FormTypes of joint venture
What are the key types of joint venture in your jurisdiction? Is the ‘joint venture’ recognised as a distinct legal concept?
Under Dutch law, the joint venture is not recognised as a distinct legal concept and the term ‘joint venture’ has no special statutory meaning.
The cooperation between two or more independent parties that is typical for a joint venture can be in the form of a purely contractual arrangement or by way of a jointly owned joint venture company. From a structuring perspective, a purely contractual joint venture is the simplest form of cooperation as it does not require the establishment and maintenance of a separate entity and is formalised merely by entering into a joint venture agreement setting out the main terms of the cooperation. If the joint venture partners have decided to structure their cooperation through a separate jointly owned joint venture vehicle, they can opt for either a partnership, which under Dutch law has no legal personality, or a legal entity. The key advantage of using a partnership is that a partnership can be tax-transparent, meaning that the joint venture partners rather than the partnership will be taxed on the partnership profits. The main disadvantages of a partnership are that owing to its lack of legal personality it cannot own assets and the fact that, in principle, the (general) partners are fully liable for the partnership’s debts. The forms of partnership that can be used as the joint venture vehicle are the general partnership and the limited partnership. If the joint venture vehicle should be a separate legal entity, the available options are a private company with limited liability (BV) and a public company (NV). The BV is by far the most common form of joint venture entity, even more so since October 2012, when a bill entered into force that transformed the BV into a very flexible legal entity. Until recently, cooperatives were also regularly used as joint venture vehicles, but their popularity has decreased significantly owing to changes in tax legislation.Common sectors
In what sectors are joint ventures most commonly used in your jurisdiction?
In the Netherlands, joint ventures are commonly used across all sectors and industries. As in other jurisdictions, joint ventures are often created to share and combine knowledge, to share costs and to limit risks and exposure. Consequently, many joint ventures are common in sectors where research and development play a key role, such as the telecoms, oil and gas, technology and consumer goods sectors.
PartiesRules for foreign parties
Are there rules that relate specifically to foreign joint venture parties?
In the Netherlands, there are presently no rules that specifically relate to foreign joint venture parties. Moreover, there are no regulatory restrictions on foreign direct investment (FDI) into the Netherlands. That being said, an EU Regulation providing a new framework for the screening of FDI into the European Union and its member states (Regulation 2019/452/EU) entered into force on 11 April 2019 and applies as of 11 October 2019. The Regulation provides a framework for the screening of FDI by member states on grounds of security or public order. Under the Regulation, member states will be allowed to implement an FDI screening mechanism subject to certain formal requirements. The Regulation does not require member states to have an FDI screening mechanism. It is still unclear whether the Netherlands will introduce an FDI screening mechanism.Ultimate beneficial ownership
What requirements are there to disclose the ultimate beneficial ownership of a joint venture entity?
Under new legislation expected to enter into force in January 2020, all legal entities and partnerships are required to register their ultimate beneficial owners (UBOs) in a public UBO register. The introduction of a UBO register is part of the implementation of the Fifth European Anti-Money Laundering Directive. The UBO register will be part of the trade register of the Dutch Chamber of Commerce.
Setting up and operating a joint ventureStructure
Are there any particular drivers in your jurisdiction that will determine how a joint venture is structured?
Typically, tax considerations are important drivers that will determine how a joint venture is structured. Other key factors that may drive the structure of a joint venture are:
- the accounting treatment of the joint venture (in particular, whether the joint venture partners wish to include the joint venture in their consolidated accounts);
- the respective ownership percentages of the partners;
- the duration of the joint venture;
- competition law aspects;
- corporate governance considerations;
- the jurisdictions where the joint venture partners are based; and
- the jurisdictions in which the joint venture will be investing.
When establishing a joint venture, what tax considerations arise for the joint venture parties and the joint venture entity? How can tax charges be lawfully mitigated?
One of the most important aspects to consider from a tax perspective when establishing a joint venture is the legal form of the joint venture vehicle and its qualification under Dutch tax law. This qualification of the joint venture vehicle is decisive when determining whether the joint venture parties or the joint venture vehicle are subject to taxation in the Netherlands. The legal form of the joint venture vehicle can also be relevant for Dutch dividend withholding tax purposes. Generally, only entities with a capital divided into shares are subject to the Dutch dividend withholding tax act.
