NETHERLANDS LAW AND PRACTICE Contributed by: Friederike Henke, Ingrid Cools, Philip ter Burg, IJsbrand Uljée, Suzan van de Kam and Epke Spijkerman, BUREN
The term “control” refers to the ability to exercise decisive influence on a target company, either through shareholding or on a de facto basis once the investment has taken place. Thresh - olds apply depending on the type of target com - pany involved. Upon receipt of the notification, the BTI will examine whether the transaction can lead to a risk to national security, particularly the continuity of vital processes, the prevention of undesirable strategic independencies and the integrity and exclusivity of knowledge and infor - mation. In principle, the approval time is within eight weeks of receipt of the notification. If a formal assessment is required, the BTI has an addi - tional eight weeks for further investigation. Each phase can be extended separately. Pending BTI approval of the transaction, a stand - still obligation applies to the parties involved. Based on article 6 (1) of the EU FDI Screening Regulation, the European Commission will have to be informed about the transaction and both the European Commission and other EU mem - ber states may ask questions about a transac - tion. 2.2 Procedure and Sanctions in the Event of Non-Compliance On the basis of current legislation, a transaction is voidable if parties to a foreign investment in the electricity, gas, or telecommunications sec - tor fail to notify the Ministry. Failure to comply with the notification obliga - tions under the Security Test Act may lead to a direct suspension of all voting rights of the inves - tor, pursuant to the transaction. The company will be obliged to make all efforts to co-operate.
Furthermore, the BTI may require the parties to make a certain notification within three months of the transaction becoming known. In the mean - time, the rights of the investor will be suspended. The BTI may also impose an administrative fine, with the maximum being 10% of the turnover. If the transaction has taken place without the approval of the BTI, the Security Test Act stipu - lates that the acquisition shall be declared null and void. 2.3 Commitments Required From Foreign Investors Foreign investors are required to fulfil the notifi - cation requirements described in 2.1 Approval of Foreign Investments . 2.4 Right to Appeal Regarding foreign investments, there is no right to appeal in the Netherlands. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The legal entities most commonly used in the Netherlands are private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid – BV) or the public limited company ( naamloze vennootschap – NV), both of which have legal personality, and the (limited or general) partnership ( personenvennootschap ), which is a contractual arrangement without legal personality. BVs The key characteristics of a BV are as follows: • capital is divided into shares; • privately owned (ie, with a closed circle of shareholders);
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