Dutch branch or a new BV? Options for a Turkish company expanding to the Netherlands

When a company operating in Türkiye decides to expand to the Netherlands, the first structural question is this: register a branch of the existing company, or set up a separate Dutch BV? Both routes start with a KVK registration and both are legally possible, but their consequences for liability, tax, bookkeeping and client perception are quite different.

In this article we compare a branch (filiaal in Dutch, vaste inrichting or permanent establishment in tax terms) with an independent BV, in other words a subsidiary. The aim is not to hand you a recipe but to show which question drives which answer. Which structure suits you depends on your goals and on the situation of the company in Türkiye, and it calls for a tailored assessment.

What is a branch, what is a BV?

A branch is an extension of the Turkish company in the Netherlands. It has no separate legal personality: every contract, invoice and debt in the Netherlands belongs directly to the Turkish parent. It is registered at KVK as the branch of a foreign company, and the parent’s trade registry documents, articles of association and director details are submitted with translation and apostille.

A BV is a separate legal person incorporated under Dutch law. The Turkish company becomes its shareholder, which creates a parent and subsidiary relationship. The BV is incorporated by notarial deed, registered at KVK in its own name and files its own UBO notification. The formation steps are described on our formation and structuring page.

The liability difference

The most visible difference is liability. With a branch, the parent is liable without limit for all obligations in the Netherlands; a Dutch dispute can reach assets in Türkiye. With a BV, liability is as a rule limited to the BV’s own capital and assets. The Turkish shareholder is not held liable for the BV’s debts, barring exceptional situations such as director misconduct.

This is not merely a legal footnote. For projects that carry risk, for hiring staff and for long-term contracts, it directly shapes the choice of structure.

Tax and bookkeeping: how the mechanics work

Under Dutch tax law a branch counts as a permanent establishment. Profit from the Dutch activity is subject to corporate income tax at the Belastingdienst (the Dutch tax authority), but since the branch is not a separate company, that same profit also sits in the Turkish parent’s books. The mechanisms of the Türkiye–Netherlands treaty then come into play to avoid double taxation; we cover them in the double taxation treaty.

A BV is a taxpayer in its own right. Its profit is taxed separately in the Netherlands, and profit reaches the Turkish parent as dividends, with any withholding tax again governed by the treaty. Which route works out better overall depends on the tax position of the company in Türkiye and on where the profit will be used, so a tailored assessment is essential.

On the bookkeeping side there is a common misconception: “If I open a branch I do not need to keep books in the Netherlands.” That is not the case. A branch must also keep separate Dutch records, file BTW (VAT) returns and prepare a corporate income tax return for the permanent establishment. Those records must reconcile with the parent’s main ledgers in Türkiye, which in practice creates a reconciliation burden between two countries.

Banks and client perception

Dutch banks tend to run a more detailed review when opening an account for the branch of a foreign company, because the file covers the whole structure of the Turkish parent, and the process takes longer. The decision is the bank’s, but in our experience BV files move more predictably.

Clients and suppliers react in a similar way. A Dutch counterparty wants to see a Dutch BV registered at KVK; a foreign branch can trigger extra questions at contract stage. For public tenders and large corporate clients the difference is more pronounced.

Which structure fits which situation?

A branch usually makes sense when:

• You need a Dutch presence for a specific, time-limited project or a single contract.
• You want to test the market before committing to a permanent investment.
• The Dutch activity mirrors the parent’s activity exactly and carries no separate risk.

A BV comes to the fore when:

• You plan a long-term presence with an office and employees.
• You want to separate Dutch risk from the assets in Türkiye.
• You may build a holding structure or sell part of the business later (exit); see BV or holding?.
• You need a strong Dutch identity for banks, clients and permit procedures such as the kennismigrant route.

The structure analysis addresses exactly these questions: duration of the activity, level of risk, staffing plans, where profit will stay and how the Turkish company is organised. The outcome is a written recommendation report; the decision remains yours.

Conclusion

A branch may look like the lighter start, but unlimited liability and parallel bookkeeping in two countries often cancel out that lightness. A BV requires a formation step (notary fee roughly € 1,050, KVK registration € 85) and in return offers a clean separation and a strong local identity. To discuss which option fits you, we are glad to listen to your situation in a free 15-minute intro call.