A transfer of shares or assets and liabilities from a joint venture party to the joint venture vehicle can trigger corporate income tax or real-estate tax, or both. However, Dutch tax law includes several provisions that could effectively allow for a tax-free contribution by the joint venture parties to the joint venture vehicle. Apart from several roll-over facilities, the participation exemption could provide relief for situations in which qualifying shareholdings are contributed by Dutch-resident joint venture parties.
If a joint venture party transfers a business to the joint venture, this will generally be considered a transfer of a business going concern for Dutch VAT purposes and deemed not to fall within the scope of Dutch VAT.
Under the foreign taxpayer rules, foreign joint venture parties can be subject to Dutch corporate income tax for holding an interest in the Dutch joint venture vehicle. In addition, any interest on a loan between the joint venture vehicle and the joint venture parties can also be captured by these rules. In most cases, it is relatively straightforward to structure around these rules, but it is important to consider the potential tax implications when setting up the joint venture structure.
Tax-planning strategies for setting up a joint venture structure that involves the use of hybrid mismatch arrangements should be revisited as the Netherlands will implement the amendment of the EU anti-tax avoidance directive (ATAD 2) with effect from 1 January 2020. Once implemented, it will be more difficult to set up a structure with double deductions or to claim a deduction without corresponding inclusion by using hybrid mismatches. Instead, tax-planning strategies should focus on the possibilities to claim roll-over facilities or exemptions where possible and needed, shifting profits from high-tax jurisdictions to low-tax jurisdictions using debt instruments, and on withholding taxes for which no credit is available.Asset contribution restriction
Are there any restrictions on the contribution of assets to a joint venture entity?
Under Dutch corporate law, there are no restrictions on the contribution of assets to a joint venture entity. However, if the joint venture vehicle is a BV or an NV, additional formalities apply if the contribution is made in exchange for one or more shares in the capital of the company.
If the joint venture entity is a BV, the management board of the BV must prepare a so-called management description that must state the value of the assets to be contributed and the valuation method applied. The valuation method applied must be in accordance with generally accepted accounting standards. The management description must refer to the condition of the relevant assets on a date that must be within five months before the date of the share issue.
If the joint venture entity is an NV, in addition to the preparation of a management description, an auditor must issue a certificate confirming that the value of the assets to be contributed is at least equal to the aggregate par value of the shares to be issued. In practice, this requirement proves to be quite burdensome, especially if the aggregate par value of the shares to be issued is substantial.
No similar requirements as to the value of the assets to be contributed exist if the contribution is made without the joint venture issuing any shares in exchange (ie, the contribution is made as a share premium contribution).
If the joint venture vehicle is a partnership, no requirements exist as to the valuation of the assets to be contributed.Interaction between constitution and agreement
What is the interaction between the constitution of the joint venture entity and the agreement between the joint venture parties?
If the joint venture vehicle is an entity with legal personality, the articles of association are its constitution. Since the articles are available for public inspection at the trade register of the Chamber of Commerce, all arrangements between the joint venture parties that are included in the articles are public information. For this reason, joint venture parties often decide to include all arrangements containing privileged information in the joint venture agreement only and not also in the articles. There is no requirement to register or file the joint venture agreement.
It is common practice to include a clause in the joint venture agreement stipulating that in case of a discrepancy between the joint venture agreement and the articles of association, the joint venture agreement prevails. The joint venture partners should be aware that, unlike the joint venture agreement, the articles of association have corporate effect, which means that the articles are binding not only on the joint venture partners but also on any third parties. It also means that any actions or resolutions taken in breach of the articles of association will be null and void, whereas actions or resolutions taken in breach of the joint venture agreement only constitute a breach of contract. Although the articles provide more protection and more certainty for the joint venture parties than the joint venture agreement, in practice it is not considered problematic to include specific arrangements between the parties in the joint venture agreement only.Party interaction
How may the joint venture parties interact with the joint venture entity? Are there any restrictions?
Information sharing and any other interactions between the joint venture entity and the joint venture parties are subject to the contractual arrangements included in the joint venture agreement and, in the case of an entity with legal personality, the provisions of the articles of association. In the case of a BV or NV, there is the statutory rule that the company’s management board and supervisory board or the one tier board, as the case may be, are required to provide all information requested by the general meeting, unless providing such information is contrary to an overriding interest of the company. It is unclear to what extent individual shareholders also have a right to information. Restrictions on information sharing may apply under rules of competition law or under the General Data Protection Act.Exercising control
How may the joint venture parties exercise control over the joint venture entity’s decision-making?
