Why should you as an entrepreneur benefit from the new law against pledge prohibitions in the Netherlands?
As of July 1, 2025, the Act on Abolition of Pledge Prohibitions entered into force in the Netherlands. This legislation eliminates contractual provisions that prevent you from pledging or transferring your monetary claims. Therefore, you will henceforth gain more opportunities to attract external credit, for example by offering outstanding invoices as collateral to a bank or factor. According to Dutch SME organizations, this amendment leads to 15-20% more financing possibilities for smaller enterprises. The legislator aims to prevent liquidity problems and stimulate investments in innovation, employment, and growth.
What does this legislative change mean concretely for entrepreneurs in the Netherlands?
The new legislation prohibits assignment and pledge prohibitions on commercial monetary claims under Dutch law. Until July 1, 2025, your suppliers or clients could stipulate in agreements that you may not transfer or pledge claims. Such clauses frequently appear in general terms and conditions, particularly in the construction and retail sectors. For instance: a construction company with outstanding invoices worth €250,000 currently cannot use these as security when contractual prohibitions exclude this possibility. After entry into force, this changes.
Article 3:83 paragraph 3 of the Dutch Civil Code determines now from July 2025 that exclusion of transferability or pledgeability is not possible for monetary claims by name arising from professional or business operations. Moreover, the legislator declares void any provision attempting to prevent this transfer or pledge. This nullity applies to both property law and contractual provisions.
Which claims fall under the new pledge prohibition in Dutch law?
The law applies exclusively to monetary claims by name arising in regular commercial or credit transactions. Namely: claims originating from the exercise of a profession or business by a professional or commercial party. Nevertheless, consumer claims remain excluded – a consumer cannot freely pledge their private claims despite this legislation.
Additionally, Dutch law must apply to the claim. Article 10:135 paragraph 1 of the Dutch Civil Code stipulates that the transferability of claims is governed by applicable law. For example: a Dutch wholesaler with claims on German customers can only pledge these according to the new rules when the agreement recognizes Dutch law.
Important exceptions to the nullity under Dutch law
However, four categories of exceptions exist wherein pledge prohibitions remain legally valid:
1. Payment and savings accounts
Claims based on bank accounts remain excluded. Banks can therefore stipulate in their general terms that you may not pledge the credit balance. This exception prevents disruption of payment transactions, because otherwise uncertainty arises about to whom the bank must pay.
2. Syndicated loans
For credit agreements involving multiple or prospective credit providers, assignment and pledge prohibitions remain possible. This exception aligns with international LMA documentation (Loan Market Association), wherein debtors can stipulate that transfer only occurs with consent. Crowdfunding involving multiple financiers also falls under this category.
3. Clearing and settlement institutions
Claims on central banks, clearing institutions, central counterparties, settlement entities, and clearing houses do not face nullity of pledge prohibitions. Consequently, payment and securities transactions remain undisturbed, because these institutions otherwise cannot adequately maintain their administration.
4. G-accounts for taxes
Claims paid to G-accounts for wage tax, VAT, and social insurance premiums remain outside the new regulation.
How does the law work in practice after July 1, 2025 in the Netherlands?
The new regulation introduces an important written notification requirement under Dutch law. Article 3:94 paragraph 5 and Article 3:239 paragraph 5 of the Dutch Civil Code stipulate that notification to the debtor must occur in writing. Without written notification, a public assignment or pledge has no legal effect, while a silent assignment or pledge cannot be invoked against the debtor.
This means concretely: when you as creditor pledge your claim to a bank, this bank must inform your debtor in writing (including electronically). If the bank fails to do so, your debtor can still discharge their obligation by paying you. Particularly for factoring and financing companies in Amsterdam, this creates administrative certainty.
Practical example from construction in the Netherlands
An Amsterdam-based construction company holds €180,000 in outstanding claims on a property developer. Until July 2025, the contract contains a pledge prohibition. The company wants to pledge these claims to its bank for working capital financing. After July 1, 2025, the pledge prohibition becomes void. The bank can accept the claims as collateral, provided it notifies the property developer in writing. The developer must subsequently pay the bank if the construction company fails to meet its obligations.
Do the new rules also apply to existing contracts under Dutch law?
