Navigating Dutch Correspondence as a Foreign Director: Tips and Challenges

Letters sent from Kamer van Koophandel "KVK"

After registering a new Dutch private limited liability company “B.V.” in the Netherlands, the first letter you receive is sent by the KVK, dutch chamber of commerce.

This letter is to confirm the company formation and the registration of your new dutch bv are complete.

You receive also a copy of the Extract, if you are not familiar with the term “Extract”, you can learn more in this Netherlands company search post.

KVK Extract of a dutch bv

It is important to ensure that the information of the Dutch company on the Extract is correct.

This Extract contains information about the dutch bv’s company name, company number, its share capital and paid up capital, its business activities in the Netherlands, and the authority vested in the board of directors to act on behalf of the dutch bv.

It is often asked by banks, suppliers, customers, lawyers, accountants or business in the Netherlands when a dutch bv enters into a contract with a third party.

Therefore, if the information shown on the Extract of the dutch bv is not correct, you must notify KVK within 6 weeks to change it. 

The registration of Ultimate Beneficial Owner "UBO"

As a part of company formation procedure, the civil law notary is required to identify and register the UBO of the dutch limited liability company at KVK.

if you are interested to learn more about the UBO registration of a Dutch company, this post UBO registration at KVK may give you some insight.

Th UBO letter sent by KVK contains the personal information about the UBO that was provided by the civil law notary.

It is not uncommon that mistakes can sometimes occur when transferring data or in the process of updating the UBO register kept by KVK.

Therefore, careful examination of this document is crucial, any discrepancies must be reported to the KVK within one week.

As of September 2020, any changes to the UBO in a dutch limited liability company must be reported at KVK with 7 days.

Registration fee after company formation

After registering a dutch private limited company at KVK,   you will receive an invoice in the amount of €75 for registering the new dutch bv at KVK.

This letter/invoice provides information of the payment reference and the deadline of settlement.

When making the payment, the correct payment reference relating to the dutch bv has to be mentioned so that KVK can identify it.

We have seen cases whereby KVK was unable to track the payment because the relevant information was missing.

Letters you expect to receive from Tax authority after company formation

Once a new dutch company is registered at KVK, you will receive several letters from the tax authority:

  1. You will receive a confirmation letter specifying your tax number and outlining the tax returns that your Dutch B.V. must file, including their frequency, such as annually or quarterly.

  2. approximately after 2 weeks of company formation, you should receive an 8 pages questionnaire to apply for VAT number.

    Commonly asked questions in this questionnaire relate to the dutch company’s business activities, personal details and contact details about its director(s) and shareholder(s), information about its customers and suppliers details, the location of warehouses, tax residency, and other pertinent information.

    This questionnaire has also a deadline to respond. In order to have your VAT number ready to start operating your Dutch company, it is important to have all the information ready well in advance.

  3. If the above is not sufficient,  you will be asked for more information and supporting documents.

Correspondence is sent by the tax authority to Dutch companies throughout the year

Corporate Income Tax (CIT)

1.    The notification of the periods and deadline to file CIT returns.

2. The invitation for filing a CIT return.

Valued Added Tax (VAT)/BTW

1. The Dutch company that has registered for VAT will receive notifications of the deadlines and periods for filing quarterly or annual VAT returns.

2. If you are subject to a VAT refund, you will be asked to provide your bank account number for a tax refund.

If you need help with setting up a bank account for your Dutch company, learn more in this virtual bank post.

3. If you are late filing a VAT return, you will receive a fine for late filing, you must respond without further delay.

Wage tax and payslip

If your Dutch company employs employees or a board member receives salary, you are required to prepare and file wage tax returns and prepare payslip every month.

Similarly, you will also receive correspondence in relation to this wages tax return filing requirements.

Preparing and paying Taxes on time

For a small dutch bv, a total of at least 5 tax payments are required each year, thus, many letters and notification to handle and respond.

Some response requires calling to the tax authority and in some occasions, waiting time on the phone could be as long as 30 minutes, this most time consuming task may prove challenging for business unfamiliar with the dutch environment.

