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(Dis)-advantages of a branch / permanent establishment in the Netherlands

Updated time: 09 Jan, 2019, 16:52 (UTC+08:00)

Advantages

  • No Dutch legal formalities is required so no Dutch notary is needed, since no legal entity (Dutch BV) is set up. The only requirement is to register the Dutch branch at the Chamber of Commerce and apply for the tax numbers at the Dutch tax authorities
  • Possible extra tax deductions in the home country with a Dutch branch
  • From a practical point of view it easier since nothing needs to be changed (website, email address, name)
  • When you stop doing business in the Netherlands no liquidation / elimination process is needed (closing is easy)
  • No substance is needed. As a result, important management decisions should not be made in the Netherlands.
  • The business administration of the branch can be maintained in the home country

(Dis)-advantages of a branch / permanent establishment in the Netherlands

Dis-advantages

  • The foreign company who established the Dutch branch is fully responsible for all the obligations and liabilities of the branch / permanent establishment;
  • To the outside world it looks better to have a legal entity instead of operating under the foreign name on the Dutch market;
  • From an accounting perspective there (might) be more overview;

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