Yes, however only after a transitional period. Article 85a of the Transitional Law New Dutch Civil Code determines that the nullity of pledge prohibitions also applies to existing agreements, provided three months have elapsed after entry into force. Consequently, parties receive until October 1, 2025 to arrange alternative contractual provisions.
For new agreements from July 1, 2025, the nullity applies directly. This means that lawyers in Amsterdam cannot include assignment or pledge prohibitions that function in property law or contract law when drafting new contracts from July onwards.
Alternatives for suppliers and debtors in the Netherlands
Although you as creditor gain more scope, debtors lose protection against unexpected assignment receipts. Ultimately, they may suddenly face other creditors. Nevertheless, certain alternative provisions remain possible:
Direct set-off provisions: Instead of an assignment prohibition, parties can explicitly agree that all claims remain mutually offsettable, regardless of transfer.
Notification obligations: Contracting parties can agree that assignment or pledge must be reported in advance, although refusal is not possible.
Payment address clauses: Clear provisions regarding modification of payment addresses reduce administrative burdens for debtors.
Which contractual provisions are also affected by nullity under Dutch law?
The law does not only affect property law prohibitions. Additionally, contractual provisions become void that aim to prevent transfer or pledge. According to the explanatory memorandum, this concerns for example:
- Penalty clauses: Provisions making a penalty payable upon assignment or pledge
- Accelerated demandability: Provisions that make the entire claim immediately demandable upon transfer
- Termination rights: Provisions granting the counterparty the right to terminate the agreement upon assignment
- Confidentiality clauses: Insofar as these primarily intend to complicate transfer
Therefore, you as entrepreneur or legal advisor in Amsterdam must critically examine existing contracts. They possibly contain more than only explicit pledge prohibitions that become void.
Do ‘negative pledge’ and ‘pari passu’ clauses remain valid in the Netherlands?
Yes, provided these are not agreed “between creditor and debtor” but between a creditor and a third party (for example the financier). Alienation or pledge prohibitions in financing agreements with third parties remain legally valid. For instance: an enterprise agreeing a ‘negative pledge’ with its bank wherein it promises not to provide securities to others remains bound to this agreement toward the bank.
How does the Netherlands position itself compared to surrounding countries?
The Netherlands aligns with this law to legislation in Germany, Austria, and the United Kingdom, where pledge prohibitions are already limited or excluded. This restores the ‘level playing field’ for Dutch entrepreneurs. Until July 1, 2025, foreign competitors namely have easier access to factoring financing and claims credit.
According to research by Dutch financial institutions, this competitive disadvantage leads to 8-12% higher financing costs for SMEs compared to German companies in comparable sectors. Consequently, this law contributes to the international competitive position of Dutch enterprises, particularly in Amsterdam as a financial center.
What practical steps should you as entrepreneur take in the Netherlands?
Before July 1, 2025:
- Inventory existing contracts: Check which agreements contain assignment or pledge prohibitions
- Assess financing possibilities: Investigate whether pledging claims increases your credit scope
- Renegotiate supplier contracts: Discuss alternative protection mechanisms with important suppliers
- Inform your financier: Consult with your bank or factoring company about new security provisions
After July 1, 2025:
- Implement written procedures: Ensure notifications to debtors always occur in writing
- Update standard contracts: Remove invalid assignment and pledge prohibitions from templates
- Consider set-off provisions: Include explicit set-off agreements where necessary
- Monitor debtor management: Watch for changes in payment addresses through assignments
Specific points of attention for lawyers in Amsterdam
Legal advisors must proactively inform clients about the consequences. Namely, existing contracts can become partially invalid from October 1, 2025 without action. Additionally, liability arises when you as lawyer fail to inform clients about this during contract revisions.
For example: a law firm in Amsterdam drafting a purchase agreement in August 2025 with a traditional assignment prohibition delivers faulty work. The clause is void, but may create the impression of protection that does not exist.
What does this law mean for subsidy claims under Dutch law?
Application to subsidies depends on the specific situation. When a government institution grants a subsidy, the enterprise acquires a monetary claim. However, Article 3:83 paragraph 1 of the Dutch Civil Code stipulates that claims may be non-transferable by their nature. For subsidies that are non-transferable due to their personal character, the new law brings no change.
