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As an English-speaking entrepreneur, you may be wondering what options are available to you as you start to plan your immigration and company structure in the Netherlands. In the planning phase of your journey to moving to the Netherlands, there are a few key factors to weigh out including: varying fees/pricing, the amount of paperwork required and what all must be submitted as part of your immigration process overall. As your resident Dutch accounting firm, Lead Out Finance is here to lay it all out for you. Below, you’ll find all of our best insight on how to choose the right business structure for you and what factors should be considered as you make your selection.
If you are looking to come to the Netherlands as an entrepreneur, you have two main options:
- Set up a BV (Besloten Vennootschap)
- Register as a ZZP (Zelfstandige Zonder Personeel)
What is the difference between a BV and a ZZP in the Netherlands?
A BV is the equivalent of a limited liability company (LLC) in the United States, which means that the company is a separate legal entity from its owner(s). It requires a minimum share capital of €0.01 and at least one shareholder. The shareholders’ liability is limited to their investment in the company. BVs are subject to corporate income tax, and the profits of the company are taxed at a flat rate of 15-25%.
Why entrepreneurs moving to the Netherlands should choose a BV company structure
In the United States, many entrepreneurs choose this business structure due to the flexibility with how many owner(s)/stakeholders you can have in the business, as well as the separation between the business operator and legal liability. Under an LLC in the United States, if your LLC is sued, the prosecutor may only pursue the monies brought in by your business, they cannot pursue any of your personal savings, assets, etc. With this business structure, you can also use your own name as the business name and still receive all of the benefits/protections listed above. Choosing the equivalent of an LLC for your business in the Netherlands (i.e. a BV) would make sense for similar reasons.
One major difference in this business structure in the United States vs. in Holland is that BVs in the Netherlands are allowed to divide their business into shares and give shares to investors as a return for their investment. With this added benefit, the BV structure is actually much more powerful than an LLC in the states as it fast tracks the capability to sell your business later on – just by selling off all of the shares of your BV.
Why a ZZP may be the right choice for entrepreneurs moving to Holland
A ZZP is the equivalent of a sole proprietorship business model in the United States. It’s a self-employment status that is popular among freelancers, consultants, and small business owners in the Netherlands. Many of the reasons for its popularity are the same in both the states and the Netherlands—ZZP structures do not require any capital, and you can set up the company quickly and easily. As a ZZP, you have an added responsibility for handling your own taxes and social security contributions as well as the added personal liability for the company’s debts and obligations. Much like a sole prop in the United States, the biggest benefit of a ZZP is the ease of setting up the business (less paperwork and fees than a BV).
The Self Employment Visa in Holland
If you are an entrepreneur who wants to come to the Netherlands, you can apply for a self-employment visa. The self-employment visa requires you to have sufficient financial means to support yourself, a solid business plan, and relevant experience in your field. You can apply for this visa at the Dutch embassy in your home country or within the Netherlands.
What are the costs of opening a company in the Netherlands?
The fees associated with starting your business in Holland varies depending on the business structure you choose. BVs are generally more expensive than ZZPs. Setting up a BV requires you to pay a notary fee, which can range from €500 (approx. $543 USD) to €1000 (approx. $1,087 USD) depending on the notary. With a BV, you will also be required to deposit a minimum share capital of €0.01. Finally, you will need to work with an accounting firm, such as Lead Out Finance, to handle ongoing accounting and bookkeeping – depending on the provider you choose, this can range from €600 and €1,800 per year.
In contrast, setting up a ZZP is relatively cheap and easy. You only need to register with the Dutch Chamber of Commerce (Kamer van Koophandel) and obtain a VAT number. The cost of registration is a one-time fee of €50.
Coming to the Netherlands as an Entrepreneur
If you are coming to Holland as an entrepreneur, there are a few things you need to know. Most often, it benefits you to have a solid business plan that demonstrates your experience, financial means, and market research. You may also need to be able to prove that your business will benefit the Dutch economy.
Secondly, you need to register your company with the Dutch Chamber of Commerce and obtain a VAT number. You also need to register with the Dutch Tax and Customs Administration (Belastingdienst) to obtain a tax number and register for VAT.
Lastly, you need to ensure that you have the appropriate visa or residence permit to live and work in the Netherlands. As mentioned earlier, you can apply for a self-employment visa if you meet the eligibility criteria.
For a full step by step breakdown of moving to the Netherlands and starting a business, check out our blog “Starting A Business In The Netherlands” here.
