The Netherlands offers multiple legal entity types, and choosing the wrong one can create tax issues, liability risks, or unnecessary restructuring later.

Many founders assume “a company is a company.” In reality, Dutch company structures are very different from each other. The liability rules change. The tax treatment changes. Even how banks and investors evaluate your business changes depending on the structure you choose.

If you are setting up a business in the Netherlands as a foreign entrepreneur, this decision becomes even more important. Some structures are designed for local freelancers. Others are meant for large corporations. And some — especially the Dutch BV — are built in a way that supports international growth and investor participation.

We regularly see founders rush into incorporation without understanding the long-term impact. Later, they realize they chose the wrong structure and need to restructure — which costs time, money, and sometimes additional tax.

At FirmNL, we always begin with structure clarity before incorporation. Because the right foundation makes everything easier: compliance, banking, taxation, and scaling across the EU.

Overview: Main Types of Companies in the Netherlands

Although the Netherlands offers a variety of legal entity forms, not all of them are appropriate for international business owners.

Certain arrangements are straightforward and made for small, neighborhood companies. Others are more structured and designed for worldwide operations, scalability, and investment. Generally speaking, liability, capital needs, tax treatment, and flexibility are the main distinctions amongst Dutch business forms.

In actuality, the Dutch BV is chosen by most international founders. But before you make a choice, it's critical to comprehend all of your possibilities.

An outline of the primary business categories in the Netherlands is provided below.

Main Legal Entities in the Netherlands

As you can see, not every structure provides liability protection. Not every structure is suitable for international operations.

For most foreign entrepreneurs entering the Netherlands, the real comparison usually comes down to:

• BV vs NV
• BV vs Sole Proprietorship
• BV vs Partnership structures

Dutch BV (Besloten Vennootschap)

A BV, established in a legal sense with me being recognized as an owner of a business in the name of the Dutch company, is the head of the structure.

A BV is, to put it simply, a distinct legal entity. That means the company is legally independent from you as an individual. If the company has debts or legal issues, your personal assets are generally protected. This limited liability protection is the main reason most international founders choose this structure.

A Dutch BV also offers flexibility. It can have:

• One shareholder or multiple shareholders
• Individual or corporate shareholders
• Foreign directors
• Holding and operating structures
  

Unlike some countries, the Netherlands does not require a high amount of capital to start a BV. Even startups can access it because the minimum share capital is only €0.01.

A BV must pay corporate income tax on its profits in terms of taxes. Dividends paid to shareholders are subject to different taxes. For many foreign founders, this form is more tax-efficient than operating as an individual.

The Dutch BV is commonly used for:

• E-commerce and import/export businesses
• Consulting and service companies
• Holding structures for international investments
• Technology startups
• EU market entry vehicles
  

Another advantage is credibility. Banks, suppliers, and investors in Europe prefer business partnerships, which are known as BV,s instead of informal business structures that include sole proprietorships.

Also Checkout: How long does it take to set up a Dutch BV?

NV (Naamloze Vennootschap)

A BV is different from an NV which functions as a distinct legal entity in the Netherlands. 

The NV structure serves as the primary business model for large enterprises that plan to raise substantial capital and eventually trade their shares on public markets. An NV must have a minimum share capital of €45,000 at incorporation, in contrast to a Dutch BV.

Just like a BV, an NV offers limited liability. The company exists as a separate legal entity which protects shareholders from facing personal liability for its financial commitments. The structure becomes more formal with increased requirements for organizational control that must be followed according to established rules.

The NV is typically used for:

• Large corporations
• Businesses planning public share offerings
• Companies seeking substantial external investors
• Multinational corporate structures

For most foreign entrepreneurs and startups, an NV is simply not necessary. It is felt that can generally be observed due to its inefficiency in SMBs and the need for capital and corporate formalities.

Sole Proprietorship (Eenmanszaak)

In the Netherlands, a sole proprietorship, or Eenmanszaak in Dutch, is the most basic type of business organization.

It is easy to register and doesn't require a notary. There is no minimum capital requirement, and you can register immediately with the Dutch Chamber of Commerce. For this reason, this form is popular among small service providers and independent contractors in the area.

However, there is one major drawback.

There is no legal distinction between you and your company when you have an Eenmanszaak. This implies that all debts, commitments, and legal claims are your own responsibility. Your personal assets may be impacted if the company is unable to pay its debts.

VOF & CV – Partnership Structures in the Netherlands

The Netherlands provides partnership options that include VOF and CV as sole proprietorship and BV serve as its business forms. 

Business partnership structures operate as the default choice for two or more individuals who wish to establish a joint enterprise.

VOF (General Partnership)

A VOF is a general partnership where two or more partners jointly operate a business. It is relatively simple to register and does not require minimum capital.

However, there is a serious point to understand.

In a VOF:

• All partners are personally liable
• Liability is joint and several
• One partner’s mistake can legally affect the others
  

This implies that each partner may be held personally liable for the entire debt of the company, not just their portion.

This could be doable for small enterprises in the area. This degree of risk is often not recommended for foreign business owners entering a new market.

Stichting (Foundation) & Vereniging (Association)

Non-commercial legal structures like the Vereniging (Association) and the Stichting (Foundation) are also available in the Netherlands. These are not based on shareholders, which sets them apart from partnerships or BVs.

Stichting (Foundation)

A Stichting does not have owners or shareholders. Instead, it is managed by a board. It is commonly used for:

• Non-profit organizations
• Charity initiatives
• Asset holding structures
• Investment holding layers in corporate groups
  

One interesting aspect is that a Stichting can sometimes be used in holding structures for asset protection or governance separation. However, it cannot distribute profits to founders like a BV can.

For foreign entrepreneurs building a commercial business, a Stichting is usually not the primary operating entity. It is not suitable for daily trading, howeve,r it can be utilized as a holding layer.

Vereniging (Association)

A Vereniging is a membership-based organization. It is typically used for:

• Clubs
• Sports associations
• Community organizations
• Professional groups
  

It is not designed for profit-making commercial activities. Although associations are able to make money, members cannot receive a portion of the earnings.

This form often isn't appropriate for foreign founders who want to scale throughout Europe, trade, or sell goods.

Comparison Table: Which Company Structure Is Right for You?

Choosing the correct structure from the beginning saves time, tax restructuring, and legal complications later.

FirmNL always evaluate your business model first before recommending a structure. Because the right legal entity affects:

Final Thoughts: Structure First, Incorporate Second

The Netherlands offers one of the most attractive business environments in Europe.
But the flexibility of its legal system means you must choose carefully.

The right structure:

• Protects your personal assets
• Optimizes your tax position
• Supports international operations
• Builds credibility with banks and partners
• Allows future growth and investment

In many cases, the Dutch BV provides the ideal balance of flexibility, protection, and scalability for foreign entrepreneurs — but it should always be evaluated in the context of your specific business model.

‍