One of the most common and effective mechanisms allowing a joint venture partner to exercise control over the joint venture company is the right of a joint venture partner to nominate its own representatives in the company’s management board, supervisory board or one tier board. A shareholder’s right to nominate a member of a corporate body is usually structured as a binding nomination right and can be included in the joint venture agreement or the company’s articles. In the case of a BV, a shareholder can even be given the right to directly appoint its own representatives in the company’s corporate bodies. The right to nominate (or appoint) is often combined with specific quorum requirements and a provision in the articles stipulating that the company can only be represented vis-à-vis third parties and important decisions can only be taken with the minority investor’s involvement.
The other most common control mechanism in a joint venture company is to include in the joint venture agreement or the articles a list of reserved matters. Decisions on reserved matters can only be taken with the consent of the minority shareholders.Governance issues
What are the most common governance issues that arise in connection with joint ventures? How are these dealt with?
The most common governance issues arising in connection with joint ventures are related to the allocation of powers to the joint venture partners and how the joint venture partners can effectively exercise control over the joint venture and its business. If the joint venture entity is structured through a legal entity, typically the allocation of powers is partly laid down in the entity’s articles and partly in the joint venture agreement. Especially in the case of joint ventures where the ownership is not divided equally between the joint venture partners, both the articles and the joint venture agreement are often extensive and detailed. The reason for this is that the Dutch Civil Code provides little protection to minority shareholders, which means that minority shareholders will have to protect themselves through the joint venture agreement and the articles, if, for instance, they want to prevent being outvoted in respect of key decisions or being diluted in cases of capital increases.
Other important governance issues are concerned with how to balance the interests of the joint venture partners on the one hand and the interests of the joint venture on the other, and how to deal with deadlock situations.Nominee directors
With an incorporated joint venture, what controls exist in your jurisdiction in relation to nominee directors? How should a nominee director balance the potentially conflicting interests of the joint venture company and the appointing shareholder?
Each director of a Dutch company has a fiduciary duty towards the company and should at all times perform his duties in good conscience. The Dutch Civil Code prescribes that in the performance of their duties, directors must be guided by the interests of the company. This implies that a nominee director is not allowed to act merely as a direct representative of the joint venture partner that nominated or appointed him or her and, in cases of potentially conflicting interests of the joint venture company and the appointing shareholder, the director cannot let the interests of the appointing shareholder prevail.Competition law
What competition law considerations are engaged by the formation and operation of the joint venture? Is approval needed?
If a joint venture qualifies as a concentration under the Dutch Competition Act and certain turnover thresholds are exceeded, the joint venture must be notified to the Netherlands Authority for Consumers & Markets (ACM). The ACM will investigate whether, as a consequence of the joint venture being established, a dominant position is created or strengthened that significantly restricts competition on the Dutch market. Such a joint venture may only be formed after consent from the ACM has been obtained. A joint venture is considered a concentration as meant in the Dutch Competition Act if:
- two or more joint venture partners can jointly exercise control over the joint venture; and
- the joint venture performs, on a continuing basis, all the functions of an autonomous economic entity.
If the joint venture does not qualify as a concentration, it may fall within the scope of the general cartel prohibition. In that case, the joint venture agreement will be null and void, unless one of several EU group exemptions applies, such as the group exemption for specialisation agreements or the group exemption for research and development agreements.Provision of services
What are the key considerations in your jurisdiction in structuring the provision of services to the joint venture entity by joint venture parties?
It is quite common that joint venture partners provide services to the joint venture. The terms under which the services are rendered can be included in the joint venture agreement or in separate agreements. The key consideration in structuring the provision of services to the joint venture entity by the joint venture parties is that these services must be provided on an arm’s-length basis. This is important both commercially and from a tax (transfer pricing) perspective.Employment rights
What impact do statutory employment rights have in joint ventures?
Various aspects of Dutch employment law have a significant impact in joint ventures. The impact of statutory employment rights in joint ventures is no different from other types of entities.
Worker mobility between the joint venture parties and the joint venture is subject to the general provisions of the Dutch Civil Code. Various rules apply, depending on the manner in which worker mobility is structured. In the event of a transfer of an employee from one of the joint venture parties to the joint venture, the latter is to be regarded as successive employer. The legal consequences are far-reaching with regard to, for example, the order of dismissal in the event of collective dismissal, the amount of the transition payment and the length of the notice period to be observed by the employer.
