|
|
| NautaDutilh law firm Newsletter |
|
| Monday,January 07,2008 Posted: 21:43 BJT(43 GMT) | | From:NautaDutilh law firm Article type:Reproduced |
NautaDutilh Newsletter
Dear Sir, Madam,
NautaDutilh is a professional law firm with an international focus. In line with our goal to bridge the gap between different legal cultures we have held a legal seminar for Chinese companies. The seminar took place in June 2007 and we intend to make it a recurring event. Also, we have organized a meeting between the Chinese Embassy and the Netherlands Ministry of Economic Affairs for the purpose of conveying Chinese companies' issues to Dutch government.
In order to help Chinese companies keep informed and updated on legal issues that are relevant to them, we present this newsletter.
This newsletter covers the following topics:
- Cooperative
- Work immigration
- Pension
- News rules for public offers
- Bidding for infrastructure
- Patent
- New negotiations tax treaty China
- "Smart and Secure Trade Lanes"
Should you have any further questions, please do not hesitate to contact NautaDutilh's China desk:
Willem J.L. Calkoen
T: +31 10 22 40 406
F: +31 10 22 40 008
M: +31 6 5349 0451
E: willem.calkoen@nautadutilh.com
Lesley Wang
T: + 31 10 224 0165
F: + 31 10 224 0008
M: +31 641 451 944
E: Lesley.wang@nautadutilh.com
Simon van Zijll
T: +31 10 22 40 294
F: +31 10 22 40 061
M:+31 6 202 105 59
E: simon.vanzijll@nautadutilh.com
Cooperative
The Netherlands is well known as a prime location for international corporations to set up their holding company, due to its favourable tax regime, strategic location in the European continent, and professional infrastructure. In practice, a Dutch B.V. is always the first consideration, specially because it benefits a lot from the Dutch "participation exemption", under which all benefits (such as dividends and capital gains) derived from certain shareholdings are exempt from Dutch corporate income tax. But presently, the Netherlands offers international corporations another more efficient opportunity to take advantage of the "Dutch cooperative", a form of business organisation which charges no withholding tax on any profit distributions made by the cooperative and can benefit from the participation exemption as well.
Main benefits of using a cooperative
No withholding tax on any profit distributions made by the cooperative.
A "participation exemption" allows the cooperative's dividend income and capital gains to be exempt from Dutch corporate income tax.
The extensive treaty network of the Netherlands and the EC Parent-Subsidiary Directive provide for a reduced withholding tax burden on dividends paid to a Dutch cooperative.
Flexible legal characteristics.
Legal characteristics of a cooperative
Historically used primarily in the agricultural sector, a cooperative is a special type of association.
A cooperative is established by notarial deed, and can be formed in a matter of days. The cooperative must be registered with Trade Register maintained by the Chamber of Commerce. A cooperative must be formed with at least two members.
It is important to note that since the use of a Dutch cooperative is a fairly new development, there is little relevant precedent under Dutch case law. Furthermore, ambiguities do arise in certain areas.
Immigration Law ( work immigration)
General Structure
Chinese immigrants who want to work in the Netherlands for a period longer than 3 months need a residence permit and, in some cases, a work permit. They also need a special visa MVV ("machtiging tot voorlopig verblijf"), to apply for in China, to be able to enter the Netherlands. This visa will only be issued if it is established that there is a right to enter, reside and work in the Netherlands.
It is also possible for Chinese citizens, living outside the Netherlands, to come to the Netherlands for a period shorter than three months and do incidental work such as attending meetings, writing articles as a journalist, some specific IT-work etc. A work permit is not necessary, but it is necessary to have a visa, issued specifically for work (business) purposes. It is important to note that there are very specific rules for this situation regarding the exact content of the work, the duration of the work and the possibility of entering the Netherlands again for the same kind of work. It is therefore advised to consult an expert or the Dutch embassy beforehand.
Work immigration
There are two forms of work immigration: the immigration of employees and the immigration of self employed persons.
In both cases it is required that there is no EU-national or legal resident that can do the job. This is a difficult standard to meet.
Other options
"Inter company transfer" policy: companies (or a group of companies) with an annual turnover of at least EUR 50.000.000 can transfer highly skilled managers and specialists to a Dutch business location. These employees must earn at least EUR 50.000 gross a year. For companies with an annual turnover lower than EUR 50.000.000 there is also an option, but this is more complicated.
