Netherlands

Employee Equity in Dutch B.V. Companies

Dutch company law requires every transfer of B.V. shares to go through a notary, which adds cost and delay to direct share ownership. Most Dutch startups therefore use stock options or a STAK structure to give employees economic exposure without constant notarial deeds.

Legal entity type
B.V. (besloten vennootschap)
Share transfer
Requires a notarial deed
Common instrument
Stock options or STAK depositary receipts
When tax is due
Usually at exercise, box 1 wage tax
2023 reform
Deferral election to tax at tradability instead of exercise

Why direct shares are impractical

Under Dutch law, transferring or issuing shares in a B.V. requires a notarial deed executed before a civil law notary. Every time a new employee joins the cap table as a direct shareholder, the company incurs notary fees and paperwork, and the process can take days. For a company issuing equity to dozens of employees over several years, this becomes expensive and slow, which is why many turn to phantom shares instead.

Because of this friction, few Dutch startups grant naked shares to employees on day one. Instead they use instruments that avoid a notarial deed for every grant: stock options that convert to shares only occasionally, or depositary receipts issued by a foundation that already holds the underlying shares.

The STAK: certification through a foundation

A Stichting Administratiekantoor, commonly called a STAK, is a foundation that holds legal title to the company's shares and issues depositary receipts (certificaten van aandelen) to employees and investors. The receipt holder gets the economic rights of a shareholder, including dividends and exit proceeds, but voting rights typically stay with the STAK board.

  • The STAK holds shares once, so subsequent receipt transfers can be done by private deed rather than a notarial deed for the underlying shares
  • Founders and investors keep voting control centralised, useful when many small employee holders exist
  • Receipt terms are set out in the STAK's administration conditions, which employees should read before accepting a grant

A STAK adds a layer of governance complexity. Smaller startups sometimes prefer stock options until the cap table is large enough to justify setting one up.

Comparing Dutch equity instruments

InstrumentOwnership at grantNotarial deed neededTypical use
Stock optionsNone until exerciseOnly at exercise, if shares are issued directlyMost common for startups
STAK depositary receiptsEconomic interest, no voteOnce, when STAK is set upLarger or later-stage companies
Phantom shares / SARsNone, cash-settledNeverCompanies avoiding cap table dilution
Direct sharesFullEvery transferFounders, rare for early employees

Box 1 wage tax on Dutch equity

Employee equity in the Netherlands is generally taxed as employment income under box 1 wage tax at the moment a benefit is realised, whether that is option exercise or phantom payout. Since 2023, employees can elect to defer the taxable moment on option exercise until the shares actually become tradable, which helps with the dry income problem common to illiquid startup shares.

Rates, thresholds and the exact conditions of the deferral election change periodically. Confirm current figures with a Dutch tax adviser before making decisions.

Questions about B.V. equity structuring

Can a Dutch startup just issue shares to every employee?
Legally yes, but each issuance or transfer needs a notarial deed, which is costly and slow at scale. Most companies use options or a STAK instead.
What is a STAK in simple terms?
A foundation that holds the real shares and hands out depositary receipts that mirror the economic value of those shares, without giving receipt holders a vote.
Do employees pay tax when they receive options?
Normally not at grant. Tax is due later, typically at exercise, unless the 2023 deferral election is used to push the taxable moment to when shares become tradable.

General information for founders, not legal or tax advice. Thresholds and rates change, so confirm the current position with an adviser in the relevant country before granting.

More on Dutch equity instruments

Subscribe to equity insights for European founders

Get concise updates on employee equity, tax changes and founder decisions.