The Netherlands is a great location to start your business. Market opportunities exist, and customers are eager to adopt new technology and willing to pay a premium. In this blog, we discuss how a foreigner can launch a business in the Netherlands.
However, there are numerous administrative considerations to make when starting your own firm in the Netherlands. For instance, as a foreigner, in order to start a business in the Netherlands, you must first certify that you are legally permitted to reside and work here. Without having to be a resident of the Netherlands, most nationalities can create a Dutch corporate organisation and act as its shareholder and director. However, if you intend to live in the Netherlands and work from an office here or manage your local staff, the situation changes.
If you are not a citizen of Switzerland, the EU or the EEA, you must apply for an MVV (‘Permission for Provisional Residence’), and occasionally a work permit (TWV). When applying, remember that your potential enterprise must promote a significant Dutch interest.
What is required from a foreigner who want to launch a business in the Netherlands?
Once you are satisfied that you are able to live and operate in the Netherlands, you should decide on the legal structure of your business. It is critical to choose a structure with a suitable legal form since this establishes accountability for the tax needs.
Fortunately, there are companies like Bolder Launch that can help you because they are aware of how challenging these decisions may be. For example, a Dutch BV is frequently used by larger companies, whereas sole proprietorships are frequently chosen by freelancers and small business owners.
Registration at the Chamber of Commerce (KvK)
Once you’ve decided on the type of business you want to start, you register with the Chamber of Commerce (KvK). This is a requirement for you. Registration is necessary one week prior to the work’s scheduled start date and one week following that date.
Upon registering with the Chamber of Commerce, your company will be given a unique company number, also known as the Chamber of Commerce number. This number must appear on every bill and piece of outgoing mail.
Taxes on your Dutch Profits
Foreigners who wish to launch a business in the Netherlands must also register their companies with the tax authorities to qualify for a VAT deduction.
How does Dutch VAT (VAT) work?
- You must charge an additional 21 per cent in VAT tax on top of your regular rate when you invoice clients for services or when they pay for your goods.
- You compute your VAT return and submit it to the tax authorities every three months.
You must pay VAT, but you can deduct it from your operating costs.
The following taxes are paid by Dutch business owners in addition to VAT:
- Income taxes
- Salary tax (when you have employees)
- Business fees (applies only to companies with legal personality)
Of course, you may also get help with Dutch business taxes from the accounting experts at Bolder Launch.
Maintain the good standing of your Dutch business
Dutch businesses are required to maintain an accounting system in the Netherlands. Every business owner must comply with the law by maintaining this administration for seven years. The Business Administration includes:
- Sending and receiving of invoices
- Statements from banks
- Accords and contracts
- Cost of conducting business (expenses and receipts)
Pensions and insurance in the Netherlands
As an independent business owner, you take risks and have a lot of responsibilities.
By getting insurance, you can both defend yourself against such risks and, more importantly, guarantee that you will have money coming in if you are unable to work.
The insurance options for business owners are as follows:
- Entrepreneurs are liable for any damage to property or injuries to people brought on by their own products, employees or business premises. This justifies the significance of commercial liability insurance. This insurance covers the damage you cause to others as a result of your business.
- Another common type of insurance is disability insurance, which protects your income in case you develop a long-term sickness.
- In the Netherlands, having health insurance is a legal requirement. You as an entrepreneur must contribute based on your taxable income.
- There will always be disputes, whether they be with clients, coworkers or vendors. The same thing happens to everyone. That is why many aspiring business owners purchase legal aid insurance. You may rely on support and guidance with legal issues when purchasing this insurance.