A Dutch BV (besloten vennootschap, private limited company) comes into existence at the moment a Dutch civil-law notary executes the deed of incorporation. There is no minimum capital: one euro cent of issued share capital is enough. Registration in the Commercial Register at the Chamber of Commerce follows, and until that registration has been made the directors are jointly and severally liable alongside the company for acts performed in the meantime.
What determines whether the structure holds up is not the notary appointment itself but what you settle before it: who holds which shares, what the articles of association say, and whether there is a shareholders agreement. This article works through each step in order, the obligations that start running once the BV exists, and the mistakes that are expensive to repair.
When a BV is worth it, and when it is not
The comparison is with the sole proprietorship (eenmanszaak) and the general partnership (vennootschap onder firma), and it turns on liability, tax and, to a lesser extent, standing.
Liability
A sole proprietor has no separate legal personality: the business debts are personal debts, and creditors can reach the house, the savings and everything else. In a general partnership each partner is jointly and severally liable for the whole of the partnership debts, so a mistake by one partner reaches the private assets of the others. A BV is a separate legal person. The company incurs the obligations, and a shareholder risks only what has been paid up on the shares. That separation is real, but it is not absolute: a director who acts improperly can still be held personally liable, which is dealt with below.
Tax
A sole proprietor pays income tax on the profit and may qualify for entrepreneurial reliefs; a BV pays corporation tax on its profit and the director-shareholder pays income tax on salary and on dividend. The rates, brackets and reliefs on both sides are set annually in the Belastingplan and published by the Belastingdienst, and the profit level at which the BV becomes the cheaper form moves with them. That calculation is a matter for a tax adviser rather than a lawyer, and any figure quoted in a guide is out of date within the year. Take the advice before the deed is executed, because the structure is easier to design than to unwind.
Standing, and the case for waiting
Clients, banks and investors do read a legal form, and a BV signals permanence. Against that stand real obligations: annual accounts to be filed, a customary salary to be paid, bookkeeping to be kept to a standard, and the cost of the deed itself. For a business with modest turnover and little liability exposure those obligations can outweigh the advantages. The honest test is not a turnover figure but a question: what would it cost you personally if a claim landed tomorrow.
Step one: what to settle before you see the notary
Everything the notary records is easier to get right at the drafting stage than to amend afterwards, and an amendment of the articles needs a further notarial deed.
The name
Check the Commercial Register for an identical or confusingly similar trade name before you commit. The Handelsnaamwet prohibits a trade name that is liable to cause confusion with an existing one in the same market, and it prohibits a name that gives a misleading impression of the ownership or legal form of the business. A registration at the Chamber of Commerce gives you no monopoly; if the brand is central to the business, a Benelux trade mark registration is the instrument that does.
Shares and share structure
Decide who holds what, and be precise about the difference between economic entitlement and control. Since the Flex-BV reform the articles may create shares without voting rights and shares without profit entitlement, so a financier can be given value without a say, or a co-founder a vote without a dividend. Fifty-fifty ownership between two founders is the arrangement that generates the most disputes, because neither can carry a resolution and neither can dismiss the other.
A holding company above the operating company
Many founders incorporate a holding BV that holds the shares in an operating BV. The legal argument for it is risk separation: profits distributed up to the holding are no longer available to the creditors of the operating company, and the shares in the operating company can be sold without selling the holding. There are tax consequences on both sides of that structure and they belong with your tax adviser. The legal caveat is worth stating plainly: a distribution to the holding must survive the board distribution test, and transfers made when the operating company is already in difficulty can be set aside as prejudicial to creditors.
Draft articles of association
The articles are the constitution of the company: the name, the seat, the objects, the share capital, how directors are appointed and dismissed, how the general meeting takes decisions, and whether a transfer of shares needs the approval of the other shareholders. The default under Dutch law is a share transfer restriction requiring the shares to be offered to the co-shareholders first, and the articles may relax or tighten it. Have them drafted for your situation rather than taken from a template; the notary will execute what is put in front of him.
