If you are looking for a chance to become your own boss this year, the Netherlands is the place for you. Thanks to solid financial incentives, the number of businesses in the Netherlands grew by 8.5% in 2021, exceeding 2 million in 2022. However, in order for your business to survive, you should be familiar with Dutch laws, administrative regulations, accounting and bookkeeping requirements, and the tax system. In this article, you will find out some of the most important matters that you should consider when starting a business in the Netherlands.
Who Can Start a Business in the Netherlands?
Almost anyone acting as a natural or legal person can establish a company in the Netherlands. It depends on the nationality of the shareholders, so the procedure and documents may be slightly different depending on whether you need a visa and/or work permit.
- EU/EEA/Swiss nationals who want to start a business in the Netherlands don’t need a work permit (TWV). However, they need a personal registration number (BSN), which serves as a social security and tax number.
- Non-EU/EEA/Swiss citizens who want to start a business need a residence permit (MVV) or a work permit (TWV).
- The Start-up Visa for non-EU citizens allows international entrepreneurs to start a business in the Netherlands within one year, giving them time to learn about the Dutch business environment and grow their business.
Legal Forms for Starting a Business in the Netherlands
Before you start a business, you should choose the legal form of your business. Depending on whether you start a business as a sole proprietor (eenmanszaak) or as a limited liability company (bv) will determine your liability and tax obligations. The most common legal forms for companies are:
- Unincorporated businesses (rechtsvormen zonder rechtspersoonlijkheid): you, as the owner, are responsible for your business income and possible debts. Unincorporated businesses include limited partnerships, general partnerships, and freelancers.
- Incorporated businesses (rechtsvormen met rechtspersoonlijkheid): you have a separate account from the company, so you are protected from the business’s debts. Corporations include, for example, private limited companies, public limited companies, cooperative and mutual insurance companies, foundations, and associations.
A business bank account is the next must-have when you start a business in the Netherlands. Apart from the fact that a business bank account is a prerequisite for business registration, it makes administration easier for you and ensures smoother operations.
Once you have decided on the structure of your business, you should choose an original name and officially register your business in the KVK or the Chamber of Commerce. First you should fill in the registration form and make an appointment. After that, you need to pay the registration fee, present a valid ID, and prove you know what kind of business you will be registering. The KVK will forward all these details about your business to the Dutch Tax and Customs Administration (Belastingdienst).
Business Insurance and Pension
When you start a business, it’s important that you protect yourself and your business against the possible risks. Depending on the nature of your business, you may need business liability insurance, cyber insurance, inventory insurance, and damage to your business from fire or burglary. In addition, insurance for you includes health insurance, disability and accident insurance, and pension or annuity insurance.
The Most Common Taxes
As an entrepreneur in the Netherlands, you have to pay different taxes depending on the type of your business. The most commonly known taxes for companies are:
- Value-added taxes – VAT (BTW)
- Income tax (inkomstbelasting)
- Payroll tax (loonheffing)
- Corporate income tax (vennootschapsbelasting)
To learn more about taxes in the Netherlands and how to avoid penalties for late tax returns and keeping incomplete records, check out the infographic How taxes kill young entrepreneurs.
In the first years of your business in the Netherlands, you can take advantage of various tax benefits that can reduce the total taxes that you have to pay in the first years. Some of them are:
- Self-employment deduction (zelfstandigenaftrek)
- Starters deduction or allowance (startersaftrek)
- SME profit exemption (MKB-winstvrijstelling)
- General tax credit (algemene heffingskorting)
- Labour tax credit (arbeidskorting)
To qualify for a tax break, you must meet certain requirements, such as documenting your operations, having three or more customers, working at least 1,225 hours per year in your business, having certain working relationships with customers, etc. Doing taxes right and getting the most out of tax breaks requires a good knowledge of Dutch laws and regulations. If you need help, FinSuperstars can give you the necessary information and provide you with a special financial advisor or accountant.
Dutch Accounting Requirements
In order to avoid various liabilities, it’s important to keep all business records required by the Dutch tax authorities, such as invoices, bank statements, contracts, and business expenses.
Some of the most important things regarding bookkeeping and accounting that you should pay attention to are:
- Timely filing of your Corporate Income Tax Return,
- Timely filing of Financial Statements,
- Updating your abbreviated statements to the Chamber of Commerce and payment of the registration fee,
- Use of proper contracts and Dutch accounting regulations,
- Completion of monthly, quarterly, or annual tax returns,
- Completion of personal tax returns,
Before jumping into all this overwhelming administrative work, ensure you’re well-informed. You can learn more about this topic in the article What are accounting and bookkeeping services and why are they important.
How to Facilitate Entry into the Dutch market?
Sounds like a lot of administrative paperwork to take care of?
The good news is that you don’t have to do all these things on your own. You can leave all the aforementioned formalities to the certified finance and accounting specialists, that will not only make sure that your company complies with Dutch accounting regulations, but also make sure that you have a clear insight into your company’s overall finances. Thanks to using a modern software solution, we can automate all these processes, saving you 32% on labor costs. Besides bookkeeping and accounting, we also offer other services:
- Financial analysts,
- Financial controllers,
- Tax and accounting clerks,
- Financial managers,
- Financial accountants,
- Payroll and time recording clerks.
Schedule a no-obligation meeting and get off to a flying start!