In the Netherlands, the system of law is based on civil law.

In the Netherlands, there are company forms with and without corporate legal personality. The legal structures with corporate legal personality (Legal Entities) are:

1. The “Besloten Vennootschap” (BV), which is a private limited company with limited liability.
2. The “Naamloze Vennootschap” (NV), which is a public company with limited liability.
3. The “Foundation” (Stichting), which is a corporate entity, without any share capital, members or shareholders.
4. The “Coöperatie” (Cooperative), which is a special type of association that enters into specific agreements with and on behalf of its members. The Cooperative has no shareholders.

The structures without corporate legal personality are:

1. A partnership, whether general (“vennootschap onder firma” or “VOF”) or limited (“commanditaire vennootschap” or “CV”).

Foreign entities could register a Dutch branch office or register the foreign entity in the Netherlands with the Dutch Chamber of Commerce and start doing business through this office location. The branch office is not considered a separate legal entity but an extension of the ‘parent’ company. Alternatively, a foreign entity could incorporate a Dutch company and become a (sole) shareholder of such entity. There are no special restrictions for foreign-owned companies intending to start a business in The Netherlands.

NVs must have a minimum issued and paid-up capital of EUR 45,000. For BVs no minimum issued and paid-up capital is required, provided that at least one share is issued to a person or legal entity other than the BV or its subsidiaries. No capital requirements apply in principle to the other Legal Entities.

The Legal Entities are established by means of the execution of a notarial deed of incorporation before a Dutch Civil Law Notary. Partnerships (the structures without legal personality) could in principle be established by means of a private instrument. The BV is the most commonly used for professional investments by both domestic and foreign entrepreneurs.

Most of the Legal Entities are managed by a management board consisting of solely executive directors. A supervisory board could be installed and may be required in certain situations, for example when the entity qualifies as a large entity. The supervisory board is tasked with supervising and providing advice to the management board. Alternatively, a one-tier board can be installed consisting of both executive and non-executive board members.

a. All Legal Entities must have at least one director. From a legal point of view there is no requirement for a director to be based in the Netherlands or to have a Dutch nationality.

In general, directors (a private individual or a legal entity, either foreign or Dutch) are appointed by the general meeting of shareholders or members. Unless disqualified as director/representative by the court, every individual/legal entity is appointable to act as representative/director of a company.

The articles of association may contain additional requirements or restrictions regarding the right of directors to (solely) represent the company (for example joint authorization or directors with a specific title).

b. There are no requirements for a shareholder to be a resident in the Netherlands or to have Dutch nationality. Both a private individual and a legal entity can act as shareholder.

The articles of association may contain specific requirements or restrictions for (potential) shareholders.

Unless otherwise stipulated in the articles of association, an entity or establishment is free to expand business operations in the Netherlands through distributors, agents or resellers.

The Dutch Corporate Governance Code (also: Code) is the most dominant governance code and applies to – briefly put – listed entities. The Code was last revised in 2025.

The Code sets out general principles, which are considered as reflecting widespread views on good corporate governance. These principles are each followed by and supplemented with specific best practice provisions. Together, the principles and best practice provisions aim to define responsibilities for

• long-term value creation
  The management board is responsible for the continuity of the company and its affiliated enterprise. The Code emphasizes the relevance of the management board to focus on long-term value creation for the company and to consider the stakeholder interests that are relevant in this context.
• Effective management and supervision
  The Code aims to strengthen the checks and balances between the management board and the supervisory board with provisions related to effective corporate governance and independent supervision.
• Remuneration
  Pursuant to the Code, the remuneration policy applicable to management board members should be clear and understandable, should focus on long-term value creation for the company and its affiliated enterprise, and consider the internal pay ratios.
• The general meeting
  The general meeting should be able to exert such influence on the policies of the management board and the supervisory board of the company that it plays a fully-fledged role in the system of checks and balances in the company. Good corporate governance requires such level of participation of the general meeting.Compliance with the Code is based on the “comply or explain” principle. Listed entities are obliged to comply with each principle and provision of the Code but may deviate therefrom. In case of a deviation, the entity in question must explain, in a separate chapter of its management report, the extent to which it did not comply with any principles and best practice provisions during the relevant financial year.

The updated Code, which entered into force on 1 January 2025, includes guidelines regarding the management report on the effectiveness of internal risk management and control systems. The internal audit function must assess the design and operational effectiveness of the internal risk management and control systems and the management board, which is responsible for the internal audit function, should report on this.

There are several ways for a shareholder to provide the entity with working capital. The main options are 1) a shareholder’s cash contribution, 2) issuance of shares and 3) providing a loan.

Besides the shareholder/entity relation, the entity may consider a loan from another entity within the same group or from a third party. In addition to this, the company may opt for other alternatives such as the restructuring of debts and asset refinancing.