Step two: the notarial deed
What the notary does
The BV is incorporated by notarial deed executed before a Dutch civil-law notary, and the deed contains the articles of association. The notary verifies the identity of the founders, carries out the client investigation required of him under the anti-money-laundering legislation, and files the company for registration. The deed is in Dutch. You do not have to attend in person: it can be executed by a proxy given in writing, which is how most incorporations with foreign founders are done. See our guide to setting up a Dutch BV with foreign shareholders for that route.
Capital, and why one cent is not a good idea
The minimum capital of EUR 18,000 was abolished on 1 October 2012 with the Flex-BV legislation, and a BV can now be incorporated with a single share of one euro cent. That is a formality, not a plan. A company that is deliberately started with less capital than its own activities require exposes its directors to the charge that they contracted obligations they knew the company could not meet, which is the classic route to personal liability in tort. Every distribution out of the company is also subject to a board test: the board must refuse approval if it knows or ought to foresee that the company will not be able to continue paying its due debts, and directors who approve a distribution anyway can be required to make good the shortfall personally.
Contribution in cash or in kind
Capital can be paid up in cash or by contributing assets, from equipment and stock to intellectual property or an entire existing business. A contribution in kind must be described, and the founders bear the risk of an overvaluation. Converting a sole proprietorship into a BV can be done in a way that defers income tax or in a way that realises it; which is preferable depends on your figures and is a question for the tax adviser. Legally, the transfer is what matters: assets have to be transferred in the correct form, contracts move to the BV only with the cooperation of the counterparty, and if staff come across, the rules on transfer of undertaking apply and their terms of employment come with them.
What incorporation costs
Notary fees for an incorporation are not regulated and vary with the complexity of the structure, so ask two or three notaries for a fixed quotation that states exactly what is included: the deed, the articles, the filings, and whether a holding structure and a shareholders agreement are covered. The Chamber of Commerce charges a one-off registration fee, published on its own website. Quoting a range here would mislead you; asking for a written quotation will not.
Step three: registration in the Commercial Register
The BV exists from the moment of the deed, not from the moment of registration. That distinction is the source of a liability trap that catches founders every year, and it works in two directions.
Acts performed in the name of a company that has not yet been incorporated bind the person who performed them personally, unless and until the BV ratifies them after incorporation and can perform. Sign a lease or a supply contract for your BV in formation and the obligation is yours until the company adopts it. Our article on the BV in formation and pre-incorporation liability sets out how ratification works. In the other direction, from incorporation until registration is complete the directors are jointly and severally liable alongside the company for every legal act performed during that period. Registration therefore is not administrative housekeeping; it closes a window of personal exposure, and the notary normally files immediately.
What registration produces
The company receives a Chamber of Commerce number and an RSIN, the identification number used by the tax authorities for legal entities. The activities are recorded under SBI codes, which determine how the company appears in the register. Where the activities are subject to VAT, the Belastingdienst issues a VAT identification number separately. Ask for a register extract as soon as the entry is live: banks, landlords and counterparties will ask for it.
The UBO register, and who can actually see it
A BV must report its ultimate beneficial owners: anyone who directly or indirectly holds more than twenty-five per cent of the shares or the voting rights, or who otherwise exercises effective control. If no one meets the test, the statutory directors are registered as pseudo-UBOs. The reporting obligation itself is unchanged and is enforced as an economic offence, with the fine categories set in the Criminal Code and indexed periodically.
What has changed is access, and older guidance is wrong on this point. Following the Court of Justice judgment of 22 November 2022 the Dutch UBO register is no longer open to the general public. Access is now confined to designated categories: government authorities and investigative services, and institutions with obligations under the anti-money-laundering legislation such as banks, notaries, accountants and lawyers, each within their own access level. A regime giving access to persons and organisations with a legitimate interest, such as journalists and civil society organisations, follows from the European anti-money-laundering package adopted in 2024; the Dutch implementing decree has been laid before Parliament but is not yet in force. Until it is, you should assume your UBO data is visible to authorities and to obliged institutions, and not to the public.
Step four: the shareholders agreement
The articles of association are a public document. Anyone can obtain them from the Commercial Register, they must comply with company law, and they cannot sensibly contain everything two or three founders need to agree. The shareholders agreement is the private contract that fills the gap, and skipping it is the most expensive omission on this list.
