Digital incorporation of limited liability companies
As of 1 August 2022 digital incorporation of a capital company will be possible under directive 2019/1151 of the European Parliament and of the Council of June 20, 2019 (the “Directive“). This means that the costs, time, and administrative burdens will be drastically reduced and setting up a Dutch BV will be more accessible through the system of digital incorporation of limited liability companies.
Digitizing the setting up of a Dutch BV is an important step towards the modernization of Dutch company law in general, as well as the notarial profession as a whole. Important to note it will only be possible for Dutch BV’s to be incorporated online if the shares are paid-up in cash.
A digital deed of incorporation will be utilized along with the digital identification by the notary by way of livestream video connection. This eliminates the requirement to be physically present at the office of the notary to execute the notarial paper deed of incorporation. A new title is added to the Civil-Law Notaries Act. This title paves the way towards the digital execution of the incorporation deed.
The Royal Notarial Professional Organization provided a centralized online execution platform that has implemented the digital incorporation process including a digital identifier that uses the highest security level pursuant to the EU regulation on electronic identification and trust services for electronic transactions in the European Single Market (eIDAS regulation). This maintains the gatekeeper role of the notary. The parties execute the deed by way of an electronic signature through the online platform.
The Dutch Ministry of Justice and Security have approached the completion of the legislation process in a cautious manner. The Netherlands embarks to implement the Directive as soon as possible but in any event before 1 August 2022.
The first version of the Digital Incorporation System is already finalized and is therefore ready to use when the Directive is implemented. The KNB is currently working on a platform for notaries to become acquainted with the Digital Incorporation System. There will also be an opportunity to give feedback on the system. Based on this, the KNB will improve the Digital Incorporation System for the final version.