Highly skilled migrants: companies that have a business location, a pay roll and at least one employee in the Netherlands, and that have signed a (standard) statement issued by the Immigration and Naturalization Department of the Ministry of Justice, can apply for admission and residence of highly skilled migrants. "Highly skilled" in this context means earning a certain amount of salary: employees younger than 30 must earn approximately EUR 34.000 gross a year, employees over 30 must earn approximately EUR 45.000 gross a year.
New policy developed by the Minister of Economic Affairs for self employed persons (not entered into force yet)
Scoring system for self-employed persons:
personal experience
business plan and
contribution to Dutch society (innovation, creation of jobs, level of investments).
Pensions
General Structure
The Dutch pension system is comprised of three pillars, namely:
basic old age pension social security under a statutory insurance scheme (first pillar);
occupational pension schemes (second pillar);
personal annuities offered by insurance companies (third pillar).
The Dutch system is a comprehensive pension system that guarantees a decent minimum income for all citizens. The basic old age pension social security (first pillar) provides an equal income for all residents - natives as well as foreigners - at a level related to the net minimum wage. This is compulsory. The second pillar comprises the occupational non-statutory pension schemes supplementary to the state pension.
The main rule is that employees who paid pension premiums while living and working in the Netherlands, cannot reclaim any amount when they leave the country. There is, however, an exemption for occupational pensions below € 400 per year. That lower amount can be reclaimed.
First pillar: the state old age pension (AOW)
The AOW is the statutory old age pension scheme of the Netherlands. It provides all residents of the Netherlands at the age of 65 with a flat-rate pension benefit that in principle guarantees 70% of the net minimum wage.
The employer and employee both need share the payment of AOW, whose amount is round [ ] % of [ ] .
Second pillar: occupational pensions
Although there is in principle no obligation for employers to enter into pension agreements with their employees, the vast majority of those employed in the Netherlands (over 90%) participate in an occupational pension scheme. A pension scheme is part of the employment conditions laid down in an agreement (which may be a collective bargaining agreement).
The way contributions are divided among employers and employees varies from one pension scheme to another.
Third pillar: private pension provisions
The third pillar of the Dutch pension system comprises individual pension provisions. These should be taken out by an insurance company and have nothing to do with the relationship between employer and employee. Everyone has the opportunity to enter into these arrangements with an insurance company.
Apart from pensions there are premiums for sickness insurance. There is a law that each company has to pay 6.5% of the salary up to a salary of € 30,000 as premium for sickness insurance.
New rules for public offers
On 28 October 2007, the new rules for public offers came into force in the Netherlands, thereby implementing the European Takeover Directive of 21 April 2004 in Dutch law.
The new rules have securities law aspects (in particular, the procedure for making a public offer), as well as corporate law aspects (e.g. the permissibility of protective measures). In general, the AFM is responsible for monitoring compliance with the securities law rules, while the authority to decide on the application of the corporate law rules is vested in the Enterprise Chamber of the Amsterdam Court of Appeal. The main exception to this are mandatory takeover bids, to be discussed below: the authority to decide whether such an obligation exists has been explicitly vested in the Enterprise Chamber.
Bidding for infrastructure
As China is a WTO member, Chinese companies are entitled to non-discriminatory treatment from EU member state bodies in public procurement procedures in comparison with EU based companies. If Chinese companies suffer any unfair treatment during the process, please don't hesitate to contact NautaDutilh for help.
Patent
In 2007, NautaDutilh represents a global Chinese company in patent litigation before the District Court in The Hague. This is the first patent case in The Netherlands in which a big Chinese company is involved. The case is now pending before the Court of Appeal. The NautaDutilh team consists of Prof. Charles Gielen, John Allen and Anne Marie Verschuur, all experienced litigators in patent cases..
New negotiations tax treaty with China
It is expected that the Netherlands will resume negotiations with China mid-December 2007 in order to arrive at a new general tax treaty.
Start of pilot "Smart and Secure Trade Lanes" between the Netherlands and China
On 19 November, a pilot project was started that aims at creating "smart and secure trade lanes" between China and the EU Member States. The customs services of the Netherlands and the United Kingdom will be responsible, jointly with the European Commission, for the pilot project from the European side.
The ports of Rotterdam (the Netherlands), Felixstowe (UK) and Shenzhen (China) have been selected for this project.
|
|
Bilateral Visits