Starting a Business in the Netherlands

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Starting a Business in the Netherlands

The following information provides an introduction to the process of setting up a business in the Netherlands.

Who May Set up a Business in the Netherlands

Anyone who receives authorisation from the Ministry of Justice to operate a business in the Netherlands may do so. 

• The Chamber of Commerce (Kamer van Koophandel, KVK) has comprehensive information in English on setting up a business: Click here
• The Tax and Customs Administration (Belastingdienst) has information in English on potential business-related taxes: Click here

The Netherlands has relatively liberal rules for foreign companies wishing to do business in the country. Businesses based outside of the Netherlands are not subject to any special restrictions when wishing to trade in the Netherlands.

• Foreign-based companies may find the Netherlands Foreign Investment Agency (NFIA) to be a helpful source of information and assistance: Click here

Types of Business Structures in the Netherlands

• Sole Trader
• Partnership
• General Partnership
• Limited Partnership
• Private Limited Liability Company
• Public Limited Liability Corporation
• Branch
• Foundation
• Association
• Cooperative
• Freelance

Sole trader (individual business owner)

A sole trader is the only owner of a business, though there may be employees. Income tax is paid on profits made. Sole traders can be personally liable for business obligations, as can their spouse.

Partnership

Partnerships are generally created between certain professionals, such as attorneys and GPs. For tax purposes the partners are considered self-employed entrepreneurs. Partners are liable for business (financial) obligations individually and spouses can also be liable, though a marriage contract can limit liability.

General Partnership (Vennootschap Onder Firma, VOF)

A general partnership is a business run by more than one person. Partnership agreements will determine contributions, liability and entitlement. For tax purposes, each partner is usually considered a self-employed entrepreneur, and income tax is payable on profits. All partners (and their spouses) are jointly, personally liable for business debts and obligations, though a marriage contract can protect spousal assets.

Limited Partnership (Commanditaire Vennootschap, CV)

A limited partnership is a business run by more than one person. It has two kinds of partners: active and limited. The limited partner tends to be the financial backer for the company, and often enters into a partnership with a sole trader who needs financial backing. The limited partner tends to allow the active partner to make the day-to-day decisions and is only at legally at risk of losing their financial investment if they are not involved in managing the company in any way. Limited partners are not required to register with the Trade Register.

Active partners are liable to third parties and personal assets (including those of a spouse) are not protected from creditors (though a marriage contract can protect spousal assets). It is highly recommended to enter into a partnership agreement when becoming a partner, in order to clarify the duration of the partnership, contribution expectations, profit split, among other things.

For tax purposes, an active partner is usually considered to be a self-employed entrepreneur and is required to pay income tax on their share of profits. A limited partner who has only provided financial backing for the company is not considered a self-employed entrepreneur, and instead has joint entitlement.

Private Limited Liability Company (Besloten Vennootschap, BV)

A BV is a private limited liability company and is considered to be a legal entity, which limits the risks to the owner(s). Shareholders are only liable for their own capital contribution. To start a private company (BV), at least €18,000 in paid-in capital (not necessarily cash) is required. Shares are allocated based on the capital, and for tax purposes, any person owning more than five percent of shares has a "substantial interest" in the company and is liable for taxes on capital gains or dividends paid. It is necessary for owners to obtain a background check for fraud or bankruptcy from the Ministry of Justice. BVs are often considered to be the best way for a foreign company to establish a subsidiary in the Netherlands.

Company information and proof of incorporation in a foreign country (if applicable) must be filed annually with the Chamber of Commerce (Kamer van Koophandel, KvK).

Note: Directors of companies registered outside of the Netherlands are legally liable for the actions of the company until all legal requirements are completed.

Before starting, search through the Chamber of Commerce Trade Registry to verify that the chosen business name is unique and appropriate. All BV company names must begin or end with "BV" For example: Acme Anvils BV.

Public Limited Liability Corporation (Naamloze Vennootschap, NV)

May be a subsidiary of a foreign company. An NV is owned by shareholders and shares may be traded on the public stock market, though shares are not held in any private person's name. Therefore owners may choose to remain unidentified. NVs may only be formed if it has at least €45,000 in paid-in capital. It is not a common type of business structure.

Branch

A company incorporated in a foreign country may engage in business in the Netherlands through a branch office. Easier to establish than a subsidiary, a branch, unlike a subsidiary, is not considered a separate legal entity, so the associated foreign head office is liable for branch obligations.

Operating a branch does not require government approval, but the branch and the branch manager must register with the local Chamber of Commerce Trade Register. The foreign company must also provide the Chamber of Commerce with:

• The articles of incorporation (in Dutch, French, German or English) as well as bylaws
• The annual report, including accounting details, as governed by the laws of the country of incorporation (may be in Dutch, French, German or English)
• An extract from the trade register or document of registration in the country of incorporation, not more than one month old
• Information regarding the registered office, the law under which the company is incorporated and (to be submitted annually) a report on the share capital IF the company is incorporated outside of the EU/EEA.

