Description
Before plucking up which is planted, there is a time to plant.
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Starting your own business
As a self-employed entrepreneur
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1 Introduction 3
2 Starting your own business 4
3 Business plan 8
4 Employment law issue 9
5 Legal forms 14
6 Registration 24
7 Taxes 27
8 Insurances 32
9 Business premises 33
Publications in English 45
Dutch government websites 47
When you have decided to start your own business a new world is opening up, with a wide varie-
ty of possibilities. You could open a shop or start your own consultancy ?rm; become a full-time
or a part-time entrepreneur. Clients may wish to hire you for advice or construction work.
Before plucking up which is planted, there is a time to plant. In other words: you will have to be
prepared to tackle challenges as well - either as a provider of services or products, as a self-employed
entrepreneur, a sole trader, an independent contractor, or as a freelancer or so-called ‘zzp’er’.
The Dutch Chambers of Commerce are incorporated under public law and, as such, target their
services at Dutch businesses across all sectors.
Being self-employed radiates a pleasant sense of freedom and independence, but it may carry
certain risks as well. Whether you offer services or products: you will do so at your own risk,
expense and with full responsibility towards third parties. Apart from that, being self-employed
entails certain obligations, such as paying taxes and VAT and keeping records of your business
activities. Preparing well is the best way to start. You are de?nitely not on your own; plenty of
competent assistance is to be found in the Netherlands’ business world.
Starting point
Before you visit the Chamber of Commerce to register your enterprise, do consider the following
issues carefully:
• a permit to start a business in the Netherlands (only for nationals who originate from outside
the EU/EEA or Swiss);
• a business plan;
• legal form and trade name of your enterprise;
• taxation and necessary insurance;
• business location, commercial lease;
• a ‘VAR’-statement from the Tax Administration, declaring you a self-employed entrepreneur.
Content 1 Introduction
Chamber of Commerce, December 2014
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If you would like to start a business in the Netherlands and you do not have the Dutch nationa-
lity and you are from outside the EU, you will have to comply with particular IND (Immigratie- en
Naturalisatiedienst, the Dutch Immigration Authorities) formalities.
Dutch Immigration Authorities
The legal form of your enterprise makes no difference for the rules’ applicability to the Dutch
Immigration Authorities: whether it is a one-man business, a Dutch private limited (BV), or a
branch-of?ce of a foreign company. The rules do not differ either if you start an enterprise shortly
after arriving in the Netherlands, or after having been employed in the Netherlands for some time.
EU, EEA and Swiss nationals
When a national of one of the EU Member States, the EEA (European Economic Area), or a Swiss
citizen, you are free to live and work on a self-employed basis in the Netherlands and do not need an
entry visa or a residence permit (Document Duurzaam Verblijf). Even if you are not obliged to register
with the IND, please do so because most authorities ask for a proof of registration when you request
for a Dutch public healthcare insurance, a healthcare, housing or childcare allowance, a mortgage,
or a phone subscription. Registration is free of charge. If you intend to stay over four months, you are
required to register at your local municipality. An expat center will help you out here.
Nationals of non-EU and non-EEA countries
If you are not a national of an EU or EEA country and not Swiss, you will need to apply for a resi-
dence permit in case you stay longer than three months in the Netherlands. A residence permit
can be obtained from the IND.
If you are a national of a country subject to the Dutch visa requirement for a more than three
months’ stay, you will have to apply for a special visa: a provisional residence permit, an MVV
(Machtiging Voorlopig Verblijf). You cannot authorize somebody else to apply on your behalf; you
will have to apply for a provisional residence permit in person at a Dutch embassy or consulate
in any country, as long as you have lawful residence in that particular country. Lawful residence
means that you have a residence permit for that country valid for at least another three months.
With just a tourist visa, you do not qualify as a lawful resident.
2 Starting your own business
Tips
Check how you can use your degree or diploma for your business in the Netherlands.
Search for ‘international credential evaluation’ at www.idw.nl
The Expatcenter Amsterdam is located in the World Trade Center (WTC) in Amsterdam’s
Zuidas district.
E [email protected]
T +31 (0)20 254 79 99
Tip
Search for ‘30% tax ruling’ at www.answersforbusiness.nl
T +31 (0)20 254 79 99
Taxes
An expatriate transferred to the Netherlands will become subject to Dutch income tax either as a
resident or nonresident taxpayer. The 30% tax facility allows the employer to grant a tax-free lump
sum allowance for the extra costs of the expat’s stay in the Netherlands (extraterritorial costs).
Working on a self-employed basis as national of non-EU / non-EEA country and non-Swiss
In this case you will have to meet several economic criteria before starting an enterprise in the
Netherlands:
• you are quali?ed to run the business in question;
• you have a business plan;
• your business serves an essential Dutch interest, i.e. has ‘added value’ to the Netherlands.
The IND does not weigh these criteria itself; the Ministry of Economic Affairs is requested to review
your situation and to decide whether the business you intend to run will be economically interesting.
If this turns out not to be the case, you cannot start your own business in the Netherlands.
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Review of economic added value
The Ministry of Economic Affairs awards points for each criterion. You will need a minimum of
30 points for each criterion (total number for all criteria: 300). The scoring system consists of three parts:
a) personal experience (education, experience as a self-employed person, working experience);
b) business plan (market analysis, product/stervice, price, organisation, ?nancing);
c) material economic purpose for the Netherlands (innovative, job creation, investments).
You should always contact the IND to ?nd out about the procedure involved in testing the economic
interest of the enterprise you intend to start. For nationals of some country, you can bring this enter-
prise to however European Regulations 68/151EEG countries, for example Turkey, special rules on
the basis of treaties between the EU and these countries. To citizens of United States of America it is
important to know about the so called ‘Amerikaans vriendschapsverdrag’.
Taking your business from abroad
The Dutch comparative companies Act recognises all foreign legal entities except business owned
by one person (female/male). If you run a one-man business in your country of origin and you can
prove this, for example by submitting a copy of registration in a commercial register in that country,
you can bring this enterprise to the Netherlands and have it registered at the Chamber of Commerce
as a Dutch one man-business.
Other legal foreign entities or foreign business forms are simply registered as a foreign legal
entity with commercial activities. Please note that you will still have to comply with the IND rules
on residence in the Netherlands.
Starting a branch of?ce in The Netherlands is also a possibility. There is question of a branch
when long-lasting business operations are conducted in the Netherlands, which form part of the
foreign enterprise. A branch can be: a sales of?ce or a production company, but also a representative
of?ce. It does not have an independent legal form, but is a part of the foreign enterprise.
Thanks to our traditionally open economy, attractive investment climate and international tax
possibilities, the Netherlands is and always has been host to many foreign enterprises. Another
pleasant aspect is the “incorporation principle”, i.e. Dutch law recognises foreign legal entities.
In other words: the foreign legal entity wishing to start activities in the Netherlands needs not be
converted into a Dutch legal form. The organisation and structure of the legal entity is governed
by the foreign law under which it was formed. National law of the state of origin applies, however
European Regulations 68/151EEG and 89/666 EEG are speci?c rules how to register companies
formed in the European Economic Region.
Tip
Additional information about opening a branch or representative of?ce in the Netherlands
can be obtained at the Chamber of Commerce Amsterdam.
Additional information about hiring or provision of workers in the Netherlands is available at:
www.kvk.nl/registrationlaw and www.answersforbusiness.nl
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Starting a business requires a number of steps and key decisions. The process of creating a
business plan enables you to look at your business in its entirety. No matter how small or big the
business, it will help you identify areas of strengths and weaknesses.
Banks require a business plan when you take out a loan. Even if you do not need the latter, and
?nancing your enterprise is not a problem, a business plan will de?nitely help you understand
the impact of starting a business. It will signi?cantly contribute to the professional and ef?cient
start-up of your enterprise. Submitting a business plan is also one of the criteria set for non-EU
and non-EEA nationals to be allowed to start their own enterprise in the Netherlands.
Get started
It is advisable to write the plan yourself. In doing so, you will gain a better understanding of your
objectives, targets and future customers or clients. Crucial question to be addressed are:
• which legal form will best suit the enterprise?;
• which products or services will you offer – DO’s and DON’Ts?;
• who will be your clients?;
• promotional activities to get contracts?;
• how to optimize visibility to your target group?;
• which prices and fees?;
• ?nancial plan (available budgets, expected turnover, investments)?;
• which insurances do you need?;
• permits and/or licenses required?;
• administrational organisation, which form?;
• what should be included in your General Terms and Conditions – if applicable?
Your legal status as a self-employed entrepreneur is quite different from an employee’s status.
If you are hired on the basis of an employment contract, your employer is the one to deduct
taxes from wage and pay national insurance and employee insurance contributions.
As an independent entrepreneur you pay taxes and contributions yourself, and you are not entitled
to the following employers’ rights: minimum wage, paid holidays, a holiday allowance, statutory
safeguards against dismissal and a statutory notice period. In order to designate the employment
relationship while starting your business, it is important to consider different contracts and apply
for a ‘Verklaring Arbeidsrelatie’ (VAR) at the Tax Administration.
Employment on the basis of a contract and implied employment
Regardless of the title chosen for the contract with your client, it is considered an employment
contract if the following criteria are met:
• your remuneration for the work performed can be seen as wages;
• there is an obligation to do the work yourself: you cannot send someone else to do the job for
you. Having to be available for speci?c work, e.g. on-call service, will also be considered as
work performed in employment;
• a relationship of authority: the employer can determine where, when and how the work should be
carried out. This relation also exists if the work you do is an essential element in the employer’s
business operations or if the employer’s pro?tability is at risk without you.