Moreover, the state secretary determines that assignment prohibitions in subsidy decisions are not civil law provisions to which the new law refers. Nevertheless, assignment prohibitions in subsidy implementation agreements can be void, namely when the subsidy claim originates from professional or business operations of the subsidy recipient.
How do OTC derivative claims relate to the new regulation in the Netherlands?
Claims from OTC derivative transactions remain pledgeable despite potential negative consequences for close-out netting in default. The legislator has not excluded this category, although financial institutions express concerns about this. Consequently, banks and other counterparties in derivative contracts must develop alternative protection mechanisms.
For instance: two Dutch banks conclude ISDA agreements with extensive netting provisions. When one bank pledges claims without consent, the netting arrangements may come under pressure. The banks must therefore include additional contractual safeguards outside the scope of Article 3:83 paragraph 3 of the Dutch Civil Code.
What role do financial institutions play after the legislative change in the Netherlands?
Banks and factoring companies in Amsterdam gain more opportunities to provide credit against pledging of debtors. According to Dutch banking organizations, this leads to 20-25% more credit provisions to SMEs within two years after entry into force. Additionally, more competition emerges in the factoring market, whereby rates presumably decline by 1.5-2%.
Nevertheless, financiers must also consider the exception for bank accounts. A bank cannot accept the balance on a client’s own payment account as security from another financier, because this claim remains excluded. Consequently, traditional bank securities such as mortgages and mortgage bonds remain important alongside claims pledging.
Practical tips for financiers in the Netherlands
- Always verify applicable law: Check whether claims fall under Dutch law
- Document written notifications: Preserve proof of all notifications to debtors
- Assess exception categories: Verify whether claims fall under Article 3:83 paragraph 4 of the Dutch Civil Code
- Monitor transitional periods: Note that old contracts only fully fall under the new regulation from October 1, 2025
What are the main points of attention during implementation in Dutch law?
The transition to the new system requires careful preparation. Therefore, we advise entrepreneurs and their legal advisors in Amsterdam to use the following checklist:
Contract management:
- Identify all agreements with assignment or pledge prohibitions
- Mark contracts falling entirely under the new law on or after October 1, 2025
- Inventory contractual provisions that may also become void
Financing structure:
- Discuss new credit facilities against claims pledging with your bank
- Evaluate factoring possibilities for regular turnover
- Calculate the effect on your working capital position
Operational procedures:
- Implement systems for written notification to debtors
- Train financial staff in new administrative requirements
- Update automatic payment processes
Legal compliance:
- Have existing general terms reviewed by a contract law specialist
- Consider alternative protection mechanisms such as set-off provisions
- Document all modifications for potential disputes
How do you prepare for disputes about the new law in the Netherlands?
Ultimately, case law must clarify how judges assess certain borderline cases. Particularly the following questions remain unclear:
- How far extends the nullity of confidentiality clauses that indirectly complicate assignment?
- Can parties still effectively exclude assignment and pledging through indirect means?
- How do set-off provisions relate to the spirit of the law?
Therefore, it is advisable to explicitly record what parties intend during contract negotiations. Lawyers in Amsterdam specializing in corporate law can advise you in this regard. Additionally, we recommend proceeding conservatively when uncertainties arise: assume that provisions impeding transfer or pledge are void unless a clear exception applies.
Where can you turn for legal advice about pledge prohibitions in the Netherlands?
The Act on Abolition of Pledge Prohibitions offers Dutch entrepreneurs considerably more financing possibilities. However, successful implementation requires thorough knowledge of the new rules and their exceptions. Moreover, questions remain about the precise scope of certain provisions.
Therefore, contact a specialized corporate law lawyer in Amsterdam for:
- Analysis of your existing contract portfolio
- Revision of general terms and standard contracts
- Advice about alternative protection mechanisms
- Guidance during renegotiations with contracting parties
- Drafting procedures for written notification
Contact our Dutch contract law specialists
Schedule an intake consultation with our Dutch contract law specialists to discuss your specific situation. We analyze your contracts, identify risks and opportunities, and develop an implementation plan tailored to your enterprise. From July 1, 2025, the rules have definitively changed – ensure your organization optimally benefits from the new possibilities.
