Netherlands Archives - Credit Card Processing & Merchant Services

The Netherlands is an attractive place to start a business as a foreigner thanks to the country’s stable economy, a strong culture of innovation, and a high level of personal freedom. If you are considering starting a business in the Netherlands as a foreigner, you will need to know: The benefits of starting a business in the Netherlands as a foreigner The primary industries and opportunities in the Netherlands Visas and work permits for foreign nationals Unincorporated and incorporated business structures The process for registering a company in the Netherlands Business taxes and insurance BENEFITS OF DOING BUSINESS IN THE NETHERLANDS According to data from the World Bank, the Netherlands is the fifth most innovative high-income country in the world and the eighth biggest economy in Europe. The Port of Rotterdam is also an important logistics hub for products entering and leaving the European Union, making the country a strategic location for accessing the EU market. While the Netherlands grants its citizens a high level of personal freedom, there is very little corruption, and the economy is stable. The startup culture and pro-business laws attract young people and entrepreneurs from around the world, creating a thriving cosmopolitan environment in which to flex your entrepreneurial skills. BUSINESS OPPORTUNITIES The Netherlands is among the top 10 exporters globally, with the major products for export including food, energy, and chemicals. According to the World Atlas, the main industries in the Netherlands are: Agriculture and food Energy (natural gas, nuclear, biomass, wind) Chemicals Metallurgy Tourism Fishing Banking Electrical engineering Creative High-tech The World Atlas also states that the Netherlands is focusing on upgrading agricultural machinery and further extending its current transportation networks, so foreign investors who can offer these services have a good chance of being approved. In addition to the major sectors, be sure to consider business opportunities in Europe generally when coming up with ideas for your own business. Goods and services that help people live sustainably and simplify their day-to-day lives are always in demand. VISAS AND WORK PERMITS Citizens from the EU member states and European Economic Area can work in the Netherlands and start a business without applying for a visa, as can Swiss nationals. If you are an EU national or Swiss citizen, you can register with the local municipality and receive a personal registration number (BSN). You will also need to register with immigration (Immigratie en Naturalisatiedienst or IND) and have a Burger van de Unie stamp placed in your passport. Foreign investors and entrepreneurs from outside of Europe will need a residence permit (MVV) or work permit (TWV) for starting a business in the Netherlands as a foreigner. There are several kinds of visas for working in the Netherlands, so it’s important to review the options to find the right one for you. To obtain a residence permit as an independent entrepreneur, you must demonstrate how your business idea contributes towards an essential Dutch interest and be scored according to a point system. Citizens of the USA and Japan are exempt from the points-based system requirement. Start-Up Visa The Dutch government has made it easier for foreign entrepreneurs to start a new business in the Netherlands with the “start-up visa,” which gives international entrepreneurs a provisional residence permit for one year to build a successful business. To apply for the start-up visa, applicants need to present a detailed business plan, show that they have sufficient funds to live in the Netherlands for one year, and have a Netherlands-based mentor who will also register with the Kamer van Koophandel (Dutch Chamber of Commerce) and coach them through the initial phase. LEGAL ENTITY TYPES There is a range of business structures from which to choose when starting a business in the Netherlands as a foreigner. The most common choices are a sole trader (eenmanszaak) for freelancers and a BV for companies. Unincorporated Business Structures An unincorporated legal form (rechtsvormen zonder rechtspersoonlijkheid) means that you are personally responsible for your business debts and there is no separation between your personal assets and business assets. In the Netherlands, the unincorporated business structures are: Sole trader or self-employed freelancer (eenmanszaak, also known as zelfstandige zonder personnel or ZZP) Limited partnership (commanditaire vennootschap or CV) General partnership (vennootschap onder firma or VOF) Commercial partnership (maatschap) According to a Dutch Chamber of Commerce report, there were nearly 2 million freelancers (ZZP’ers) registered in the Netherlands in 2018, which—together with the start-up visa—makes this a very popular way to start your business activities in the Netherlands. Incorporated Business Structures Legal forms of incorporation (rechtsvormen met rechtspersoonlijkheid) separate your personal and business assets, protecting you from your business debts. In the Netherlands, companies can choose from the following options: Private limited company (besloten vennootschap or BV) Public limited company (naamloze vennootschap or NV) Cooperative and mutual insurance societies (coöperatie en onderlinge waarborgmaatschappij) Association (vereniging) Foundation (stichting) A BV can be established with a minimum share capital of €1 (divided into 100 shares of €0.01), whereas an NV requires a minimum share capital of €45,000 to be established. Besides these initial requirements, you will need around €1,500–2,500 to cover all start-up costs, including notary fees and the Chamber of Commerce registration fee. HOW TO REGISTER A COMPANY IN THE NETHERLANDS There are several steps involved in starting a business in the Netherlands as a foreigner. Fortunately, most of the appointments can be made online, so each step shouldn’t take up too much of your time. Check your Business Name New businesses in the Netherlands must have a unique business name. Freelancers can trade under their own name, but registering a separate business name is a popular option. To check whether your business name is available, search the Dutch Chamber