Becoming an entrepreneur in the Netherlands can be a great alternative to being an employee for an employer.
How to set up a business in the Netherlands
There are several administrative issues you need to take care of when setting up a business. These include:
› You must be allowed to work
› Legal structure
› Business registration
› Taxes & BTW
› Administration
› Insurances and pension
› Business plan and other issues
Six months in asylum procedure or status holder
After 6 months from the start of your procedure you are permitted to start your own business.
See our other blog ‘Work and income (during the procedure)‘ for more information about the requirements.
Recognition of your profession
In the Netherlands there are a number of professions that are regulated, such as in the medical, scientific and legal fields. This means that you must have a recognised qualification in order to set up a business within that sector.
If you obtained your qualification or diploma outside the Netherlands then you will need to get permission to practice in the Netherlands.
See the EP nuffic list of regulated professions in the Netherlands. To have your qualification recognised you will need to contact the competent authority shown under your profession in the list.
For more information visit the Dutch government’s page on professional qualifications.
Selecting a legal form for your business
Once you have ensured you can reside and work in the Netherlands, you need to decide which legal form your business will take. It’s important to choose a structure with the right fit, as this determines the liability for your business debts and tax obligations.
Dutch legal forms of businesses
Here is an overview of all the Dutch business forms (rechtsvormen). To learn more about each of these structures visit the legal business forms page.
Unincorporated business structures (Rechtvormen zonder rechtspersoonlijkheid)
In these unincorporated legal forms you (and your private assets) are liable for the debts of your business.
› Eenmanszaak: sole trader / one person business
› Vennootschap onder firma (VOF): general partnership
› Maatschap: commercial / professional partnership
› Commanditaire vennootschap (CV): limited partnership
Incorporated business structures (Rechtvormen met rechtspersoonlijkheid)
In these incorporated legal forms you and your private assets are, in most cases, protected from the debts of your business.
› Besloten vennootschap (BV): private limited company (ltd. or Inc.)
› Naamloze vennootschap (NV): public limited company (plc or Corp.)
› Coöperatie en onderlinge waarborgmaatschappij: cooperatives and mutual insurance societies
› Stichting: foundation
› Vereniging: association
Certain legal forms are better suited to certain types of businesses. For example, freelancers(ZZP) and small business owners usually choose the eenmanzaak structure, while the most common form for larger businesses is a BV.
If you are a group of dentists running a clinic you might choose a maatschap, or if you are operating a non-profit organisation then you might choose a stichting.
For more information about all of these business structures check the legal forms page.
Business registration at the KvK
When you have decided the type of business you would like to start, then you need to register it with the KvK (Kamer van Koophandel), the Dutch Chamber of Commerce, which will enter it in the Dutch Trade Register.
Registration should happen from one week before you start doing business to one week after.
To register your business you will need to be registered with your local municipality, otherwise you must provide authenticated proof of your residential address abroad.
You will need to select a business name (it’s possible to register more than one) and prepare a description of your business activities. It’s possible to check existing business names on the KvK search page (in Dutch).
If your business is unincorporated (such as an eenmanszaak or VOF) then you, and your partners if you have them, must submit the registration forms at the KvK.
Businesses with an incorporated structure (such as BV or stichting) need to incorporate their company via notarial deed, so the KvK registration forms are normally submitted by the notary.
The business registration process
Here is the process if you are registering your business yourself:
1. First complete a form on the KVK’s registration form page. Forms for all legal structures are available in both English and Dutch. You can fill out the form on screen and then print it in both languages.
Text in the free writing fields, such as the description of your business activities, must also be translated into Dutch.
Alternatively, if your Dutch is good enough, you can fill in a KVK online registration form(inschijven bij de KvK). On this page you will need to select “enterprise or corporation” (onderneming of rechspersoon) and then fill in a series of pages in Dutch on your business details.
2. Once your form is complete schedule an appointment to visit your local KvK branch on the appointment page (afspraak maken).
3. When you have your appointment at the KvK business you will need to bring:
› Your completed form
› A payment (usually 50 euros)
› Valid ID (passport, residence permit or Dutch driving licence)
› Your business address and contact details (including rental contract if your business is not located at your home address, see FAQ)
Once you register you will be given a unique business number, known as the KvK nummer, which you will need to be use on all invoices and outgoing post for your new business.
Business taxes and the Netherlands
Your new business also needs to be registered with the Belastingdienst (Dutch tax office).
It is wise to register as soon as possible, so that you can claim VAT deductions on the investments you make to start the business.
If you are starting an unincorporated business(eenmanszaak, VOF, maatschap or CV) then you can register with the Belastingdienst during your KvK appointment.
If you are starting an incorporated business (BV, NV, cooperatie, stichting, vereniging) then you can request the notary to register with the Belastingdienst.
Tax types for businesses
If you have a business in the Netherlands then you will need to pay some or all of the following types of tax:
› BTW (VAT)
› Income tax
› Payroll tax (if you have employees)
› Corporation tax (only applicable to incorporated businesses)
BTW (VAT)
It is compulsory for businesses to charge value-added tax, known as BTW, on all products and services they sell in the Netherlands.
