Which Dutch corporate laws apply to foreign-owned companies?

Russell Advocaten · 01 nov 2026

Yes, Dutch corporate law applies to every company incorporated in the Netherlands, regardless of who owns it. A foreign-owned private limited company (BV) is a Dutch legal entity subject to Dutch law from the moment of incorporation: the nationality or residence of its shareholders makes no difference. This means that multinational groups operating a Dutch subsidiary must comply with Dutch company law, Dutch employment law, and Dutch corporate governance requirements in full. The sections below address the most common legal questions that arise for foreign-owned companies operating in the Netherlands.

Does Dutch law apply to a foreign-owned BV?

Dutch law applies in full to any BV incorporated in the Netherlands, irrespective of whether its shareholders are foreign individuals, foreign companies, or multinational groups. The BV is a Dutch legal entity governed by Book 2 of the Dutch Civil Code. Its nationality is determined by its place of incorporation, not by the nationality of its owners.

This principle has significant practical consequences for international businesses. A parent company based in the United States, Germany, or elsewhere cannot simply apply its home-country rules to its Dutch subsidiary. The Dutch BV operates under Dutch law on every matter that touches the company itself: its governance structure, the rights and duties of its directors, the rules for shareholder decision-making, and the grounds on which directors may be held personally liable.

Foreign shareholders retain their rights as owners (they can appoint and dismiss directors, approve major decisions, and receive dividends), but they exercise those rights within the framework that Dutch law prescribes. Where a parent company’s instructions conflict with Dutch legal requirements, Dutch law prevails for the subsidiary. This is a point that foreign-owned companies frequently underestimate when managing a Dutch subsidiary from abroad.

What Dutch corporate governance rules must foreign-owned companies follow?

Every Dutch BV must comply with the corporate governance framework set out in Book 2 of the Dutch Civil Code. This framework governs the internal structure of the company, the division of authority between its organs, and the procedural rules for key decisions. Foreign ownership does not create any exemption from these requirements.

The core governance obligations include the following:

General Meeting of Shareholders (AGM): The AGM must be held at least once a year, within six months of the end of the financial year. The AGM holds ultimate authority over major decisions, including the appointment and dismissal of directors, approval of annual accounts, and amendments to the articles of association.
Management board: The day-to-day management of the BV rests with its managing directors. Their authority and responsibilities are defined by the articles of association and Dutch law, not by instructions from the parent company alone.
Articles of association: Every BV must have articles of association (statuten) drawn up by a civil-law notary. These set out the company’s name, registered office, share structure, and rules for appointing directors. Any amendment requires a notarial deed.
Registration with the Business Register: The BV and its directors must be registered with the Dutch Chamber of Commerce (KVK). Changes in directorship must be updated promptly.
UBO register: The ultimate beneficial owners of the BV must be registered in the KVK’s UBO register.

For foreign-owned companies, a particular governance tension arises when the parent company wishes to direct the subsidiary’s management without formally appointing directors. Under Dutch law, the managing directors of the BV bear independent legal duties to the company. Instructions from a parent company do not override those duties, and a director who blindly follows parent-company instructions that harm the subsidiary may face personal liability.

How does Dutch law regulate the appointment and dismissal of directors?

Under Dutch law, managing directors of a BV are appointed and dismissed by the General Meeting of Shareholders, unless the articles of association assign that authority to another body such as a supervisory board. The appointment must be registered in the Business Register. Dismissal can take place at any time by shareholder resolution, but the legal consequences depend on whether the director also holds an employment contract.

The distinction between corporate dismissal and employment termination is critical for foreign-owned companies to understand:

Corporate dismissal: A shareholder resolution to dismiss a director ends the person’s role as a statutory director immediately. This is a corporate-law act and does not require court approval.
Employment termination: If the director also has an employment contract with the BV, terminating that contract is a separate matter governed by Dutch employment law. Dismissal from the directorship does not automatically terminate the employment contract, and Dutch employment law provides significant protections that cannot be waived by contract.
Procedural requirements: Before a dismissal resolution is passed, the director must be given the opportunity to be heard. Failure to observe this right can render the dismissal procedurally flawed, even if it remains valid as a corporate act.

For foreign parent companies accustomed to at-will employment or simpler dismissal procedures in their home jurisdiction, the Dutch two-track system (corporate dismissal on one hand, employment termination on the other) frequently causes complications. Specialist advice on Dutch corporate law is advisable before any director dismissal is initiated.

When can directors of a Dutch subsidiary face personal liability?

As a general rule, the BV itself is liable for its debts, not its directors personally. However, Dutch law recognises several circumstances in which a managing director can be held personally liable. This risk applies equally to directors of foreign-owned subsidiaries, including executives appointed by a parent company to manage the Dutch entity.