NVs and BVs can return proceeds to their shareholder(s) in several ways. For both NVs and BVs dividend distributions are subject to certain capital requirements (consisting of a balance sheet test and liquidity test). These capital requirements aim to avoid bankruptcy or harm to creditors.

By far the most common option is to distribute dividend to shareholders.

Dividend distributions – NV
The general meeting (of shareholders) of a NV can resolve to distribute the NV’s profits to its shareholders as a dividend only upon adoption of the annual accounts and only if the NV’s equity exceeds the amount of the issued share capital and the reserves required to be maintained by law and the articles of association.

An interim dividend is only allowed if (i) an interim dividend is specifically allowed by the NV’s articles of association; and (ii) the NV’s equity exceeds the amount of the issued share capital and the reserves required to be maintained by law and the articles of association. The NV’s equity in this regard should be calculated based on an interim balance sheet not older than the first day of the third month prior to the month when a resolution on interim dividend is adopted.

Dividend distributions – BV
The general meeting (of shareholders) of a BV can resolve to distribute the BV’s profits to its shareholders provided that the BV’s equity exceeds the amount of the reserves required to be maintained by law and the articles of association. A resolution of the general meeting in this regard will remain without any effect until the BV’s management board approves it, which approval must be withheld if the management board knows or should reasonably foresee that the company will not be able to continue the payment of its due and collectable debts following the distribution.

The entity may also execute share buybacks.

Repurchase of NV-shares
A NV is allowed to repurchase its own, fully paid-up, shares with or without consideration unless its articles of association exclude or limit such possibility. A transfer of NV shares requires a notarial deed of transfer, unless the shares are listed on a regulated stock exchange.

A repurchase of shares with consideration is only allowed if the NV’s equity, reduced by the acquisition price, is not less than the paid-up and called-up portion of the capital, increased by the reserves that must be maintained under the law or the articles of association. The NV’s equity in this regard shall be calculated on the basis of the last adopted balance sheet, reduced by (i) the acquisition price for shares, (ii) the amount of loans granted by the NV with a view of acquisition by a third party of shares in its capital, and (iii) (dividend) distributions to others that the company and its subsidiaries became liable for after the balance sheet date. If more than 6 months have passed since the end of a financial year without the annual accounts for that year having been adopted, no repurchase of shares is allowed.

Repurchase of BV-shares
A Dutch BV is allowed to repurchase its own, fully paid-up, shares with or without consideration unless its articles of association exclude or limit such possibility.

A repurchase of shares with consideration is only allowed if (i) the BV’s equity, reduced by the acquisition price for shares, is not less than the reserves the BV is required to maintain by law and the articles of association and (ii) the BV’s management board has approved the share buyback, where the management board must withhold approval when it knows or could reasonably foresee that following the share buyback, the BV will not be able to continue paying its due (and payable) debts. As opposed to the NV, Dutch law does not include any specific requirements regarding the balance sheet of the BV based on which its equity should be calculated.

Unless Dutch law or the articles of association of the BV or NV entail a greater majority, all decisions are adopted by a simple majority of the votes cast.

Specific voting requirements or percentage requirements for specific decisions may be included in the articles of association.

In principle, shareholders (or members) are not authorized to issue binding instructions to the management. However, the articles of association may stipulate that the managing board must act in accordance with the instructions of the general meeting. The managing board is not obliged to follow such instructions if such instructions are contrary to the interests of the company and its affiliated enterprise.

Dismissal procedure

See above under ‘Termination of the employment agreement’

Associated Cost

See above under ‘Statutory Redundancy Payment’

Collective dismissals

A collective dismissal implies the dismissal for business reasons of more than 20 employees (working in the same business area, with the dismissals taking place within a period of 3 months).

In case of a collective dismissal, the trade unions and UWV should be notified in time. The employer should submit a dismissal plan. After the notification, the employer should also notify the works council (if any). All aforementioned stakeholders should be able to have a substantial influence on the decision. Therefore, they should be involved in a very early stage of the process.

Trade unions

Under Dutch labour law, trade unions play an important role in the negotiation of collective bargaining agreements. Collective bargaining agreements have to be concluded between trade unions, as the employees’ representatives, and organizations that represent the employers or individual companies. The company can also be bound to a collective bargaining agreement if it is not represented by an employers’ organization but if the agreement is declared generally binding by the Dutch Minister of Social Affairs.

Collective bargaining agreements are customary in a large number of industries in the Netherlands and lead to additional rights and obligations to be observed by the employer. Whether or not a collective bargaining agreement is applicable depends, amongst other things, on the activities performed by the company and the individual employee.

The trade unions should be consulted with respect to collective dismissals (more than 20 dismissals). In that case also the UWV should be notified.