If cross-border employment is involved, it should be noted that all statutory employment provisions must be applied to employees who perform their work in the Netherlands. In addition to this, all employees seconded to the Netherlands to work for the joint venture are entitled to a limited number of basic employment conditions, such as the minimum wage, minimum paid annual leave and protection against discrimination, regardless of the law applicable to the employment contract.
In the event that a joint venture party contributes significant tangible assets to the joint venture (including employees), this may qualify as a transfer of an undertaking under EU and Dutch law. In that event, employees employed by the joint venture party and working for the business to be transferred will become employed by the joint venture by operation of law and under the same terms and conditions. In addition, dismissal following such a transfer of an undertaking is subject to more stringent rules. This also applies to a possible harmonisation of the terms and conditions of employment following a transfer.
Lastly, if the joint venture has a works council, its employees in the Netherlands must be involved in certain decisions of the management of the joint venture.Intellectual property rights
How are intellectual property rights generally dealt with on the creation, operation and termination of a joint venture in your jurisdiction?
When setting up the joint venture, intellectual property (IP) rights owned by the joint venture partners can be either transferred to the joint venture or the joint venture partners will retain ownership and grant a licence to the joint venture. The joint venture parties should also agree from the outset how to deal with newly created IP rights, not only for the duration of the joint venture but also upon termination of the joint venture.
Funding the joint ventureTypical funding
How are joint ventures generally funded in your jurisdiction? Are there any particular requirements relating to funding and security packages?
When determining how to fund a joint venture, tax considerations usually play an important role. In the Netherlands, joint ventures structured through a legal entity are generally funded through capital contributions, shareholder loans or third-party financing, or through a combination of these ways of funding. Typically, the joint venture agreement will contain detailed provisions on the funding of the joint venture, including the consequences for a party failing to comply with its funding obligation as agreed between the partners.
Partnerships are usually funded by way of capital contributions recorded in capital accounts maintained by the partnership for each individual partner, and partner loans, or a combination of the two.
There are no particular requirements relating to the funding of the joint venture and security packages.Capital injection restrictions
Are there any legal or regulatory restrictions on the injection of capital into, or the distribution of profits or the extraction of cash by other means from, the joint venture entity?
There are no legal or regulatory restrictions on the injection of capital into a joint venture. Whether there are any legal restrictions on distributions will, however, depend on how the joint venture is structured.
If the joint venture entity is an NV, distributions are only allowed if this is explicitly permitted in the company’s articles and only to the extent that freely distributable reserves are available. Whether there are indeed sufficient freely distributable reserves must be evidenced by way of recent interim balance sheet.
A BV is more flexible than an NV as far as distributions are concerned: distributions to the BV’s shareholders may be made without the requirement for a minimum amount of equity to remain within the company, except for the reserves that must be maintained under the law or the articles (if any). An additional requirement, however, is that distributions may be made only with the consent of the management board. The management board may refuse to give its consent only if it has determined that, after the distribution, the BV will not be able to continue paying its due and payable debts.
In practice, joint ventures are often partially funded through shareholder loans to allow for funds to be paid to the joint venture partners by way of a repayment of principal or the payment of accrued interest, or both. Such payments are not subject to any restrictions or other formalities from a legal or regulatory perspective.
If the joint venture is structured through a partnership, there are no restrictions on distributions to be made to its members or partners.Tax considerations
What tax considerations should be taken into account in the operation of the joint venture?
Depending on the legal form of the joint venture vehicle, Dutch dividend withholding tax could be due on dividend distributions to the joint venture parties. The statutory rate is 15 per cent, but exemptions can apply for joint venture parties who are tax-resident in an EU member state or in a country that has a tax treaty with the Netherlands.
There is no withholding tax on interest payments in the Netherlands, but there are plans to impose withholding tax on interest and royalty payments made to residents of low-tax or no-tax jurisdictions. These rules are set for implementation effective from 1 January 2021.
For the deductibility of the interest paid by the joint venture, it is important to consider the earning stripping rules that have been implemented in the Netherlands following the issuance of the EU anti-tax avoidance directive. On the basis of these rules, the deductibility of net borrowing costs is limited to the higher of 30 per cent of the tax EBITDA or €1 million.
There is no group relief in the Netherlands, but there is a possibility for consolidation of the results of companies that are part of a fiscal unity. Generally, this regime is not relevant for joint venture structures, as one of the requirements is that there is a (direct or indirect) 95 per cent legal and economic ownership between the parent and the subsidiaries in the fiscal unity. If no fiscal unity can be formed, it is not possible to offset joint venture losses with the results of the joint venture parties unless the joint venture vehicle is transparent for Dutch tax purposes.Accounting and reporting issues
Are there any noteworthy accounting or reporting issues for the joint venture parties regarding their investment in the joint venture?