Consequently almost all businesses are required to add BTW tax (usually 21 percent) to their sales.
The tax office then collects this tax four times a year via the VAT declaration (BTW aangifte).
What does the BTW mean for your business?
› When you invoice clients for your services, or set a price on products, you will need to add an additional 21 percent BTW tax on top of your regular fee. This additional money must be set aside as you will be required to pay it to the tax office within the next few months.
› Every quarter you (or your accountant) will calculate your VAT declaration and transfer the BTW you have gathered to the tax office.
› You can deduct BTW from business-related expenses such as materials, travel costs or equipment.
› Under the Small Business Scheme (kleineondernemersregeling) if you collect under 1.883 euros BTW per year (after deductions) then you will pay less or no BTW to the Belastingdienst.
› If you do not submit the VAT declaration on time, or if your payment is late, then you will receive a fine.
Income Tax (inkomstbelasting)
If you have a business then you will need to do your annual income tax return, which is similar to when you have a job with an employer.
Completing your income tax when you have a business is a little complicated as you need to prove you are an entrepreneur to gain access to certain tax benefits (see tax break section below).
A good accountant is essential for helping you to calculate your income tax.
Payroll Tax (loonheffing)
If you have employees then you, as an employer, need to deduct payroll tax from their salaries. Payroll tax includes wage tax and national insurance and pension contributions.
Corporation Tax (vennootschapsbelasting)
If you have an incorporated business, such as a BV or NV, then you need to calculate and pay corporation tax (vennootschapsbelasting). Foundations and associations also sometimes need to do a corporate tax declaration.
Tax breaks for new businesses
There are several tax benefits, collectively known as the ondernemersaftrek (entrepreneurs’ deduction), that are available for new businesses in their first years. To learn more about these tax breaks visit the no legal form page.
Other tax breaks include:
› General tax credit (algemene heffingskorting)
› Labour tax credit (arbeidskorting)
Business administration
In the Netherlands businesses are obliged to keep administrative records for seven years. This includes both electronic and paper records such as:
› invoices sent
› invoices received
› bank statements
› contracts and agreements
› business activity expenses
How to format your invoices
When you make invoices for your business you must number them consecutively and provide the following information:
› date and invoice number
› business name, address, BTW & KvK numbers
› name and address of customer
› description of the product or service
› price excluding BTW (VAT)
› BTW rate and amount
Insurances and pension
As an independent business owner you run risks that you are not exposed to as an employee. These can include:
› inability to work due to illness or an accident
› damage to your business from fire or burglary
› being held responsible for mistakes or causing damage
Other factors that you are responsible for as an entrepreneur are:
› paternity leave
› pension
Taking out insurance protects you against such risks and can guarantee you an income if you are unable to work or if your business is adversely affected. Here is an overview of the main types of insurance for business owners:
Personal insurance
Types of personal insurance include:
› Health insurance – compulsory for everyone in the Netherlands.
› Invalidity insurance – either private (through an insurance provider) or voluntary (via the UWV) to cover disability or incapacity to work.
› Accident insurance – a lump sum payment in case of disability caused by an accident.
› Maternity leave – under the Maternity Benefit Scheme for the Self-employed (ZEZ or zwangerschapsuitkering) female entrepreneurs can apply for a pregnancy and maternity benefit for a minimum of 16 weeks.
› Pension or annuity policy – since the Dutch state pension is not sufficient to live on, it is essential for entrepreneurs to build up an additional retirement funds via a pension or annuity scheme.
Professional insurance
Types of (voluntary) insurance that cover your business include:
› Business or professional liability insurance – If you or your company are held responsible for causing damage.
› Legal expenses insurance – to cover legal expenses if a business issue goes to court.
› Loss of profits insurance – covers lost income if you have to temporarily shut down your business, for example after a fire.
› Property insurance – for goods, machinery, equipment or buildings.
› Partner or associate insurance – if you cannot work with your business partner due to illness.
› Machinery breakdown insurance – to cover repairs.
› Computer insurance – for damage caused by viruses, power cuts, Includes loss of data.
› Goods transport insurance – to protect goods until they arrive at their destination.
› Credit insurance – to cover unpaid invoices from debtors.
Additional types of business insurance can be found on the Answers for Business webpage.
If you have employees then employee insurance (social security) is automatically deducted within the payroll tax.
Terms and conditions
To help protect yourself against conflicts and claims of liability you can apply general terms and conditions to your products and services.
Business plan and other issues
A fundamental part of preparing to be your own boss is to create a business strategy for finding clients and promoting your services. This includes making a website and financial and marketing plans.
Since you will be running a Dutch business it also makes sense to learn Dutch. This will not only help you manage your administration – especially when dealing with the Belastingdienst – but it will also help you to connect with Dutch clients and offer them with a better service.
Resources for new businesses
For information about running a business in the Netherlands visit the following pages:
› KvK site in English
› KvK brochure on starting a self-employed business
› Answers for Business
› Startup Delta
› Ondernemersplein
Source: Iam Expat