Works council

According to the Dutch Works Council Act, an employer must establish a works council if at least 50 employees work within the company. The works council has various rights to promote and protect the interests of employees. It must be given the opportunity to render advice with respect to various decisions to be taken by the company, before they can be implemented. Certain other decisions require prior consent of the works council before they can be implemented. The detailed requirements of the Works Council Act are beyond the scope of this guide.

In the event of a company which employs at least 10 and less than 50 persons, no works council has to be established. An employee representative body (personeelsvertegenwoordiging) can in that case be established. In case no employee representative body is established, the employer shall give the employees the opportunity of a meeting with an employer representative at least twice each calendar year. The level of rights and responsibilities of a certain representative body depends on the type of body as described above.

The Dutch Criminal Code (Wetboek van Strafrecht; “DCC”) criminalizes various forms of bribery and corruption, including the bribery of both public officials and private individuals. Corruption is not defined and is assimilated to the term bribery under the DCC. Key DCC provisions regarding anti-bribery and anti-corruption are: sections 177, 178 and 178a and 363, 364 and 364a DCC (which prohibit the bribery of public officials) and section 328ter and 328quater (which prohibit bribery in the private sector). These provisions apply to conduct that takes place both within the Netherlands (section 2 DCC), to acts committed abroad that have a significant link to the Netherlands (sections 3-6 DCC) and, under certain conditions, to acts committed abroad by Dutch nationals or residents (sections 7 and 8 DCC). The DCC thus has extraterritorial reach.

In addition to the DCC, the Netherlands is a signatory to several international anti-corruption conventions, including the OECD Anti-Bribery Convention, the United Nations Convention against Corruption (“UNCAC”) and the Council of Europe’s Criminal Law Convention on Corruption, which provide for international standards and cooperation in the fight against corruption.

The Dutch Public Prosecution Service (Openbaar Ministerie, “OM”) is responsible for the enforcement of the anti-bribery and -corruption laws and regulations. The OM follows specific instructions for the investigation and prosecution of bribery of public officials in the Netherlands, as laid down in the Instruction on the Investigation and Prosecution of Corruption of Public Officials in the Netherlands (Aanwijzing opsporing en vervolging ambtelijke corruptie in Nederland). Furthermore, the Instruction on the Investigation and Prosecution of Foreign Corruption (Aanwijzing opsporing en vervolging buitenlandse corruptie) sets out the factors involved in determining the appropriateness of prosecution of cases of foreign bribery of public officials.

The Economic Offenses Act (Wet op de Economische Delicten, “WED”) specifically contains provisions for administrative law measures and criminal penalties for economic offences. Non-compliance with the Anti-Money Laundering and Prevention of Terrorism Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, “Wwft”) and the Dutch Sanctions Act 1977 (Sanctiewet 1977, “Sw”) can have major consequences as it is an economic crime as referred to the WED (both acts will be further discussed under question 19). Management is at risk of being personally fined or criminally prosecuted for economic crime. For companies, criminal fines can amount to EUR 1,100,000 or 10% of the annual turnover (if the latter amount is higher) and/or a six year prison sentence or EUR 110,000 for management. In addition, breaches of the Wwft can also be sanctioned by the imposition of administrative law measures, such as fines.

There is no general obligation to report economic crimes to the relevant authorities under Dutch law. For the sake of completeness, the “Covered Institutions” as referred to under question 19 are obliged to report unusual transactions to the Dutch Financial Intelligence Unit Nederland (“FIU-Nederland”). Nevertheless, in case of suspicions of money laundering, there is a possibility to report these suspicions to the Fiscal Information and Investigation Service (Fiscale inlichtingen- en opsporingsdienst, “FIOD”), a Dutch government agency responsible for investigating financial crimes.

Dutch anti-money laundering and countering the financing of terrorism (“AML/CTF”) legislation can be divided into administrative law and criminal law. The Anti-Money Laundering and Prevention of Terrorism Financing Act (Wet ter voorkoming van witwassen en financieren van terrorisme, “Wwft”), in force since 2008, is the most well-known Dutch anti-money laundering statute. The Wwft is the Dutch implementation of various European anti-money laundering directives. In broad terms, the Wwft requires certain persons and institutions (“Covered Institutions”, see definition below) to (i) perform due diligence on their clients, (ii) monitor their transactions and (ii) notify any unusual transactions to the Dutch Financial Intelligence Unit Nederland (“FIU-Nederland”). Covered Institutions include financial institutions, professional service providers and financial service providers. For example, banks, life insurers, lawyers, accountants, public notaries, casinos, trust offices, crypto service providers and life insurance brokers.