Personal liability can arise in the following situations:

Improper management (onbehoorlijk bestuur): If a director has seriously neglected their duties, they may be held personally liable for the company’s losses. Dutch courts apply a high threshold, but the risk is real in cases of financial mismanagement, failure to maintain proper accounts, or acting against the company’s interests.
Failure to file on time: If a BV fails to file its annual accounts on time with the Chamber of Commerce, this creates a legal presumption of improper management in the event of insolvency. The burden then shifts to the director to prove that the financial difficulties were not caused by the management failure.
Personal co-signing of loans: A director who personally guarantees a BV’s debt is liable for that debt if the BV cannot repay it.
Pre-incorporation liability: Any agreements made on behalf of a BV before it is formally incorporated bind the person who made them personally, unless the BV ratifies those agreements after incorporation.
Wrongful trading: Entering into obligations on behalf of the BV when the director knows or should know that the company cannot meet them can give rise to personal liability towards creditors.

Directors of Dutch subsidiaries who are also employees or officers of the foreign parent company face an additional risk: they may receive instructions from the parent that conflict with their duties to the Dutch subsidiary. Acting on such instructions does not shield them from liability under Dutch law.

What is the large-company regime and which foreign-owned companies does it affect?

The large-company regime (structuurregime) is a set of mandatory corporate governance rules that applies to Dutch BVs and NVs that meet specific size thresholds. Under this regime, the company is required to establish a supervisory board (Raad van Commissarissen) with significant powers, including the authority to appoint and dismiss managing directors. This materially limits the control that shareholders, including a foreign parent company, can exercise over the subsidiary’s management.

A Dutch company is subject to the full structuurregime if it meets all three of the following criteria for three consecutive years:

Equity capital (including reserves) of at least €16 million
A works council established by law
At least 100 employees in the Netherlands

There is a mitigated version of the regime for certain international groups. A Dutch subsidiary may qualify for the mitigated structuurregime if it functions as an international holding company and the majority of its employees work outside the Netherlands. Under the mitigated regime, the supervisory board does not have the power to appoint managing directors: that authority remains with the shareholders. However, the supervisory board still has significant advisory and oversight functions.

Foreign parent companies that acquire or grow a Dutch subsidiary to the point where it meets the thresholds above must take active steps to implement the required governance structure. Failing to do so is a breach of Dutch company law and can expose the company and its directors to legal challenge.

Which Dutch employment law obligations apply when a director is also an employee?

When a managing director of a Dutch BV also holds an employment contract, Dutch employment law applies to that relationship alongside Dutch company law. This dual status (statutory director and employee) is common in Dutch subsidiaries and creates a set of obligations that foreign-owned companies must understand before making any changes to a director’s position.

The key employment law obligations in this context include:

Salary requirements: A director who is also a major shareholder (DGA) must receive a salary that meets the customary salary standard (gebruikelijkloonregeling) set by the Dutch Tax Administration. The salary must reflect market conditions for the role.
Dismissal protection: Despite the ease of corporate dismissal, the employment contract of a director can only be terminated in accordance with Dutch employment law. This generally requires either a settlement agreement (vaststellingsovereenkomst), a court procedure, or a UWV procedure, depending on the grounds for dismissal.
Transition payment: A director whose employment is terminated after two or more years of service is generally entitled to a statutory transition payment (transitievergoeding), unless the termination is the result of seriously culpable conduct by the employee.
Notice periods: Contractual and statutory notice periods apply to the employment relationship and must be observed, even where the corporate dismissal takes immediate effect.

The interaction between corporate dismissal and employment termination is one of the most complex areas of Dutch law for foreign-owned companies to navigate. A parent company that dismisses a director by shareholder resolution without addressing the employment contract simultaneously may find itself facing an ongoing employment obligation, and a potential unfair dismissal claim, even after the person has ceased to act as a director.

The specific outcome in any given situation will depend on the terms of the employment contract, the articles of association, and the circumstances of the dismissal. Given the complexity involved, it is advisable to seek specialist legal advice before initiating any director-level change.

How Russell Advocaten assists foreign-owned companies with Dutch corporate law

Russell Advocaten is an internationally oriented law firm based in Amsterdam with more than 80 years of experience advising large and mid-sized businesses, government bodies, and private clients on Dutch law. The firm’s corporate law team advises foreign-owned companies and multinational groups on the full range of issues that arise when operating a Dutch subsidiary, from initial incorporation and governance structuring to director appointments, dismissals, and board-level disputes.