of Commerce’s commercial register or contact the Benelux Office for Intellectual Property (BOIP). Register at the Chamber of Commerce The Kamer van Koophandel (Chamber of Commerce) is where all new businesses must register to receive their unique company registration number. First, you’ll need to download the registration form (available in Dutch and English) and fill it out in Dutch. Then, make an appointment online to visit the KvK. For your appointment, you will need to take: €50 for the registration fee ID, including your passport, residence permit, or Dutch driver’s license Your business name Proof of knowledge of the type of business you want to register (sole trader, company, etc.) Supporting documentation might also be required, depending on the type of business you want to register: Your business plan Your most recent bank statement (no more than 30 days old) Proof of address (for a home office) Rental contract (for business premises, if relevant) Once your application is approved, you will be issued a company registration number—also referred to as a KVK number—that will appear on the trade register. Sole proprietors will receive a VAT number when they register their business, and companies will receive their VAT number within five days. The KvK passes the details of all self-employed workers on to the Dutch tax authority, who will send out a letter soon after registration with your username and password for filing digital tax returns. OPEN A BUSINESS BANK ACCOUNT If you haven’t already opened a business bank account, this is the perfect time to do it. In addition to a regular bank account, ecommerce entrepreneurs will also need to open a merchant account through a payment processor to provide a secure global payment gateway to their clients. Many merchant account providers in Europe, such as Unicorn Payment, offer a suite of merchant services with your subscription to help you track your transactions and protect yourself and your customers against fraud. OTHER REQUIREMENTS Aside from registering with the KvK and opening a bank account, there are several other steps that you may need to complete when starting a business in the Netherlands as a foreigner: Employer registration. Companies that employ Dutch residents must register with the Dutch Trade and Customs Administration as an employer for the purpose of withholding payroll tax. EORI number. Businesses that intend to import or export goods within the EU will need to visit the Dutch Trade and Customs Administration and apply for an EORI number. Professional registration. Professionals in regulated industries—such as medicine, dentistry, accounting, and law—should bring evidence of their qualifications and register with the appropriate professional association. Local municipality. New businesses may need to register with the municipality, depending on the kind of business they intend to operate. Environmental permits. Other permits, such as environmental permits, may be required for businesses that handle hazardous substances. CREATING INVOICES Every Dutch company—no matter which legal form it takes—must create a legal invoice (factuur) for every transaction that contains the following information: The date of invoice The date of payment or the delivery of the service (if different from the date of invoice) The name, address, and VAT of the client Your KvK number Your VAT number A description of the goods and services and the quantity (if relevant) The price without VAT The VAT rate The amount due as VAT The total of the price with VAT included Each invoice should be sent in by the 15th of the following month or within the month following that quarter if you file your VAT returns online. You should keep each of your invoices for 7 years, or 10 years if the invoice is for immovable property. TAXATION, INSURANCE, AND EMPLOYERS’ OBLIGATIONS Tax obligations in the Netherlands are similar for sole proprietors and companies and are progressive—i.e., the more you earn, the more heavily your income is taxed. Sole proprietors need to pay: Income tax (inkomstenbelasting). Sole proprietors pay income tax on their profits and employment earnings at a minimum rate of 9.42% and a maximum rate of 49.5%. Value-added tax or turnover tax (omzetbelasting). Businesses with a turnover exceeding €20,000 per calendar year must charge VAT on their deliveries at a rate of 19% for non-exempt goods. In addition to income tax and VAT, corporations also need to pay: Payroll Tax. Companies must deduct payroll tax, which includes income withholding tax, social security contributions, and an income-dependent employer’s health care insurance contribution. Corporation income tax (vennootschapsbelasting). Corporations pay 25.8% tax on their taxable profit for each financial year for taxable amounts over €395,000 and 15% if the taxable amount is less than €395,000. Please note that the rate of 25.8% applies from Jan 1, 2022, up from 25% in previous years. Dividend tax (dividendbelasting). The Dutch dividend withholding tax rate is set at 15%. This tax must be paid within 30 days following profit distribution and can be offset against your corporate income tax. Import and export levies. Companies that import and export goods will pay additional levies on these transactions. TAX INCENTIVES AND DEDUCTIONS There are several tax incentives and deductions available for sole proprietorships, partnerships, and companies that can reduce the amount of tax you pay. It’s a good idea to speak with an accountant about all of the relevant tax credits and deductions before registering your company—and have receipts made out to your new company from the start—to make sure you can claim the maximum amount come return time. CAREFUL PLANNING PAYS OFF As you’ve seen, starting a business in the Netherlands as a foreigner is a fairly straightforward process. However, it’s important to seek expert legal advice before launching out to make sure you choose the right business structure and obtain the necessary permits and licenses. Once you get established in the Netherlands, take advantage of the country’s economic power and innovative culture to grow your business. With the right advice and business partners by your side, your enterprise has every chance to succeed.

How to Start a Business in the Netherlands as a…