Money laundering is also covered under the Dutch Criminal Code (Wetboek van Strafrecht; “DCC”), which applies to any natural or legal person that commits an offence in the Netherlands. In the event that a legal person commits an offence, the prosecution and penalties may be directed at the legal person, the instructing party or factual leader in respect of the offense, or both (section 51 DCC). Pursuant to section 420bis DCC, a person is guilty of committing a laundering offence where such person conceals an asset’s illicit origin or handles such assets knowingly. Section 420quater DCC penalizes culpable laundering. In short, a person is guilty of committing culpable laundering where such person conceals an asset’s nature, origin, or ownership, or deals with an asset, while he must reasonably suspect it to be of criminal origin.

Although not strictly speaking related to anti-money laundering, please be aware that various international economic and financial sanctions apply, which prohibit trading with certain parties, supplying certain goods (such as dual-use goods) or making financial resources available to parties in sanctioned countries. In the Netherlands, the key source of sanctions requirements is the Sanctions Act 1977 (Sanctiewet 1977, “Sw”). The Sanctions Act must be complied with by all legal entities that are active in the Netherlands.

In the upcoming years, the European AML/CFT regulatory framework will undergo a significant update with the introduction of the so-called AML package. This package entered into force in July 2024 and establishes a single, harmonized EU rulebook for AML/CFT. The package introduces significant changes as well as new requirements to the current AML/CFT framework. Financial institutions and other institutions that are subject to the (new) rules must update internal processes and embed an AML/CFT compliant culture. Most of the AML package rules are effective from 10 July 2027.

The AML package consists of three regulations and one directive:

• Regulation (EU) 2024/1624 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AML Regulation, “AMLR”). This regulation contains directly applicable AML/CFT rules for all Covered Institutions in scope (which scope has been expanded compared to previous AML/CFT laws). Among other topics, the AMLR regulates Client Due Diligence (“CDD”), including beneficial ownership transparency, the reporting of suspicious transactions, and it includes an EU-wide limit of 10,000 EUR to cash payments (the Dutch legislator has chosen for a lower threshold of 3,000 EUR, which already applies as per 1 January 2026). With AMLR, the Wwft will be replaced, incorporating only the provisions necessary to transpose AMLD6 (which is elaborated upon in the next bullet).
• Directive (EU) 2024/1640 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AML Directive 6, “AMLD6”). This directive must be transposed into the national laws of Member States, replacing Directive 2015/849 (AMLD5). Among other things, AMLD6 requires Member States to set up national central registers on beneficial ownership, as well as registers on bank account and real estate information and promotes closer cooperation and expanded powers for FIUs and supervisory authorities.
• Regulation (EU) 2024/1620 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA Regulation, “AMLAR”). This regulation establishes the new Anti-Money Laundering Authority (“AMLA”), based in Frankfurt, which strengthens coordination among (national supervisors and FIUs of) Member States and ensures consistent enforcement of AML rules across the EU. AMLA will directly supervise selected high-risk financial institutions.
• Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets (Transfer of Funds Regulation, “TFR”). This regulation includes revised rules on the information accompanying transfers of funds and certain crypto-assets to enable traceability in compliance with the so-called ‘travel rule’.

Yes, there are rules regulating supply chain compliance in the Netherlands, with the EU moving towards a comprehensive legal framework that incorporates principles similar to the French loi de vigilance and the UK Modern Slavery Act.

While the Dutch Child Labor Due Diligence Act (Wet zorgplicht kinderarbeid) was adopted in 2019, it has not (yet) fully entered into force, as the Dutch legislator has chosen to prioritize the implementation of broader European legislation: the Corporate Sustainability Due Diligence Directive (“CSDDD” or “CS3D”; Directive (EU) 2024/1760).

This EU directive entered into force on 25 July 2024 and is currently being transposed into Dutch law via the International Responsible Business Conduct Act (Wet Internationaal Verantwoord Ondernemen, “Wivo”). The aim of the CSDDD is to foster sustainable and responsible corporate behaviour in companies’ operations and across their global value chains. The new rules will require companies in scope to identify and address adverse impacts on human rights and the environment resulting from their activities, both within and outside Europe. EU member states have until 26 July 2028 to transpose the CSDDD into national law. Companies have to comply with the CSDDD from 26 July 2029 onwards.

Lastly, there is the EU Forced Labor Regulation (“FLR”; Regulation (EU) 2024/3015), which will apply from 14 December 2027, that prohibits products made with forced labour from the EU market. The ban applies to all products, whether imported or produced within the EU for domestic consumption or export.

The annual accounts comprise of:

• Management board report
• Financial statements, consisting of:
  – Balance sheet
  – Profit and loss account
  – Notes
• Other information

Consolidated financial statements, when required, are part of the annual accounts.

