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2012.06.18 - Netherlands: Simplification of incorporation and ongoing maintenance procedures for BV companies.


Netherlands: On 12th June 2012, the Senate adopted the amendments proposed to simplify the corporate legislation of the Netherlands, and consequently to make the country more attractive for investment purposes. The relevant regulations Wet Vereenvoudiging en Flexibilisering BV-recht were enacted.

The new regulations will take effect on 1st October 2012, and are aimed at simplifying the incorporation procedures for private companies with limited liability being the BV (Besloten Venoоtschap met Beperkte Aansprakelijkheid).

As far back as 2003, the Ministry proposed such simplification which defined the resulting entities as Flex BV.

The amendments provide for the following:

  1. The requirement for mandatory deposit of the authorised capital for the company incorporation (being EUR 18,000) has been abolished.
  2. As a result, the requirement that a confirmation bank statement (or the auditor’s report on the value of the contributed property, where the authorised capital is covered by means of non-financial assets) be submitted before a BV incorporation has been abolished.
  3. The authorised capital may be denominated either in EUR or in other currencies.
  4. Broader possibilities are provided for shareholder registration (for example, from now on shares may be issued without voting rights and/or without the right to receive dividends). Share transfer restrictions (blokkeringsregeling) in the articles of association will no longer be mandatory but such restrictions may be set voluntarily by the decision of the shareholders.

For existing BV companies, these changes may result in preferred corrections in the text of their existing articles of association.

International Overseas Services comments:

These legislative changes are likely to make the Netherlands a more attractive jurisdiction for the incorporation of holding companies.

For many years, several European jurisdictions have competed for the status of the best holding company regime and have accordingly attracted additional investment into the country. Simultaneously, it is important to take into consideration that incorporation of the company in a specific country does not automatically mean that benefits of the holding regime will be received. In determining the benefits, the EU states pay increasing attention to the actual economic existence (Substance) of the company to prevent a situation where the relevant legal entity is not an operating business, but rather a ‘conduit’ instrument that receives dividends and immediately transfers them onwards on favourable terms.

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