Most international groups arrive in the Netherlands assuming that incorporation is the difficult part. It rarely is. A Dutch BV is formed by deed before a civil-law notary and entered in the Handelsregister kept by the KVK along a defined path with known requirements. The step that derails timetables, and the one clients consistently underestimate, is the opening of a Dutch bank account. It is not an administrative formality performed once the entity exists. It is a second, independent review of the structure by an institution with its own regulatory exposure, its own risk appetite, and only a limited duty to explain a refusal.
The account is a second approval, not a form
A notarial deed makes the company exist. A bank account makes it operable. Between the two sits a gap that many groups discover only after the entity is registered, the lease is signed and the first invoices are due. Incorporation is not conditioned on a domestic bank relationship, so an entity can be fully constituted and still unable to receive a single euro.
The practical consequence is sequencing. Where a bank relationship is critical to the timetable, the onboarding conversation should begin in parallel with the structuring work rather than after it. Facts that are trivially adjustable at the design stage, such as which entity holds the operating contracts or where the directors are resident, become expensive to revisit once the deed is executed. A structure that is elegant on paper but cannot be explained to a compliance officer in three sentences is, for banking purposes, a defective structure.
What the bank is actually being asked to do
Dutch banks operate under the client due diligence regime of the Dutch anti-money-laundering and counter-terrorist-financing act, in a supervisory climate that has been unforgiving. The obligation is not simply to verify a client at the point of entry; the statute requires the institution to identify the client and its ultimate beneficial owner, to take reasonable measures to understand the ownership and control structure, to establish the purpose and intended nature of the relationship, and to keep the relationship and the transactions passing through it under continuous review so that they correspond to what the institution knows of the client and its risk profile, investigating the source of the funds used where necessary. The duty is continuing, and the institution carries the consequences of getting it wrong.
This changes the character of the exercise. The bank is not assessing whether the client is profitable, well capitalized or reputable. It is assessing whether it can hold a defensible file. Anything it cannot understand well enough to defend later is, from its perspective, a liability rather than an opportunity. Foreign investors frequently read a refusal as a judgment on their integrity. In most cases it is a judgment on the legibility of the file.
A bank does not refuse the files it dislikes. It refuses the files it could not defend to its own supervisor years afterwards.
The questions behind the questionnaire
The information requested is broadly consistent across institutions, and identification of the ultimate beneficial owners comes first. What the bank needs is not the immediate shareholder but the natural persons at the end of the chain, with identity documentation and proof of address for each of them. The statutory duty to record ultimate beneficial owners in the Handelsregister is discharged separately at the KVK and continues to apply in full, but the register is no longer open to the general public. Following the Court of Justice judgment of 22 November 2022 in the joined Luxembourg Business Registers and Sovim cases, which, as the Court’s press release on that judgment records, held invalid the provision under which beneficial ownership information had to be accessible in all cases to any member of the general public, the KVK states that the details of UBOs in the UBO register are not public and that only organisations such as the Public Prosecution Service, the police, the Tax Authority and the Financial Intelligence Unit can view all the data at any time. That closure to the general public does not extend to the bank. Institutions subject to the anti-money-laundering act may inspect the recorded name, month and year of birth, country of residence, nationality and the nature and extent of the interest held for the client due diligence that act requires of them, and the KVK lists banks among the organisations that can consult the register. What is filed at the KVK and what is declared to the bank therefore have to agree. None of this relieves the bank of its own duty to identify the beneficial owner and take reasonable measures to verify that identity.
Once those persons are named, the questions turn to money, and they arrive in two forms that are distinct. Source of funds asks where the money entering the account comes from. Source of wealth asks how the beneficial owner came to have wealth at all. The second question is the one that catches applicants unprepared, particularly where wealth was accumulated over decades across several jurisdictions.
The remaining questions concern the business itself and what will pass through the account. A description of the business is expected to state what is sold, to whom, under what contracts, and with what margin logic; generic descriptions such as consultancy, trading or investment management, offered without specifics, invite escalation. Expected flows are wanted in figures, meaning anticipated volumes, average and maximum transaction sizes, currencies, frequency, and whether the account will be used for third-party receipts or for intra-group settlement. Counterparties and countries complete the picture: the principal customers and suppliers by name where possible, and the jurisdictions on both sides of the flows.
Where the structure includes intra-group financing, cash pooling or guarantee arrangements, expect those to be probed as well; the bank will want to see that the flows have a commercial rationale and documented terms, which overlaps directly with the arm’s length requirements applying to intercompany funding.
Why files are refused
No genuine connection with the country. A registered address, a mail-forwarding arrangement and a non-resident sole director describe an entity that could be located anywhere. If nothing about the business requires the Netherlands, the bank is being asked to take on risk without any corresponding relationship.
Opaque or unverifiable activity. Where the description of the business cannot be corroborated by contracts, a website, an operating history or identifiable customers, the file cannot be closed, and the institution is forbidden to enter into the relationship or carry out the transaction until its due diligence has produced the result the statute requires. Newly formed entities are not disqualified, but a start-up file must compensate with clarity about the founders and the plan.
