Start a trading company in the Netherlands for EU import
Do you wish to export goods to the EU or maybe export from the EU? The Netherlands offers excellent conditions for trading activities. Due to its geographical advantages and ideal infrastructure facilities such as ports and airports, the Netherlands is one of the main trading locations in the European Union. This is why many import/export companies choose Netherlands to establish their company.
It can be very attractive to opening a Dutch business. The Netherlands and its neighboring countries Belgium and Germany count a large number of powerful consumers. Your business can not only service these countries. You can use the Netherlands as a stepping stone for import for all member states.
Read more on company formation in the Netherlands here.
Is there a license required for a Dutch trading company?
Depending which kind of goods you are trading with, there are special rules and regulations that apply when importing and/or exporting controlled goods from or to the Netherlands.
Opening of a warehouse, branch or subsidiary in the Netherlands?
In order to set up a trading company in the Netherlands, you can choose either to open a Dutch branch of your company or to register a company. Registering a branch might be easier in terms of initial paperwork and procedures. Starting a company can be more convenient in terms of potential liabilities.
In case you intend to establish presence in the EU/Dutch market, a warehouse in the Netherlands could be the right choice for you. This way you will be able to import/export goods from/to the Netherlands easier.
If your only need consists of storing goods in the Netherlands for its distribution, you may want to rent a warehouse space. Such facilities are commonly offered near ports and airports, where there are also distribution centers and logistics facilities.
This does not constitute a legal independent entity, and therefore, the head office of your company will remain liable for any expenses and damages that you may incur, for instance, during the transportation of the goods from and to the warehouse.
You must register a Dutch branch office of your company with the business register of the Chamber of Commerce. If you establish a branch of your company in the Netherlands, this does not create a legal entity itself. Which means that the branch will be dependent from the main office. Usually a branch office only executes a limited number of processes.
Previously, a branch office was more tax-efficient in connection with the set off of costs. This advantage over the subsidiary no longer exists. The accounting will consist of a branch annual report. In addition, the annual accounts of the head office will contain the figures of the branch.
If your intention is to open a fully operational Dutch entity, then you may want to start a subsidiary in the Netherlands. This means that the subsidiary will be an independent legal entity from the parent company, carrying with it all liabilities and responsibility of any company in the Netherlands.
For doing this, you will need to register the subsidiary as a new company at the business register. The subsidiary does not need to have the same legal form as the parent company.
If you open a private limited liability company (B.V.), a cooperative or foundation that operates as a business, you will need to file VAT returns and corporate tax returns. You will also need to file publication accounts with the business register.
Which legal form for your trading company in the Netherlands?
Most entrepreneurs decide to open a BV (besloten vennnootschap) for the trading activities. It is a populair legal form with limited liability. A BV can be used for all kind of trading activities.
Creating a new independent subsidiary in the Netherlands has certain advantages. Such as administrative simplicity as there is no need for incorporating figures from a branch in the overall records.
At opening of a Dutch bank business account, it is relatively easy if you have a company registered in the Netherlands with a Dutch legal form. A branch will lead to additional question and possibly a refusal of the bank account opening request.
When dealing with the tax authorities office for VAT and corporate tax, it is easier to have a standalone company. Communicating with one tax administration in a single country is simpler than two administrations located in different jurisdictions.
Of course, it is always advised to draw up a business plan which summarises your needs and to consult a Dutch legal and business advisor who is specialized in these matters and can help you in making the right choice for you.
VAT treatment for importing goods into the EU
The Netherlands has a very attractive VAT regime. Once your business has been registered, a Dutch VAT number and EORI number can be requested. The VAT number is required to file VAT returns. An EORI number to be able to import into the EU and to export out of the EU.
Before Great Britain left the EU, the UK was often used for bringing goods from all over the world into the EU. Since the Brexit, UK based trading companies have to import their products for a second time to be deliver goods to clients in the EU. This can be a burdensome task. In particular if your business sells a large number of different products.
More and more British based companies therefore decide to start a second business hub in the Netherlands. The Netherlands is a country that qualifies well to facilitate the import of goods. You do not need much more than to set up a company in the Netherlands, a registered address and a warehouse. The warehousing and logistical aspects can all be arranged by third parties.
Note that a permanent establishment will be required to obtain a Dutch VAT and EORI number which ensures an easy access to the EU. Import into the EU via the Netherlands is even more attractive under the ‘article 23 license’. The facility can defer Dutch VAT from the moment of passing the customs to the moment of the VAT filing.
In case you import goods from outside the EU, you will need to pay taxes at the Dutch Customs office, and the sum will depend on the country of origin and the type of goods that are being imported.
Within the EU there is free movement of goods, which is highly convenient if you are planning to deliver goods to customers located within the EU, who will not have to pay import taxes, but will need to pay local VAT tax instead of the VAT of the Netherlands.
Also your VAT rate (BTW) would be 0%, if you deliver goods to corporate clients in a EU country. Though it is always recommended to check requirements of the country of destiny.
In order to use the 0% VAT rate, you will need to fulfill two basic requirements. The first is making sure that your customer is in possession of a valid VAT number; and the second is that you can prove that the goods have been transported to the destination country inside the EU, for example, through a transport document
Read more on a Dutch VAT number here
Read more on a Dutch EORI number here.