If the working relation does not show all characteristics of a ‘proper’ employment relation, it may
still be seen as one. This is called a notional employment relationship: although the employment
relation has not been established explicitly, there is an implicit employer-employee relation.
Consequently, the fee you charge is seen as wage, so, the employer will have to deduct taxes
from your wages and pay national insurance and employee insurance contributions.
A notional employment relation exists if:
3 Business plan 4 Employment law issue
Formats
Business plan formats can be obtained from various private parties that specialise in
supporting starters. Just take a look on the internet or download an example from:
www.sba.gov/tools
Records show that enterprises started upon a thorough
business plan are more likely to be successful.
As part time entrepreneur you will probably be given a
VAR-ROW. Professionalising your business independency
helps to obtain a VAR-WUO; some principals prefer this.
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• you work for a client project for at least two days a week;
• you earn more than 40% of the minimum wages for the project a week;
• the relation with the client lasts more than 30 days; a new contract within one month after the
termination of the ?rst contract is seen as continuation of the previous contract.
A notional employment does not exist if actual and practical independence can be proven,
for which a VAR can be instrumental.
Commercial contracts
As a self-employed entrepreneur you or your client can initiate to formalise the contractor-client
relation by entering into a commercial contract. Parties should always insist on putting down the
arrangements agreed upon. There are two types of commercial contracts:
1. Service agreement - Under this type of contract you are obliged to perform to the best of your
ability, committing yourself to do your client’s work without being employed by him. The work
is usually classi?ed as ‘services’.
2. Contractor agreement - Under this type of contract you have a speci?c target obligation. You
commit yourself to produce a concrete, tangible object at a certain price.
Criteria for legal independence: Actual circumstances are decisive here. An of?cial statement
signed by client and yourself that the contract is a commercial one is helpful proof. Criteria are:
• the degree of independence and absence of supervision/authority;
• permanence;
• pursuit of pro?t;
• clientele.
Not just these criteria, but their interconnection especially plays a decisive role. Many contracts
can be considered both an employment contract and a commercial contract with a self-employed
entrepreneur. Decisive will be to which degree you meet the different criteria.
Verklaring Arbeidsrelatie (VAR)
In order to designate the employment relationship you can apply for a ‘Verklaring Arbeidsrelatie’
(VAR) at the Tax Administration.
The VAR is an of?cial statement. Based upon the applicant’s information the Tax Administration
will de?ne income as:
• income earned in employment: the freelancer will have a VAR income;
• income earned from other proceedings: the freelancer will have a VAR-row;
• pro?t from enterprise: the freelancer will have a VAR-wuo;
• partnership’s own risk and account: the freelancer will have a VAR-dga.
VAR-income and -row: employed or not?
With a view to the VAR-income and -row, the employer will have to de?ne and check whether he
should pay income tax and employees insurance premiums, based upon the existence of an employ-
ment contract or otherwise. Explanatory assistance – but no de?nite answer! – can be found at the
website of the Ministry of Finance. The Tax Administration may conclude differently.
VAR-wuo and -dga: certainty in advance
Only VAR-wuo or -dga supply the employer beforehand with complete ?nancial certainty provided
he meets the following conditions:
• The freelancer’s activities should be similar to the VAR’s description. So, the freelancer is not
entitled to carry out IT work if the VAR denotes carpentry.
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• The freelancer is on the job during the validity of the VAR (1 calendar year).
• The VAR should be the authentic original.
• The employer should determine the freelancer’s identity on the basis of a valid proof of identity
(no driver’s license). Copies of the VAR and proof of identity should be kept in the administration
for 7 years.
Having acted this way, the employer has a solid defense in case the Tax Administration or UWV
may reach another verdict afterwards. So, it may be wise for both freelancers and employers to
object against a VAR-income or -row.
VAR application
Bearing in mind the utmost importance of the VAR-outcome, it is obviously important to carefully
?ll out the VAR-form. Only the freelancer him/herself is allowed to apply for a VAR. A directeur-
groot aandeelhouder (DGA) should apply for a VAR in case of external consultancy.
The Tax Administration provides a digital VAR application form; to which you will get a reply within
5 days, but at the latest within 8 weeks. If additional information is needed, the Tax Administration
will contact the applicant.
Please note the following when ?lling out the form: the Tax Administration considers request as
a total, coherently, and takes the activities into account. If not all answers are favorable it does
not necessarily mean that no VAR-wuo will be given. For example: an interim manager with two or
more employers can still be entitled to a VAR-wuo.
The freelancer should write down reasonable expectations. If, however, the actual situation
afterwards turns out to have been differently, this will not have any consequences as long as the
deviation is within normal risk of enterprise limits. For example, the freelancer expected to have
3 or more employers, but due to a recession this turned out differently. The freelancer has to ?ll out
the form to the best of his knowledge and should not deliberately misrepresent the state of affairs.
If this should afterwards be proven to have been the case, the Tax Administration will recover the
indebted taxes and premiums from the freelancer. Some of the questions need a ‘yes’ or ‘no’ only;
choose the nearest suitable.
Relation employer/former employer
As a part-time independent entrepreneur / part-time employee you could get involved in a
con?ict of interest with your (former) employer. If you intend to provide services, comparable to
the ones he provides, you better ask his permission/advice to run your own business. Starting a
business as a full-time independent entrepreneur you should be aware of a possible con?ict of
interests as well. You probably signed a non-competition clause within your employment contract
that remains valid after termination of employment. In any case it is wise to contact/consult your
(former) employer about your intentions.
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In order to accommodate the starting entrepreneur or professional, Dutch law recognizes various
legal forms, such as a one-man business, a private limited company (BV), a partnership or a limited
partnership. The main issues at stake are the matter of liability if your enterprise should run up
debts, and which tax regime applies.
A. One-man business
One-man business is also referred to as sole trader or sole proprietorship or independent contractor.
If you start a one-man business you will be the fully independent founder and owner. More than one
person may work in a one-man business, but there can only be one owner. A one-man business can
also employ personnel.
Setting up
You can establish a one-man business without a notarial deed. Registration in the Trade Register
is mandatory. As a private individual you can only register one one-man business. However, you
can have more than one trade name and carry out various business activities under different trade
names. These activities can be carried out at the same or at another address, as a branch of?ce of
the one-man business.
Liability
As the owner of a one-man business you are responsible for everything concerning your enterprise; for
every legal act and all its assets and liabilities. No distinction is made between private and business
property. Thus, business creditors can seek recovery from your private property and private creditors
from your business property. If your one-man business goes bankrupt, you yourself go bankrupt as
well. If the owner of a one-man business should be married in a community of property regime, the
creditors may also lay claim to the partner’s property. Partner liability can be avoided by a prenuptial
or a postnuptial agreement drafted by a civil-law notary. However, since partners are usually
requested to co-sign when taking a loan, the agreement may not offer the protection expected.
A civil-law notary can provide more information.
5 Legal forms
The majority of starting entrepreneurs either choose a one-man
business or a general partnership as the legal form for their
business, according to their preference for doing business by
themselves or in cooperation with others.
Taxes and social security
The pro?t made in a one-man business is taxed in box 1 – income tax. If the Tax Administration
fully considers you an entrepreneur, you are entitled to tax allowances such as the entrepreneur’s
allowance, investment allowance and the tax-deferred retirement allowance. The owner of a one-
man business cannot claim social bene?ts under the Sickness Bene?ts Act, the Work and Income
Act and the Unemployment Insurance Act. Therefore, it is advisable to take out insurances to
cover these risks. You will qualify for the following national insurance schemes:
• General Old Age Pensions Act;
• Surviving Dependants Act;
• Exceptional Medical Expenses Act;
• General Child Bene?t Act.
Continuation of the business activities and business succession
With a one-man business no distinction is made between private and business. If you die, both
business and private property will fall into your heirs’ estate. You will need to make provisions to
guarantee your business’ continuity. A tax consultant could provide more details.
B. General partnership, the ‘VOF’
A general partnership is a form of cooperation in which you run a business with one or more business
partners. You and your partner(s) are the associates or members of the general partnership. One of
the characteristics of this legal form is that each partner contributes something to the business:
capital, goods, efforts (work) and/or goodwill.
Setting up
A partnership contract is not a statutory requirement for the formation of a general partnership,
but it is, of course, advisable to put down in writing what you and your business partner(s) have
agreed upon. A partnership contract could arrange the following matters:
• name of the general partnership;
• objective;
• contributions by partners in capital, know how, goodwill, assets and efforts (work);
• distribution of pro?ts and offset of loss;
• allocation of powers;
• arrangements in case of illness;
• arrangements for a partner’s days’ holiday.
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Liability
An important characteristic of the general partnership is the joint and separate liability of the partners.
Each partner can be held fully liable – including private property – if the general partnership fails
to meet its obligations, even if these obligations were entered into by another, authorised partner.
Creditors of the partnership may seek recovery from your business property and your private property
and the property of the other partner(s). Restrictions agreed upon in the partners’ authority have to be
of?cially registered in order to gain legal effectiveness towards third parties. The general partnership
usually has ‘separate capital’, i.e. the business capital contributed by the partners, which is kept apart
from their private property and capital. This capital is to be solely used for business purposes. Should
one or more creditors seek recovery from the partnership – for instance in the case of bankruptcy
– they could do so from the separate capital. If this should be inadequate to pay the partnership’s
debts, creditors may seek full recovery from the partners’ private property. If so, you could hold the
other partner(s) liable for having failed to meet their obligations, but only after the creditors have
been paid. In private matters creditors of partners cannot seek recovery from the partnership’s busi-
ness assets or the private property of the other partner(s). Because of this partners’ broad liability it is
advisable to have a prenuptial or postnuptial agreement drafted if you are married under a community
of property regime. A civil-law notary could provide you with more information.
