walslaw, Amsterdam boutique law firm
ENNL

Joint venture structuring

Structure is the foundation of every joint venture. The vehicle, the capital architecture, the voting thresholds and the reserved matters determine how decisively the venture can move and how well each partner is protected when interests diverge. We advise Dutch and international parties on JV structuring, from greenfield ventures and contractual cooperations to entity-based vehicles housing significant capital and IP. The work turns on judgement, in matching the legal vehicle to the commercial purpose, anticipating the second and third capital rounds, and building governance that continues to function once the venture comes under strain.

When clients call us

  • Two or more parties are forming a new venture and need the structure designed
  • An existing cooperation is moving from contract to entity
  • A new partner is joining an established JV
  • An existing JV needs restructuring after a change in scope, capital or partners
  • A cross-border element calls for us to act as Dutch lead counsel

Key legal & commercial issues

I.

Incorporated, contractual or hybrid

Most Dutch JVs use a BV (besloten vennootschap) as the joint venture vehicle. Coöperatie, commanditaire vennootschap (CV) or vennootschap onder firma (VOF) and purely contractual cooperation are appropriate where they fit the commercial purpose better, for example in project-based cooperation, cost-sharing, R&D consortia or tax-driven structures. The choice is a substantive one, since it determines liability exposure, tax treatment, governance flexibility and how easily the venture can take on outside capital.

II.

Capital and contribution design

The form of each partner's contribution, whether cash, assets, IP, services or contractual rights, determines valuation, dilution and downstream tax treatment. We work alongside tax counsel to align the capital structure (equity, share premium, shareholder loans, third-party debt) with the partners' commercial expectations and with the likely funding path over the first three to five years.

III.

Reserved matters and board seats at the structuring stage

The reserved matters list is settled with the equity split rather than after it, because the two form a single bargain. A partner accepting a minority position is accepting it on the basis of what that position still allows it to control, and a list negotiated once the percentages are fixed arrives too late to influence either the price or the balance of the venture. The design of the list itself, the thresholds attaching to each item and the distinction between approval, consent and information rights are treated in full under Governance and decision-making.

Board seats are the other protection that is often assumed to follow from the structure. Under article 2:239(5) DCC a director owes a duty to the company and its connected enterprise rather than to the shareholder that nominated the director, so board representation alone cannot deliver a partner's protections, and a structure that relies on it leaves the partner exposed at exactly the point the protection is needed. The protections belong in the articles and the shareholders' agreement, and the mechanics of shareholder-appointed and nominee directors are likewise covered under Governance and decision-making.

IV.

Dutch-law specifics partners should plan for

  • Share classes in a BV can carry differentiated voting, profit and meeting rights (artt. 2:201 and 2:228 DCC).
  • Transfer restrictions that need corporate effect should be set out in the articles of association.
  • Works council advice (WOR) can be triggered by the formation, restructuring or termination of a JV.
  • Merger control thresholds (ACM or European Commission) must be tested at formation.
  • The Wet Vifo may require a prior notification or approval for acquisitions or investments involving vital providers or sensitive technology, and can therefore affect the transaction timetable.

What we advise on

What we advise on

  • Choice of vehicle (BV, NV, coöperatie, CV/VOF, contractual JV)
  • Equity split, share classes and economic vs voting rights
  • Capital structure: equity, share premium, shareholder loans, external debt
  • Contribution of assets, IP and going-concern businesses
  • Cross-border JVs as Dutch lead counsel
  • Sequencing of regulatory filings (WOR, merger control, Wet Vifo)
  • Future-proofing for new partners, capital rounds and asset injections
  • Restructuring existing JVs to fit changed commercial reality

Typical documents and deliverables

Typical documents and deliverables

  • Term sheet or letter of intent with exclusivity and process terms
  • Shareholders' or joint venture agreement
  • Articles of association of the JV entity
  • Contribution agreements (cash, assets, IP, business)
  • Subscription agreement and notarial deed of share issuance
  • Shareholder loan agreements and subordination terms
  • Ancillary services, IP licence and supply agreements between partners and the JV
  • Works council letter and supporting memo (where applicable)

How we support the process

How we support the process

  1. 1

    An early session on the commercial model, the contribution profile and what each partner expects

  2. 2

    Selection of the legal vehicle and the capital architecture, settled together with tax counsel

  3. 3

    Drafting of the shareholders' agreement, the articles and the contribution documents as one set

