How much share capital you like to issue when you incorporate your BV is a question the notary will ask you. What amount will you issue?
How much share capital?
The lowest amount you can issue is EUR 0,01 share capital. Sounds fantastic, but is it fantastic? We think it is not. Actually we think will could work against you. How is that?
The BV company requires you to provide annual reports, which are also published with the Chamber of Commerce. Anybody interested in your company either to provide you with finance, to potentially participate, or provide investment funds, can download such annual report. If you then have on the equity part the silly EUR 0,01, it is pity full noticed.
Besides EUR 0,01 being pity full, it is nearly always forgotten by the shareholder to pay into the BV. If not paid, the limited liability has not started.
So man up and make it at least EUR 100. Is EUR 100 enough we ask you. The share capital is meant to pay for the initial costs the company may have before it makes turnover. The first costs you have are the notary, and a notary is more expensive than EUR 100. I expect you might rent an office with a deposit, have a domain to be paid etc. Hence we suggest to make the amount EUR 5.000 instead.
How much share capital to prevent Box 3 taxation?
A commonly asked question is how to avoid Box 3 taxation. We are not so creative that we have an answer to such a question. But if you happen to have a Box 3 “issue” and you are about to incorporate a BV company, you could decide to make a huge share capital deposit.
Huge could be a million. Then your BV company has a million share capital. Is this wise? That we have no answer to. Will it save Box 3 taxation? Under 2020 rules yes, but we have heard rumors that in Box 2 (where you report this BV) a similar system as in Box 3 is to be introduced.
Could you lose the million? Yes you can, but that depends on your entrepreneurs talent. If you have none, then the rules is that you are maximum liable up to the amount of share capital you put in the BV. That implies in this case you lost the million. If you have entrepreneur skills or you have a low risk business model, we do not expect you to lose the million.
Mind you, the financial gains the share capital makes in the BV such as capital gains, are taxed in the result of the BV company. Whereas if you make a capital gain in Box 3, this is not taxed.
The day you think you want to have the money back in Box 3, you can terminate the BV and the pay out of the share capital is tax free.
Tax-is-exciting
We think tax-is-exciting and we like to assist you with the accountancy services you need for running the BV company. It we can make suggestions already at the start, we suggest a higher share capital. No only makes a higher share capital it easier to pay our invoice, but it looks better in the annual report and it prevents an immediate loan agreement with the shareholder to fund the costs of the BV company.
Sorry for the dashes in the middle of the word tax-is-exciting. Apparently Google has a dirty mind and sees only a three letter word that we refer to when we practice to reproduce ourselves. Anything related to that word is spam, hence this devout solution.