Taxes and social security
Each partner will pay his own income tax on his pro?t share. If the Tax Administration sees the
individual partner as an entrepreneur, he is entitled to all kinds of tax allowances, such as the
entrepreneur’s allowance, investment allowance and the tax-deferred retirement allowance.
As far as social security is concerned, the same rules apply to the entrepreneur – partner as to
the owner of a one-man business.
Continuation of the business activities and business succession
Under Dutch law the general partnership ends when one of the partners resigns or dies. In order
to secure the continuation of the general partnership, the partners can include a clause in the
partnership contract arranging for the other partners to continue the general partnership – with
or without a new partner – or to terminate it.
C. Limited partnership, the ‘CV’
A limited partnership, the ‘CV’, is a special type of general partnership (VOF). The difference is that
the CV has two types of business partners: general, and limited or sleeping partners. The latter
are only ?nancially involved; they cannot act on behalf of the partnership. Besides, the name of a
limited partner cannot be used in the trade name of the limited partnership.
Setting up
A partnership contract is no statutory requirement for a limited partnership, but, again, partners
better put down the agreements. Apart from the matters mentioned in the VOF, the contract
should arrange the distribution of pro?t between general and limited partners. When registering
a limited partnership in the Trade Register, the personal details of the general partners are listed;
the details concerning the limited partners are restricted to total number and their contributions
in the partnership.
Liability
General partners can be held fully liable if the partnership fails to meet its obligations. Bankruptcy of
the limited partnership will automatically lead to the general partners’ bankruptcy (not applicable to
limited partners). A limited partner can only be held liable for the maximum sum contributed to the
partnership. However, should the limited partner act on behalf of the partnership, he will be seen as a
general partner and fully liable, in which case creditors of the partnership can lay claim on his private
property as well. Restrictions agreed upon in the partners’ authority have to be of?cially registered in
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order to gain legal force towards third parties. The general partners’ liability in a limited partnership
is quite broad, so, if partners are married under a community of property regime they are advised to
have a prenuptial or postnuptial agreement drafted. A civil-law notary could provide more information.
Taxes and Social security
General partners pay income tax on their share in the pro?t. If the Tax Administration sees the indivi-
dual partner as an entrepreneur, he is entitled to various tax allowances, such as the entrepreneur’s
allowance, investment allowance and the tax-deferred retirement allowance. As far as social secu-
rity is concerned, the same rules apply to the entrepreneur – partner as to the owner of a one-man
business [link to c – Social Security under one-man business]. Limited partners, who cannot be held
personally liable for the enterprise’s debts, are not seen as entrepreneurs by the Tax Administration.
Continuation of the business activities and business succession
Under Dutch law the limited partnership ends when one of the partners resigns or dies. In order
to secure the continuation of the limited partnership, the partners can include a clause in the
contract arranging for the other partners to continue the partnership – with or without a new
partner – or to terminate it.
D. Professional partnership, the ‘maatschap’
The partnership referred to as ‘maatschap’ under Dutch law differs from the general partnership
and the limited partnership in that it is a form of cooperation established by professionals such
as doctors, dentists, lawyers, accountants, physiotherapists etc., rather than a cooperation
established for the purpose of doing business. The partners are referred to as ‘maten’ instead
of ‘partners’. Each ‘maat’ contributes personal efforts, capital and/or assets. The purpose is to
share the income earned on the one hand and the expenses incurred on the other.
Setting up a professional partnership
A partnership contract is no statutory requirement for the formation of a professional partnership, but
partners better lay down their agreements with the other professionals in a partnership contract. This
partnership contract could arrange the following matters:
The Chambers of Commerce can answer your questions about
the legal environment of your business. Seminars and other
regular services are available.
• contributions made by the partners;
• distribution of pro?ts, pro rata each partner’s contribution – distributing all pro?t to one partner
is not allowed;
• allocation of powers – each partner is entitled to perform management acts, unless agreed upon
otherwise; as from 1 July 2008 the professional partnership has to be registered in the Trade
Register. This does not apply to partnerships that act internally only, such as a partnership in
which costs are pooled.
Liability
Each authorised partner can enter into a contract, thus binding the partnership: all partners. Each
partner can be held liable for an equal part. If a partner should act beyond his authorization, the
other partners will in principle not be held liable: the partner in question is the only partner that has
bound himself. A professional partnership has no ‘separate capital’ from the private assets of the
partners. Creditors having a claim on the partnership can only seek recovery for equal parts from
the individual partners; these creditors do not rank above creditors who have a claim on the private
assets of a partner. To a married partner the same reservations apply as to the general partners in
general partnerships and limited partnerships. They are advised to have a prenuptial or postnuptial
agreement drafted. A civil-law notary could provide more information.
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Taxes and social security
Each partner pays income tax on his pro?t share. If the Tax Administration sees the individual partner
as an entrepreneur, he is entitled to various tax allowances, such as the entrepreneur’s allowance,
investment allowance and the tax-deferred retirement allowance. Regarding social security the same
rules apply to the entrepreneur - partner as to the owner of a one-man business.
Continuation of the business activities and business succession
Under Dutch law the professional partnership ends when one of the partners resigns or dies. In
order to secure the continuation of the partnership, the partners can include a clause in the contract
arranging for the other partners to continue the partnership – with or without a new partner – or to
terminate it.
E. Private company with limited liability, ‘BV’
In contrast to the legal forms described above - enterprises run by natural persons - the private
limited is a legal person: a person having rights and obligations, just like a natural person. The
natural person who has incorporated the private limited cannot be held liable, in principle, for
the debts incurred by the private limited. The BV itself is seen as the entrepreneur, whereas the
natural person who is appointed director merely acts on behalf of the BV and cannot be held
personally liable (with the exception of certain situations) for his acts. A private limited company
can be incorporated by one person – a sole shareholder BV – or by more persons. The capital of a
private limited is divided in shares.
Incorporating
This involves a number of statutory requirements, most important of which: Incorporation takes
place through a notarial deed. This should include the articles of association of the company.
The civil-law notary will check the legal contents of the articles.
Liability
The shareholder’s liability is limited to the total sum of his participation. Since the BV is a legal
person, having its own independent rights and obligations, the persons involved - directors and
supervisors - cannot be held liable for the debt of the company. In other words: the company’s
creditors can never seek recovery from the private assets of these of?cers. However, a company
director or of?cer may be held liable as a private person if he has acted negligently or culpably.
If he is responsible for the company’s bankruptcy because of wrongful or fraudulent behavior in
the company’s policy, creditors of the company may ?le a claim against him. In the formation
phase of the company, a director may be liable for the company’s acts. This liability ends as soon
as the legal person is incorporated and the acts are con?rmed by the company. As long as the
company has not been registered in the Trade Register, directors’ and of?cers’ liability continues.
In practice, limited liability often does not apply because banks require the director and principal
shareholder of the company to co-sign for loans taken out on behalf of the BV.
Taxes and social security
The private limited pays corporation tax – also referred to as company income tax – on the pro?ts
earned. The BV’s director and shareholder is employed by the BV His eligibility for social security
under the Dutch social security laws depends on the relation of authority between himself and
the private limited. A relation of authority is considered not to exist if:
• the director, possibly with his or her spouse, can cast more than 50% of the votes in the share-
holders’ meeting;
• two thirds or more of the shares are held by the director and/or close relatives up to the third degree;
• the director cannot be dismissed against his will.
Without a relation of authority, the director and shareholder cannot rely on the social security
insurances. He will have to take out his own insurances; to him the same rules apply as to the
owner of a one-man business.
Continuation of the business activities and business succession
Continuation of the company is secured by the fact that the BV is a legal person that exists
independently from the persons having incorporated or managing the private limited. When the
director dies, the continuation of the enterprise is not at risk, viz. the enterprise is run by the BV
and a new director will have to be appointed. A private limited can be sold in two different ways:
• BV’s shares are sold;
• BV’s enterprise (machines, inventory, stocks, etc.) is sold.
If the shares are sold, the proceeds are subject to income tax (box 2) if the shareholder has a
substantial interest (holder of a minimum of 5% of the shares). If the enterprise is sold, the BV
will have to pay corporation tax on the pro?t or book pro?t on the sale. If the shareholder of the
BV selling the enterprise is a BV itself, the structure is referred to as a holding – advantage of
which: the holding will in principle have to pay taxes on the proceeds.