The management boards of Dutch companies are obliged to prepare annual accounts, generally within five months (for the NV and BV) or six months (for the cooperative, mutual guarantee association, commercial foundation and commercial association) after the end of the financial year. Extensions are allowed, provided that the annual accounts are adopted by the annual general meeting and filed at the Dutch Trade Register within 12 months after the lapse of a financial year.

Audit of annual accounts is only required for medium-sized and large companies (and IFRS financial statements regardless of its company size).

The exemptions for micro, small and medium-sized companies only apply if their annual accounts are prepared in accordance with Dutch generally accepted accounting principles (i.e. no IFRS).

An entity qualifies as a micro, small, medium-sized or large company respectively if it meets two or three of the following criteria on two consecutive balance sheet dates, without interruption afterwards on two consecutive balance sheet dates (applicable to financial years starting on or after 1 January 2024):

For the classification of the first and second financial year, the size of the entity calculated at the end of the first financial year is decisive. Please note that the quantitative size criteria may be subject to change (article 2:398-4 DCC) as it was during 2023.

Sustainability reporting

The European Commission published the Omnibus I simplification package in February 2025 with legislative proposals to simplify compliance for companies, including changes to the Corporate Sustainability Reporting Directive (CSRD). The CSRD revises the Non Financial Reporting Directive (NFRD) and sets EU requirements for sustainability reporting. After trilogue negotiations, the European Parliament adopted a provisional political agreement on 16 December 2025. The provisional agreement reduces the number of companies in scope of the CSRD and delays some reporting timelines; the changes become definitive once the final amending text is published in the Official Journal of the EU.

Under the original CSRD staged effective dates were set as follows:

• Financial year 2024 (accounting periods starting on or after 1 January 2024): large EU public interest entities (EU PIEs) in scope of Article 2:398–7 DCC with more than 500 employees (entities already within the NFRD scope); and large non EU entities with more than 500 employees listed on an EU regulated market.
• Financial year 2025 (accounting periods starting on or after 1 January 2025): other large EU entities (listed and unlisted) that exceed the thresholds in Article 2:397–1 DCC; and large non EU entities with fewer than 500 employees listed on an EU regulated market.
• Financial year 2026 (accounting periods starting on or after 1 January 2026): listed EU small and medium sized entities, EU small and non complex credit institutions, and captive insurance undertakings; and non EU small and medium sized entities listed on an EU regulated market (with a two year transitional period).
• Financial year 2028 (accounting periods starting on or after 1 January 2028): certain non EU entities that generate net revenue in the EU of more than EUR 150 million (group or individual level) and which have at least one large or listed EU subsidiary, or an EU branch, generating net revenue of more than EUR 40 million.
• The CSRD also requires limited assurance of reported sustainability information by an external auditor or an independent assurance provider; the Commission was to assess the feasibility of moving to reasonable assurance and to adopt any related standards under the deadlines set in the Directive.

Under the provisional agreement CSRD reporting obligations would apply to the following entities:

• Financial year 2027 (accounting periods starting on or after 1 January 2027):
  o EU entities: CSRD obligations would apply to EU undertakings or parent undertakings that, as of their balance sheet dates, exceed both EUR 450 million in net annual turnover and 1,000 employees on average during the financial year. The revised threshold is assessed on a single financial year.
  o Non EU issuers on EU regulated markets: non EU issuers listed on an EU regulated market would be in scope if, as of their balance sheet dates, they exceed both EUR 450 million in net annual turnover and 1,000 employees on average during the financial year. The revised threshold is assessed on a single financial year.
• Financial year 2028 (accounting periods starting on or after 1 January 2028):
  o Non EU groups: EU subsidiaries or branches of a non EU parent would be in scope where the group both (a) generates net turnover in the EU exceeding EUR 450 million at group level for each of the last two consecutive financial years, and (b) has at least one EU subsidiary or branch that generated more than EUR 200 million in net turnover in the preceding financial year.

Other elements of the provisional agreement (provisional):

• Member State discretion: Member States may exempt undertakings included in the original “wave 1” scope that fall outside the revised thresholds for reporting years 2025 and 2026. (“Wave 1” undertakings with between 500 and 1,000 employees or EUR 450 million or less net turnover.)
• Assurance standards: the provisional agreement postpones the Commission’s deadline for adopting limited assurance standards from 1 October 2026 to 1 July 2027 and removes the option to extend the limited assurance requirement to reasonable assurance.

The final amending text implementing the provisional agreement will be published in the Official Journal of the EU. Member States are to transpose the EU provisions into national law at the latest 12 months after that entry into force date (date to be confirmed). The precise legal effect and timing of application will depend on the final adopted text published in the Official Journal and on the timing and manner of national transposition.

