Want to start a business in the Netherlands?

Have you been thinking about setting up a business overseas? And seriously considering the Netherlands as a potential option? You are definitely not the first person to come up with this idea. Because it would be a smart decision! The Dutch offer a multitude of benefits for aspiring foreign entrepreneurs. This, in turn, leads to a continuously growing amount of foreigners wanting to invest in the Netherlands. Or start their business here.

Here are some reasons why you should definitely think about it:

  • Holland has one of the lowest tax rates in Europe: starting from 20%
  • There is also no value added tax (VAT) for transactions between member states of the EU
  • The Dutch offer the largest number of treaties for double tax avoidance worldwide
  • Dutch companies have an amazing and well-known reputation in global (e-)commerce
  • More than 90% of the Dutch speak English and often a second foreign language, like Spanish and French, too
  • The Netherlands have a highly educated labor force (third in the global top for education level)
  • Holland offers an outstanding and innovative international business atmosphere
  • The country welcomes foreign entrepreneurs and investors by offering a very stable legal and political climate as well as superb international relations

The Dutch are strong in many different sectors

One of the main benefits of becoming a company owner in the Netherlands is the multitude of sectors the Dutch are really successful in. The Netherlands offers very favorable prospects to either start a business, or invest in an already existing company. Dutch companies are world-famous for their innovative, pioneering and efficient solutions and ideas. Certain industries stand out in this regard from others, like Information & Technology, Logistics, the Health sector, the Creative & Arts sector, Renewable & Offshore Energy, High-Tech Systems & Innovations, Agriculture and the Pharmaceutical and Chemical sector.

It’s no surprise that Holland was ranked the 3rd best country for business this year by none other than Forbes Magazine. The World Economic Forum ranked the Netherlands the 5th most competitive and innovative country in the world. Still not convinced?

Financial and economic opportunities

When considering Holland for your start-up, you are basically also considering the whole European Union. The Netherlands is part of the EU and this provides you with endless possibilities and opportunities:

  • The European Single Market allows you to freely import and export services and goods throughout the EU
  • The Netherlands houses Schiphol as well as Rotterdam port: two logistical powerhouses connecting your business to the whole world in an instant
  • The Netherlands is a stable core member of the EU, which will make your company look solid and dependable too
  • The Dutch are famous for their international trade skills and their accessibility to huge international markets, which of course will become available to you too
  • The workforce in the Netherlands has long been known as well-educated and bilingual, which allows you access to a plethora of fantastic recruitment opportunities for your company
  • The costs for starting a company in the Netherlands are relatively low when compared to a lot of neighboring countries
  • Because of this trade mentality and strong infrastructural position, the Netherlands are currently holding the 20th position of largest economy in the world. Not bad for one of the smallest countries on the planet!
    Amsterdam Canals

    Amsterdam Canals

The Netherlands and neighboring countries: a comparison in tax rates

Next to all the benefits already listed above, the tax rates in Holland are very favorable as well. It’s no secret that The Netherlands is loved by an infinite amount of wealthy investors due to the mild tax rates. Combine that with the innovative atmosphere and logistical power and you have a golden combination. Just take a look at the tax rates of some neighboring countries:

Country Corporate Income Tax Rate
France 33,33-36,6%
Germany 23-33%
Luxembourg 29-30%
Belgium 29%
Netherlands 20-25%

But there is more positive news coming: by 2021 the tax rates for profits under 200.000 euros will be reduced from the current 20% to a mere 16%. Profits over 200.000 euros are currently taxed at 25%, but this number will be reduced to 21%. The government aims to attract even more foreign investors this way, by providing a strong investment climate. This makes right now probably the ideal time to start a business in the Netherlands!

Who can start a business in the Netherlands?

In general, everyone can start a Dutch business. Any persons from any country may start a BV company in the Netherlands, it does not matter from which country you are.

However, the procedure for residency in the Netherlands will vary according to your home country. If you can reside in the Netherlands depends on whether you are an EU, EEA and Swiss citizen or a Non-EU citizen. We will explain both situations a bit more comprehensively.

The residency procedure for EU, EEA and Swiss citizens

All EU, EEA and Swiss citizens enjoy exactly the same benefits as citizens from the Netherlands. What does this mean specifically? You won’t have to apply for any residence permit to be able to live in the Netherlands, because all EU and EEA citizens are considered equal.