22 23
Legal forms
Schematic representation of legal forms
Legal forms One-man business Private Limited
Company (BV)
Public Limited
Company (NV)
Partnership
(Maatschap)
Establishment Free Notarial deed of
incorporation
Notarial deed of
incorporation
Free, preference in
writing / (notarial)
contract
Capital
required
None € 0,01 € 45.000 None
Governance Owner Executive board Executive board Partners
Other bodies None Shareholders
(possibly board of
directors)
Shareholders
(possibly board of
directors)
None
Liability Private 100% Board of directors
(in case of negligence
or unjust payment to
shareholders)
Board of directors
(in case of negli-
gence)
Private for equal
amount if partner-
ship does not ful?ll
obligations
Taxation Income tax, SME
pro?t dispensation,
employer deduction
(if hour quota is met)
Partnership tax, in-
come tax over board
member salaries and
over dividend
Partnership tax, in-
come tax over board
member salaries
and over dividend
Income tax, SME
pro?t dispensation,
employer deduction
(if hour quota is
met)
Social
security
No employee
insurance
No employee
insurance, unless
resignation against
will of director-share-
holder is possible
No employee
insurance, unless
resignation against
will of director-share-
holder is possible
No employee
insurance
Schematic representation of legal forms (continued)
Legal forms Commercial Partnership
(VOF)
Limited Partnership (CV) Foundation (Stichting)
Establishment Free, preference in writing /
(notarial) contract
Free, preference in writing /
(notarial) contract
Notarial deed of incorpo-
ration
Capital
required
None None None
Governance Partners Managing partners Board of directors
Other bodies None Limited partners None
Liability All partners privately
for 100% if Commercial
partnership does not ful?ll
obli gations
Managing partners privately
for 100%, Limited partners
have limited liability
Board of directors
(in case of negligence)
Taxation Income tax, SME pro?t
dispensation, employer
deduction (if hour quota
is met)
Managing partners; Income
tax, SME pro?t dispensation,
employer deduction (if hour
quota is met)
Possibly partnership tax
Social
security
No employee insurance No employee insurance Board is not in paid
employment
24 25
Before you are allowed to start your business operations, you will have to register your enterprise
in the Dutch Trade Register, which is administered by the Chambers of Commerce. Registrations
in the Trade Register are public; everyone can check whether a particular person is authorised to
act on behalf of an enterprise and which legal form it has: a one-man business, a partnership or a
private or public limited.
How to register your enterprise
Registration requirements
Once you have decided upon your business’ legal form, you can have your enterprise registered
at the local Chamber of Commerce. Registration should take place within a period of one week
preceding, and one week following the actual commencement of business activities. Without
registration in the Population Administration of the municipality, you will need to submit
authenticated proof of your residential address abroad. The person registering the business has
to submit a valid proof of identity, which document has to be personally submitted at the
Chamber of Commerce. The following documents are accepted as valid IDs:
• a valid travel document (passport or European ID card);
• a valid Dutch driving licence (non-Dutch driving licence not accepted);
• a residence permit issued by the IND;
• a Dutch refugee passport;
• a Dutch aliens passport.
If you do not start your business at your home address but at a location you have e.g. rented, you will
also be requested to show the lease to con?rm the business address. Once the registration has been
completed, you will be given a unique eight-?gure registration number. This CoC number should be
referred to on all your outgoing mail. Because we do not have any English forms available please dial
the following number for more information 088 585 15 85 – option 3.
Who can register the enterprise
When an enterprise is registered at the Chamber of Commerce, it is of the utmost importance that
the registration forms which are submitted have been signed by the right person. Depending on the
legal form of the enterprise, the forms can be registered in the Trade Register by:
• the owner of the one-man business (registration of a one-man business);
• the partners (registration of a general partnership, VOF, and a professional partnership, ‘maatschap’);
5 Registration
• or the general partners (registration of a limited partnership, ‘CV’);
• If the enterprise is a legal person, a BV, the civil-law notary will usually see to the registration
formalities.
The persons who should register the enterprise and sign the registration forms can also be held
responsible in the event an enterprise is not registered.
In special circumstances other persons may be authorized and/or obliged to see to the registration
of an enterprise. The Chamber of Commerce can advise you on these circumstances.
Registration forms
The registration forms can be downloaded from the Chamber of Commerce website (www.kvk.nl).
As a statutory requirement, all forms are in Dutch and have to be completed in Dutch. Translations
in English of forms 6, 11 and 13 are available to assist you while ?lling out in the Dutch form to be
handed in. Registration is not free of charge. When you register a company you will have to pay a
one time registration fee of 50 euro.
After registration
Once the enterprise has been registered, it is the owner’s or partner’s responsibility to keep the
information up-to-date. With a BV the manager authorised to act on behalf of the BV is responsible.
Permits and Licences
Most business activities can be performed without any permits or licences, but for some activities,
like catering business, transport or taxi ?rm, you do need a licence. And an environmental permit
may be required if your products or business operations negatively affect the environment. Permits
and licences can be applied for at the municipality or at the provincial authorities. Some sectors re-
quire registration with an industry board or a product board. Registration is a statutory requirement,
based on the Act on Business Organisations. An industry board is a kind of interest group for a
speci?c sector. The same applies to a product board, which includes all enterprises in a production
chain, from producers of raw material to manufacturers of end products.
Registration in the Dutch trade register is compulsory for every
company and every legal entity, including ‘freelance’ and ‘zzp’
(‘zelfstandige zonder personeel’ self-employed without staff).
26 27
Termination / dissolution of the enterprise
When transferring or selling your company, you will have to comply with a number of rules and
regulations. You should also enter information about the sale into the Trade Register and reach a
settlement with the Tax and Customs Administration. A business transfer within family involves
several other tax aspects.
A self-employed entrepreneur is responsible for his own tax affairs. It is important to know all about
the taxes that will have to be paid and which deductions and exemptions may apply. Another aspect
of this responsibility is the obligation to keep records of your business administration for the Tax
Administration to inspect – if this should come up.
The Tax Administration
The Tax Administration should be noti?ed as soon as it is known when the enterprise starts doing
business. If you start a one-man business, a professional partnership, a limited partnership or a
general partnership, you can register your enterprise for the Tax Administration and for the Trade
Register at the same time. Both registrations take place at the Chamber of Commerce. A ‘Registration
Form Foreign Companies’ is available on the website of the Tax Of?ce. You can complete this form
and take it and the Registration forms of your company to the Chamber of Commerce. You will have to
submit the form personally.
If you start a legal person, for example a private limited (a BV), you will also have to notify the
Tax Administration. The relevant form, the ‘Statement of information for starting up a business’ is
available on the website of the Tax Administration. Since incorporation of a BV can only be effec-
ted by means of a notarial deed, you will have to go to a civil-law notary before you can register
the company.
You should register for the Tax Administration at an early stage, because of certain tax facilities.
New businesses can often claim a VAT refund on investments, because in the beginning usually
more VAT is paid than actually charged.
New businesses are likely to be visited by a tax inspector, who checks whether the business records
and administration meet the standards required. You can also make an appointment yourself for
and For entrepreneurs who do not have to.
Taxes to be paid
The different taxes described below – apart from the corporation tax – are payable if your business
is a one-man business, a professional partnership, a general partnership or a limited partnership.
The taxation rules applying for an incorporated business, a BV, will not be described in detail.
7 Taxes
28 29
• the number of clients your business has;
• the degree of independence of your business;
• the activities performed as expressed in time and in money;
• who bears the entrepreneurial risks;
• the business’s position in the market;
• liability for debts incurred by the enterprise;
• whether pro?t is made and the amount of pro?t made.
If you meet these standards, you will be ‘introductory visit’. return large sums of VAT, the regulation
entitled to the ‘entrepreneur facilities’.
These are allowable deductions before taxes, such as investment allowance, tax-deferred retire-
ment reserve and entrepreneur’s allowance. The entrepreneur’s allowance consists of:
• self-employed persons’ allowance and starters’ allowance;
• allowance for research and development work;
• co-working partner’s relief;
• SME pro?t exemption – exemption for small and medium sized enterprises;
• discontinuation relief.
To be eligible for the ?rst three allowances you will also have to meet the ‘hour criterion’: you must
be active in your business for at least 1,225 hours per year. This means, for example, 50 weeks of
24.5 hours per week. For persons un?t to do other work, the number of hours is 800. If you happen
to have run a business once before in the last ?ve years, the rule is that you will have to work for
more than 50% of your working hours in your own business. An exception is made in case of preg-
nancy. For the statutory period for pregnancy and maternity leave – a minimum of 16 weeks – the
Tax Administration will apply the average number of hours you worked in the period preceding the
pregnancy leave.
Income earned from other proceedings (Resultaat uit overige werkzaamheden ROW)
You worked and earned income which does not fully qualify as pro?ts from business activities
or income as wage. The income can be taxed in two ways: according to the pro?t system or the
payroll system.
A. Value added tax (VAT)/ Turnover tax
It is compulsory for businesses to charge VAT (in Dutch: BTW) when invoicing their clients. There
are exceptions, however. If you teach educational courses or provide educational training, you may
be VAT-exempted for these activities. Services rendered by journalists, composers and authors are
also VAT-exempt, just like medical services and products. The VAT rate is 6% or 21%, depending on
the type of product or service. The rate may be 0% if you trade internationally outside the EU. The
VAT you charge and which is paid by your client must be returned to the Tax Administration. The VAT
which your suppliers charge can be offset against this. If you do not charge VAT, you cannot offset
VAT. You should check with the Tax Administration if you are not sure whether you should charge
VAT or not. VAT is paid either on a monthly or on a quarterly basis, depending on the type of busi-
ness you have and the level of turnover. A more speci?c indication will be provided.
‘Kleine ondernemersregeling’
‘Small-sized entrepreneurs’ applies. If this regulation is applicable in your situation, you will pay
less VAT or no VAT at all. You could also request an exemption for VAT declaration. The regulation
will apply to your business if:
• the VAT to be returned to the Tax Administration on an annual basis – after deduction of input tax
– is less than € 1,883;
• the business you run is a one-man business, a professional partnership, a general partnership or
a limited partnership.
You meet the administrative requirements for VAT, such as maintaining invoicing records. If this
regulation should apply to your business, you will have to add this advantage to your income tax
declaration.
B. Income tax
Pro?t system
The Tax Administration applies the following criteria to determine whether you are to be seen as an
entrepreneur when paying income tax:
The Trade Register will provide you with a BTW (VAT)-number.
You’ll need this to offset VAT with the Tax Of?ce periodically
(usually every 3 months). Take care of charging your clients VAT.
