How to set up a business in the Netherlands
If you're thinking of moving to the Netherlands, one major thing you have to consider is how you'll generate income. Perhaps instead of answering to a boss, you want to be your own instead? Thankfully, it's relatively simple to start your own business in this country so you answer to no one but yourself. In this article, we'll tell you what you need to successfully set up a business in the Netherlands.
Conditions for starting a business in the Netherlands
Obviously, you need to have valid residence in the country before you can think about setting up a business. If you're from the EU, EEA, or Switzerland, you can both live and work in the Netherlands without any extra paperwork. Thus, you can set up a business straight away.
However, if you're from a country other than those, you'll need to go through the regular route of applying for a provisional residence permit (MVV) and/or a work permit (TWV). Of course, there are some exceptions; for example, if you're an American, you won't need an MVV.
Startup Visa
Another exception is if you're moving to the Netherlands to create your own startup business. The government allows you to apply for a startup visa if you're from outside of the EU, EEA, or Switzerland. This gives you a maximum of one year to get your business going.
You must prove to the government that you've made a new product or service, and this must be done with an experienced facilitator. The government has guidance on how to get an experienced facilitator, as well as the conditions they need to meet. If you don't want to search for an experienced facilitator yourself, then you'll be pleased to know that they have a list of recognized facilitators you can use.
To apply for a startup visa in the Netherlands, you must have your chosen facilitator submit an application on your behalf to the IND (Immigratie en Naturalisatiedienst, the Dutch immigration services). Or you can submit it yourself, but it must be by post. In this application, you need to show your business plan and how you plan to operate it.
Most entrepreneurs still living outside of the Netherlands need to submit their application for a resident permit to the Dutch embassy or consulate in their home country. However, if you're from Australia, Canada, Japan, Monaco, New Zealand, Vatican City, the United Kingdom, the United States, South Korea, or Switzerland, you can just submit your application directly on the IND's website. If you already have a valid residence permit and want to switch to a startup entrepreneur one, you can also use this online form.
Once you've submitted your application, then it can take the government up to three months to approve or reject it. If it's been approved, you'll be notified, and you can pick up a provisional residence permit at your home country's Dutch consulate or embassy. This allows you to travel to the Netherlands legally and when you do, you'll then receive another letter that tells you when and where you can get your actual startup visa.
If you need to hire highly-skilled foreign employees, as of 1 June 2021 (until 2025, as it's a 4-year pilot project), you can apply for a residence arrangement for these people. Your business won't have to meet the regular sponsor requirements for highly skilled migrants, which enables you to hire faster and easier. You can find more information about this on the IND's website.
Seeing as the startup visa is only valid for one year, you may be wondering about what you need to do to stay in the country past that year. You can then apply for a regular residence permit or that's for self-employed people, or any other type of residence permit that you're eligible for.
Self-employed Residence Permit
You can also apply for a residence permit as a freelancer. However, this process is much more rigorous than the one for a startup visa, so we suggest you go that route instead.
If you still want to proceed, then the requirements for a freelancer residence permit will depend on several things, such as your nationality. For example, if you're an American, you'll need to meet the general requirements, as well as prove that your work will benefit the Dutch economy, you meet the income requirements, and have at least one commission in the Netherlands.
If you want to find out the specific requirements for your nationality, then check out the IND's page on self-employed residence permits to get more details.
Types of companies expats can create in the Netherlands
No matter what type of company you create in the Netherlands, you'll have to go to or deal with the KvK (Dutch Chamber of Commerce, or “Kamer van Koophandel”) at some point. They're in charge of registering your business legally.
Good to know:
If you want to create a startup, you can get some financial help from the government through the Ambitious Entrepreneurship Action Plan.
Below are some of the businesses you can create in the Netherlands.
Unincorporated Businesses (Rechtsvormen Zonder Rechtspersoonlijkheid)
- One-person business: eenmanszaak
- General partnership: vennootschap onder firma (VOF)
- Professional partnership: maatschap
- Limited partnership: commanditaire vennootschap (CV)
Because these companies are unincorporated (and therefore aren't legal entities), this means you'll personally be responsible for any debt your business incurs. You'll need to use your own belongings and capital to pay off said debt if it happens.
If you want to open any of the above businesses, you can go directly to the KvK and register your business there. You won't need a notary; you just need to fill out the registration form and make an appointment.
Incorporated Businesses (Rechtvormen Met Rechtspersoonlijkheid)
- Private limited company (either Inc. or Ltd.): besloten vennootschap (BV)
- Public limited company (either Corp. or Plc.): naamloze vennootschap (NV)
- Cooperatives: cooperatie en onderlinge waarborgmaatschappij
- Association: vereniging
- Foundation: stichting
These types of businesses are less risky because they are legal entities. This means that should your business incur debt, you won't be liable for them. Of course, there are some exceptions to this; if it's found that you've performed reckless actions, committed fraud, or have gravely mismanaged the funds, and this has led to the company's debts, then you'll personally be responsible for paying back the money.
