Thought - Aprox. 8 min.

The Dutch Start-up BV: to be or not to be?

The Dutch Start-up BV: to be or not to be?
Written by
Stephanie ter Brake

The Dutch House of Representatives recently received a proposal for the introduction of a new Dutch corporate entity: the Start-up BV. The Start-up BV qualifies as a private limited liability company (“BV”) with special benefits for the first two years after incorporation. Only innovative start-ups affiliated with either an incubator / accelerator or financed by acknowledged business angels are eligible to set up a Start-up BV. We will briefly discuss the proposal and compare the Start-up BV with structures presently used by start-ups.

The proposal

The proposal mainly focusses on tax benefits for the Start-up BV. The first one is that the Start-up BV will automatically be granted a ‘Research & Development’ statement (Speur- en ontwikkelingsverklaring), which allows companies to lower the wage costs of employees directly involved in research and development. Second, persons holding a substantial share in a Start-up BV will be exempted from the minimum salary requirement (gebruikelijkeloonregeling) i.e. EUR 44.000,00 or 75% of the highest salary paid by the Start-up BV. Third, the Start-up BV will not be required to withhold payroll tax (loonheffing) on the first employee. Fourth, investors in a Start-up BV will also be eligible for tax benefits. Non-fiscal benefits are: (i) Start-up BVs are allowed to offer employees more than three fixed term employment contracts before a permanent contract must be offered, and (ii) Start-up BVs will be exempted from the obligation to publish annual accounts. Below we will analyze the proposal point-by-point.

Tax benefits

The whole idea of supporting and facilitating start-ups is very positive, but it is worth to take notice that most of the fiscal benefits are also available for regular BVs. The requesting procedure in order to obtain a Research & Development statement is generally simple and user-friendly, and in the last few years only 2% of the requests were denied. Furthermore, the Dutch tax authorities accept a lower minimum salary for substantial investors in start-ups already. However, an exemption on withholding payroll tax on the first employee is not available for regular BVs and thus seems very welcome, also in order to reduce the unemployment rate. This said, it is not necessary to introduce a new legal entity to accomplish this.

Employment contracts

With regard to the maximum number of fixed term employment contracts, it seems that current legislation does not leave room for an exemption for start-ups. Moreover, even if the Start-up BV would be exempted from this rule, the fixed term employment contracts in total may not exceed a period of two years. Thus, an exemption on the maximum number of three fixed term employment contracts only opens the possibility to choose, for instance, four contracts of six months instead of three contracts of eight months. There is no reason to advocate for an exemption on the maximum period of two years, because the Start-up BV is proposed as a temporary entity only for the first two years after incorporation.

Annual accounts

Our last comments concern the exemption on publishing the annual accounts. Under current legislation, small corporations can be eligible for a ‘small enterprise’ regime, meaning that they only have to publish a simple balance sheet and a profit and loss statement, accompanied with a short explanation. Strictly speaking, this is more than suggested in the proposal, but since the Start-up BV will not be exempted from the bookkeeping requirements, publishing the simple annual accounts is not too burdensome in our opinion.

The HoldCo-OpCo structure

Start-ups are a hot item and there is no doubt that they are important in many ways, but we are not convinced that it is necessary to introduce a new start-up entity. As discussed above, most of the proposed benefits are also available for regular BVs. However, in order to obtain a flexible company structure, it is market practice to structure start-ups with a holding BV (HoldCo) and a 100% subsidiary BV as an operating company (OpCo). The main features and advantages of this structure are the following.

Tax efficient

The HoldCo-OpCo structure is very tax efficient. The Dutch participation exemption (deelnemingsvrijstelling) provides for a corporate income tax exemption on dividends distributed by OpCo to HoldCo. Besides, if the HoldCo-OpCo chooses to be considered as a ‘fiscal unity’, profits and losses of the OpCo can be set off against profits and losses of the HoldCo and vice versa. Further, a fiscal unity does not have to file two separate tax returns. Finally, the shares in the OpCo can be sold in whole or in part without this being subject to corporate income tax at the level of HoldCo.

Risk management

The HoldCo-OpCo structure arranges for a better risk management. The HoldCo holds the earnings, intellectual property, real estate, pension money and other valuable assets, while the OpCo is the contracting party to the outside world. Earnings and valuable assets can be sheltered from potential liability claims arising against the OpCo. Thus, the risks are allocated at the level of OpCo.

Fee structure

In most cases the HoldCo will be appointed director of the OpCo, and therefore will charge the OpCo a management fee. The HoldCo can also charge the OpCo for use of assets like the rental of an office space or license fee for IP rights.

Future proof

On the one hand, the HoldCo-OpCo structure keeps the OpCo ‘light’, as a result of which it can more easily enter into joint ventures with other companies or sell shares in the OpCo. On the other hand, the HoldCo-OpCo structure will have beneficial impact on the continuity of the start-up, because the HoldCo can finance a restart if the OpCo should become insolvent.


The HoldCo-OpCo structure is very suitable for start-ups that want to attract national or foreign investors. Hence, there are more possibilities when looking for finance.


We like the idea of supporting start-ups, but in our opinion it is not necessary to introduce a new corporate vehicle, since most of the proposed benefits are already available for regular BVs, and the frequently used HoldCo-OpCo structure creates lots of advantages and flexibility for start-ups as it is.


Do you want to structure your start-up? Please don’t hesitate to contact us. We have a special start-up desk and are more than happy to assist you with the structuring of your start-up, including the preparation of the supporting contractual arrangements such as a shareholders agreement and a management agreement.

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