If a legal entity is at the head of a group, then this entity will, in principle, be required to prepare consolidated financial statements in addition to its stand-alone accounts. In these consolidated financial statements, it should include not only its own financial data, but also the financial data of the legal entities and companies belonging to its group. A group exists when a company can exercise decisive control over one or more other legal entities (the group companies), which together form an economic unit through organisational interconnectedness. Whether a shareholder may include the financial data of another company in its consolidated financial statements will, in principle, depend on whether the shareholder can effectively exercise control over the other company. Dutch law provides an exception to this rule for joint ventures: if certain statutory requirements are met, a joint venture partner may include the financial information of the joint venture in its consolidated accounts in proportion to the interest it holds in the joint venture.
Deadlock, exit and terminationDeadlock provisions
What deadlock provisions are commonly included in joint venture agreements in your jurisdiction?
In order to avoid deadlock situations as much as possible, the joint venture parties should from the outset agree on key operational and procedural matters involving the joint venture, such as capital calls, external financing, the business plan, the annual budget and exit. Such agreements will typically be included in the joint venture agreement.
With respect to deadlock situations for which no arrangements are included in the joint venture agreement, the parties often rely on escalation provisions included in the joint venture agreement pursuant to which the relevant matter is referred to an advisory or investment committee or senior management of the joint venture parties for a decision. A deadlock matter can also be escalated to an expert or a mediator.
Other deadlock-resolution mechanisms involve the forced sale of the shares held by a joint venture party in the joint venture, such as put and call options and shoot-out provisions (such as Russian roulette, Texas shoot-out or Dutch auction), or even the winding-up of the joint venture. In the case of a 50/50 joint venture, parties can also agree on a casting vote being granted to the chair of the management board in the case of a deadlock.Exit provisions
What exit provisions are commonly included? Does the law restrict any forms of mandatory transfer provision or any basis of calculation?
Joint venture agreements typically include a number of mechanisms allowing a party to exit the joint venture or for the joint venture to be terminated in a regulated manner in specific situations. Commonly used exit mechanisms include put and call options, shoot-out provisions and rights of first refusal or rights of first offer. Tag-along and drag-along rights are very common in joint ventures where there is a minority investor.Tax considerations following termination
What are the tax considerations on termination of the joint venture?
Upon termination of the joint venture, all hidden reserves will become taxable at the level of either the joint venture vehicle or the joint venture parties. This is also the case when the joint venture vehicle is transparent and the joint venture partners sell their interest in the joint venture.
If the joint venture vehicle is treated as an entity, Dutch dividend withholding tax could be due on the distribution of the joint venture assets. A repayment of capital is generally not subject to Dutch dividend withholding tax.
Under the foreign taxpayer rules, dividends or sale proceeds could be subject to Dutch corporate income tax.
DisputesChoice of law and resolution methods
In your jurisdiction, are there constraints on the choice of law or the method of dispute resolution provided for in joint venture agreements?
Under Dutch law, there are no constraints on the joint venture partners’ ability to choose the governing law of the joint venture agreement. The articles of association of a legal entity can, however, only be governed by Dutch law. Joint venture partners are also free to choose the method of dispute resolution in respect of the joint venture agreement.Mandatorily applicable local law
What mandatory provisions of local law will apply irrespective of the choice of governing law?
There are certain special mandatory rules of Dutch law that will apply irrespective of the choice of governing law, but in only very limited situations will any of these rules be relevant for joint venture agreements. If the joint venture vehicle is a legal entity, however, Dutch company law will apply to the legal entity even if the joint venture agreement concerning the Dutch company is not governed by Dutch law.
In addition, the right of shareholders of a Dutch company to submit a request to the Enterprise Chamber of the Amsterdam Court of Appeal to initiate an investigation into the policy and affairs of the company cannot be set aside by choosing the law of another jurisdiction as the governing law of the joint venture agreement.Remedy restrictions
Are there any restrictions on the remedies a tribunal can grant that would have a bearing on the arbitration of joint venture disputes? Are there any restrictions on the arbitration of shareholder claims?
Under Dutch arbitration law, a tribunal can, in principle, grant all remedies that an ordinary court can. There are no restrictions specifically applying to joint ventures or shareholder claims. An arbitral award is just as binding as a judgment of an ordinary court. However, unlike the judgment of an ordinary court, an arbitral award is, in principle, not enforceable. The enforcement of an arbitral award on assets located in the Netherlands requires the permission of a Dutch court, which will almost always be granted.