30 31
The pro?t system is most common. So you should keep up-to-date administration. Business costs
are deductible according to the entrepreneurs’ ruling. You are, however, not entitled to all entrepre-
neurs’ ?scal facilities. (such as self-employed deductions and starters’ deduction).
In the payroll tax system or opting-in ruling principal and freelancer can agree that the ?rst will
submit payroll tax on behalf of the latter: this is the so-called ‘opting-in’.
In this regime, the freelancer will not be able to deduct any costs, but the principal could provide
the freelancer with certain allowances without ?scal consequences. Beware however: this system
does not make the ‘freelancer’ an ‘employee’ in the common, daily practice sense. The principal
will not deduct any employed persons’ insurance scheme contribution. This opting-in ruling has to
be announced beforehand with the Tax Administration.
C. Payroll tax
If you have employees in your enterprise, you, as the employer, will have to deduct payroll tax at
the source and pay this to the Tax Administration. The payroll taxes are composed of the following
elements: wage tax, national insurance contributions, employed persons’ insurance scheme contri-
bution and income-dependent Care Insurance Act contribution.
The administration of the business – keeping records
Your enterprise is by law obliged to keep a good and proper administration. Besides, you have to
keep the records for a period of 7 years: all information recorded either on paper or electronically,
such as cashbook administration and receipts, sales and purchases ledgers, invoices received and
copies of invoices sent, bank statements, contracts, agreements and other such documents, soft-
ware and databases. Your administration must also show how much VAT you have to pay or have
paid to the Tax Administration. So, you also need to keep records of:
• invoices sent;
• invoices to pay;
• expenses connected with business activities;
• income;
• private use of goods and services.
Your invoices should be numbered in consecutive numbers. The invoices should state:
• date and number;
• name and address of the supplier or customer (and the VAT identi?cation number when trading
with another EU country);
• description of the goods delivered or service provided;
• prices exclusive of VAT;
• the VAT amounts, split into VAT rates.
32 33
An independent entrepreneur runs risks unknown to employees, like not having any income when
unable to work because of illness or accident. An employee’s income is guaranteed in case of
illness and disability. Besides, an entrepreneur may be held responsible for mistakes or damage
caused, or his business premises may get burglarized or damaged by ?re.
Before starting up an enterprise, you should evaluate the possible risks in your particular line of busi-
ness and insure these. An insurance consultant will be glad to provide more detailed information.
A. Personal insurances
Healthcare
Every resident of the Netherlands pays a nominal premium of approximately € 1,300 per year on a
basic health insurance. This premium is paid directly to the health insurance company of your choice.
Extra insurance is needed to cover various risks. Apart from the nominal premium to be paid to the
insurance company, the Tax Administration collects an income-dependent Insurance Act. If you are
a part-time entrepreneur and part-time employee, your salary as an employee will ?rstly be taxed in
accordance with the rules that apply to employees. This contribution is paid by the employer, after
which the income-related contribution you have earned as an entrepreneur is calculated.
If your income is below a certain standard, you will receive a ‘care allowance’ from the government,
which can be applied for at the Tax Administration.
Incapacity for work and invalidity
An independent entrepreneur is not covered by compulsory invalidity insurance in the context of
the Work and Income Act (the WIA ). He is not entitled to a bene?t if unable to work as a result of
illness or disability. A part-time entrepreneur combined with employment will be covered partially,
so, he will receive a pro rata bene?t.
To cover this ?nancial gap risk, an entrepreneur could take out invalidity insurance, either a private
invalidity insurance or a voluntary invalidity insurance.
Private invalidity insurance
First of all, before taking out private invalidity insurance, the allowance needed on an annual basis
should be determined, for which 80% of income is the rule of thumb. The amount can be changed
during the insurance term, or you could stipulate for payment to be increased by a certain percentage
8 Insurances
every year. It has to be decided when the insurance starts making payments and when payments
should end. You could choose to have the payments start within a couple of weeks after you have
fallen ill, but you may also have certain resources of your own that will keep you going for some time
without relying on your insurance right away. Any time between fourteen days and three years is
possible; the payments could end any time between your 50th and 65th birthday. The sooner the
insurance starts making payments, the higher the premium, of course. First of all: if and at what price
you qualify for an invalidity insurance depends among other things on the branch you work in, your
age and your health.
Voluntary invalidity insurance
If you meet the requirements posed by the Employee Insurance Agency (UWV) you could take out
voluntary invalidity insurance at the UWV to cover illness and invalidity. These insurances are similar
to the employee insurances for illness and disability, the Sickness Bene?ts Act (ZW) and the Works
and Income Act (WIA). The voluntary ZW insurance pays up to a maximum of 104 weeks (2 years); after
this period you can take out WIA insurance.
The (maximized!) payments under both insurances are based on the daily income you earn as an
independent entrepreneur. A voluntary insurance can only be taken out if you previously had a
compulsory insurance against the ?nancial consequences of illness - for at least one year, for example
34 35
as an employee. For taking out a voluntary insurance, you have to report to the UWV within 13 weeks
after the compulsory insurance has ended. After this the UWV will no longer be obliged to insure you.
Accident insurance
An accident insurance pays out a lump sum if you become partially or completely disabled as a
result of an accident.
Pension insurance and annuity policies
Every inhabitant of the Netherlands aged over 65 (in the nearby future the age of 65 will become
67) receives AOW, national old age pension. This is a basic pension, which may not be suf?cient to
live on. Therefore, be advised to build up a supplementary pension through a pension insurance
scheme. You could take out an annuity policy or another type of savings scheme.
Entrepreneurs and pregnancy
Female entrepreneurs are entitled to a pregnancy and maternity bene?t for a minimum of 16 weeks.
This is the Maternity Bene?t Scheme for the Self-employed (ZEZ) and the female entrepreneur is
entitled to the statutory minimum wages. Independent female entrepreneurs, who worked at least
1,225 hours in the year preceding their application for a ZEZ bene?t, will receive a full bene?t. For
entrepreneurs who worked fewer than 1,225 hours, the ZEZ bene?t will depend on their income
during the year preceding their application for the ZEZ bene?t. The bene?t is paid under the Work
and Care Act (Wazo) and administered by the UWV.
B. Professional insurances
Business and professional liability insurance
An entrepreneur runs speci?c risks when doing business. A client may hold you responsible for the
delivery of defective goods or for not having performed the services correctly. If actually liable for the
damage caused by defective goods and services, you will have to pay compensation. Liability for
damages is not restricted to purely material damages; you may also have to compensate for damage
caused to your client’s property while working for him. Or anyone working for you might claim loss of
income when he or she can no longer provide in its own income as a result of an accident happened
while working for you. Or you may be held responsible for environmental damage. ‘The polluter pays’,
has taken root in Dutch jurisdiction. It truly is expedient to take out a business or professional liability
insurance to cover all possible risks. The insurance company only pays out if you are insured at the
very moment the damage occurs; there is no way of insuring retroactively. The premium due depends
on the size of enterprise and the sector or industry.
Business liability insurance
Business liability insurance covers the damage occurred while running a business. If you, so to say
a building constructor, drop a brick on a parked car, you are responsible for the car’s damage. The
insurance will pay for the damage you caused. The insurance, however, does not cover all damages
you are responsible for. If the construction you have built turns out to be of bad quality and the
client claims compensation, you cannot recover this from your insurance company. Claims arising
from breach of contract will not be compensated by the insurance company either. These claims are
considered to be entrepreneurial risk. If you have to pay a ?ne because of late delivery, for example,
this will be for your own expense.
Professional liability insurance
If you are a professional – consultant, lawyer, civil-law notary, physiotherapist, etc. – your client
may suffer (immaterial) damages as a result of inaccurate acting or incorrect information on your
part. If you, being a consultant, should advise a client to undertake speci?c action, which has
adverse effects, your client may suffer considerable damages. If the client holds you responsible for
these damages and you are actually liable, your insurance will pay the compensation, because it is
a professional risk. The premium depends on your profession and the size of your enterprise. Some
36 37
professions insurance companies may not be eager to cover, because of the high risks at stake.
E.g. a ?aw in a software program could bring about enormous damage. In case of gross negligence
or intent on your part the insurance company is unlikely to pay.
Legal Expenses Insurance
Con?icts and disputes easily arise in business. This may lead to unexpected expenses, especially if
the dispute ends up in court. If you have a legal expenses insurance, your insurer will see to it that
you will be assisted by a lawyer. The expenses incurred will usually be paid or reimbursed by the
insurance company. Not all legal assistance is covered by legal expenses insurance; do check with
the insurer which type of disputes is included and which costs will not be reimbursed.
Insurance for goods, machinery and equipment; buildings insurance
At your own risk are all goods and products you have in store, all machinery, equipment, of?ce
inventory and computers at your premises. Things like a ?re breaking out or your business pre-
mises getting burglarized could bring about a considerable loss. Analyse the existing risks, take
out proper insurance and check the conditions of the insurance company carefully. Security or ?re
prevention measures, like sprinklers, are usually required.
If you are the owner of the building, you probably wish to insure the premises with a building
insurance that covers damages caused by, for example, ?re, lightning or explosions. Damage to
windows is not covered by a building insurance; you will have to take out separate glass insu-
rance. Not only the insurance company, but banks as well may pose certain conditions before
granting you a loan for investing in your business. If you have a bank loan to ?nance the business
premises or machinery, equipment, etc., the bank often stipulates that you take out buildings
insurance.
Loss of pro?ts insurance
This insurance will cover the losses you suffer as a result of temporarily having to shut down your
business, for example after a ?re.