The residency procedure for Non-EU citizens

If you are resident of a different country not situated in the EU or EEA, then certain procedures will apply if you want to reside in the Netherlands. These are according to Dutch immigration regulations and mainly prescribe how to obtain a residence permit. Depending on your specific wishes and situation, this may either be a start-up permit or a self-employed permit.

How to know which permit you need for your Netherlands immigration?

As a non-EU citizen, you will need a permit in order to be able to live in the Netherlands. However, according to Dutch immigration law you will need to meet certain conditions and criteria to be able to obtain this permit. An agency named the Netherlands Enterprise Agency (RVO) will score your application for a permit.

The end score depends on factors such as your ambition, experience and the future prospects of your company. In general, your company will need to provide some added value to the already stable and positive business climate in the Netherlands. Read the specs for both permits below to find out which one is probably most suitable for you.

The start-up visa

This is a visa you can obtain when you want to live in the Netherlands. Some requirements as provided by the RVO are a stable and solid business plan, proof that your business is innovative and proof that you have enough financial resources to be able to sustain yourself for one year in Holland. Also, you will need to find yourself someone called a ‘facilitator’. This mentor-like person will help you with advice on management, marketing, investments and research.

The self-employed residency permit

The self-employed residency permit is for people who want to move to the Netherlands for an indefinite period of time. You will need to prove that your business has the capacity to benefit the Dutch market in some way. The way you can show this is by providing a solid business plan, as well as good financial prospects from third parties. The financial information must also be certified by an accountant or financial advisor. Eligibility for this permit is point based, meaning you will need to acquire a minimum amount of points if you want to qualify. The only two nations exempt from this system are Japan and the United States.

Regulated professions in the Netherlands

One thing you will also need to inform yourself on is the question whether your specific profession is regulated in Holland. Because then, you will need officially recognized qualifications to be able to set up a business within your sector. If your qualifications are from a different country than the Netherlands, you will need to obtain permission to be able to practice in Holland. To know if you fall under this category, check the EP nuffic list of regulated Dutch professions. Afterwards you can contact the competent authority listed under your specific profession. They can recognize your qualifications.

In general there are very few regulated businesses in the Netherlands.

Legal business forms in the Netherlands

When you decide to start a business in the Netherlands, you will be presented with a vast array of legal entities to choose from. There are mainly two categories: unincorporated business structures and incorporated business structures. There is one very notable distinction between these two. An owner of an unincorporated business structure will be held privately accountable for any debts created with the business, whereas an incorporated business structure provides a separation between private and business assets. This is also one of the main reasons most foreign entrepreneurs choose to start a Dutch private limited company.

Types of unincorporated business structures:

  • Eenmanszaak: Sole trader/single person business
  • Vennootschap onder firma or VOF: General partnership
  • Commanditaire vennootschap or CV: Limited partnership
  • Maatschap: Commercial/professional partnership

Types of incorporated business structures:

  • Besloten vennootschap or BV: Private limited company (ltd. and Inc.)
  • Naamloze vennootschap or NV: Public limited company (plc. and Corp.)
  • Coöperatie en onderlinge waarborgmaatschappij: Cooperative and mutual insurance society
  • Stichting: Foundation
  • Vereniging: Association
    rotterdam-centraal-skyline

    Rotterdam Central Station

Characteristics of all Dutch legal company forms

It can be a bit tricky to choose from all the specific business types in the Netherlands. In general most foreign investors and entrepreneurs choose the private liability company and/or a BV holding structure due to the largest amount of financial benefits and its limited private liability. Nonetheless, to help you choose we have compiled an extensive list of all the possible company legal forms. This way you can compare all the characteristics in your own time and make an informed decision.

Sole trader / Single person business

The single person business is also known as the sole proprietorship. This is a very good choice for Dutch entrepreneurs who have only local activities and already poses a BSN number. Or maybe you don’t have the need for investors as you don’t have many investments to start with. Then this legal form might be for you, as it also provides some nice tax breaks in the first few years. The only downside is that you will be privately held accountable for any business debts, since there is no separation between private and business assets. If you so choose, you are able to employ personnel. That, and certain tax breaks are the reason many entrepreneurs opt for a limited company.

The private limited company does have downsides, it is not able to be opened or operated by a non-resident.

