Practical Advice: Starting a Business in the Netherlands

10.01.2023

Being your own boss (or somebody else's)

When you graduate from Wittenborg and want to enter the Dutch workforce, there are a couple of options. You can start looking for a job, or you can also start your own business. The Netherlands is very friendly to entrepreneurs and start-ups; it is relatively easy to register a new business. However, it does require some skills, knowledge of Dutch business law and a little bit of luck to find success. To begin with, you need to know which rules and regulations apply when you want to start your business in the Netherlands. It is worth noting that the rules, particularly regarding business subsidies and taxation, are different according to the municipality and can change every year based on government planning.

Registering a business

In order to run a legitimate enterprise in the Netherlands, you must have a personal citizen service number (BSN) and the enterprise must be registered with the Dutch Chamber of Commerce (Kamer van Koophandel, KVK) in the Business Register (Handelsregister). Different bodies in the Netherlands appear to use different criteria for determining whether a person is an entrepreneur or business owner. For example, the KVK considers you an entrepreneur if you supply goods and/or services, charge more than a nominal or ‘symbolic’ fee and thus earn a profit, and if you regularly do business with other people, not just friends and family. You must compete with other entrepreneurs who provide similar services or products. Meanwhile, the Dutch Tax and Customs Administration (Belastingdienst) – who will receive your details upon your registration with the KVK – has slightly different guidelines. For the tax services, you are considered an entrepreneur if you invest money and/or time to start and grow your business, you do business regularly rather than it being a ‘one-off’ job, you have multiple clients, and you decide for yourself when and how you work.

For the Belastingdienst to assess whether you are an entrepreneur for Value Added Tax (VAT) purposes, there is yet another set of guidelines. For example, you must run the business independently, receive a regular income and have an income in addition to a permanent job. They will also ask whether you are attempting to earn money from an entitlement or assets such as savings, investments or house or holiday home. Additionally, pay attention to the fact that if you are considered an entrepreneur for VAT purposes, you will not always be automatically considered an entrepreneur for income tax purposes, as the criteria for these categories are different. If you have questions about whether you fit the aforementioned criteria, you can get in contact with the KVK here and the Belastingdienst here. Depending on your business, you may also need to register who your Ultimate Beneficial Owners (UBO) are, which refers to the person(s) who own an organisation and maintain effective control over it.

Types of business entities

The Netherlands has a few kinds of business structures which it recognises: sole proprietorship (eenmanszaak), private limited company (BV), public limited company (NV), general partnership (VOF), limited partnership (CV), foundation (stichting), association with notarial deed (vereniging), professional partnership (maatschaap), and cooperatives (coöperatie). Each structure has its own advantages and drawbacks, so make sure you do your research and find a structure which is suited to your business model and industry. You may also register as a self-employed person (Zelfstandig zonder personeel, ZZP), and it should be noted that this is not a business structure but a taxation category. A ZZP’er or freelancer has the option of registering their business as an eenmanszaak or as a BV.

Government schemes

To make sure the Netherlands is a friendly place for business and growth, the government has come up with various schemes to facilitate commerce and the survival of budding enterprises. One such scheme is the Small Business Scheme (Kleineondernemersregeling, KOR). The KOR is a voluntary scheme intended for businesses registered in the Netherlands with an annual turnover that does not exceed €20,000, excluding VAT. Participants in the KOR are exempt from declaring and paying the VAT and do not charge it to their customers, which simplifies administrative tasks. NB: once registered with the KOR, one may only opt out after three years, or if annual turnover begins to exceed €20,000. You can find more information in English on the KOR here. There are also different opportunities for loans and funding depending on the structure and needs of the enterprise. You can find information on that here.

Labour laws and insurance

If you want to own a business with employees, it is imperative to read about Dutch labour laws, which tend to be stricter than in many other places and have different rules for foreign employees. For example, while certain countries may have few stipulations about maximum working hours, Dutch law stipulates that workers are not allowed to exceed certain hours, and are entitled to sick days, certain amounts of vacation leave and regular breaks. This applies to all workers, even foreigners or temporary employees. Also, when creating a schedule, the employer must take into account the personal circumstances of the employee, such as if they have to take care of their family, or they have certain ancillary activities like volunteering which they need to do. Furthermore, it is not legal to discriminate against employees who may need certain forms of leave in the future. For example, one may not fire or refuse to hire a person who may become sick or pregnant in the future, or if they are or their partner is pregnant already. These same people are entitled to any necessary leave or reasonable adjustment to their working schedules. There is even leave for those who have recently adopted a child. Compliance with the law is governed by the Dutch Labour Authority. To read more on employee working hours, you can look here. To learn about leave schemes governed by law, look here.

There is also the matter of business insurance, which can protect you in the event of losses or unforeseen circumstances. While certain forms of insurance are voluntary, a few forms of business insurance in the Netherlands are compulsory. For example, you must insure any vehicles used for the purpose of business. To learn about third-party liability insurance for company vehicles, you can follow this link. Additionally, you must have insurance on any company-owned buildings or ‘immovable’ property, which you can find out more about here. This form of insurance will protect you against natural disasters, theft or vandalism. Lastly, there is professional indemnity insurance, which will protect you in the event that your client suffers some form of loss related to your services. This is only required for certain professions. Finally, there are different kinds of voluntary insurance you can take out, such as disability insurance, sick leave insurance, loss of business insurance and cyber insurance. Be sure to look into each form of insurance to choose the best protection for yourself, your employees and your enterprise.

Hopefully you have found this article to be an informative stepping-stone to setting up your business in the Netherlands. Wittenborg University of Applied Sciences wishes you success in utilising your top-quality education to pursue your dreams in business.