You have made the decision: the Netherlands is your European base. Now comes the question that every international company faces before they can start hiring: what legal structure do you actually need? Getting this right is important since this decision affects your hiring timeline, your tax position, your liability exposure, and how easily you can scale or exit if things change.
In this guide, we’ll provide a clear breakdown of the three main routes – what they are, how they work, and when to use them – so you can choose the option that works best for your unique circumstances.
The three routes at a glance
| Structure | Best for | Time to set up | Liability | Admin burden |
| BV (private limited company) | Long-term commitment, 5+ employees | 4–6 weeks | Limited | High |
| Branch office | Testing the market, temporary presence | 2–4 weeks | Parent company bears full liability | Medium |
| Employer of Record (EOR) | Hiring 1–4 people fast, no local entity | Days | EOR bears employment liability | Very low |
Option 1: The Dutch BV (Besloten Vennootschap)
The BV is the Dutch equivalent of a private limited company (Ltd in the UK, GmbH in Germany, SARL in France). It is the most common subsidiary structure for international companies making a serious, long-term commitment to the Netherlands.
A BV is a fully separate legal entity. It can hire employees directly, sign contracts, hold assets and borrow money – all independently of the parent company. Shareholders are protected from personal liability.
This is the right choice when you are planning to hire more than five employees, need full control over payroll and employment contracts, require a Dutch VAT presence for commercial reasons, or may eventually want to raise capital or sell the entity.
How to set up a BV
- Choose a company name and check availability with the Dutch Chamber of Commerce (KVK).
- Draft articles of association with a Dutch notary (notaris). This is a legal requirement, you cannot incorporate a BV without one.
- Execute the deed of incorporation before the notary.
- Register with the KVK. Once registered, you receive a KVK number, and a VAT number (BTW-nummer) is issued by the Dutch Tax Authority (Belastingdienst).
- Open a Dutch business bank account. Several banks now offer remote account opening.
Key requirements
- Minimum share capital: just €0.01 – the old €18,000 requirement was abolished in 2012.
- A Dutch notary is legally required for the deed of incorporation.
- At least one director (bestuurder) – this can be a non-resident.
- A registered address in the Netherlands (a virtual office address qualifies).
Option 2: A branch office (bijkantoor)
A branch office is not a separate legal entity – it is an extension of your parent company operating in the Netherlands. It has a Dutch address and a KVK registration, but all legal and financial obligations rest with the parent.
A branch office works well when you are testing the Dutch market before committing to incorporation, when the parent company is well-known and being perceived as a foreign entity carries no commercial disadvantage, or for structural reasons specific to your industry.
The main risk is liability: if the branch runs up debts or causes harm, the parent company is fully exposed. Most legal advisers recommend moving to a BV once the operation becomes substantial.
How to set up a branch office
- Register with the KVK, providing the parent company’s founding documents (translated into Dutch if not already in English).
- Appoint a representative in the Netherlands – required for the KVK registration.
- Register for Dutch VAT if you expect to make taxable supplies in the Netherlands.
Key differences between a BV and a branch office
| Factor | BV | Branch office |
| Legal entity | Yes | No — extension of parent |
| Parent liability | Protected | Parent liable for all branch activities |
| Corporate tax | Dutch CIT applies to BV profits | Dutch CIT on Dutch-source income |
| Appearance to partners | Fully Dutch company | Foreign company with local presence |
| Dissolution | Formal liquidation process | Simple de-registration at KVK |
Option 3: Employer of Record (EOR)
An EOR is a third-party company that employs people on your behalf in the Netherlands. The EOR becomes the legal employer handling payroll, tax withholding, social contributions, and employment contracts, while your team members work for you operationally.
No Dutch entity is required and you can have someone working in the Netherlands within days.
An EOR is the right starting point when you need to hire one to four people quickly before your BV is incorporated, when you are genuinely uncertain whether the Dutch market will work out, when the individuals you want to hire are ready now or when you want to test a new team structure before committing to infrastructure.
How it works in practice
- You select a candidate.
- The EOR issues a Dutch employment contract to the candidate.
- You pay the EOR a monthly fee covering salary, employer contributions, and a service margin.
- The EOR handles payroll, sick leave administration, holiday pay, pension enrolment, and all Dutch HR compliance.
EOR fees typically range from €400 to €1,000 per employee per month on top of employment costs, depending on the provider and the complexity of the arrangement. At a small headcount, this is often cheaper than the overhead of running your own Dutch payroll. At ten or more employees, a BV almost always becomes more cost-effective.
Tax considerations
Please note that whichever structure you choose, you are subject to Dutch Corporate Income Tax (CIT). The 2026 rates are 19% on the first €200,000 of taxable profit and 25.8% above that. Branch offices are taxed on Dutch-source income only. BVs are taxed on worldwide income, with relief available under the participation exemption for qualifying foreign subsidiaries.
If you are bringing international staff to the Netherlands, the 30% tax ruling is also worth understanding – check out our detailed guide on this topic.
Next steps
Setting up a legal entity and building your Dutch team are closely linked decisions. The structure you choose affects your hiring timeline, your contractual flexibility, and your ability to attract talent. We specialise in helping international companies navigate exactly this transition – from the first hire to building multilingual teams in the Netherlands.
If you are in the planning stage, speak to a Dutch notary and a tax advisor for the legal and fiscal side. For the recruitment side, we would be happy to advise on what a realistic hiring timeline looks like given your chosen structure.