Foreign entrepreneurs mostly opt for a limited company since the Dutch limited does not have any restrictions on foreign residents as owner or director.

General partnership

A general partnership consists of two or more partners doing business together. Each partner contributes to the general partnership, be it in capital, labor, knowledge or assets. All partners work together towards a mutual goal. The partners are each privately responsible for any debts, made by themselves but by other partners as well. The profits are also shared between all partners. It’s not an obligation to create and sign a contract between partners, but to avoid any misunderstandings it is very much advised. Especially considering the joint private responsibility for all liabilities we already mentioned.

Commercial/Professional partnership

The commercial partnership is a fitting legal entity for practicing professionals who work together, like therapists or accountants. All partners are privately responsible for all liabilities. This business structure allows multiple partners to join forces within a certain profession, which can be beneficial for the clients due to a shared knowledgebase. The partners are considered equal and all profits are shared amongst partners. Partners are not allowed to make commitments or act on behalf of other partners. Like in the general partnership, it is highly advised to sign a mutual contract between all partners to avoid problems in the future.

Limited partnership

The limited partnership is very similar to the general partnership. However, the partners are not exactly as equal. Within a limited partnership there is generally one managing partner who runs all daily operations, and a silent (limited) partner who acts mostly as a financial provider. This is why a lot of starting business owners choose this company form when they are short on capital: the investor becomes a partner simply by providing financial assets and advising the managing partner on various financial affairs. The managing partner is solely liable for all business debts. To avoid future misunderstandings it is very much advisable to set up a contract between the managing partner and the silent partner(s), but this is not compulsory.

Private Limited Company

The private limited company is the most chosen incorporated business form in the Netherlands. Not just by Dutch entrepreneurs but by foreign investors as well. Since 2012 the flex-BV has been introduced, which meant the previous minimum share capital of 18.000 euros was eliminated. Nowadays everyone can start up a private limited company with as little as 1 eurocent.

When you start a private limited company, you are entitled to a board of directors and corporate shareholders. You can choose to set up a private limited company on your own, or with partners. In that case the ownership of the company is distributed into shares. All shareholders together have the power to make decisions for the company. But the general management is usually in the hands of the (board of) directors. It is possible to be both a shareholder and a director. In that case you are considered to be an employee who acts on behalf of the company.

Private limited company in formation

Establishing a private limited company can take a little bit of time, since you also have to go to the notary. This is why you can set up a private limited company in formation. This status will allow you to sign contracts, trade and make business agreements for example. One thing you should be mindful of, is the fact that during this phase you are personally accountable for any debts you might make.

Public Limited Company

A public limited company is very similar to a private limited company. The big difference is the fact that the shares of a public limited company can be traded on the stock market. A public limited company is very fitting for large businesses, but requires a minimum share capital of 45.000 euros. So you will need a little bit of money to start this company form. Like a private limited company, this legal entity also has a board of directors and shareholders.

Cooperative/Mutual insurance society

A cooperative is basically a collective of professionals who all strive for the benefit of all. Think of examples like farmers, journalists, artists and such. These individuals work together and combine their resources in order to reach that mutual goal. Members of a cooperative can work together, but also independently. There is a general meeting of members that acts as management, as well as an appointed board. Both profits and costs are divided between all members. A mutual insurance society is also a form of a cooperative.

Foundation

A foundation is a rather versatile entity, which can be used in various ways. Such as a commercial entity, an entity for family funds or a holding structure. A foundation can have shares, own real estate and also earn profits but only under specific regulations. It is also possible for a foundation to sometimes be exempt from taxes, accounting and reporting requirements, but the conditions linked to such options are very strict. The main aim of a foundation is generally to benefit a specific cause that the foundation stands for. If a foundation is founded at a notary, it will be limited in liability.

Association

The association is mostly used in the case of two or more persons with a common aim. Think of shop owners in a certain district, or home owners in the same street. The main goal of the association is the attainment of shared goals, as well as maintenance of shared real estate. An association has an appointed committee next to its general members. This committee includes a chair, treasurer and a secretary. In general there are two types of associations in the Netherlands: associations with full legal capacity and with limited legal capacity.

Which company form will you choose in the Netherlands?

