Tax and legal framework:

The incorporation of a Dutch company can take at least a month. If the company has to be used before that time, the company can be registered as a company under incorporation with the Chamber of Commerce, so that it can legally enter into transactions, or it can be considered to purchase an existing Dutch shelf company, which is a lot more expensive than incorporating a company.

If a Dutch or foreign company wants to start employing personnel here in the Netherlands, it should be considered that employment law here is very strict, so that it is difficult to fire personnel, which makes this an expensive and lengthy matter.

Opening a bank account can also be a time consuming process, especially for a foreign company without a presence here. In the meantime payments often have to be made from a foreign bank account, which causes delays, extra bank costs and possibly fines and additional interest due for late payment to the tax inspector.

The registration with the Dutch tax and social security authorities can also take a long time, so that it may take a while before any input VAT can be refunded and before any PAYE and social securities can be paid, so that once the registration is done, a big amount is due at once.

Hiring personnel is a difficult and expensive process due to the tight Dutch labour market, the strict employment legislation and the high personal income tax and social security rates here.

Granting stock options to employees working here can be expensive and not always beneficial, due to the fact that employees sometimes have to pay PAYE first on the taxable benefit of the stock options, depending on the specific stock option plan, whereas it depends on the future development of the company, its shares and options to decide whether it has been positive to have been granted stock options.

The Dutch tax and social security authorities are very strict with deadlines for payment, so that late payment of for example VAT and PAYE may cause fines and additional interest becoming due on the principal amount.

On the other hand, when it comes to a substantial refund of input VAT, which has been paid when purchasing commercial real estate here, it can take months before the refund has finally been made to the payer.

Relocation of foreign employees to the Netherlands can be a problem, especially if these employees are not from other European Union countries, since in that case they need a residence and a work permit, which may be time consuming and difficult to obtain, since a certain specific expertise and working history within the group world-wide will have to be demonstrated.

If a foreign employee starts working for a group company here and becomes resident here as well, it has to be kept in mind that the Dutch tax and social security rates are very high, up to 52%.