Layered structures without a stated reason. Multiple holding tiers across several jurisdictions are common and often entirely legitimate. What causes difficulty is the absence of an explanation. Each layer should have a purpose that can be stated in a sentence. Where the only available answer is fiscal, the file will struggle, and not only with the bank: the ruling policy in force since 1 July 2019 opens advance consultation only where the applicant belongs to a group carrying on real operating activity in the Netherlands, the so-called economic nexus, and where in addition operating activity is carried on for the applicant’s own account and risk, with sufficient relevant personnel present in the Netherlands at group level and with that activity fitting the applicant’s function within the group. That nexus requirement, in both of its parts, is by its nature inapplicable where the certainty sought is that there is no non-resident corporate income tax liability under article 17 or 17a. And no advance certainty is given where the saving of Dutch or foreign tax is the sole or decisive motive for the transaction.
Higher-risk sectors and geographies. Certain activities attract enhanced scrutiny as a matter of policy rather than suspicion: crypto-asset services, gaming, dual-use goods, cash-intensive businesses, and any flow touching sanctioned or listed jurisdictions. Some institutions decline these categories outright. That is a commercial policy decision, and it is generally not open to appeal.
Politically exposed persons. PEP status among the beneficial owners or their close associates does not preclude onboarding, but it moves the file into enhanced due diligence, with the approval of a member of senior management before the relationship is entered into or continued, appropriate measures to establish the source of the wealth and of the funds involved, and continuing enhanced monitoring.
Substance is the recurring theme
The Dutch tax framework and the banking framework converge on the same question from different directions. Corporate income tax applies at 25.8 per cent above a taxable amount of 200,000 euro, with 19 per cent on the first tranche of profit, and that liability arises whatever the shape of the group. What depends on the facts is access to relief. The participation exemption applies only where the shareholding meets its conditions and the holding is not a low-taxed investment participation. Reduced rates or exemptions on the dividend withholding tax, which the statute sets at 15 per cent of the proceeds, whether under a treaty or within the European Union, depend on the recipient’s position being real rather than nominal. The conditional withholding tax, which reaches interest, royalties and dividends paid to associated entities in low-taxed or listed jurisdictions and in abusive arrangements, and the documentation duty under article 8b, which applies without any turnover threshold, both proceed from the premise that the recorded facts describe what the entity genuinely does. That charge is levied at the highest corporate income tax rate, 25.8 per cent, and where it reaches a dividend the dividend withholding tax already withheld is set against it, so a distribution within its scope carries the higher rate and not fifteen per cent.
A bank asks the same thing in plainer language. Who signs? From where? Who negotiates the contracts? Where are the people? Groups that have taken the substance question seriously at the design stage find the banking conversation materially easier, because the answers already exist and are supported by evidence rather than by assertion.
Assembling a file that can be reviewed
A workable application is a coherent narrative supported by documents, not a stack of documents. In practice that means the corporate chain in a single readable chart from the operating entity to the natural persons, with percentages; identity and address documentation for those persons; the deed, the extract from the KVK and the articles; audited or management accounts for the group where they exist; a short written description of the business model and the expected flows in figures; and evidence of the Dutch connection, whether that is a lease, employment contracts, customer or supplier agreements, or the appointment of a resident director with genuine authority.
Source of wealth deserves separate preparation. A narrative supported by evidence, whether sale agreements, dividend histories, tax returns or property records, is far more effective than a bare statement. Where the group already maintains transfer pricing documentation, the local file is frequently the clearest available account of what each entity actually does.
Two further points of discipline. Answer the question that was asked, in writing, and keep the answers consistent across the file; inconsistencies between the questionnaire, the accounts and the chart are among the fastest routes to escalation. That discipline reaches the register as well: where an institution finds a discrepancy between the beneficial ownership data it has been given from the Handelsregister and what it knows of that beneficial owner from other sources, it must report the discrepancy to the KVK. And disclose adverse history rather than allowing the bank to discover it. Litigation, a prior account closure or negative media coverage handled openly is a manageable fact; the same fact surfacing in a screening tool after the applicant has been silent about it reads as concealment.
Timing, cost and what cannot be promised
No responsible adviser should quote a fixed timetable for onboarding. Duration depends on the number of beneficial owners and the jurisdictions involved, whether standard or enhanced due diligence applies, the completeness of the first submission, the number of follow-up rounds, and the institution’s own capacity at the time. Each additional round of questions restarts the internal clock. Cost is similarly a set of components rather than a figure: the notarial deed, KVK registration, the banking application itself, ongoing account maintenance, the local administration and annual accounts, the corporate income tax return, and any resident director or office arrangements. Their relative weight follows the complexity of the group, not a schedule.
What can be managed is preparation. Applying to more than one institution in parallel is sensible, since risk appetites differ and a refusal from one is not a verdict from the market. Payment and electronic money institutions can bridge an operational gap, though they are no substitute where the group needs credit facilities or guarantees. Above all, the structure should be built so that it can be described honestly and briefly. Structures that require a long explanation tend not to survive review, at a bank or anywhere else, which is why the formation and the banking strategy belong in the same conversation.
Montclare structures and operates Dutch and cross-border holding platforms for international groups. Our services are set out on our services page.
This article is informational and does not constitute tax advice. Each engagement is subject to scope and applicable regulation.