Choosing virtual office or physical address for your dutch company

To complete a company formation in the Netherlands, a Dutch address is required to register at KVK.

In most cases, many foreign management boards choose a virtual office for their dutch company address.

Curious about the difference, this company address post may be able to give you some insight.

Limited services offered by a virtual office providers

The services that virtual office providers in the Netherlands can offer are limited.

They can ONLY offer a dutch address for you to register your Dutch company and scan the incoming letters to your email address.

You often still need to deal with them yourself which might be a challenge for you as a foreign director.

Here are a few challenges you may encounter as a foreign director dealing with Dutch official letters.

1. Technical and Dutch language:

Tax administration correspondence often uses technical language and jargon that may be difficult for non-native speakers to understand.

This could make it difficult for the non-resident management boards or their company secretary to know exactly what is being requested of them or what action they need to take.

While Google Translate can be a useful tool for quickly translating text, it is important to remember that it is not always accurate and can sometimes produce mistranslations or errors.

In the case of important correspondence from the tax authority, relying solely on Google Translate could be risky and lead to misunderstandings or mistakes. 

2.  Legal implications:

Tax administration correspondence often has legal implications and may require a certain level of expertise to handle properly.

If the board of directors or their company secretary is not familiar with Dutch tax law, they may struggle to understand the implications of the correspondence and the potential consequences of not responding appropriately.

For example, a foreign director may think that filing a VAT return is unnecessary if there have been no transactions recorded in their dutch company.

While it may be accurate in certain countries, it certainly does not apply to the Netherlands. There have been several instances where the foreign directors have incurred unnecessary penalties.

3.  Time pressure:

If the correspondence has a deadline, the foreign director may feel additional pressure to respond quickly and accurately.

This could be hard if you don’t understand what it is that you need to do and the board cannot find anyone with the right knowledge and experience in the Netherlands to assist.

4.   Cultural differences:

Dutch culture may have different expectations around communication and business etiquette, which could be unfamiliar to someone who is not from the Netherlands.

For example, Dutch business communication is often direct and to the point, which could be perceived as blunt or rude by someone from a culture that values more indirect communication.

5.  Time zone differences:

If the foreign director or their company secretary is in a different time zone than the Netherlands, it may be difficult for them to respond to correspondence in a timely manner.

This could be especially challenging if the correspondence requires urgent attention or if there are time-sensitive deadlines.

Our solutions exclusively for our international clients

Our Handling of Dutch Correspondence for Foreign Directors package is specifically designed to handle all incoming Dutch official correspondence and respond to letters within the specified timeframe.

So our clients can be assured that this administrative task is well taken care of.

By delegating these tasks to us, their precious time can be well spent on other aspects of their business, like growing and expanding to their Dutch or EU customers.

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What does Dutch BV mean in business?

This is the Netherlands Private Limited liabilities company or in Dutch a besloten vennootschap “BV”.

BV is a legal entity which is commonly used by foreign or local companies to establish a business in the Netherlands.

Aside from correspondence from the tax authority and KVK, are there any other forms of communication that require a response?

You may receive letters from Municipality in the Netherlands to provide information of your dutch business.

Do I need a business address in the Netherlands?

Yes, a dutch address is essential to complete the company formation procedure.

What are the fundamental filing obligations for a Dutch BV?

  • prepare and filing annual account;

  • prepare Annual general meeting for adoption of annual account;

  • Filing quarterly VAT return and ICP return if selling to the EU;

  • Filing the annual corporate return yearly;

  • Filing wages tax return monthly.

Registering a dutch bv from abroad

You can register a Dutch limited liability company from your home country using our customized company formation package, designed specifically for non-residents.

What is the role of local company secretary for a dutch company?

A local company secretary plays a crucial role in assisting foreign board members who may be unfamiliar with the legal and fiscal landscape in the Netherlands. Their in-depth knowledge of local regulations and procedures is instrumental in ensuring the smooth functioning of the Dutch business.