Generally, it is possible for a party to bring an action for revocation or annulment of an arbitral award before the Court of Appeal. The revocation or annulment of an arbitral award can only be claimed on the following grounds:
- there is no valid arbitration agreement;
- the arbitral tribunal has been constituted in violation of the applicable rules;
- the arbitral tribunal has not acted in compliance with its mandate;
- the arbitral award has not been signed or is not substantiated; or
- the arbitral award, or the manner in which it was established, is contrary to public order.
In practice, the courts are quite reluctant to set aside an arbitral award.Minority investor protection
Are there any statutory protections for minority investors that would apply to joint ventures?
There are no statutory protections for minority investors if the joint venture vehicle is a partnership. The Dutch Civil Code does, however, provide some protection for minority shareholders of a Dutch company by prescribing that certain resolutions can only be adopted unanimously or by an enhanced majority of votes in the general meeting. Such resolutions include:
- a resolution to make a distribution to shareholders of a BV on a non-pro-rata basis requires the affirmative vote of all shareholders;
- a resolution to amend the articles of association of a BV in respect of a change in the voting rights can only be adopted unanimously at a meeting at which the entire issued capital is represented; and
- a resolution to convert the legal form of the company into another legal form requires an affirmative vote of at least 90 per cent of the votes cast.
How can joint venture parties have liabilities to each other beyond what is expressly agreed in the joint venture agreement?
If the joint venture is structured as a partnership, the partners (in the case of a general partnership) or general partners (in the case of a limited partnership) are jointly and severally liable for the partnership’s debts. If a partner is held liable, he or she will have a compensatory claim on the other partners for their respective share in the liability.
If the joint venture vehicle is a company, the basic rule is that the shareholders are not liable for the company’s debts. Generally, joint venture parties will only have liabilities to each other if this is expressly agreed in the joint venture agreement, except for liability pursuant to a wrongful act committed by a joint venture partner resulting in damages to another joint venture partner.Disclosure of evidence
Are there any particular issues that can arise in joint venture disputes in your jurisdiction concerning disclosure of evidence?
The discovery process of collecting information in the pre-trial phase of a civil lawsuit, which is well known in common law jurisdictions, does not apply in the Netherlands. However, the Dutch rules of civil procedure provide for certain instruments that can be used to obtain information in civil proceedings. Interested parties may require from the party who has records at his or her disposal or in his or her possession, access to or a copy of specific records with regard to a legal relationship to which he or she or his or her legal predecessors are party. Such an action can be brought in pending proceedings on the merits, but also in preliminary relief proceedings.
Furthermore, a party may request the court to hold a witness hearing or to appoint an expert witness. Such a request may be submitted even if there is no civil procedure pending.
Market overviewJurisdictional advantages
What advantages does your jurisdiction offer for parties wishing to set up and operate joint ventures?
Although the Netherlands is a small country, it has a very large and strong economy. It is a very attractive and popular jurisdiction to invest in for a variety of reasons, including:
- the Netherlands has a central geographical location and a superior infrastructure of ports, airports, roads and railways;
- its workforce is highly skilled;
- a vast majority of the population speaks English;
- the Netherlands has advanced telecoms and IT infrastructure; and
- the Netherlands is a politically very stable country.
Are there any particular requirements or restrictions relating to joint ventures in your jurisdiction that could deter international investors?
In the Netherlands, there are no particular requirements or restrictions relating to joint ventures that could deter international investors.
Updates & TrendsKey developments of the past year
What are the current trends affecting joint ventures in your jurisdiction? What recent developments in legislation and case law have had an impact on joint ventures?Key developments of the past year32 What are the current trends affecting joint ventures in your jurisdiction? What recent developments in legislation and case law have had an impact on joint ventures?
During the past year, there have not been any major developments that have had a material impact on joint ventures.
The most important development in case law during the past few years is the ruling by the Dutch Supreme Court in the Cancun case in 2014. The Dutch Supreme Court ruled that, in the case of a joint venture company, the corporate interest of such joint venture company is also determined by the nature and content of the cooperation agreed between the shareholders in the joint venture agreement. According to the Dutch Supreme Court, in the performance of their duties, the directors must also exercise due care with regard to the interests of all those involved in the company and its business, partly on the basis of the principles of reasonableness and fairness, which have overriding effect under Dutch law.