The machine only needs a 165 metre stretch of tarmac or grass to take to the skies.
The PAL-V can be configured as a gyrocopter, meaning lift is generated by an auto-rotating rotor on top with forward speed coming from a propeller on the back.
Its top speed is the same on the ground as in the air, around 180 km an hour.
When the machine is not being flown these surfaces fold away allowing the vehicle to be driven quickly on its three wheels.
PAL-V said its flying car offers the ultimate in freedom and mobility.
"If you want to fly over a mountain you can do that and then drive at the other end and go to your destination or fly over water or past a traffic jam of course," said PAL-V CEO and co-founder Robert Dingemanse.
"All those kind of things are possible now."
PAL-V said the machine is quieter than a helicopter due to the slower rotation of the rotor. The company says it takes off and lands with low speed, cannot stall, and is very easy to control, making it one of the safest types of aircraft.
PAL-V said it meets regulations to be operated in the air and on the roads, though to fly one a customer must hold a private pilot's licence, requiring 20 to 30 hours of flying lessons.
