NETHERLANDS Law and Practice Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
1. Market Trends 1.1 Technology M&A Market
2. Establishing a New Company, Early-Stage Financing and Venture Capital Financing of a New Technology Company 2.1 Establishing a New Company In general, new-start-up companies are incor- porated in the Netherlands. This is due to its favourable entrepreneurial landscape (ie, stable economy, strong and flexible legal framework, and competitive fiscal climate). Typically, new start-up companies are incorporated as either a sole proprietorship ( eenmanszaak ) or a private limited liability company ( besloten vennootsc- hap or BV). Dutch corporate law allows entre- preneurs to incorporate a Dutch BV with a mini- mum contribution of EUR0.01. The incorporation of a new Dutch BV can be completed within a week. In contrast to the private limited liability company, the incorporation of a public limited liability company ( naamloze vennootschap ) in the Netherlands requires an initial capital con- tribution of at least EUR45,000. This legal entity is also subject to a less flexible legal framework than the BV and is not often used for start-ups. 2.2 Type of Entity Entrepreneurs in the Netherlands are predomi- nantly advised to choose a private limited liability company ( besloten vennootschap ) for the initial incorporation due to its flexible regime and the limited liability for the shareholders (attractive for venture investors), and because nearly no initial capital contribution is required (see 2.1 Estab- lishing a New Company ). In some instances, different types of entities are preferred, which can be based on tax and other considerations. 2.3 Early-Stage Financing Early-stage financing, or seed investment, is usually provided by entrepreneurs themselves, friends and family, venture capitalists, angel
The technology M&A market in the Netherlands has shown resilience compared to global trends, though it has faced some challenges similar to those seen in other sectors. Over the past few years, global M&A activity, especially in the tech- nology sector, slowed due to economic pres- sures such as inflation, rising interest rates and stricter regulatory scrutiny. However, the Neth- erlands has performed relatively strongly, with deal volumes in the technology, media and tel- ecommunications (TMT) sector seeing a slight increase in the past year, even though the total value of deals dropped significantly. 1.2 Key Trends Over the past 12 months, several key trends have emerged in the technology M&A landscape in the Netherlands, reflecting broader global shifts while also showcasing unique regional characteristics. • Increase in mid-market deals: The Dutch tech sector has seen a steady focus on mid-mar- ket transactions. Despite the global decline in deal values, mid-sized deals remained relatively robust, particularly in the software and IT services segments, which continue to be highly attractive for investors. • Regulatory pressures: Regulatory scrutiny has increased, particularly for larger tech deals, as Dutch authorities align with EU regulations to curb monopolistic behaviours and protect market competition. This has extended the timeline for larger deals and deterred some larger deals from proceeding. Please also refer to the Netherlands Trends & Development chapter in this guide.
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