Starters are often a bit in doubt about which legal entity will suit their needs best. The choice will mostly be between a private or public limited company. In general if you manage to make a lot of money in a short time, the benefits of a private limited company can prove very advantageous. Not only fiscally speaking, but the Dutch BV is most practical for foreign entrepreneurs. As the company may be owned by any foreign resident.
This is exactly why almost all foreign entrepreneurs and investors will choose the private limited company from the start. The tax rates are lower for a private limited company. This makes it more suitable for companies with a higher turnover and/or investments. Additional benefits of a private limited company include (but are most certainly not limited to):

Limited liability

As a shareholder you will never be personally held accountable for any business debts. All risks are linked (and thus limited) to business investments. So your private funds are in general safe.

Minimum share capital has been reduced to almost nothing

Before October 2012 the minimum share capital for establishing a private limited company used to be 18.000 euros. Since this date the amount has been reduced to a mere 1 euro cent, which opened doors for many more entrepreneurs to invest in this company form.

Subsidies and premiums for innovation

It is possible to apply for a wide variety of premiums and subsidies when owning a private limited company in the Netherlands. Entrepreneurial subsidies include for example the Innovation Box instrument and WBSO (R&D tax credit).

You won’t have to pay taxes on interest, dividends and royalties

In the Netherlands companies are able to benefit from reduced tax rates on interest, royalties and dividends. This is due to a large network of treaties with nearly a 100 different countries and jurisdictions. You will also be able to benefit from reduced rates on transferred dividends to Dutch companies, and lower tax rates on capital gains from share sales in a source country.

What are the exact differences between a Dutch public and a private limited company?

As described before, the shares of a public limited company can be traded on the stock market. Also, a private limited company can only issue registered shares. A public limited company can issue both registered and bearer shares. Sometimes there might be certain transfer restrictions applying to certain (or all) shareholders, this will be defined by the articles of association. Other shareholders will have to give their consent in such cases, when one of these shareholders decides to transfer his or her shares. For more in-depth information you can always contact us, we will be happy to elaborate on the precise differences between these two company forms.

Which foreign legal entities are comparable to the public and private limited company?

A private limited company can be compared to any limited liability company all over the world. For example, in Germany this would be the German Gesellschaft mit beschrankter Haftung (GmbH). The appropriate French version is the société a responsabilité limitée (SARL) and in the UK it is also known as a private liability company (ltd.).

The public liability company can be compared with a corporation. These companies are also the ones that are traded on stock exchange. In the UK this company form is known as the public limited company too (plc.). In France, the correct name is the Société Anonyme (SA) and in Germany the Aktiengesellschaft (AG).

The holding structure for a Dutch private limited company

Apart from a single private limited company, you can also choose to establish a so-called holding structure for your company. This is also a legal entity, which holds only assets. This means that a holding does not have any liability or risks involved with any operations. It is a very secure way to start your business. All actual business activities will be carried out though a subsidiary.

The subsidiary belongs to the umbrella holding company, it is possible to have multiple subsidiaries under one holding. The subsidiary performs all business activities like services or trade and is liable for any debts or claims. The holding however, is safe from these claims or debts. The combination of a holding and a subsidiary is a holding structure, which has the following characteristics:

  • the holding structure includes two or more separate private limited companies
  • one of these private limited companies is a holding without any business activities
  • one (or more) private limited company is a subsidiary and engages in business activities
  • the company founder (you) owns the shares of the holding company
  • and the holding company owns the shares of the subsidiary
    bv holding structure

Benefits of a holding structure in the Netherlands

When you establish a holding structure, you reduce two unwanted factors: risks and taxes. Risk is reduced because you add an extra layer of protection between your business activities and you as a business owner. You can structure your private limited company in a way that it protects your capital. Profits and pension provisions you accumulate over the years are protected from business related risks this way. In terms of reduced taxes, you can profit from some nifty tax advantages like the participation exemption. This will allow you as an owner to sell your company without having to pay profit tax. How? By simply transferring the profits to the holding company.

