Digital incorporation of a BV

On January 1, 2024, the Digital Incorporation BV Act (Wetsvoorstel digitale oprichting BV) came into effect. As the name suggests, this act enables the incorporation of a Dutch BV digitally without incorporators having to appear in person at the notary. Incorporating a BV digitally should ensure faster, easier, and cheaper incorporations than the traditional physical method. It will also make it easier to incorporate a BV whilst being abroad.

Physical method

In a non-digital incorporation process, the physical deed of incorporation is executed before a notary in Dutch. Each incorporator must appear in person at the notary’s offices to execute the deed or may be represented by a written proxy. Even in the latter case, in most cases, incorporators will have to go to a notary, namely if the notary has not yet identified the parties and needs to legalize the signature on the power of attorney. However, identification can also be done via video call, which does not require legalization.

Scope

The digital incorporation process of a BV is open to all residents of the EU. However, the incorporators do not have to be in the EU at the time of incorporation. E.g., a person with the Italian nationality can incorporate a Dutch BV digitally from the United States. Unlike a physical notarial deed of incorporation, the legislator provided for the possibility of the digital deed of incorporation – including the BV’s articles of association – to be executed in English. A subsequent amendment to the articles of association may then also be in English.

Digital incorporation is only possible if the shares are paid up in cash; therefore, if an incorporator wants to pay up its shares in kind, the BV can only be incorporated by execution of a physical notarial deed.

Process of digital incorporation

The process for digitally executing the deed of incorporation begins with identification via the digital execution platform of the Dutch Royal Notarial Association (KNB). The identification can only take place with an electronic proof of identity with a reliability level ‘high’. We kindly refer to www.notaris.nl/nieuws/digitaal-identificeren-bij-de-notaris for more information.

The parties and the notary then meet in a digital execution room, where they can see and speak to each other. Such a direct video and audio connection is necessary and may not be delayed or obscured. The notary will summarize and set out the content of the deed of incorporation and point out to the parties the consequences that result from it, as is the case with a the execution of a physical notarial deed.

The incorporation becomes effective by signing an electronic notarial deed of incorporation in the same digital platform. This electronic notarial deed can only be signed with a qualified electronic signature. A qualified electronic signature is an electronic signature with the highest level of security, such as a digital certificate or an app on the signer’s smartphone.

The Dutch BV can also be digitally incorporated on the basis of a digital power of attorney. The process of signing the digital power of attorney is similar to signing the digital deed of incorporation itself. The digital power of attorney authorizes a person employed by the notary to log into the digital environment and execute the deed on behalf of the incorporator.

Benefits of digital incorporation and further modernization

The new possibility of incorporating a BV digitally promotes the modernization of Dutch law and has a number of important advantages. For example, any EU resident can incorporate a Dutch BV, regardless of the country where it is located. It is also possible to execute the deed digitally at the notary’s offices. Another important advantage is that with digital incorporation, the articles of association may be in English, unlike the physical deed.

Further modernization is to be expected in the (near) future. The electronic notarial deed will most likely be applied to other notarial deeds. Not only can the incorporation of a Dutch BV then take place digitally, but also other legal acts for which a notarial deed is required, such as a mortgage or transfer deed.

Should you have questions about this topic, or would you like to incorporate a Dutch BV digitally? Please feel free to contact one of our corporate team members for more information.