For foreign-owned companies, Russell Advocaten offers practical support in the following areas:

Advising on the corporate governance requirements that apply to Dutch BVs and NVs, including the structuurregime
Guiding parent companies through the appointment and dismissal of statutory directors in compliance with both Dutch company law and Dutch employment law
Advising directors on their duties, responsibilities, and personal liability risks under Dutch law
Representing companies and directors in shareholder disputes and inquiry proceedings before the Enterprise Chamber of the Amsterdam Court of Appeal
Providing boardroom counselling to management boards and supervisory boards to identify and prevent legal risks at an early stage
Supporting cross-border matters through the international Primerus network, which connects Russell Advocaten with more than 3,000 lawyers in 40 countries

Russell Advocaten’s lawyers speak and write English, German, and Dutch, making the firm well placed to advise international executives and foreign parent companies that are navigating the Dutch legal system for the first time. The firm is recommended annually by the Legal 500, the leading guide to top-quality law firms in Europe.

If your company requires specialist advice on Dutch corporate law, director liability, or the governance of a Dutch subsidiary, contact Russell Advocaten to discuss your situation with one of our corporate law specialists.

This information is general in nature and does not constitute legal advice for your specific situation; for that, please consult a lawyer at Russell Advocaten.

Veelgestelde vragen

Can a foreign parent company instruct its Dutch subsidiary's directors to follow group-wide policies, even if those policies conflict with Dutch law?

A foreign parent company can issue instructions to its Dutch subsidiary, but those instructions cannot override the independent legal duties that managing directors owe to the BV under Dutch law. Where a group policy conflicts with Dutch legal requirements — for example, on financial reporting, employment practices, or governance procedures — Dutch law takes precedence for the subsidiary. A director who follows parent-company instructions that harm the subsidiary may still face personal liability, regardless of where those instructions originated.

What is the first practical step a foreign company should take after incorporating a Dutch BV?

After incorporation, the immediate priorities are registering the BV and its managing directors with the Dutch Chamber of Commerce (KVK), registering the ultimate beneficial owners (UBOs) in the KVK’s UBO register, and ensuring the articles of association accurately reflect the intended governance structure. It is also advisable to review whether the BV’s size or structure could trigger the large-company regime (structuurregime) in the near future, so that governance arrangements can be planned accordingly. Getting these foundations right from the outset avoids costly corrections later.

What happens if a foreign-owned BV fails to hold its Annual General Meeting within the required timeframe?

Under Dutch law, the AGM must be held at least once a year, within six months of the end of the financial year. Failing to hold the AGM on time is a breach of Dutch company law and can have practical consequences, including the inability to formally approve the annual accounts, which in turn can trigger the legal presumption of improper management if the company later becomes insolvent. In some circumstances, shareholders or other stakeholders may seek a court order compelling the company to hold the meeting.

Can a Dutch BV director be held personally liable for decisions made in good faith that turn out to be commercially unsuccessful?

Dutch courts apply a high threshold for director liability and do not hold directors personally liable simply because a business decision turned out badly. Personal liability requires serious culpability — meaning the director’s conduct must fall clearly outside the range of what a reasonably competent director would do in the same circumstances. Honest commercial misjudgements, even costly ones, generally do not meet this threshold. However, the risk increases significantly where there are failures in financial administration, late filing of annual accounts, or decisions made while knowingly disregarding the company’s inability to meet its obligations.

Is it possible to structure a Dutch subsidiary so that the parent company retains maximum control over management decisions?

Yes, within the limits set by Dutch law, the articles of association can be drafted to give the parent company broad influence — for example, by requiring shareholder approval for a wide range of management decisions or by granting the parent the right to appoint and dismiss directors. However, certain controls cannot be contracted away: managing directors always retain independent statutory duties to the BV, and if the large-company regime applies, the supervisory board gains mandatory powers that limit shareholder control. Careful drafting of the articles of association at the time of incorporation, with specialist Dutch corporate law advice, is the most effective way to align governance with the group’s operational needs.

What is a common mistake foreign companies make when dismissing a director of their Dutch subsidiary?

The most frequent mistake is treating the shareholder resolution to dismiss the director as the end of the matter, without simultaneously addressing the director’s employment contract. Under Dutch law, corporate dismissal and employment termination are two separate legal acts governed by different rules. If the employment contract is not properly terminated — typically through a settlement agreement, a UWV procedure, or a court application — the company may remain bound by salary obligations and face an unfair dismissal claim, even after the person has stopped acting as a director. Always seek specialist advice before initiating a director-level dismissal.

Does the Dutch large-company regime (structuurregime) apply automatically once the thresholds are met, or does the company need to take active steps?

The structuurregime does not apply automatically the moment the thresholds are met — a company has a period of two years after it first qualifies to implement the required governance changes, including establishing a supervisory board. However, the obligation is mandatory once the criteria have been satisfied for three consecutive years, and failing to implement the required structure is a breach of Dutch company law. Foreign parent companies should monitor their Dutch subsidiary’s size and workforce regularly and take proactive steps to restructure governance before the deadline, rather than waiting until a legal challenge arises.

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