A holding structure is advisable for people who:

  • will very likely sell their company one day, due to the abovementioned participation exemption
  • need risk protection for their capital
  • desire to start a fiscally flexible Dutch business

The procedure of starting a Dutch company

If you want to start a company in the Netherlands, it is not mandatory anymore to physically travel here. You and potential other shareholders can authorize us to act on your behalf. Other extra actions, like opening a bank account, may also be done remotely. The entire procedure can be completed in a very small timeframe if you so wish: only 48 hours. This can only be achieved when all your documentation is complete and correct though. By far the largest amount of time is spent on the necessary verification of all documents, so please make sure you checked these well. When we have received all the forms, this is how we proceed:

Step 1

The identity of all the people involved and the accompanying documents are all checked. We also check the availability of your preferred company name.

Step 2

We prepare all the documents for the formation of a business, which will then be sent back to you and possible shareholders to sign. After you place a legalized signature, you send all documents back to us.

Step 3

When we receive the signed documents, we will start the registration procedure. A notary will sign the deed of incorporation and submit the deed of formation to the Dutch Chamber of Commerce. You will receive your registration number, which is basically the identification number of your company. At this point, your company officially exists!

The Chamber of Commerce provides us (or you, if you are physically present) with a corporate extract. You will also receive your VAT number. After all this, you can basically start doing business. We advise to immediately take care of all other necessities as well at this point, like opening a bank account and finding a suitable accountant. You will need an accountant for your tax filings and the annual statement which is published every year at the Chamber of Commerce.

public notary

How much time does each individual step take?

To illustrate the procedure in steps, every step takes the following amount of time:

  • The preparation and signing of all necessary documents: 1-5 hours
  • The verification and authentication of all received documents: 1-2 days
  • The drafting of all the notary documentation: 1 day
  • The registration of the company at the Chamber of Commerce: 1 day
  • Getting your tax identification number: 1 day
  • The opening of a bank account in the Netherlands: 1 day
  • The registration of your company for VAT: 1 day

How much will it cost me to start a business in the Netherlands?

Starting a Dutch business will involve multiple mandatory fees and costs. How much this will be exactly is calculated per client, since every client has different needs and preferences. To point you a bit in the right direction, we have summed up all the standard costs you should definitely take into consideration:

  • The preparation of all your legal documents and identification papers
  • The standard fee at the Chamber of Commerce for registration
  • The standard fee for registration at the tax authorities
  • The fee for the actual formation of the company by a notary
  • The fee for assistance with your VAT number and possible EORI number
  • The fee for extra services like opening a bank account
  • The fee for assistance with translation services

Dutch taxes explained in detail

Once you have a business in the Netherlands, you will obviously be obligated to pay taxes. There are multiple types of taxes in relation to businesses:

  • VAT: in the Netherlands this is called ‘belasting toegevoegde waarde’ (BTW)
  • Income tax
  • Corporation tax when you own an incorporated business
  • Payroll tax when you have employed peopletax-accounting

Dutch VAT

Apart from certain pre-defined exemptions, all Dutch businesses are obligated to charge VAT on their products and/or services. In most cases, this is the standard rate of 21%. In other cases a lower rate might be applicable. You can find a list of all exemptions on the website of the Dutch tax authorities (Belastingdienst). This tax is collected via the VAT declaration you hand in on a quarterly basis.

The Dutch VAT rates:

  • 21% is the standard VAT rate
  • 9% is a special lower VAT rate (per 1 january 2019 the lower rate has changed from 6% to 9%)
  • 0% is a VAT tax exempt rate
  • 0% is also used for transactions between all EU member countries, the client instead pays the applicable VAT to the tax authority of the client’s country

The VAT you pay can be deducted from most business expenses. Think office supplies, travel costs but also larger things like electronics and company vehicles. There is also a VAT tax break for small business owners: if you collect less than 1.883 euros in VAT per year, you don’t have to pay this VAT to the tax authorities. Last but not least: always remember to submit your quarterly VAT declaration on time. If you don’t, you will be fined.

Dutch income tax

Every business owner needs to submit their yearly income tax return, just like every employee. For business owners this can prove to be a little tricky, since there are loads of forms you need to fill out and every detail must be exactly right. Especially if you want to profit from certain tax breaks and benefits. We always advise foreign investors and entrepreneurs to hire a good accountant, so you don’t have to worry about your financial and fiscal administration.

Dutch corporation tax

If you are the owner of a public or private limited company, you will need to pay corporation tax every year. Sometimes associations or foundations also have to pay corporation tax under certain conditions. As mentioned previously, the current corporation tax rates are 20% for all profits below 200.000 euros and 25% for all sums above this figure. But from 2021 these percentages will be lowered to respectively 16% and 21%. The Dutch government hopes to attract more foreign investors this way. These conditions apply to both public and private limited companies.