Setting up an incorporated business in the Netherlands will be a little more complicated than an unincorporated one. First, you need a notary to draw up a contract. They also need to register your business at the KvK on your behalf. You'll receive an RSIN number when registered, which is like a BSN (Dutch Social Security number) for your startup.
Freelancers
Freelancers (also known as zelfstandigen zonder personeel (ZZP)) won't need to create legal structures. You'll still need to register as a ZZPer.
Many opt to register as a sole proprietorship, but you can also create a private limited company. Also, some ZZPers will come together and create a cooperative to pool their resources. This offers some protection since there's a legal entity, but you can still act as a sole proprietorship. Do note that you'll have to pay corporate taxes for any profits.
If you and your partner or highly trusted friend are both freelancers, you can also consider creating a VOF. All involved parties are responsible for finances, so if one partner incurs debt, the others may need to bail them out, so to speak. This is why it's recommended that you only form a VOF with those you can trust completely.
Cooperating with businesses in other EU countries
Do you want the opportunity to cooperate with businesses in other EU countries? This is possible if you look into European legal structures. There are three types available: European Economic Interest Grouping (EEIG), Societas Europaea (SE, European public limited-liability company), and European cooperative society (SCE).
An EEIG can't have more than 500 employees and is intended to help all businesses out by pooling together resources, skills, and activities. There must be at least two members from different EU countries, and you can't have investment from the public. The good news is, that you aren't restricted to forming an EEIG with capital; financing is flexible here.
The SE is a type of public limited-liability company that gives you better mobility in the single market since you can run your business under one European brand name. You can also create subsidiaries that are also SEs. To create an SE, both your head and registered office must be in the same EU country, and you need to have a minimum subscribed capital of €120,000. You must have branches or subsidiaries in other EU countries. You can set up an SE in four ways: merger, forming a European holding company, forming a European subsidiary, or conversion. The documents you provide will depend on how you form your SE.
Like the other two options, the members of an SCE can't be from just one EU country. This cooperative allows you and other members to come together and have common activities while still retaining independence. What's great about this arrangement is your benefits aren't based on your capital contribution; rather, it depends on your profit. The minimum capital to create an SCE is €30,000, and it must be registered in the country that the head office is in. You must also call a general meeting at least once a year.
How to change your company's legal structure in the Netherlands?
If at any time you want to change your company's legal structure, you'll need to report it to the tax office (Belastingdienst), as well as the KvK. Depending on which changes you make, you may need to reapply for licenses in your municipality.
How to get funding for your business in the Netherlands
To get funding for your startup, you can ask banks and other financial institutions in the Netherlands. However, they'll want proof that your business is a wise investment and that you'll be able to pay them back if your business fails.
Another way to get funding is to offer equity in your company. If you do this, then you'll need to start a BV, as this means you have shareholders.
Taxes in the Netherlands
In addition to registering your company with the KvK, you'll also need to register with the Belastingdienst. At the end of every quarter, you'll need to report the BTW you've paid and collected from your clients. Depending on what expenses you have to deduct, you may still owe the Belastingdienst money, or they may reimburse you a certain amount.
In addition, certain businesses will also have to file annual accounts with the KvK. For example, if your startup is a BV, NV, cooperative, or VOF, you're obligated to file annual accounts. The exact requirements will depend on how big your company is: micro, small, medium, or large. Typically, those who own micro or small businesses can manage to file annual accounts on their own. Regardless, you'll be able to file digitally, which can save on troublesome paperwork.
If you have a foreign legal entity, you still may need to file your annual accounts in the Netherlands. For example, if your business is outside of the EU but has a branch in the Netherlands, you have to file an annual account in your home country.
Make sure you file your annual accounts on time, as there are no extensions allowed. The deadline will depend on what type of business you have, but usually, it's within 8 days of adopting the legal structure or within 12 months from the end of the financial year. If you file your paperwork late, then you may be subject to a fine. In addition, if your business is a legal entity, if you file your annual accounts late, you may become responsible for its debt if you declare bankruptcy. So as you can see, it's extremely important to file on time!
Where to get help for setting up a business in the Netherlands?
If you're not sure what type of business you should set up, you can always make an appointment with the KvK. They'll be more than happy to help you translate paperwork and assist in creating the type of business that's right for your desires.
Should you have any questions after creating your business, you can still turn to the KvK. If you hire an accountant, you can also refer to them, as they may include consultations in the monthly fees they charge you.
