During a very uncertain and nerve-wracking Brexit episode, many elements got caught up in a whirlwind of hasty last-minute decisions. In an 11th hour masterstroke, Britain managed to succeed in negotiating a series of exit deals with the EU. And while these deals were certainly finalized, nobody knew how they’d impact trade, economies, and the real world.
Soon after these developments came to light, it quickly became evident that imports into the EU would now prove to be a very challenging and tedious task for British companies due to new administrative and transport regulations.
This has, of course, caused concern and frustration to skyrocket among traders, businesses, and entrepreneurs who relied on imports into the EU. As a result, establishments are now scrambling to look for alternatives.
In an attempt to mitigate this issue, more than 700 British companies, especially ones with product production based in Asia, have already started making arrangements to establish a branch office or representative entity in the EU region.
The Netherlands seems to be a popular destination for establishing a new hub among these companies, and rightly so, due to its strategic location, logistical sophistication, UK proximity, and a seemingly non-existent language barrier.
Robert Bron of ABiLiTieS, a seasoned professional in company establishment in the Netherlands, attests to the fact that his firm has assisted about 40 British companies in establishing a Dutch company or registering branch offices. We talked to him about his experience with setting up new businesses and what UK entrepreneurs should keep an eye out for.
Should you set up a Dutch branch or company?
Robert says that entrepreneurs are often split between the 2 avenues when it comes to choosing between a branch or company. The differences between the two are not very stark. Both require the preparation, maintenance, and publishing of annual accounts, and the same goes for corporate income tax returns and VATs. Opening bank accounts for a company is often less tedious than that needed for a branch office.
This, coupled with the bonus of reduced liability and simplistic operation of a company, makes it more feasible for most entrepreneurs to establish a company. A BV, which is a private, limited liability company, is, therefore, the most preferred legal entity among entrepreneurs.
How much time and effort is involved in the setup?
It usually only takes about a week’s worth of time to fully register and set up a BV. The same can be said for a registered address, which could also exist of a Dutch virtual address. It’s entirely possible to execute the whole process remotely, which means that it’s not necessary for you even to visit the Netherlands.
BV registrations and setup can typically cost around EUR 1250 pre VAT. All documents come standard with English translation, making it easy for you to understand everything easily.
How can you obtain a Dutch VAT & EORI number?
Any company that registers with the trade register, and has VATable activities, automatically receives a VAT number. The VAT number usually gets issued two weeks after the registration is completed. It’s important to note that the VAT number is only issued if there is a significant extent of a company’s Dutch presence.
Therefore, you should consider many critical elements such as your clientele, services, inventory, and warehousing. If the Dutch Tax authorities have any doubts or concerns, a questionnaire will be filled in, after which they can decide on VAT number issuance. EORI numbers can simply be activated via email requests by your Dutch tax consultant or first-time usage at a Dutch border.
What is the process for opening a bank account?
In the case of Dutch employees, you can easily open a bank account at nearly every bank. If your establishment in the Netherlands doesn’t have much more than just a virtual office, it’s advisable to consider opening an account with an online bank.
All banks located within the SEPA region, which includes the EU, Iceland, Liechtenstein, Norway, Switzerland, and Great Britain, will work adequately as transfer costs between these channels are fairly low.