Partner or associate insurance
This insurance will cover the risk you run if your business partner or associate can no longer work in
the business in case of, for example, illness.
Machinery breakdown insurance
This insurance will cover the repairs of machinery. Machinery breakdown as a result of wear and
tear or bad maintenance is not covered.
Computer insurance
This insurance covers any damage that may result from improper use, viruses or power cuts. Both
hardware and software are covered, which means that loss of data is covered as well.
Insurance for goods transport
During transportation goods may be damaged. You need a transport insurance if you are responsible
for the transportation of the goods until they arrive at their destination. If your business transports the
goods itself, insurance should also be taken out to cover the risks during transportation.
Credit insurance
Not all debtors will pay the invoices you send them; they may be involved in bankruptcy proceedings,
or suspension of payments has been granted. A debtor could also dispute an invoice and refuse to
pay. Credit insurance will pay the invoiced amount, but the insurance company will probably check
your accounts receivable portfolio before insuring you. The insurance company will not accept
invoices sent to clients with bad creditworthiness.
General Terms and Conditions
Applying General Terms and Conditions (GTC) to all the contracts with your clients or customers
makes clear to them what terms and conditions you apply for services, payments, purchase or sales
orders, etc. GTC may help to avoid awkward discussions or con?icts, because each party’s rights
and obligations are de?ned. Please realise that especially larger companies and organisations
usually apply their own GTC and may, therefore, be unwilling to accept yours.
The following terms and conditions are usually included in the GTC:
• offer – free of obligation or not, term for acceptance;
• transportation – responsibility for transportation costs, insurance and import duties;
• delivery term – de?nition of circumstances beyond a party’s control;
Make general terms and conditions known to your clients before
closing the deal. Be sure to have them ?t to your liability insurances.
38 39
• retention of title – when will the other party become the goods’ owner (e.g. after payment);
• guarantee – if a guarantee is provided, terms and conditions;
• dispute resolution – competent court or arbitration;
• liability – limitation of liability, total amount of damages to be paid.
Under Dutch law GTC may not be unreasonably onerous – i.e. you may not impose terms and
conditions that would not be fair on the other party. Just like your customers and clients will not be
allowed to apply unreasonably onerous terms and conditions to the contract you enter into with
them. If you apply GTC, make sure that your customer or client has been informed about your GTC
before closing the contract, because only then they will become valid. If your customer or client also
applies GTC, do negotiate whose GTC will apply to the contract involved. If you are in a position to
do so, be the ?rst to reject the applicability of the other party’s GTC!
Long-distance sales and purchases
If you are involved in the long-distance selling of products or services in the Netherlands (e.g.
selling via the Internet, via a web shop, by telephone, by fax or by post) you must comply with rules
such as the business’ obligation to provide information and the customer’s right to return what he
or she purchased. www.answersforbusiness.nl/regulation/long-distance-sales-and-purchases.
A considerable number of part-time and full-time entrepreneurs run their enterprises from their
home address. Others lease commercially exploited of?ce space, a shop or other premises where
they have their registered business. Whichever you choose, please bear a few things in mind.
Zoning plan
Do check the local zoning plan in which the municipality determines what the designated use of
premises or locations is. The designated use of most houses – including terraced houses and
semi-detached houses – is ‘residentially’. Strictly speaking, you cannot start a business at that
address. In practice, setting up an enterprise at an residential designated address is permitted
provided that:
• the type of business you run can be classi?ed as an of?ce;
• your clients do not visit the house;
• you do not cause any nuisance to your neighbours;
• only a small part of the house is used for business activities.
A shop, a hairdresser’s salon, beauty parlour or a mechanic’s workshop, are not very likely to be seen
as businesses which can be run at your home address.
If you rent business premises, you should also check with the municipality whether you are allowed to
run the intended business at those premises. In case you intend to run a café at those premises, the
zoning plan should list the designated use of this location as ‘catering industry’. If the zoning plan has
another designated use, you will not be allowed to open a café at that address. Requesting a change
in designated use may be a lengthy procedure.
Tax-deductibility of accommodation costs
The costs incurred for renting business premises are fully tax-deductible. If your enterprise is at your
home address, tax-deductibility of the costs is not always possible. The Tax Administration only allows
you to deduct costs if:
• the of?ce space is an independent part of the house, with its own entrance, for example;
• at least 70% of your income must be earned in the home of?ce space if you also have of?ce space
somewhere else.
Without a working space elsewhere, at least 30% of your income must be earned in the home of?ce.
9 Business premises
40 41
If you meet these conditions, a maximum of 4% of the value of the of?ce space and a pro rata part
of the costs of the of?ce space are tax-deductible. The Tax Administration will inform you on the
tax-deductibility of accommodation costs in your situation.
Professional accessibility
Renting or buying business premises only makes sense if you are a full-time entrepreneur. Running
a business at your home address will be a lot less expensive than renting business premises, but
do realise that a business run from your home may look less professional to your clients. It will be
ef?cient to have a business telephone number attached to your trade name, next to a private (family)
telephone number. Another way of smoothing the clients’ way to contact you is to engage a bureau
providing secretarial services. Answering your phone, taking messages or putting calls through will
then be taken over in your absence. For business meetings and appointments you might consider to
temporarily rent space at a business unit or park, instead of receiving at your home address.
Renting business premises
Depending on the type of business premises you rent, your rights and obligations may differ. Renting
a shop, you have more protection if the owner wants to terminate the contract than when renting
an of?ce. Renting an of?ce space in a large of?ce building where temporary of?ces can be rented is
different again.
Premises for retail and catering business
Retail businesses (e.g. shops) and catering businesses (e.g. cafés and restaurants) operate different-
ly. Retail and catering business are accessible to the public, whereas of?ces can usually only be visi-
ted upon invitation. The rules that apply to these business premises differ as well. The law concerning
premises for retail and catering business provides the entrepreneurs with a right to security of tenure,
i.e. protection against termination of the contract by the lessor. In commercial rental law the party
that rents the premises is referred to as the lessee and the owner of the premises or the party that is
entitled to let the premises is referred to as the lessor.
Business premises
Publicly accessible locations where goods or services are delivered directly to the public are referred
to as business premises.
In Dutch: ‘middenstandsbedrijfsruimte’. Examples are shops, cafés, restaurants, traditional enter-
prises such as greengrocers’, butchers’ and bakers’, garages, dry-cleaners’ and collection and delivery
services. The rental law that applies to renting business premises stipulates that the entrepreneur
who rents the premises will be entitled to security of tenure for an initial period of 5 + 5 years or a
initial period between 5 and 10 years. If you should not wish to take on long-term obligations, you
could opt for a short-term contract with a maximum of 2 years.
Termination
The lessor can only terminate a rental contract when he has good reasons to do so, and termination
can only take place if the statutory notice period and other statutory rules are observed. It would be
getting too far off the subject – start doing business – to confront you with all caveats. Summarizing:
mutual agreement and understanding are essential aspects in renting and letting premises and espe-
cially the termination of a contract should be handled precisely. In case of indistinctness or doubt, do
not hesitate to consult either your local Chamber of Commerce or a real estate professional or lawyer.
Other business premises
Premises used by entrepreneurs to run a business which cannot be classi?ed as retail and catering
business, ‘bedrijfsruimte’ (as described above), are referred to as other business premises, ‘overige
bedrijfsruimte’. For instance: factories, of?ces, banks, travel agencies, bicycle lock-ups, car rental
?rms, workshops not freely accessible to the public, casinos, law ?rm of?ces, advisor bureaus,
doctor’s surgeries, funeral undertakers; sports centers, gyms and garage boxes as well. If you rent
premises like these, the contract does not have to comply with any statutory rules on the term of the
42 43
lease. Lessor and lessee are free to enter into any form of contract they like. The rent to be paid cannot
be changed during the term of the contract, not even by requesting the court to permit this, but parties
can include a clause on interim rent review. If lessor and lessee have not agreed otherwise, the lease
is supposed to be for an inde?nite period of time.
Termination of the contract must take place by giving notice. If a notice period has not contractually
been agreed on, the notice period will be the same as the payment term for the rent. So, if the rent is
paid on a monthly basis, the notice period will be one month. If the rent is paid twice a year, the noti-
ce period is six months, unless parties have agreed on another notice term. When the lessor has given
notice of termination, the lessee does not have to vacate the premises immediately, but is given two
months to request the court to extend the vacation period (period after which he has to leave). The
court can extend this to one year maximum. After the ?rst request for suspending the vacation period,
the court can grant another two extensions, to maximum one year each. If a lessee fails to meet his
contractual obligations, e.g. if he does not pay the rent, the court may not grant any extensions.
Renting of?ce space in a large of?ce building
An alternative to renting of?ce premises or working from home is to rent of?ce space in an of?ce
building with of?ce units for small enterprises. The advantages are the relatively low rent and
?exible conditions.
Networking
When you run a small business you should try and avoid situations where you are no longer availa-
ble for particular clients because you work for one client exclusively for a period of time. Clients
and potential clients are likely to turn to larger, more ?exible ?rms and business opportunities run
to waste. Working together with other small businesses in similar circumstances could mean a way
out of this dilemma. Passing on or taking over contracts makes you more ?exible and you will never
have to sell ‘no’. Cooperation agreements with fellow self-employed entrepreneurs are well worth
considering. It goes without saying that you should inform your client about the partners with whom
you will be doing (his) business.
Examples
• 5 + 5-year contract. You rent the business premises for an initial 5-year period, to be
extended with a subsequent 5-year period. If you or the lessor does not give notice of ter-
mination before the expiry of the initial 5-year period, the contract will automatically be
extended for another 5-year period. If notice of termination is not given at the end of this
second 5-year term, the contract will automatically be renewed for an inde?nite period of
time. There are legal restrictions for the lessor to terminate the contract.
