlands explains the registrations and their terms.
Data protection, sector rules and marketing
The General Data Protection Regulation applies to any Dutch operation, and the Autoriteit Persoonsgegevens supervises it. A company established outside the EU that offers goods or services to people in the Netherlands or monitors their behaviour must designate a representative within the Union. Every business needs a lawful basis for each processing operation, a record of processing activities, and a written processing agreement with each supplier that processes data on its behalf. A personal data breach must be notified to the supervisory authority within seventy-two hours unless it is unlikely to present a risk.
Sector regulation is easy to overlook from abroad. Food and consumer products fall under the NVWA, financial services under the AFM and De Nederlandsche Bank, and competition and consumer enforcement under the ACM. Organisations in the sectors designated by the Cyberbeveiligingswet, in force since 15 August 2026 as the Dutch implementation of the NIS2 Directive, must register with the National Cyber Security Centre, take risk management measures and report a significant incident within twenty-four hours, with a fuller report within seventy-two hours. Consumer-facing marketing has its own rules on unfair commercial practices and disclosure, including for advertising through creators, which we set out in our article on the legal pitfalls of influencer marketing in the Netherlands. Our overview of compliance requirements shows how these regimes overlap.
Frequently asked questions
- Do I need a Dutch legal entity to do business in the Netherlands?
No. A foreign company may trade here through a registered branch. The difference is liability: with a branch the foreign entity itself is liable for everything done in the Netherlands, while a BV confines liability to the Dutch company. - What is the fastest way to start operations?
A branch is quicker because no notarial deed is required. Incorporating a BV involves a Dutch civil-law notary, whose identification and anti-money-laundering checks, together with opening a bank account, usually determine the timetable rather than the deed itself. - What are the main employment law risks for a foreign employer?
Continued payment of wages and reintegration during up to 104 weeks of sickness, the fact that dismissal requires either the employee agreement or permission from the UWV or the kantonrechter on a statutory ground, and the possible application of a universally binding collective labour agreement. - How do I protect my brand in the Netherlands?
There is no national Dutch trade mark. Register with the Benelux Office for Intellectual Property for Benelux protection, or file an EU trade mark. Designs follow the same route; patents go through Octrooicentrum Nederland or the European Patent Office. - Can I use my home-country contracts here?
Only after review. Dutch law contains mandatory rules for employment, commercial agency, consumer contracts and certain leases, and has its own requirements for the valid incorporation of general terms and conditions. - Must contracts be in Dutch?
No. Commercial contracts may be in English. Court proceedings are conducted in Dutch, with the exception of the Netherlands Commercial Court, which hears international commercial disputes in English where the parties have agreed to it. - Are there sector-specific rules I should check?
Almost certainly. Food and consumer products fall under the NVWA, financial services under the AFM and De Nederlandsche Bank, and cybersecurity obligations under the Cyberbeveiligingswet apply to designated sectors since 15 August 2026. - What should be arranged before the first employee starts?
Registration as an employer, a written contract meeting Dutch requirements, a check on any applicable collective agreement, occupational health support for sickness cases, and a pension arrangement where the sector obliges one.
How Law and More can help
Law and More advises foreign companies on establishing and running a business in the Netherlands: choosing between a branch and a BV, incorporation and governance, Dutch employment documentation and dismissal files, contracts and general terms, intellectual property and regulatory compliance, and litigation before the Dutch courts. We work in Dutch and in English. If you would like your Dutch structure or your contracts reviewed, please contact us.