Other Types of Dutch Company Structures
Aside from BVs and ZZPs, there are several other types of companies and structures in the Netherlands.
- NV (Naamloze Vennootschap): A public limited liability company that can issue shares to the public.
- Co-operative (Coöperatie): A company that is owned and controlled by its members.
- Partnership (Vennootschap Onder Firma): A company that is owned by two or more partners who are personally liable for the company’s debts.
- Limited Partnership (Commanditaire Vennootschap): A company that is owned by one or more general partners who are personally liable for the company’s debts, and one or more limited partners who are not personally liable for the company’s debts.)
Each type of company has its own advantages and disadvantages, depending on your business needs and goals. For example, NVs are suitable for large-scale businesses that need to raise capital from the public. Co-operatives are ideal for businesses that prioritize democratic decision-making and community ownership. Partnerships are suitable for small businesses that require flexibility and shared responsibility.
By working with Lead Out Finance early on in your planning process, we can help determine what business structure is a best fit for your needs and put you in contact with additional professionals who can help organize, gather, and submit the appropriate legal documentation, business plans and more for your chosen business structure.
Frequently Asked Questions in Dutch Business
What does a Dutch Besloten Vennotschap mean?
Besloten Vennootschap, abbreviated as BV is a legal business entity/structural option available to those looking to begin a business in Holland. It is the equivalent of a private LLC.
What are the requirements for starting a BV?
To set up a BV in the Netherlands, the first step is to create the company’s legal framework by drafting its statutes in a notarial deed. This process is known as incorporation. After that, a starting capital deposit of €0.01, which can be in cash or in kind, must be made.
Next, the company needs to be registered in the KVK’s Business Register (Handelsregister). It’s important to note that until the registration is complete, the founder(s) remain personally liable for the company. This registration process is typically handled by a civil-law notary.
Finally, the BV must be registered with the Dutch Tax and Customs Administration (Belastingdienst). This step is also typically taken care of by the civil-law notary.
What tax considerations are there for a private LLC/BV structure?
If an individual owns 5% or more of their company’s shares, they are considered to have a ‘substantial interest’ (aanmerkelijk belang) and are referred to as a ‘director and major shareholder’ (DGA).
As a DGA, it is necessary to pay income tax (inkomstenbelasting) on the salary earned and potentially Dutch dividend tax (dividendbelasting). Paying yourself a salary from a BV is relatively costly, and a less expensive option (fiscally) is to pay out a dividend. The BV must also pay corporation tax (vennootschapsbelasting, VPB) on its profits.
If I have a BV, can I hire additional personnel?
It is possible for a BV to employ staff, but it is essential to keep in mind that Dutch payroll taxes and social contributions must be paid for the employees. If you are employing individuals for the first time, you must register as an employer with the Dutch Tax and Customs Authorities and report it to KVK.
How much tax do I pay as a ZZP in the Netherlands?
In the first tax bracket (1), the corporate income tax rate will increase from 15% to 19%, resulting in a higher tax payment on profits up to €200,000. If the business profit exceeds €200,000, a tax rate of 25.8% applies on the exceeding amount, which is consistent with the previous year’s percentage.
How long can US citizens stay in the Netherlands without applying for permanent residence?
Citizens of the United States may stay in Holland for up to 90 days before they must acquire/apply for permanent residence.
How Do I Register as a ZZP’er in the Netherlands?
Registering to be a freelancer is super simple, and you can do this by filling in a form on the KVK website, which will ask for your name, business name, and contact details. Once you have completed this submission to the KVK, you will get an appointment date to meet with a KVK employee.
What is the 30% rule for businesses in the Netherlands?
The 30% tax ruling is a tax advantage for highly skilled migrants in the Netherlands. An employer can pay up to 30% of the salary of an expat employee with the 30% status free of tax. An enormous tax saving for both employee and employer, but keep in mind that it is only possible with a BV..
What is an expat?
An expatriate (expat for short) is an individual living and/or working in a country other than their country of citizenship.
Understanding Dutch company structures and all the legal forms that come with them is crucial for English-speaking entrepreneurs who want to come to the Netherlands as self-employed individuals. BVs and ZZPs are the most common company structures, each with its own advantages, disadvantages and associated fees. Through careful consideration, planning and diligence, we can help you navigate the Dutch business landscape and make informed decisions for your business.
If you’re ready to begin the process of moving to the Netherlands and becoming an entrepreneur abroad, reach out to us! For more insight and resources on building a business, beginning the immigration process and more, check out the rest of our blog here.