• Contract for a period of 5 - 10 years. If you rent the business premises for an initial period
of 5 to 10 years, notice of termination may be given, either by the lessor and the lessee,
taking effect by the end of each year, i.e. at the end of year 5, the end of year 6, etc. If
notice of termination is not given in any year, the contract will be automatically extended
by a number of years to the total period of 10 years. So, an initial contract of 7 years will
be extended by 3 years.
• Long-term contract. If you rent the business for an initial term of 10 years or more, the
5 + 5 term does not apply. If notice of termination is not given before the end of this
period, the rental contract will remain in force for an inde?nite period of time. Short-term
contracts. You can enter into a rental contract for a maximum of 2 years if unsure whether
your business will be successful at a speci?c location. The contract term rules do not
apply, neither does security of tenure. The contract automatically ends – no notice has to
be given – when the contractual term expires. But, if the contract is continued after the
initial 2-year period, it will be automatically extended to a total of 5 + 5-year period.
44 45
Building up a network is obviously important to every entrepreneur. Especially one-man business
entrepreneurs are eager to exchange information and share experiences. You could become a
member of a network organisation or an association of entrepreneurs. There are associations for
speci?c branches and special interest groups for young entrepreneurs, female entrepreneurs or
entrepreneurs with a non-Dutch background. The local shopkeepers’ association and an interest
group for business park enterprises are other examples. The Chamber of Commerce gladly provides
information on such organisations and associations in your area.
Legal aspects of doing business in the Netherlands
Bilingual edition, 2007 (English & Chinese)
This booklet aims to provide a basic understanding of Dutch business law to foreign entrepreneurs
and their legal service providers, who are about to start, or are engaged in business operations in the
Netherlands. Areas covered are the legal framework, regulatory and antitrust matters, tax aspects,
labour law, intellectual property, spatial planning and environmental issues and insolvency. Search at
www.loyensloeff.com news, publications for book title.
‘Doing business in the Netherlands’ is a practical guide providing relevant information to start
up a business in the Netherlands. It will help to decide upon the most optimal legal form for your
business; how to make smart use of the available subsidies; whether to lease or buy a business
property; whether to hire local personnel or bring your own staff from abroad. The guide also
provides useful insight into the Dutch tax system. Search for ’doing business in the Netherlands’ athttp://eng.mazars.nl/ or at a search machine.
Memorandum on the 30% tax ruling
An expatriate transferred to the Netherlands will become subject to Dutch income tax either as a
resident or non-resident taxpayer. Such transfers will often incur signi?cant additional costs (like
double housing costs, relocation costs, losses on the sale of assets, etc.) due to a temporary stay
outside the home country. Since it may be dif?cult for an expatriate to prove the deductibility of
said costs according to the Dutch tax law, the Dutch tax authorities have issued the 30% ruling
the latest revision of which is effective from January 1, 2001 (article 15 letter k Wage tax act 1964).
Search for memorandum tax ruling at www.horlings.nl.
Publications in English
46 47
Answers for business
Answers for Business is the starting point of the Dutch government for entrepreneurs. See at a glance
which rules, permits, taxes and subsidies apply when you do business in The Netherlands.
> www.answersforbusiness.nl/guides
Government.nl
Government.nl is the central access to all information about governmental organisations
in the Netherlands.
>http://government.nl
Dutch Immigration authorities
The IND (Immigratie- en Naturalisatiedienst) has the governmental task to carry out the
vimmigration policy.
>https://ind.nl/en/individuals/residence-wizard
Dutch Ministry of Foreign Affairs (BuZa)
The of?cial website of the Dutch Ministry of Foreign Affairs offers speci?c information for newcomers
in the section ‘coming to the Netherlands. It also offers a selection of expat websites.
> www.minbuza.nl/en/you-and-netherlands
Taxes
A brief outline of all taxes in the Netherlands is to be found at:
>http://english.min?n.nl en www.belastingdienst.nl, English, business
Insurances
The Ministry of Social Affairs and Employment has made available brochures in different languages
with information on working in the Netherlands, the minimum wage, and rights and obligations of
employees from EU countries.
>http://government.nl/ministries/szw
Dutch Central Bank
>Search at www.dnb.nl view Register of supervised/regulated Banks.
Dutch Bankers Association
> www.nvb.nl look at the English publications, general banking conditions, Association of Banks.
Chambers of Commerce
The Dutch Chambers of Commerce provide information on starting a business, legal forms,
registration in the trade register, international trade etc. We accumulate knowledge, contacts and
partnership. Partnership, making us the essential reference point for every ?rm doing or seeking to
do business.
Would you like to contact the Chamber of Commerce?
Find an of?ce nearby at www.kvk.nl/kantoren
Dutch government websites
KVK.NL
doc_343562445.pdf
Before plucking up which is planted, there is a time to plant.
1
Starting your own business
As a self-employed entrepreneur
3
1 Introduction 3
2 Starting your own business 4
3 Business plan 8
4 Employment law issue 9
5 Legal forms 14
6 Registration 24
7 Taxes 27
8 Insurances 32
9 Business premises 33
Publications in English 45
Dutch government websites 47
When you have decided to start your own business a new world is opening up, with a wide varie-
ty of possibilities. You could open a shop or start your own consultancy ?rm; become a full-time
or a part-time entrepreneur. Clients may wish to hire you for advice or construction work.
Before plucking up which is planted, there is a time to plant. In other words: you will have to be
prepared to tackle challenges as well - either as a provider of services or products, as a self-employed
entrepreneur, a sole trader, an independent contractor, or as a freelancer or so-called ‘zzp’er’.
The Dutch Chambers of Commerce are incorporated under public law and, as such, target their
services at Dutch businesses across all sectors.
Being self-employed radiates a pleasant sense of freedom and independence, but it may carry
certain risks as well. Whether you offer services or products: you will do so at your own risk,
expense and with full responsibility towards third parties. Apart from that, being self-employed
entails certain obligations, such as paying taxes and VAT and keeping records of your business
activities. Preparing well is the best way to start. You are de?nitely not on your own; plenty of
competent assistance is to be found in the Netherlands’ business world.
Starting point
Before you visit the Chamber of Commerce to register your enterprise, do consider the following
issues carefully:
• a permit to start a business in the Netherlands (only for nationals who originate from outside
the EU/EEA or Swiss);
• a business plan;
• legal form and trade name of your enterprise;
• taxation and necessary insurance;
• business location, commercial lease;
• a ‘VAR’-statement from the Tax Administration, declaring you a self-employed entrepreneur.
Content 1 Introduction
Chamber of Commerce, December 2014
4 5
If you would like to start a business in the Netherlands and you do not have the Dutch nationa-
lity and you are from outside the EU, you will have to comply with particular IND (Immigratie- en
Naturalisatiedienst, the Dutch Immigration Authorities) formalities.
Dutch Immigration Authorities
The legal form of your enterprise makes no difference for the rules’ applicability to the Dutch
Immigration Authorities: whether it is a one-man business, a Dutch private limited (BV), or a
branch-of?ce of a foreign company. The rules do not differ either if you start an enterprise shortly
after arriving in the Netherlands, or after having been employed in the Netherlands for some time.
EU, EEA and Swiss nationals
When a national of one of the EU Member States, the EEA (European Economic Area), or a Swiss
citizen, you are free to live and work on a self-employed basis in the Netherlands and do not need an
entry visa or a residence permit (Document Duurzaam Verblijf). Even if you are not obliged to register
with the IND, please do so because most authorities ask for a proof of registration when you request
for a Dutch public healthcare insurance, a healthcare, housing or childcare allowance, a mortgage,
or a phone subscription. Registration is free of charge. If you intend to stay over four months, you are
required to register at your local municipality. An expat center will help you out here.
Nationals of non-EU and non-EEA countries
If you are not a national of an EU or EEA country and not Swiss, you will need to apply for a resi-
dence permit in case you stay longer than three months in the Netherlands. A residence permit
can be obtained from the IND.
If you are a national of a country subject to the Dutch visa requirement for a more than three
months’ stay, you will have to apply for a special visa: a provisional residence permit, an MVV
(Machtiging Voorlopig Verblijf). You cannot authorize somebody else to apply on your behalf; you
will have to apply for a provisional residence permit in person at a Dutch embassy or consulate
in any country, as long as you have lawful residence in that particular country. Lawful residence
means that you have a residence permit for that country valid for at least another three months.
With just a tourist visa, you do not qualify as a lawful resident.
2 Starting your own business
Tips
Check how you can use your degree or diploma for your business in the Netherlands.
Search for ‘international credential evaluation’ at www.idw.nl
The Expatcenter Amsterdam is located in the World Trade Center (WTC) in Amsterdam’s
Zuidas district.
E [email protected]
T +31 (0)20 254 79 99
Tip
Search for ‘30% tax ruling’ at www.answersforbusiness.nl
T +31 (0)20 254 79 99
Taxes
An expatriate transferred to the Netherlands will become subject to Dutch income tax either as a
resident or nonresident taxpayer. The 30% tax facility allows the employer to grant a tax-free lump
sum allowance for the extra costs of the expat’s stay in the Netherlands (extraterritorial costs).
Working on a self-employed basis as national of non-EU / non-EEA country and non-Swiss
In this case you will have to meet several economic criteria before starting an enterprise in the
Netherlands:
• you are quali?ed to run the business in question;
• you have a business plan;
• your business serves an essential Dutch interest, i.e. has ‘added value’ to the Netherlands.