Due to the quickly evolving nature of the laws and regulations related to sustainability reporting, it is advised to consult your advisor in order to get an up-to-date overview of the applicable reporting requirements

Books and records should be kept at the company’s address. These documents include the minutes of board meetings and shareholders meetings as well as the by-laws of the company and the company’s shareholders or members register.

Every financial year, it is essential to hold at least one shareholders’ meeting. The main agenda of this meeting is the discussion of the annual accounts, which are then submitted for approval to the shareholders. Additionally, the meeting serves as an avenue to decide on other critical matters, such as:

• The appointment and dismissal of directors;
• The remuneration policy for directors;
• Any amendments to the company statutes.

Companies and legal entities must register 1 or more UBOs. UBOs (Ultimate Beneficial Owners) are the owners or the persons who are in charge of a company. The UBO register helps to prevent financial and economic crimes such as money laundering, financing terrorism, tax fraud and corruption. The register makes it clear to whom money is sent. This way, people cannot hide any potential financial crimes behind a corporation.

An UBO is the owner or the person who is effectively in control of an organization:

Ultimate beneficial owners are for instance:

• persons who own more than 25% of shares of a company or legal entity, or
• persons who have more than 25% of voting rights of a company or legal entity, or
• persons who have more than 25% economic interest of a company or legal entity, or
• persons who are effectively in control of the company

If there is no person who qualifies as an UBO based on the abovementioned criteria, all members of the management board of the Dutch company must be registered as so-called Pseudo-UBOs.

Corporate income tax

Public and private companies pay corporate income tax on their profits. Special rules apply to companies that form a tax group and to companies that own 5% or more of another company.

Corporate income tax rates in 2026

The corporate income tax rate depends on the taxable amount. The taxable amount is the taxable profit in a year reduced by deductible losses.

• If the taxable amount is € 200,000 or less, the corporate income tax rate is 19%.
• If the taxable amount is more than € 200,000, the corporate income tax rate is € 38,000 plus 25,8% for the taxable amount exceeding € 200,000.

Taxation of international businesses

The government wants to avoid international businesses being taxed twice. The Netherlands has therefore concluded tax treaties with a large number of countries.

Resident taxpayers

All businesses that are incorporated under Dutch law or that are located in the Netherlands pay tax on their worldwide income in the Netherlands. Worldwide income includes income earned outside the Netherlands. However, it excludes income earned through foreign based permanent establishments.

Non-resident taxpayers

Non-resident businesses pay corporation tax in the Netherlands on:

• taxable profit from a Dutch business;
• taxable income from a substantial holding in a businesses located in the Netherlands;
• taxable profit from a business located in Aruba, Curaçao or St Maarten or a permanent establishment located in Bonaire, St Eustatius and Saba, subject to certain conditions.

Tax treaties

A tax treaty is an agreement between two countries laying down which of them may tax which income. One country will levy taxes and the other will provide a tax reduction or exemption.

A list of the countries with which the Netherlands has signed a tax treaty is available on the website of the Dutch tax authorities.

Pillar 2

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) has endorsed the two-pillar approach to international tax law.

Pillar Two introduces a global minimum tax of at least 15% for multinational groups with revenue exceeding EUR 750 million, ensuring entities to pay a minimum tax rate regardless of jurisdiction. The Netherlands has implemented Pillar Two in its legislation as per 2024.

APA/ATR policy

The Netherlands is in favour of Advance Pricing Agreements (APAs) and Advance Tax Rulings (ATRs). APAs and ATRs are binding agreements made with the Dutch Tax Authorities on the application of tax laws to international groups of companies.

APAs and ATRs provide foreign investors with assurance on how national and international tax rules will apply to them in the Netherlands. This avoids differences of interpretation in the future.

A reduced rate of up to 9% applies to activities covered by the innovation box. The innovation box provides tax relief to encourage innovative research. All profits earned from innovative activities in principle are taxed at this special rate.

Dividend tax

Companies can distribute some of their profits as dividend to their shareholders. Dividends are subject to tax. The general rate of dividend tax is 15% in the Netherlands.

Withholding and deduction of dividend tax

Dividend tax is withheld from the profit distributed to shareholders. Shareholders can deduct the withholding from the balance payable on their income tax or corporate tax returns. If a company receives a dividend on the shares it owns in another company it can deduct the dividend tax from the balance of its corporation tax payable. A private individual can deduct it from the balance of income tax payable.

Dividend tax exemption or refund

In some circumstances, a company may be entitled to partial or full exemption from dividend tax or to a dividend tax refund.

Withholding on interest, dividends and royalty payments

A conditional withholding tax may be levied on interest-, dividends- and royalty payments to affiliated entities based in low taxed jurisdictions or in cases of abuse. The general rate of withholding tax is in principle equal to the highest corporate income tax rate (i.e. 25.8%).