Dutch payroll tax

If you plan to hire employees for your business, you will also need to take into account that you will have to deduct payroll taxes from their salaries. Payroll taxes include several separate sums, such as pension premiums, the contribution for insurance and wage tax.

Frequently Asked Questions about starting a Dutch company (FAQ)

  1. Can I start a Dutch business while currently living somewhere else?
    It is possible for residents of all countries worldwide to start a business in the Netherlands. Take a look at the visa or permit requirements for more information. To establish a company, you don’t have to be physically present as the whole procedure can be done remotely
  2. How can I obtain Dutch citizenship?
    When you want to become a Dutch citizen, there are a few options available like naturalization or marriage. Children of one or more Dutch parents may also claim their citizenship. For more information regarding the procedure please contact us, we will tell you all you need to know.
  3. Do I need a visa to enter the Netherlands and if yes; how do I get one?
    If you are a non-EU citizen, you can stay in the Netherlands during a maximum period of 90 days with a Schengen Visa. If you want to stay longer, you will have to apply for a visa at the Dutch Embassy in your country of residence.
  4. Are there any other permits I need to start a Dutch company?
    When you want to start a business in the Netherlands, you will either need a start-up permit or a self-employed permit. Which one is suitable for you depends mostly on your specific situation. It might also be possible that your business might need special licenses or permits, for example if you would like to open a restaurant. Contact us for personalized information.
  5. Will my company need a Dutch address?
    Yes, your company will have to be registered at a valid address in The Netherlands. There is also an option to start a representative office or branch of your already existing international business.
  6. Which company forms are available in the Netherlands?
    There is a total of 9 different legal entities in Holland you can choose from. The most popular business type by far is the Dutch private limited company, the ‘BV’.
  7. I am interested in establishing a private limited company, can you provide me with detailed information about this Dutch legal entity?
    We are always happy to provide you with all the information you need, just give us a call.

    1. What procedure do I have to follow to start a company in the Netherlands?
      The main procedure at our firm includes four steps:
    1. Submitting the deed of incorporation
    2. Submitting the Articles of Association
    3. Registration at the tax office
    4. Opening of a bank accountOnce these steps are all taken care of, your company is officially open for business.
  8. Which documents do I need to form a Dutch company?
    To start a business you will need Articles (and Memorandum) of Association.
  9. Is there a minimum share capital required?Only the public limited company has a minimum share capital nowadays: 45.000 euro. Since the introduction of the ‘Flex-BV’ in 2012 the minimum share capital for a private limited company is set at 1 euro cent.
  10. How long is the procedure to start a Dutch company?
    It will take between 3 to 5 working days to start a business, but in urgent cases we can manage all in 2 business days. Please contact us for more information.
  11. How can I register a brand or trademark?
    If you want to register a brand or trademark, the logical order would be to first establish a business and then apply for the registration. There might be options to skip the starting of a business part, please contact us for detailed information.
  12. Are there any legal requirements for foreign investors?
    As a foreign investor you basically have exactly the same rights as Dutch citizens. You must keep all relevant legislation in mind when investing, applying for permits and licenses and so on.
  13. Can I start an international trade business through a Dutch company?
    Yes, this is a possibility and done often by international traders. Local incorporation can bring you many benefits.
  14. Which taxes will I have to pay when I own a Dutch company?
    You will have to pay VAT, income tax, corporate tax if you have an incorporated business and possibly payroll tax if you hire employees.
  15. What are the requirements for employment in the Netherlands?
    International employees need permits in order to be able to work in the Netherlands. You will always need to draft a written employment agreement which needs to be signed by both parties. The relationship between you and your employees is regulated by the Dutch Law of Employment.
  16. What are the most important legal aspects of starting a company in the Netherlands?
    The things you will need to consider are

    1. Availability of your preferred company name and compliance with relevant Dutch laws
    2. You will need to establish a local office
    3. You will have to obtain all permits you need and meet all requirements for registration of a business

Do you have a question, or would you like to start a company in the Netherlands?

If you have any questions on the procedure or you would like to ask our advice about your plans for starting a company in the Netherlands, write us for a free consultation. We will answer your case within 1 working day.

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