Foundation (Stichting)

A foundation is considered a legal entity with no members, and is allowed to make money, however profit distribution is very limited. Any profits are subject to corporate tax and possibly turnover tax. Managers are generally not personally liable for foundation obligations, though it is sometimes possible.

Association (Verenining)

A non-profit organisation with a goal that has voting members who are generally each allocated one vote. Associations may earn money, but the money must be used for the association goal and may not be distributed to members. Profits are liable to taxation. There are two ways to organise an association:

1. Establish the Deed of Association without the use of a notary and optionally sign-up with the Chamber of Commerce Trade Register. This will result in an association with limited legal rights.
2. Establish the Deed of Association with the use of a notary and register with the Chamber of Commerce Trade Register. This will result in an association with legal rights .

Cooperative (Coöperatie)

An association that may pay dividends to members.

Freelance (Zelfstandige Zonder Personeel, ZZP)

The term "freelancer" is not recognized; rather ZZP is used to refer to a self-employed person with no employees.

Registration With the Chamber of Commerce

The Chamber of Commerce Trade Register (Kamer van Koophandel) provides information about businesses to the public, offers information about running a business, and stimulates regional business development. The Trade Register provides information about things such as a company's capital, deposits with the Chamber of Commerce (Deponeringen), mergers or splits, whether a business is still an ongoing concern and who the authorised signatories are.

Any organisation that performs an activity for economic gain must register with the Trade Register at the Chamber of Commerce in the district in which the business is located. This registration does not incorporate a business; it is part of the process of opening a business. There is a charge for registration (the price depends on the type of business, number of employees and the region in which it is registered). There is also an annual fee thereafter.

• For contact information for local Chambers of Commerce: Click here

A business should register within one week (before or after) the business is to commence trading. Registration by mail takes approximately a week, but registration in person takes a few hours. Take valid personal identification, a copy of a recent bank statement not older than 30 days, or an original excerpt from the register of births, deaths and marriages.

Registrants may also need to provide a rental contract stating the business premises address for any rented premises. A registration number is assigned on registration, which must be printed on all future outgoing post.

• For general registration guidelines: Click here

Registration forms are available from the Chamber of Commerce Trade Registry. Forms are in Dutch but English translations may be available). The registration forms outline documentation requirements

Note: most completed forms must be delivered in person to the Chamber of Commerce offices.

• For registration forms from the Trade Registry at the Chamber of Commerce: Click here select the link for the required form to obtain the Dutch form as well as the English translation

Once registered with the Chamber of Commerce, the information becomes public record and is available for review by anyone on request (and for a small fee).

Any changes to company information must be registered with the Chamber of Commerce Trade Register.

Companies must also register with the offices of direct as well as indirect taxation and with social security.

Permits and Diplomas

To enter into some lines of business, it is necessary to obtain required permits and certification from the local council and/or Chamber of Commerce. For example, teachers are required to obtain a Certificate of Good Conduct. It may also be necessary for foreign diplomas to be legalised. The Chamber of Commerce can be of assistance in determining these requirements.

• For information from the Chamber of Commerce on diploma requirements: Click here
• For more information on Certificates of Good Conduct from the Ministry of Justice: Click here (PDF)

Hiring Staff

• For information from the Netherlands Chamber of Commerce about obligations when hiring staff: Click here

Terms and Conditions

Drawing up standard company Terms and Conditions will be helpful when undertaking business transactions. They can be printed on invoices or quotations and can eliminate the need to clarify them repeatedly.

Taxation

All new companies must register with the local offices of direct taxation, indirect taxation and social security. It is recommended to notify the Dutch Tax and Customs Administration (Belastingdienst) as soon as it is certain a company plans to start trading. When registering with the Chamber of Commerce Trade Registry, sole traders, limited partnerships and general partnerships may register with the Dutch Tax and Customs Administration at the same time.

Business owners are legally required to keep records of all matters concerning the finances of their company. They are also legally required to keep all records relating to taxation for a minimum of seven years.

• For additional information from the Netherlands Chamber of Commerce: Click here
• For information on business taxes from the Dutch Tax and Customs Administration on business taxes: Click here
• For information on taxation from the Netherlands Chamber of Commerce: Click here

Taxation is a very complex topic and it is recommended to seek out professional tax advice before starting a business.

Benefits

For those on government unemployment benefits, it may be possible to start a business while receiving benefits.

• For further information, see the Netherlands Chamber of Commerce website: Click here

Insurance

• For information on business insurance from the Netherlands Chamber of Commerce: Click here

Related Information

• The Dutch Chamber of Commerce (Kamer van Koophandel, KVK)
• The Dutch Tax and Customs Administration (Belastingdienst)
• The Netherlands Foreign Investment Agency
• Information on starting a business in the Netherlands from the Doing Business project: Click here
• AngloINFO INFOrmation Page on Unemployment in the Netherlands
• AngloINFO INFOrmation Page on Notaries, Civil Law Notary in the Netherlands