Transfer tax on immovable property

Acquisition of economic or legal ownership of immovable property in the Netherlands is subject to a 10.4% transfer tax over its market value.

No Stamp duties or capital tax is applicable in the Netherlands.

The Financial Supervision Act and the Public Takeover Bid Decree set out specific rules for Dutch listed companies that are the subject of a public offer. Certain rules in the Civil Code may also be important in relation to a transaction with a Dutch public company, for example:

• Shareholder approval is required for certain significant transactions;
• There are rules regarding (cross-border) legal (de)mergers;
• There are general corporate governance rules.

EU regulations may also be relevant in the context of a tender offer on a Dutch listed company. In particular, the following are important when making a public offer:

• Regulation (EU) 596/2014 on market abuse (Market Abuse Regulation).
• Regulation (EC) 139/2004 on the control of concentrations between undertakings (Merger Regulation).
• Regulation (EU) 2022/2560 on foreign subsidies.

The main regulatory body in The Netherlands regarding the public offer process is the Authority for the Financial Markets (‘AFM’). In addition to regulating the public offer process, the AFM may also be involved if the target company is regulated by the AFM because of the sector it operates in (for example, financial services).

In relation to Dutch public companies, the Dutch Corporate Governance Code (see no. 9 above) also discusses best practices in relation to takeovers. Other regulations that may be relevant in the context of a public offer for a Dutch public company are the:

• Competition Act.
• Works Council Act.
• Merger Code.

Other potentially relevant regulators include the:

• Netherlands Authority for Consumers and Markets (‘ACM’), and the European Commission (competition authorities).
• Dutch Central Bank (financial sector).
• Minister of Economic Affairs (energy sector)
• Healthcare Authority (healthcare sector).

There is a mandatory merger control regime which applies to “concentrations”. A concentration is defined in the Dutch Competition Act (‘DCA’) as:

• a merger of two or more previously independent undertakings;
• the acquisition of control by one or more undertaking(s) over the whole or parts of one or more other undertaking(s); and
• the creation of a joint venture that performs all the functions of an autonomous economic entity on a lasting basis.

The Netherlands Authority for Consumers and Markets (‘ACM’) must be notified of a potential concentration / merger if the following two (cumulative) thresholds are met:

• the merging businesses have a combined global annual turnover of at least EUR150 million; and
• at least two of the merging businesses each have an annual turnover of at least EUR30 million in the Netherlands.

There is a legal basis for the ACM to review below-threshold concentrations if the purchaser obtains a dominant position.

Different thresholds apply for mergers in the pension fund sectors.

The review process of merger control notifications under the DCA consists of two phases: the notification phase (Phase 1) and the license phase (Phase 2).

Phase 1 starts when the ACM receives the notification. During Phase 1, the ACM must decide within four weeks whether the transaction requires a license. If no license is required, the parties can execute the transaction. If the ACM decides that a license is required, the parties can apply for the license at their discretion and according to their own timetable. However, without a license the transaction cannot be implemented. Phase 2 is initiated with the submission of a license request. During Phase 2, the ACM will conduct a more in-depth analysis of the effects of the concentration. To obtain the necessary license, the undertakings concerned must provide more detailed information to the ACM. The ACM must decide on the license request within 13 weeks. On average, however, a Phase 2 procedure typically takes five to six months. If the ACM decides not to grant a license, the notifying parties are not allowed to execute the transaction.

Dutch case law supports that negotiating parties have the obligation to negotiate in good faith. Moreover, the principle of reasonableness and fairness applies to negotiating parties. Said principle requires, among other things, that if a party is contemplating breaking off the negotiations, such party has the obligation to respect the legitimate interests of the other party(ies), which may lead to pre-contractual liability depending on the stage of the negotiations and the legitimate expectations of the other party(ies).

The acquisition of the employer does not directly affect the employment contracts of the employees. In situations where a target company has a works council, such work council does have certain rights on the basis of the Works Council Act. In addition, there may be an obligation under an applicable collective labor agreement to consult with trade unions (on the social consequences of the acquisition).

The Works Council Act regulates the different forms of voluntary and mandatory employee representation within Dutch companies. A legal entity with 50 employees or more is legally required to establish a works council. A works council has different rights, such as:

• The right to be informed on certain types of decisions or on certain aspects of the company;
• The right to be consulted (i.e. right to render advice) in respect of certain types of economic and organizational decisions, such as (amongst others) major investments, the appointment or dismissal of a member of the management board, important changes in the organization of the company, restructurings affecting the company and the transfer of all or part of the company (such as a merger or asset sale). The consultation obligation could also apply if the respective decision is taken in a group context at a higher level (for example by the management of the parent company).
• A co-determination right (i.e. the right to consent) with respect to certain other types of decisions, e.g. important decisions in the social field, such as amendments to working hours, working conditions, bonus/incentive schemes or a job evaluation system.

