The Netherlands - Work
Establishing a business in the Netherlands is easy, but there are some decisions to make. The company's founder has to decide between the legal forms of business. This decision has tax implications. The simplest decision is between a sole trader and a BV (limited liability private company).
The needs of the entrepreneur are decisive for the form of business. The sole proprietor is fully liable for his business. The BV with limited liability is attractive because of his limitation. On the other hand, every company is difficult to manage without any personal liability. The general terms and conditions relating to liability and insurance can more or less offset the difference between the two types of company.
The limited liability of the BV shows customers and business partners a solid company, and you can still act on your own. The sole proprietorship or individual company is mistakenly often only associated with an individual as a business person. That is not right because individual refers to the company capital that a person owns. However, the company can have as many employees as desired.
The BV has many fiscal rules for the relationship between the shareholder and BV. The rules refer to salaries, assets and other income. It may have a significant impact on the tax due. The income from the first earned Euro is taxed.
The individual company has almost no rules. The entire income is taxed, and significant tax revenues are granted so that a new entrepreneur can earn approximately € 22,000 of taxable income without incurring income tax during the first three years after the company is founded. After that, the amount drops to around € 18,000.
BV offers opportunities that the individual company does not have. The possibilities include, for example, the transfer of company shares to a third party in the case of company sales. Holding structures are often established. In holding company, sales tax is not immediately due. Credit agreements can be made; internal pension plans can be created and much more.
It is possible to convert the individual company into a BV company. This may be interesting with a view to a future sale or other possibilities.
Founding a Company
Selecting a Legal Structure
The first step of the foundation should be the right selection of the business form. The importance of this step lies with the issues it bears in such as liability and obligations. In the Netherlands, to select a legal form for a company, the choice you have to make first is whether it should involve a legal person or not.
Selecting a Trade Name
The Dutch Trade Name Act is the code that you should keep in mind and meet the requirements of while choosing a name. The trade name should be unique and not confusing or misleading in the sector and region which you wish to operate. After a suitable name has been selected, the Kamer van Koophandel (The KvK is the Chamber of Commerce) should check whether it is not already used.
Capital of the Company
Minimum capital share must be deposited to the company’s bank account.
Registration with the Trade Register and Tax Administration
Applications and Registrations
Once you successfully finished the first steps, you are required to have your company registered with the Dutch Business Register of the Chamber of Commerce. Tax and Customs Administrations registrations will happen automatically as you enter the Dutch Business Register. The announcement of incorporation will be performed by the Chamber and made in the Netherlands’ Official Gazette (
You should keep in mind that you may require to apply for further permits from different authorities before starting to operate your business. For instance, you need to check whether you meet with certain professional qualifications, environmental regulations, and/or safety requirements or whether your choice of location for the company is in line with zoning plan. To make this step easier, All-in-one Permit for Physical Aspects (Omgevingsvergunning) can, or in some cases must be obtained to carry out your business plans.
Under Dutch regulations, a company is obliged to keep proper accounts and file its annual accounts (state of assets and liabilities) at the Chamber of Commerce on an annual basis.When starting a business, it is of high importance to create your accounts in a timely matter and maintain them, whilst establishing your company. The records form the basis for your tax returns. Some documents are mandatory. You are allowed to digitize your records and use this as sufficient proof of your business activities. For more information and advice, please contact a local Tax Office.
If you live in the Netherlands or earn income here, you are obliged to take out health insurance and to pay Dutch national insurance contributions. Furthermore, you may be legally obliged to insure your business’ assets in the event of legal liability or other risks.
From agriculture and food to logistics, chemistry to textile, the Netherlands welcomes entrepreneurs with many possibilities for trade and investment. If you also want to get advantage of the Netherlands’ flexible well educated multilingual labor market and many other excellences by building up your business in the Netherlands, a lawyer can help you with every step.
We recommend MANZ LEGAL, as this law firm specializes in such matters.