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The Dutch Limited Partnership (Commanditaire Venootschaap) CV

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The Dutch Limited Partnership (Commanditaire Venootschaap) CV

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A limited partnership is a business run by more than one person. It has two kinds of partners: active and limited.

The limited partner tends to be the financial backer for the company, and often enters into a partnership with a sole trader who needs financial backing. The limited partner tends to allow the active partner to make the day-to-day decisions and is only at legally at risk of losing their financial investment if they are not involved in managing the company in any way. Limited partners are not required to register with the Trade Register.

Active partners are liable to third parties and personal assets (including those of a spouse) are not protected from creditors (though a marriage contract can protect spousal assets). It is highly recommended to enter into a partnership agreement when becoming a partner, in order to clarify the duration of the partnership, contribution expectations, profit split, among other things.

For tax purposes, an active partner is usually considered to be a self-employed entrepreneur and is required to pay income tax on their share of profits. A limited partner who has only provided financial backing for the company is not considered a self-employed entrepreneur, and instead has joint entitlement.

The Netherlands is not generally considered a tax haven or low tax jurisdiction, but the country is well regulated. It is considered an open, top tier jurisdiction which welcomes international business and boasts millenary experience in trade, financial services, and more.

The Netherlands is a highly developed member state of the EU, and a jurisdiction with a standard level of taxation. The rate of corporate tax in Netherlands is 25%.

However, Dutch legislation provides the opportunity of registering and using Netherlands entities with a zero rate of tax using a vehicle known as aCommanditaire Venootschaap (CV), similar in its composition to most limited partnerships in other jurisdictions.

The CV is a limited partnership having no less than two partners. One of the partners is a General Partner, while the other partners have the status of Limited Partners.

The legislation by default provides that the operating body of a CV company is the General Partner. However, there are no restrictions

to appoint additional persons to the position of director or manager of a CV company. Nonetheless, the General Partner bears the basic responsibility for the commercial activity and for the financial obligations of a CV company.

Dutch CC. An Attractive Planning Tool

Basic CV Requirements

The C.V. consists of at least two partners:

A general partner

One or more limited partners

The relationship between the partners is established by way of a Limited Partnership Agreement that includes their respective percentage of ownership.

The partnership agreement will include a restriction on the inclusion of a new limited partner or the removal of an existing partner.

The general partner is entrusted with the representation of the C.V. in regard to its business activities. By contrast, limited partners may not be involved in the active conduct of the C.V.’s business.

The percentage of ownership held by the general partner can be small or large depending on the agreement reached between the parties. Some C.V.’s are structured with the general partner owning a fraction of the C.V.’s assets (for example 0,001%) and the limited partner holding the remaining 99,999%.

Provided the C.V. is deemed to be non-resident it does not need to maintain books or file accounts or tax returns in the Netherlands. Registration of the C.V. in the relevant Chamber of Commerce is required.

C.V. Main Features

Company type

Commanditaire Venootschaap (CV)


Netherlands CV companies require a minimum of 2 Partners, who may be natural persons or corporate bodies from any legal jurisdiction.
Each Netherlands CV company must file a Register of its Partners with the Netherlands Trade Register (Kamer Van Koophandel)


The legislation on Netherlands CV companies does not consider a status of shareholders.


 There is no statutory requirement for a Company Secretary to be appointed.

Authorised share capital

No minimum capital requirements; to be decided on the Partnership Agreement.

Company Names

 The name of Netherlands CV company must end with the wordsCommanditaire Venootschaap, or suffix"CV".
Company names containing restricted words such as"Bank", "Insurance", "Trust", etc. will not be permitted unless an appropriate national operating licence has been obtained by the company.

Beneficial Ownership Information

 Information with regard to ultimate beneficial ownership must be disclosed to the Registered Agent of a company and is held by the agent on a confidential basis.

Filing of Annual Return

 An Annual Return must be submitted every 12 months after the date of registration.

Filing of Financial Statements

 Depending on the LP residency for tax purposes.

Corporate Taxation

 Corporate Tax rate for Netherlands CV companies with non-resident partners is 0%.

Tax Treaties

 CV companies are not regarded as residents for tax purposes in Netherlands, and therefore are not entitled to take advantage of Double Tax treaties concluded by Netherlands with other countries.

Timeframe for incorporation

3/5 working days.


Dutch Partnership Income Taxation

There are various forms of partnerships in the Netherlands.

The most common forms of partnerships are:

The private unlimited partnership (in Dutch: “Maatschap”);

The collective unlimited partnership (in Dutch: “Vennootschap onder firma” or “VOF”);

The limited partnership (in Dutch: “Commanditaire Vennootschap” or “CV”)

The partnerships referred to above, have the mutual characteristic that they do not have legal personality, meaning that they cannot themselves enter into agreements or own assets. The VOF and the CV can however under Dutch law have an equity separated from their owners.

For the levy of Dutch income tax, the VOF and the Maatschap are always treated as tax transparent entities. This implies that each partner is taxed for his/her share in the income of the partnership as if it was earned directly and each partner should report this income in his/her own annual income tax return as income from an entrepreneurshipin Box 1.

A CV has per definition partners with limited liability (the Limited Partners), but also partners with unlimited liability (the General Partners).

For the General Partner the CV is always considered tax transparent, meaning that for the levy of income tax the general partner is in essence treated the same way as partners in a Maatschap or VOF: each partner is taxed for his/her share in the income of the partnership as if it was earned directly.

The tax status of the Limited Partners is dependent on the tax status of the CV.

