The State Secretary for Legal Protection (Staatssecretaris van Rechtsbescherming) stated on 12 August 2025 in a letter to the House of Representatives that the Temporary Act transparency turbo liquidation (Tijdelijke wet transparantie turboliquidatie) will be extended by two years. On 15 November 2023, the Temporary Act entered into force for an initial duration of two years. The Temporary Act was set to expire on 15 November 2025, but it provides the possibility of extension for an additional period of two years after the expiry of the first term. At the request of the Ministry of Justice and Security (Ministerie van Justitie en Veiligheid), researchers affiliated with Leiden University conducted a study to assess the extent to which the objectives – improving transparency, strengthening creditors’ legal position and preventing misuse – of the Temporary Act are being achieved in practice, as well as to gain insight into the experiences and broader effects arising from its implementation. The researchers also made recommendations, on the basis of which the State Secretary for Legal Protection has determined to extend the Temporary Act.

A turbo liquidation is an immediate termination of a legal entity through the adoption of a dissolution resolution, provided that no (potential) assets remain at the time the decision is taken. In the case of a turbo liquidation, the formal liquidation procedure does not need to be followed. It was introduced in 1994 to provide a simple and cost-efficient method for dissolving ‘empty’ legal entities. However, it soon became apparent that the procedure opened the door to misuse, as creditors were often unaware of the dissolution and found it difficult to safeguard their position. The Temporary Act aims to address these issues by increasing the transparency of the procedure and strengthening the legal position of creditors. With the Temporary Act, the entrepreneur is obliged to file financial statements with the Chamber of Commerce (Kamer van Koophandel). Creditors must also be informed without delay that the company has been dissolved, that the documents have been filed with the Chamber of Commerce, and that they are available for inspection there. Creditors may also take action against the turbo liquidation by demanding access to the company’s records, holding directors personally liable, or petitioning the court to reverse the turbo liquidation. Misuse of a turbo liquidation is a criminal offense and may result in a director disqualification of up to five years. For more information on the requirements for conducting a turbo liquidation, see the short read: “Temporary act on transparency turbo liquidation” (Tijdelijke wet transparantie turboliquidatie) by Stefan Kroezen (26 September 2022).

The study examining the functioning of the Temporary Act concludes that, compliance with the accountability obligation and the disclosure obligation contributes to greater transparency and better legal protection for creditors. While the formal accountability and disclosure obligations are largely met, actual compliance often falls short in terms of timeliness, completeness, and level of detail, limiting the intended effect on transparency. The absence of monitoring mechanisms exacerbates this deficiency, such that the intended effect on transparency is not consistently achieved in practice. Compliance with the obligations generally allows creditors to access the information needed to determine possible next steps, but shortcomings in transparency reduce the improvement of their position. The preventive effect against misuse is difficult to assess due to the lack of concrete data on the extent and frequency of fraud, and without effective public enforcement, the Temporary Act’s contribution to preventing improper use and recidivism remains limited. Overall, the researchers recommend extending the Temporary Act, noting that it provides clear behavioural standards and addresses a transparency gap, while also suggesting potential improvements in supervision, enforcement, and the design of accountability obligations for consideration in a possible permanent legislative framework.

The State Secretary for Legal Protection supports the researchers’ view that a structural improvement of the turbo liquidation regulation is desirable and is therefore preparing a legislative amendment to make the Temporary Act on transparency of turbo liquidation permanent, taking into account the report’s recommendations. For the duration of the preparation of the permanent legislative amendment, the Temporary Act will be extended for a period of two years, until 15 November 2027, ensuring it remains in force.

If you have any further questions regarding this topic, please feel free to reach out to Stefan Kroezen, Willem Pham or any other corporate team member.