With respect to consultation procedures, the works council has to be involved in an early stage, so that it can have a significant influence on the eventual decision to enter into the relevant transaction. If these procedures are not followed correctly, the company risks negative advice or advice under certain conditions from the works council, which could result in a delay in the decision-making process or even in litigation at the Enterprise Chamber.

Security screening

Under the Dutch Investments, Mergers and Acquisitions Security Screening Act (the Act) (Wet Veiligheidstoets Investeringen, Fusies en Overnames) there is a ground for the competent Dutch authorities to scrutinize potential investments in certain defined sectors. The Act is complementary to the existing sector-specific EU Regulation on Foreign Direct Investment Screening (Regulation 2019/452) for telecom, gas and electricity and introduces an ex ante and ex post screening mechanism for the Dutch government regarding investment activities that may pose a risk to national security interests.

Scope

The Act applies to acquisition activities through which a potential buyer may acquire control over a target company active in the following sectors: (a) vital providers, (b) an operator of a high-tech campus or (c) companies active in the field of (very) sensitive technology.

Vital providers are companies that are active in the fields of: heat transport, nuclear energy, air transport, management of business campuses, port areas, banking, infrastructure for the financial market, recoverable energy or gas storage. Operators of high-tech campus areas are often entities responsible for the security and infrastructure of campuses with unique research facilities. Examples of (very) sensitive technology are dual-use technologies, robotics, quantum computing, biotechnology and semiconductors. Additional categories for both vital providers and companies active in the field of (very) sensitive technology may be designated by the Minister of Economic Affairs and Climate. The minister has issued a proposal to expand the categories of very sensitive technology with inter alia the following sectors: AI, advanced materials, nanotechnology and sensor technology.

Procedure

Under the Act, vital providers, companies with sensitive technology and campus operators must report acquisition activities to the Investment Review Agency (BTI) of the Ministry of Economic Affairs and Climate. After reporting to the BTI, the BTI assesses whether the envisaged transaction may pose a risk to national security.

If, according to the BTI, an acquisition activity leads to a risk of national security on the basis of the assessment, the Minister decides whether a further investment assessment is necessary. The Minister can decide that an acquisition activity is permitted if certain requirements or further regulations are met. If the Minister decides that an acquisition activity leads to a risk to national security that cannot be sufficiently limited by requirements or regulations, the Minister can prohibit such acquisition activity.

Sector specific approvals

Several sector-specific restrictions and approvals apply in the Netherlands in which the designated Minister is granted the power to prohibit acquisitions of or the exercise of predominant control over a Dutch target company active in that specific sector. The Act is not applicable if the transaction is already subject to national sector-specific security tests. Examples of such restrictions/approvals are laid out in the Telecommunications Act, the Electricity Act 1998, the Gas Act and the Financial Supervision Act.

No.

The most common method to wind up a BV or NV is by means of a voluntary dissolution and liquidation. The general meeting of shareholders can resolve to dissolve a company at any time. Upon dissolution, an entity continues to exist for the purposes of liquidating its assets. The liquidation and settlement of all debts is carried out by a liquidator appointed by the general meeting. It is a common practice in the Netherlands that the (former) board member(s) continue acting as liquidator(s).

The liquidation procedure requires (i) a filing of the liquidation accounts and distribution plan with the Dutch trade register, (ii) announcement in a daily newspaper and (iii) expiration of a two-months creditors’ opposition period during which any creditor may oppose the liquidation by filing a petition with a local court. The liquidation cannot be completed until a creditor’s opposition is resolved or lifted.

Any positive liquidation surplus available upon settlement of all known debts shall be distributed to the shareholder(s) in conformity with the articles of association. If upon dissolution a liquidator is confronted with a negative liquidation surplus, he must file for bankruptcy unless all known creditors reach an agreement to proceed with liquidation outside the bankruptcy process.

An entity ceases to exist and can be deregistered from the Dutch trade register as from the moment it ceases to hold any asset.

If there are no assets or capital left in an entity, an entity may opt for the fast-track liquidation method. With this method, only a resolution of the general meeting of shareholders resolving on the dissolution is required to dissolve the entity. The resolution dissolves the legal entity with immediate effect. It must be noted that the fast-track liquidation is not without risks. A creditor can demand payment through court if it turns out afterwards that there are outstanding debts. As a result, shareholders are personally liable as the legal entity has been dissolved.

In connection to this fast-track liquidation method, the Temporary Transparency Turboliquidation Act (Act) has entered into force in July 2023, which poses additional obligations for BVs and NVs that intend to use such fast-track liquidation method. The Act takes effect for two years with the possibility of an extension.