Open and Closed Limited Partnerships (CV)

From a tax perspective two forms of CV’s must be distinguished: the CV whereby the partners can freely transfer/exit/entry without consent of all partners (a so-called “Open CV”) and the CV whereby this is not the case (a so-called “Closed CV”).

For the Limited Partner, the participation in an Open CV resembles the participation in a Corporation, and therefore the Limited Partner is taxed the same way as shareholders in a corporation would be taxed.

The Open CV itself is subject to Dutch corporate income tax for the income allocable to the Limited partners. The income of a Limited Partner in an Open CV is in most cases taxed asincome from substantial shareholding(Box 2) or income from saving and investments(Box 3) unless special circumstances apply.

The Limited Partner in a Closed CV is treated similar as the General partner: for the levy of income tax they are basically treated the same way as partners in a Maatschap or VOF: each partner is taxed for his/her share in the income of the partnership as if it was earned directly, unless special circumstances apply.

Dutch Limited Liability Partnership (CV)

Benefits of the legal Aspects

A CV is a contract between one or more general partners and one or more limited partners. While a CV agreement can be concluded verbally, in practice a CV is typically set up by means of written agreement (contract), which is preferably executed as a notarial deed by a Dutch civil-law notary. A CV can be set up easily and within a few days. Dutch law does not include requirements as to the contents of the CV-agreement, pursuant to the principle of contractual freedom. Also, there are no requirements with regard to the identity of the partners. Hence, residents as well as non-residents can be partners in a CV, while the partners can be private individuals as well as corporate bodies.

The management of the CV must be performed by the general partner(s). The general partner(s) can be held liable for the debts of the CV. While the general partner is entrusted with the management of the CV, the limited partner is typically the party that provides the funding of the CV. The limited partner may under no circumstances be involved with the management of the CV; violation hereof means that the limited partner also will become liable for any debts and obligations of the CV. It should also be noted that the partners are free to determine their respective interests in the profits of the CV. While no partner may be completely deprived of the profits of the CV, a profit allocation of e.g. 0.001% for the general partner and 99.999% for the limited partner is allowed.

In international structures, it is common that the CV only has one general partner. This general partner is typically a designated corporate entity, often a Dutch foundation, provided and managed by a Dutch fiduciary service provider. This is basically for two reasons:

1 - The CV is not a corporate entity; it cannot hold legal title to assets. Therefore, legal title to the CV-assets is held by the general partner for the risk and account of the CV.

2 - The Dutch Foundation is not an entity designated to conduct a business and, as general partner, will not conduct any other business. Hence liability risks are ruled out as much as possible.

Tax Aspects

For Dutch tax purposes, a CV can be either “closed” (i.e. tax transparent) or “open” (i.e. tax non-transparent). Pursuant to Dutch tax legislation, a CV will be considered “closed” if the admission and substitution of limited partners is subject to the unanimous consent of all other partners. Hence, the partners are free to decide whether or not the CV should be tax transparent or not, by including adequate provisions in the CV agreement. Any CV which is not “closed”, is considered “open”. For completeness sake, we note that the Dutch tax treatment of an open CV is very similar to the tax treatment of a Dutch company, i.e. it is liable to Dutch corporate income tax.

Profit distributions by a “closed” CV to its partners are not subject to Dutch withholding taxes. Furthermore, the contribution of assets to a CV does not trigger any (capital) taxes.

Tax Planning Opportunities

The “closed” CV is a highly popular international tax planning tool. This popularity is due the tax transparency of the CV and its highly flexible character. Because the CV is tax transparent, any profits of the CV will for Dutch tax purposes be allocated to the partners in the CV according to their pro rata interest in the CV. When the partners are not tax residents of the Netherlands however, the partners will not be subject to Dutch taxation in respect of their share in the profits of the CV, as long as the partners do not derive Dutch source income through the CV. Dutch source income notably includes an enterprise carried out in the Netherlands, substantial shareholdings in Dutch resident companies and real estate based in the Netherlands. Below we will outline two very common international tax planning structures in which a CV is used.

CV as a Portfolio Investment Holding Company

In this set-up, the “closed” CV is merely used to hold portfolio investments. The limited partner typically has a 99.999% interest in the CV and the general partner has a 0.001% interest in the CV. Both the limited and the general partner are domiciled outside the

Netherlands. While the CV is tax transparent for Dutch tax purposes, the CV is considered tax non-transparent from the perspective of the country of residence of the limited partner. Hence, the limited partner is mostly not required to report any income, as long as he does not receive any profit distributions from the CV. As such, a significant tax deferral can be achieved, allowing the profits of the CV to be reinvested for as long as desired. Furthermore, distributed profits could qualify as tax-exempt income under the participation exemption regime at the level of the corporate limited partner.

CV as a Trading Entity

In this set-up, the CV engages in the international trading of goods. The CV (Agent) is instructed by a company (Principal) in a low taxed country, to perform certain specified trading activities for the risk and account of the Principal. The Principal can be a partner in the CV, although this is not required. Any profit realized by the CV from the trading transactions, is not taxed in the Netherlands because of the tax-transparent character of the CV. We have extensive experience with trading structures and can advise on all aspects for the setting up of a proper functioning trading structure. Furthermore, it should be noted that a similar set-up with a “trading” CV is in principle also possible for the international routing of services.


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Whilst most providers either specialise on personalized consultation at relatively high rates or run bulk registration factories without any support, we want to offer the positive aspects of both types.

Therefore TBA combines professional advice, worldwide registration services, reasonable fees, customized order processing, lifetime support and fast processing. Where others see company formation services as a bulk registration with no support and no individual assistance, we do care about your business needs

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