The migration sequence

  1. Incorporate the BV, with a holding company above it if you expect growth or a future sale. See BV incorporation.
  2. Value and transfer the assets: client contracts, intellectual property, domains and equipment. The LLC sells or licenses them to the BV at a documented arm’s-length value. See transfer pricing basics. A transfer of intellectual property is often combined with the Dutch innovation box. See the 9% innovation box rate.
  3. Renew client paperwork: you transfer each client with a short assignment letter or a new order form. Most clients sign within a week.
  4. Switch billing and subscriptions to the BV. European clients then also get local VAT treatment. See the VAT setup.
  5. Wind down the LLC: file a final return and dissolve it with the state, or keep it as a small company for the US market.

The main tax points

The asset transfer is a taxable event in the US, based on the values you document. Set the price early, while the values are still modest, so the transfer costs little tax. From then on, the BV pays Dutch corporate tax on its profit: 19% to €200,000 and 25.8% above that. For your own pay, the Dutch rules for a director and major shareholder (DGA) apply. This is the standard setup for a founder who manages their own BV. See the DGA salary rules for US owners.

Does your company want its European entity in the Netherlands? See setting up a Dutch subsidiary for the steps, the costs and a comparison with other countries.

Founders who relocate with the business

Many founders relocate to the Netherlands together with the company, under DAFT. The BV is then also your treaty business. See DAFT with an existing US LLC. You can also stay resident in the US while the BV sells to European clients. See owning a Dutch BV as a non-resident.

Relocating from the US with your business? See the Dutch American Friendship Treaty (DAFT) and your Dutch company.