Netherlands

How to open a branch in the Netherlands

  • The branch is an extension of a foreign company on a chosen market. In the Netherlands, this can be a preferred method of doing business, instead of incorporating a limited liability company. The article talks about how to open a branch in the Netherlands as well as the main characteristics of this type of legal business form.

    The branch office in the Netherlands

    Opening a branch is one of the ways in which a foreign company can enter the Dutch market. This business type is suited primarily to financial institutions, namely banks, however, it can be the legal entity of choice for any international company looking to operate in the Netherlands.

    An important particularity of the branch is that it is fully dependent on the foreign company. It is not a separate Dutch legal entity like the subsidiary. Instead, the parent company abroad is liable for its debts and obligations incurred in the Netherlands.

    Requirements for the Dutch branch office

    Although the general requirements for registration and management are lighter in case of a branch compared to a newly formed public or private limited company, the branch still need to go through a registration phase. This is done at the Dutch Chambers of Commerce and once the registration is complete, the tax authorities are also notified and the branch is registered for tax purposes, including VAT in the Netherlands. Additional registration with the social security office is required for the purpose of hiring employees.

    The foreign company will need to provide adequate documents for branch registration, including but not limited to its Articles of Association, the decision to start a branch and the appointed branch representative in the Netherlands.

    The branch is subject to the same corporate income tax in the Netherlands. However, the double tax treaties signed between the Netherlands and the foreign company’s country of residence will determine the taxation rules for each jurisdiction.

    Investors who choose to open a Dutch branch are advised to seek proper advice from local company formation experts or tax specialists, as needed. Opening a branch in the Netherlands can be the first step for company expansion and advancement.