Irrespective of what your business objectives are, there’s a wonderful reason to accomplish them in the Netherlands. Any business can profit and find its equal in the flourishing business environment in the Netherlands.
If you are keen on becoming your own boss, then the Netherlands is an ideal place to consider launching your own business. But, there are various subjects entrepreneurs need to be aware of.
The Netherlands welcome entrepreneurs
Practically anyone can start a business in the Netherlands, but the process may be a little different depending on whether you require a visa or work permit. Below is a list of those who can launch their business in the Netherlands
- Non-EU citizens
A foreigner can start his/her own business in the Netherlands, or bring a business from abroad. There are specific conditions that need to be addressed, the major being legal residence, and approval to work in the Netherlands.
Non-EU citizens who are looking to launch a business or become self-employed will generally need to obey Dutch immigration procedures and acquire a residence permit (MVV) or work permit (TWV).
- EU/EEA/Swiss citizens
Citizens of European Economic Area (EU , Iceland, Liechtenstein, and Norway) and Swiss citizens don’t require a residence permit to enter, live and work in the Netherlands. A passport or ID card is adequate proof of legal stay.
Citizens of other countries planning to stay longer than 90 days generally need an entry permit, (MVV), and a residence permit, allocated by the Dutch Immigration Authority (Immigratie en Naturalisatie Dienst), the authoritarian source of residence permits.
- Start-up visa for expats
There is another alternative for non-EU/EEA/Swiss citizens: the Dutch start-up visa. This visa enables non-EU citizens to establish a company in the Netherlands with the hopes of a prosperous, lucrative business. The visa gives global entrepreneurs a one-year period to start their businesses, enabling time for expats to understand the Dutch business environment and grow their client base.
Legal structures for starting a business in the Netherlands
The Netherlands has several regulations and legal forms for distinct business structures. Freelancers are generally single-person businesses, whereas larger companies are frequently considered private limited companies. But if you are running a clinic you might select a maatschap, and if you are operating an NGO you might select a Stichting.
The two most popular legal forms (rechtsvormen) are unincorporated business forms and incorporated business forms.
Here is an overview of all the Dutch business forms (rechtsvormen).
Unincorporated business structures (Rechtvormen zonder rechtspersoonlijkheid)
In these legal forms, you are liable for the deficits of your business.
- Eenmanszaak: sole trader
- Vennootschap onder firma (VOF): general partnership
- Maatschap: professional partnership
- Commanditaire vennootschap (CV): limited partnership
Incorporated business structures (Rechtvormen met rechtspersoonlijkheid)
In these legal forms, you are, in most cases, insured 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.
Starting your business in the Netherlands
Commencing a business in the Netherlands begins with the name. You have to select a business name and prepare a definition of your business activities. It’s possible to check existing business names on the KvK (Kamer van Koophandel), search page.
Register your Dutch business at the Chamber of Commerce
When you have determined the type of business you would like to start, then you have to register it with the KvK (Dutch Chamber of Commerce), which will enter it in the Dutch Trade Register. Registration has to happen from one week before you commence business activities to one week after. To register your business you have to be registered with your local city, else you must deliver valid proof of your residential address abroad. To start, you have to fill out the online form as much as possible before coming to your appointment.
To register with the Netherlands Chamber of Commerce, you have to bring thee a valid ID, a signed lease (rental or sales contract of your Dutch business address), and registration fee
Depending on your business type, you might also be asked to bring a detailed business plan, a recent bank statement, for home offices, evidence of your home address, and a rental contract if hiring a premises
And once your registration is authorized, you will be given a personal company registration number.
Register at the IND (Immigratie en Naturalisatiedienst)
Citizens from EU/EEA countries are required to register at the Dutch immigration service. They will issue personal ‘Burger van de Unie’ stamps on their passports.
All other non residents registering a new business in the Netherlands will receive a VAT number and a letter from the Dutch tax office. This number will be used when issuing invoices and buying goods for your business.
Business administration
In the Netherlands, businesses are required to keep administrative records for a period of seven years. This includes records such as invoices sent and received, bank statements, contracts and agreements, and business activity expenditures.
Invoices need a specific format and must contain detailed information. Online accounting software can be useful for doing this personally but you can also ask for the aid of a certified Dutch accountant for administrative needs.
A legal invoice (factuur), must include the following;
- Date and invoice number
- Business name and address,
- BTW and KvK numbers
- Name and address of the client
- Illustration of the product or service
- Price excluding BTW
- BTW rate and sum
Business taxes in the Netherlands
A new business in the Netherlands has to be registered with the Dutch tax office (Belastingdienst). It is highly recommended to register as soon as possible in order to claim VAT deductions on the investments you make to start the business.
If you are launching an unincorporated business, you can register with the Belastingdienst during your KvK appointment, but if you are launching an incorporated business, you can request the notary to register with the Belastingdienst.
Tax types for businesses
If you have a company in the Netherlands, you have to pay the following types of tax:
- Self-employment taxes
- BTW (VAT)
- Income tax (inkomstbelasting)
- Self-employment taxes
Dutch corporate tax must be paid by sole proprietors as well as companies. According to the Ministry of Finance, natural persons pay tax on their profits through their income tax returns.
Self-employed workers in the Netherlands have to register their business with the Dutch tax authority and submit their own tax returns themselves. Corporate taxes in the Netherlands can seem difficult for the self-employed as income tax must be filed yearly.
- VAT (BTW)
It is mandatory for most businesses to charge VAT, on all products and services rendered in the Netherlands. Also, virtually all businesses are obliged to add VAT to their sales. The tax office collects this tax four times a year through the VAT declaration.
- Income Tax
If you have a business in the Netherlands, you have to do your annual income tax return. Finalizing your income tax might be a little confounding as you need to prove you are an entrepreneur to gain access to specific tax advantages. A good accountant is crucial for helping you to calculate your income tax.
Tax advice for entrepreneurs in the Netherlands
Whether you’re new in the Netherlands or you are been based there for a while, understanding the Dutch tax system can be a little sophisticated, especially if you’re starting your own company. But, thankfully there are various expat-friendly tax advisors in the Netherlands who can help with a lot of tax-related issues, giving advice and information in English or other languages.
Business insurance in the Netherlands
As a self-sufficient business owner, you run risks that you aren’t prone to as an employee. Taking out insurance safeguards you against such risks and can assure you an income if you are unfit to work or if your business is negatively affected. Different types of insurance have to be considered. These include health insurance, unemployment insurance, and business liability insurance.
If you plan on starting a business in the Netherlands, make sure you start off right by understanding all the laws and guidelines for becoming a new freelancer, entrepreneur, or business owner.
In other words, contact your Damalion expert now to start your company in the Netherlands.