A serious agreement deals with control and with exit. On control: which decisions need more than a simple majority, what happens when the shareholders deadlock, and what a shareholder may and may not do outside the company by way of competition or use of its information. On exit: whether shares may be transferred freely, whether the others have a right of first refusal, what happens to the shares of a founder who leaves, dies or becomes incapable, how the price is determined and by whom, and whether a majority selling the company can require the minority to sell as well and whether the minority can insist on joining that sale. Valuation is the clause most often left vague and most often litigated; name the method or the valuer, not merely a fair price.
The alternative to agreeing these things in advance is the statutory fallback, and it is slower and blunter. The statutory dispute regime allows a shareholder to be compelled to transfer shares or to have his shares taken over, and it was overhauled by the WAGEVOE with effect from 1 January 2025 to make those proceedings faster and to concentrate them. Beyond it lie inquiry proceedings before the Ondernemingskamer (Enterprise Chamber), which can suspend directors and appoint an interim manager. Both are real remedies, and both cost more than the agreement you did not draft. Our article on what a shareholders agreement must cover goes into the clauses in detail, and shareholder disputes in the Netherlands describes what happens when it comes to that.
Step five: the obligations that start once the BV exists
Separate the assets, and forget about piercing the veil
Dutch law has no general doctrine of piercing the corporate veil, and looking for one is a distraction. What Dutch law has is director liability, and it comes from three directions. Internally, a director who performs his task improperly is liable to the company. Externally, a director who enters into obligations on behalf of the company while knowing, or having every reason to know, that it will not be able to perform and will offer no recourse commits a tort in his own right. And in bankruptcy, the trustee can hold the board liable for the whole deficit where manifestly improper management was an important cause of the insolvency.
The last of those is where sloppy administration becomes dangerous. If the company has not kept proper books or has not filed its annual accounts on time, improper management is established as a matter of law and is presumed to have caused the insolvency, leaving the director to prove otherwise. Mixing private and company money is not a technical breach; it is the evidence on which such a case is built. Give the BV its own bank account, document every transaction between you and the company, and repay a current-account debt rather than letting it grow. Our article on when directors become personally liable sets out the case law.
The director-major shareholder and the management agreement
A director who holds a majority of the votes, or who together with close relatives can block his own dismissal, is not covered by the employee insurance schemes; a designation order sets out exactly when that is so. The relationship with the company is normally documented in a management agreement, frequently between the holding company and the operating company rather than with the individual, recording the duties, the fee, the notice period, liability, and what happens to intellectual property and confidential information on termination.
A statutory director is in a weaker position than an ordinary employee even where there is an employment contract. The general meeting can dismiss a statutory director at any time, and under Dutch case law that corporate dismissal in principle also ends the underlying employment, without preventive review by the UWV or the subdistrict court. That is one more reason to record the financial consequences of departure in advance.
The customary salary
A director-major shareholder must take a salary from the company that is customary for the work performed. The tax legislation sets the test: the salary must be at least the highest of the salary from the most comparable employment, the salary of the highest-paid employee of the company, and a statutory minimum amount that the Belastingdienst publishes each year. The efficiency margin that used to allow a discount on the comparable salary was abolished with effect from 1 January 2023, so guidance still quoting seventy-five per cent of a comparable salary is out of date. Paying too little invites an additional assessment; the calculation is one to make with the tax adviser and to revisit annually.
Bookkeeping and the annual accounts
The company must keep records from which its rights and obligations can be known at any time. The board draws up the annual accounts within five months of the end of the financial year, a period the general meeting can extend by up to five further months on special grounds; the general meeting then adopts them, and they must be filed with the Commercial Register within eight days of adoption and in any event no later than twelve months after the end of the financial year. Micro and small companies file a limited version. Late filing is an economic offence in its own right, and in a subsequent bankruptcy it triggers the presumption of improper management described above. That is the reason to treat the deadline as hard rather than indicative.
Director liability insurance
Cover for directors and officers pays the costs of defending a personal claim and, within its limits, the damages. It does not cover intent or fraud, and it does not substitute for keeping the books and filing on time. Read the exclusions and the run-off provisions before relying on it, particularly the position of a director who has resigned.
