Establishing a public limited company

Unlike the incorporation of a Dutch private limited company (in Dutch: besloten vennootschap, BV), for which no minimum capital is required, the incorporation of an NV is subject to a minimum capital of €45,000.

Many entrepreneurs choose to set up not just one but two companies, namely a holding company and an operating company. This has several advantages. Fiscally, the main advantage is that this allows you to make use of the so-called ‘holding exemption’ from corporation tax. Everything the operating company pays out to the holding company is untaxed. Only if you choose to distribute profits to yourself privately from your holding company, the distribution is taxed (with income tax, in box 2). This immediately illustrates the other major advantage of a holding-operating company structure: risk spreading. Everything you ‘hoard’ in the operating company is available to its creditors. With a holding company, you can distribute the surplus liquid funds to it and thus ensure that these funds are not exposed to the risk of the business without incurring taxation. A sale of (part of) the shares in the operating company is also tax-free: after all, the holding company holds the shares that are sold, and the profit generated by the holding company from that sale remains untaxed under that same holding exemption.