When a foreign company plans to open a sales office, distribution centre or assembly facility in Europe, choosing the right location is the key element in the decision-making process. Will the new operation be easily accessible? Will it be located near the customer and supplier base of the company? What are the most efficient and reliable modes of transport? Is qualified labour available? Is English spoken?

Through its strategic location, highly developed infrastructure, stable economy, well-educated and productive workforce, and mild tax climate, The Netherlands has already offered a large number of foreign companies stability, reliability, and growth potential.

The Netherlands is well known for its open economy. It is in favor of international trade without national and/or regional barriers and it welcomes foreign investments. An indispensable feature of Dutch legislation is, among other things, that company law does not make a difference between Dutch nationals and foreigners. A separate, but very important, subject is formed by the enhancement of free competition in the Netherlands by the Competition Act. In addition, companies created under foreign law are free to operate in the Netherlands. For instance, they can be a party to a contract, participate in partnerships and establish a legal entity. It should be noted that there are usually no objections to the employment of skilled foreign managers or specialist staff in the Netherlands. Work and residence permits are usually issued to these employees, provided they have complied with entry requirements.

Dutch legal entities are internationally regarded as sound and generally respected. This reputation is ensured by Dutch business law, fine-tuned by case law, which governs the institution, running and liquidation of legal entities. For foreign investors, the most important entities include a private limited liability company or Besloten Vennootschap (BV), a public limited liability company or Naamloze Vennootschap (NV), as well as some forms of partnerships. However, if the set up a legal entity in the Netherlands is not a possibility, a branch might also be an option.

A special way for a foreign company to carry out activities in the Netherlands or in Europe with the Netherlands as its base, is the conclusion of a joint venture with a Dutch party. Another possibility is to merge with or acquire another company. A joint venture can take the form of, for instance, a partnership or a BV. The selection of a potential joint venture partner and the structuring of a joint venture is a very complicated process. Therefore, it would be advisable to contact one of the competent advisors in this field, available in The Netherlands.

The BV and NV have most features in common. NVs and BVs are separate legal entities that may sue, be sued, enter into contracts and transact business in their own name. The liability of shareholders is limited to their capital subscription. Shares of a BV must be transferred by notarial deed, and the transfers must be in accordance with the relevant clauses in the company's bylaws that restrict the free transferability of the shares. The time required to establish a business in The Netherlands is normally about three months. That is the approximate time it takes for The Ministry of Justice to issue a statement of no objection and for the notarial deed to be completed.

Companies registered under the laws of another country may operate in the Netherlands through a Dutch branch. Foreign individuals or companies may be members of Dutch partnerships or may enter into commercial agreements with Dutch companies or individuals.