There are two commonly used methods of moving your Dutch business from the Netherlands. On the one hand there is the ordinary migration by moving the company’s principal place of management. On the other hand you can opt for a cross-border migration and conversion pursuant to which a Dutch Company will convert itself into a Company governed by the laws of another Member State of the European Union or the European Economic Area.
The Ordinary Migration Procedure
An implicit migration is effectuated in three steps. The first step is taken by holding a board meeting. The board must express its intention to transfer the place of effective management, pin-point an “emigration date” and name the jurisdiction in which it wishes to re-domicile. Following this meeting the board must issue a written statement in which they confirm their resignation and the aforementioned emigration date. The second step consists of holding a shareholders meeting in the Netherlands in which the resignation of the sitting directors is approved, the emigration date is confirmed, as well as the appointment of new directors. The shareholders must also approve the transfer of all records and the closure of all Dutch bank accounts. It is important to document the address of the new business space and open bank accounts in the new domicile. The third and last step consists of several practical matters. New offices must be arranged, the Dutch company must be deregistered with the Dutch Chamber of Commerce and adjustments should be made listing the new directors and new business address. This deregistration in the Netherlands is logically followed by registration with the Chamber of Commerce in the new domicile. In short, the last step consists of effectuating all decisions made by both the board of directors and the shareholders.
Services provided by KC Legal
- Preparation the board and shareholders resolutions for migrating the Dutch company;
- All registrations with the Dutch trade registry;
- Preparing and filing the account of liquidation with the trade registry;
- Preparing and filing the emigration and post-emigration corporate income tax returns.
The Cross-Border Conversion Procedure for outbound conversions
When considering a cross-border conversion, the objective is to transform a Dutch company into one governed by the laws of another Member State of the European Union or the European Economic Area. Dutch law outlines specific regulations for cross-border conversions applicable to Dutch private limited liability companies (BV or NV). This conversion is permitted only when the counterpart is also a limited liability company under the laws of another EU member state or the EEA.
Taking this into account, the following steps need to be taken to effectuate the cross-border conversion:
Firstly, the board of managing directors of the entity seeking to convert must prepare a conversion proposal stating its current name, registered office, and registration number. Unless this requirement is waived, the board will also need to prepare an explanatory report justifying the legal and economic aspects of the conversion and explaining its implications for shareholders, creditors, and employees. Employees, creditors, and shareholders must be given the opportunity to provide their comments on the proposal no later than 5 working days before the date on which the general meeting makes its decision.
This proposal will then be deposited for three months at the office of the Commercial Register where the entity is registered. The conversion proposal and report will be deposited at the Dutch company’s business office, during which period creditors may file objections to the proposed conversion. Prior to the conversion, the Dutch company must also announce in the Staatscourant that the relevant documents have been deposited and when and where they are available for inspection.
In accordance with the certification requirement, a notary must oversee the legality of the cross-border conversion. This assessment consists of a formal test and a fraud test. The formal test examines compliance with the procedures and applicable regulations. The fraud test focuses on unlawfulness, potential fraudulent or criminal purposes, and evasion or circumvention of national or Union law.
A two-thirds majority of the general meeting must vote in favor of the cross-border conversion. Shareholders who vote against have the right to sell their shares for appropriate compensation.
Finally, the relevant foreign certificate/evidence of registration, along with a certified copy of the Dutch notarial record, must be filed with the Dutch Commercial Register with the request to deregister the newly converted entity.
Services provided by KC Legal:
- All communications with the Dutch + foreign notary
- Preparation of the conversion proposal
- Preparation of the explanatory report justifying the legal and economic aspects of the conversion
- All relevant communications with the Dutch district court
- Publications in the Staatscourant
- Preparation of a resolution concerning the conversion and the amendment of the articles of association
- Preparation and issuance of a written statement confirming the resignation of the board and setting the emigration date
- Organizing the appointment of new directors
- Reviewing the transfer of all records and the closure of all Dutch bank accounts
- Preparation of the merger accounts and necessary filings with the trade registry
- Preparation and filing of the emigration corporate income tax returns