What is a BV? And what are the benefits of this legal structure.
A BV (Besloten Vennootschap) is the Dutch equivalent of a limited liability company (S.L. in Spain or LLC in Anglo-Saxon countries). The term “besloten” means “closed” or “private,” reflecting the nature of this entity: a private company with shares that are not publicly traded.
This legal form is, by far, the most popular among foreign and local entrepreneurs who wish to establish a serious business in Dutch territory.
Main advantages of establishing a BV in the Netherlands
1. True limited liability
Perhaps the most important advantage: your personal liability is limited to the capital you have invested in the company. This means that, in case of financial difficulties, your personal assets are protected. In a business world as unpredictable as today’s, this protection is invaluable.
2. Credibility and professional prestige
Dutch companies, especially BVs, enjoy an excellent international reputation. For clients, suppliers, and business partners, a BV conveys seriousness, stability, and commitment to your business project. It’s a clear signal that you’re not improvising.
3. Flexibility in capital structure
Since 2012, with the “Flex BV” law, capital requirements have been significantly reduced. You no longer need the €18,000 that was previously mandatory, and can even start with a symbolic €1. This has greatly democratized access to this legal form.
4. Substantial tax advantages
The Netherlands offers one of the most attractive tax regimes in Europe for companies, including:
- Competitive corporate tax rate (15% for the first €395,000 of profits and 25.8% for the rest)
- Extensive network of treaties to avoid double taxation
- The famous “participation exemption” that exempts from taxes dividends and capital gains derived from qualified participations
- The “innovation box” with a reduced rate of 9% for income derived from patented innovation
5. Ease of attracting investment
The structure of a BV facilitates the entry of investors through the issuance of different types of shares with different rights. This allows you to maintain control while obtaining the necessary financing to grow.
Why do so many entrepreneurs choose a BV?
The question might rather be: why not? The most common reasons we hear from our clients are:
- International projection: A BV functions as an excellent platform to operate throughout Europe and beyond.
- Long-term planning: For projects with a vocation for permanence and growth, the BV offers the ideal legal structure.
- Clear separation between personal and business finances: Fundamental for professional and transparent management.
- Ease of transferring or selling the business: The share structure simplifies these operations compared to other legal forms.
- Stable business environment: The Netherlands provides a predictable legal framework and an efficient judicial system, which reduces long-term uncertainty.
Practical considerations
Forming a BV is relatively simple but requires certain formal steps: preparation of articles of association by a Dutch notary, registration with the Chamber of Commerce (KVK), and obtaining a tax number.
The process can be completed in approximately one week, although it is advisable to have specialized advice to optimize the structure from the beginning.
Conclusion
The Dutch BV represents much more than a simple legal form: it is a strategic tool that combines personal protection, tax advantages, and international prestige. If you are seriously thinking about developing a business in Europe with growth prospects, few options offer so many advantages in a single package.
Each business situation is unique, so we recommend contacting specialists who can analyze your particular case and help you determine if the BV is the best option for your specific objectives.