  4. 4

    Regulatory filings, notarial steps and incorporation logistics coordinated against a single timetable

  5. 5

    Governance support through the first year of operation, once the venture is running

Questions clients ask before instructing us

Questions clients ask before instructing us

BV or coöperatie: which Dutch vehicle works better for a JV?
The BV is the default vehicle and suits most joint ventures, offering flexible share classes, tailored voting and profit rights, well-understood governance and a market familiar with its documentation. The coöperatie is worth considering where the partners want membership rather than share capital, where the Dutch dividend withholding tax position on distributions to foreign members is material, or where the membership base is expected to change over time, since admitting and removing members is simpler than transferring shares. Coöperaties are common in agriculture, energy and fund structures for those reasons. The choice is driven by the commercial model, tax, member dynamics and corporate law: a coöperatie must enter into agreements with its members to provide for their material needs, whereas a BV does not. We advise testing the tax position with the tax advisor at an early stage.
Can different shareholders have different voting and profit rights?
Different shareholders can hold different voting and profit rights, which is one of the reasons Dutch BV law works well for joint ventures. The articles can create separate share classes with different voting rights and profit entitlements, including non-voting shares, which retain profit rights, and shares without profit rights, which retain voting rights. The articles can also give a meeting of holders of a particular share class the power to appoint a director under article 2:242(1) Dutch Civil Code, provided every shareholder with voting rights can participate in the appointment of at least one director. That has corporate effect, unlike a contractual nomination right. Appointment from a binding nomination is a separate mechanism. The practical rule is that arrangements requiring corporate effect belong in the articles, while contractual arrangements between the parties can sit in the shareholders' agreement.
Do we need a notarial deed to form the JV?
It depends on the vehicle. Incorporating a Dutch BV requires a deed of incorporation containing the articles of association, executed before a Dutch civil-law notary, followed by registration with the Chamber of Commerce. Any subsequent amendment to the articles, issue of shares or transfer of shares also requires a notarial deed. A purely contractual joint venture does not require one. Incorporating a BV is typically quick once the notary holds Wwft identification for the ultimate beneficial owners and the corporate documents from foreign shareholders, which is usually the slower element. Where the BV is formed by contributing an existing business, the contribution in kind requires a description by the founders under article 2:204a Dutch Civil Code and adds time.
When does works council advice apply to JV formation?
The Works Councils Act (WOR) gives a works council an advisory right on entering into, materially changing or terminating an important and durable cooperation with another undertaking, which can capture joint venture formation, as well as on the transfer of control of a business. That right may be held by the works council of each partner, and by that of any business contributed to the joint venture. Where either partner contributes a business unit with employees, or the JV materially changes the activities of an existing undertaking, the need for consultation depends on whether the proposed decision falls within the advisory right, including its significance requirements, and advice must be sought before the decision is taken. Where the decision taken is not in accordance with the advice of the works council, implementation must be suspended for one month, during which the council can appeal to the Enterprise Chamber. We advise treating the consultation as a workstream from the term sheet onwards rather than as a formality to be completed once the documents are agreed.
Do we need merger-control clearance for a 50/50 JV?
A full-function joint venture, one that performs the functions of an autonomous economic entity on a lasting basis, is a concentration. Where the turnover thresholds are met, it must be notified to the ACM or, where the EU Merger Regulation applies, to the European Commission, and it must not be implemented before the applicable standstill period has expired or clearance has been obtained. A JV that is not full-function, for example a pure production or R&D vehicle dependent on its parents, falls outside merger control but is then assessed under the EU and Dutch prohibition on anti-competitive agreements. In either case the analysis is best completed before the term sheet fixes the structure.
How do we plan for a second partner joining later?
The accession machinery is best built into the documents at formation, while no partner has a position to defend. That means an accession deed under which a new shareholder becomes bound by the shareholders' agreement, a share class structure with room for a new class, pre-agreed dilution and anti-dilution mechanics, a valuation method for the entry price, and clarity on how the reserved matters list and board composition adjust. We advise settling in advance whether existing partners have pre-emption rights on new issues and whether admitting a partner is itself a reserved matter. Renegotiating those terms with a candidate already at the table costs time when it is least available and places the existing partners under avoidable strain.

Related areas

Back to Joint ventures & strategic alliances

Designing a new joint venture? Let's get the structure right from day one.

Get in touch