The mistakes that cost the most
Four recur often enough to be worth naming. The first is no shareholders agreement, or one downloaded and never adapted, which surfaces the moment two founders stop agreeing. The second is a structure chosen without thinking about the exit: a single operating BV held directly by two individuals is simple to incorporate and awkward to sell, split or refinance, and correcting it later means a share transfer with tax consequences. The third is treating the company account as a private one, which converts an ordinary business failure into a personal liability case. The fourth is instructing a lawyer only once something has gone wrong, when the drafting that would have prevented it is no longer available.
A fifth is quieter and just as damaging: letting the formal side lapse. Minutes of shareholder resolutions that were never written, an amendment to the articles that was agreed but never executed, a director who resigned but was never deregistered, a UBO entry that no longer reflects who controls the company. Each is trivial on its own and each becomes an argument against you in a dispute. Our overview of Dutch company risks to avoid collects the practical ones.
Frequently asked questions
What does it cost to establish a BV in the Netherlands?
Notary fees for an incorporation are not fixed by law and differ substantially between offices and between structures, so the only reliable answer is a written quotation. Ask for a fixed price that states whether it covers the deed and articles, the filings, a holding structure and a shareholders agreement, and whether the client investigation required under the anti-money-laundering rules is included. The Chamber of Commerce registration fee is a separate one-off charge, published on its own website.
Is there still a minimum capital for a BV?
No. The minimum of EUR 18,000 was abolished on 1 October 2012, and a BV can be incorporated with one share of one euro cent. The protection that the minimum used to provide has been replaced by liability rules: the board must test every distribution against the company ability to keep paying its debts, and directors who let the company trade on obligations it plainly cannot meet can be held personally liable. Fund the company for what it is actually going to do.
What is the difference between the articles of association and a shareholders agreement?
The articles are a public document, executed by notarial deed, filed with the Commercial Register and binding on the company and everyone who becomes a shareholder. The shareholders agreement is a private contract between the shareholders themselves, is not filed anywhere, and binds only its parties. Company law arrangements that must be effective against third parties belong in the articles; commercial arrangements between founders, valuation mechanics and non-competition belong in the agreement. Where the two conflict, the articles prevail as a matter of company law, which is why they should be drafted together.
Should I set up a holding company alongside the operating company?
It is not required. The legal case for it is that profits taken up to the holding are outside the reach of the operating company creditors and that the operating company can be sold on its own. The tax case is a separate question for a tax adviser, and it is usually the decisive one. Weigh both before the deed is executed, because inserting a holding afterwards involves a share transfer that has consequences of its own.
Can I convert my sole proprietorship into a BV?
Yes. The business is contributed to the BV, and there are two routes with different tax outcomes: one defers the income tax on the hidden reserves subject to conditions, the other realises it. Which suits you is a tax question. The legal work is separate and is often underestimated: assets must be transferred in the correct form, contracts pass to the BV only if the counterparty cooperates, permits and licences do not automatically follow, and where staff transfer with the business the rules on transfer of undertaking apply, so their existing terms of employment come across unchanged.
How long does it take?
The deed can be executed as soon as the notary holds the identification documents, has completed the client investigation and has articles both founders agree on. Preparation, not the appointment, is what takes time: settling the share structure and the shareholders agreement can run to several weeks where there is more than one founder. The company exists from the deed, and the notary files it for registration immediately.
Am I still personally liable as a director-major shareholder?
As a rule, no: the company bears its own obligations. The exceptions are what matter. A director can be liable to the company for improper performance of his task, to a creditor in tort for entering into obligations the company was never going to be able to meet, to the trustee in bankruptcy for the whole deficit where management was manifestly improper, and to the tax authorities for unpaid payroll tax and VAT where the inability to pay was not properly notified. Keeping the books, filing the accounts on time, reporting inability to pay promptly and documenting decisions is what keeps you on the right side of all four.
Building the company on a foundation that holds
Incorporating a BV is a single appointment; the structure around it is the part that decides how the company copes with growth, a dispute between founders, a departure or a sale. Most of what goes wrong later was decided, or left undecided, in the weeks before the deed.
Our corporate lawyers advise on the choice of legal form, draft articles of association and shareholders agreements, arrange the incorporation with the notary and act where a dispute between shareholders or a claim against a director arises. If you are considering a BV, or already have one that was set up without much thought, we are glad to look at it with you.