The IND does not weigh these criteria itself; the Ministry of Economic Affairs is requested to review
your situation and to decide whether the business you intend to run will be economically interesting.
If this turns out not to be the case, you cannot start your own business in the Netherlands.
6 7
Review of economic added value
The Ministry of Economic Affairs awards points for each criterion. You will need a minimum of
30 points for each criterion (total number for all criteria: 300). The scoring system consists of three parts:
a) personal experience (education, experience as a self-employed person, working experience);
b) business plan (market analysis, product/stervice, price, organisation, ?nancing);
c) material economic purpose for the Netherlands (innovative, job creation, investments).
You should always contact the IND to ?nd out about the procedure involved in testing the economic
interest of the enterprise you intend to start. For nationals of some country, you can bring this enter-
prise to however European Regulations 68/151EEG countries, for example Turkey, special rules on
the basis of treaties between the EU and these countries. To citizens of United States of America it is
important to know about the so called ‘Amerikaans vriendschapsverdrag’.
Taking your business from abroad
The Dutch comparative companies Act recognises all foreign legal entities except business owned
by one person (female/male). If you run a one-man business in your country of origin and you can
prove this, for example by submitting a copy of registration in a commercial register in that country,
you can bring this enterprise to the Netherlands and have it registered at the Chamber of Commerce
as a Dutch one man-business.
Other legal foreign entities or foreign business forms are simply registered as a foreign legal
entity with commercial activities. Please note that you will still have to comply with the IND rules
on residence in the Netherlands.
Starting a branch of?ce in The Netherlands is also a possibility. There is question of a branch
when long-lasting business operations are conducted in the Netherlands, which form part of the
foreign enterprise. A branch can be: a sales of?ce or a production company, but also a representative
of?ce. It does not have an independent legal form, but is a part of the foreign enterprise.
Thanks to our traditionally open economy, attractive investment climate and international tax
possibilities, the Netherlands is and always has been host to many foreign enterprises. Another
pleasant aspect is the “incorporation principle”, i.e. Dutch law recognises foreign legal entities.
In other words: the foreign legal entity wishing to start activities in the Netherlands needs not be
converted into a Dutch legal form. The organisation and structure of the legal entity is governed
by the foreign law under which it was formed. National law of the state of origin applies, however
European Regulations 68/151EEG and 89/666 EEG are speci?c rules how to register companies
formed in the European Economic Region.
Tip
Additional information about opening a branch or representative of?ce in the Netherlands
can be obtained at the Chamber of Commerce Amsterdam.
Additional information about hiring or provision of workers in the Netherlands is available at:
www.kvk.nl/registrationlaw and www.answersforbusiness.nl
8 9
Starting a business requires a number of steps and key decisions. The process of creating a
business plan enables you to look at your business in its entirety. No matter how small or big the
business, it will help you identify areas of strengths and weaknesses.
Banks require a business plan when you take out a loan. Even if you do not need the latter, and
?nancing your enterprise is not a problem, a business plan will de?nitely help you understand
the impact of starting a business. It will signi?cantly contribute to the professional and ef?cient
start-up of your enterprise. Submitting a business plan is also one of the criteria set for non-EU
and non-EEA nationals to be allowed to start their own enterprise in the Netherlands.
Get started
It is advisable to write the plan yourself. In doing so, you will gain a better understanding of your
objectives, targets and future customers or clients. Crucial question to be addressed are:
• which legal form will best suit the enterprise?;
• which products or services will you offer – DO’s and DON’Ts?;
• who will be your clients?;
• promotional activities to get contracts?;
• how to optimize visibility to your target group?;
• which prices and fees?;
• ?nancial plan (available budgets, expected turnover, investments)?;
• which insurances do you need?;
• permits and/or licenses required?;
• administrational organisation, which form?;
• what should be included in your General Terms and Conditions – if applicable?
Your legal status as a self-employed entrepreneur is quite different from an employee’s status.
If you are hired on the basis of an employment contract, your employer is the one to deduct
taxes from wage and pay national insurance and employee insurance contributions.
As an independent entrepreneur you pay taxes and contributions yourself, and you are not entitled
to the following employers’ rights: minimum wage, paid holidays, a holiday allowance, statutory
safeguards against dismissal and a statutory notice period. In order to designate the employment
relationship while starting your business, it is important to consider different contracts and apply
for a ‘Verklaring Arbeidsrelatie’ (VAR) at the Tax Administration.
Employment on the basis of a contract and implied employment
Regardless of the title chosen for the contract with your client, it is considered an employment
contract if the following criteria are met:
• your remuneration for the work performed can be seen as wages;
• there is an obligation to do the work yourself: you cannot send someone else to do the job for
you. Having to be available for speci?c work, e.g. on-call service, will also be considered as
work performed in employment;
• a relationship of authority: the employer can determine where, when and how the work should be
carried out. This relation also exists if the work you do is an essential element in the employer’s
business operations or if the employer’s pro?tability is at risk without you.
If the working relation does not show all characteristics of a ‘proper’ employment relation, it may
still be seen as one. This is called a notional employment relationship: although the employment
relation has not been established explicitly, there is an implicit employer-employee relation.
Consequently, the fee you charge is seen as wage, so, the employer will have to deduct taxes
from your wages and pay national insurance and employee insurance contributions.
A notional employment relation exists if:
3 Business plan 4 Employment law issue
Formats
Business plan formats can be obtained from various private parties that specialise in
supporting starters. Just take a look on the internet or download an example from:
www.sba.gov/tools
Records show that enterprises started upon a thorough
business plan are more likely to be successful.
As part time entrepreneur you will probably be given a
VAR-ROW. Professionalising your business independency
helps to obtain a VAR-WUO; some principals prefer this.
10 11
• you work for a client project for at least two days a week;
• you earn more than 40% of the minimum wages for the project a week;
• the relation with the client lasts more than 30 days; a new contract within one month after the
termination of the ?rst contract is seen as continuation of the previous contract.
A notional employment does not exist if actual and practical independence can be proven,
for which a VAR can be instrumental.
Commercial contracts
As a self-employed entrepreneur you or your client can initiate to formalise the contractor-client
relation by entering into a commercial contract. Parties should always insist on putting down the
arrangements agreed upon. There are two types of commercial contracts:
1. Service agreement - Under this type of contract you are obliged to perform to the best of your
ability, committing yourself to do your client’s work without being employed by him. The work
is usually classi?ed as ‘services’.
2. Contractor agreement - Under this type of contract you have a speci?c target obligation. You
commit yourself to produce a concrete, tangible object at a certain price.
Criteria for legal independence: Actual circumstances are decisive here. An of?cial statement
signed by client and yourself that the contract is a commercial one is helpful proof. Criteria are:
• the degree of independence and absence of supervision/authority;
• permanence;
• pursuit of pro?t;
• clientele.
Not just these criteria, but their interconnection especially plays a decisive role. Many contracts
can be considered both an employment contract and a commercial contract with a self-employed
entrepreneur. Decisive will be to which degree you meet the different criteria.
Verklaring Arbeidsrelatie (VAR)
In order to designate the employment relationship you can apply for a ‘Verklaring Arbeidsrelatie’
(VAR) at the Tax Administration.
The VAR is an of?cial statement. Based upon the applicant’s information the Tax Administration
will de?ne income as:
• income earned in employment: the freelancer will have a VAR income;
• income earned from other proceedings: the freelancer will have a VAR-row;
• pro?t from enterprise: the freelancer will have a VAR-wuo;
• partnership’s own risk and account: the freelancer will have a VAR-dga.
VAR-income and -row: employed or not?
With a view to the VAR-income and -row, the employer will have to de?ne and check whether he
should pay income tax and employees insurance premiums, based upon the existence of an employ-
ment contract or otherwise. Explanatory assistance – but no de?nite answer! – can be found at the
website of the Ministry of Finance. The Tax Administration may conclude differently.
VAR-wuo and -dga: certainty in advance
Only VAR-wuo or -dga supply the employer beforehand with complete ?nancial certainty provided
he meets the following conditions:
• The freelancer’s activities should be similar to the VAR’s description. So, the freelancer is not
entitled to carry out IT work if the VAR denotes carpentry.
12 13
• The freelancer is on the job during the validity of the VAR (1 calendar year).
• The VAR should be the authentic original.
• The employer should determine the freelancer’s identity on the basis of a valid proof of identity
(no driver’s license). Copies of the VAR and proof of identity should be kept in the administration
for 7 years.
Having acted this way, the employer has a solid defense in case the Tax Administration or UWV
may reach another verdict afterwards. So, it may be wise for both freelancers and employers to
object against a VAR-income or -row.
VAR application
Bearing in mind the utmost importance of the VAR-outcome, it is obviously important to carefully
?ll out the VAR-form. Only the freelancer him/herself is allowed to apply for a VAR. A directeur-
groot aandeelhouder (DGA) should apply for a VAR in case of external consultancy.
The Tax Administration provides a digital VAR application form; to which you will get a reply within
5 days, but at the latest within 8 weeks. If additional information is needed, the Tax Administration
will contact the applicant.
Please note the following when ?lling out the form: the Tax Administration considers request as
a total, coherently, and takes the activities into account. If not all answers are favorable it does
not necessarily mean that no VAR-wuo will be given. For example: an interim manager with two or
more employers can still be entitled to a VAR-wuo.
The freelancer should write down reasonable expectations. If, however, the actual situation
afterwards turns out to have been differently, this will not have any consequences as long as the
deviation is within normal risk of enterprise limits. For example, the freelancer expected to have
3 or more employers, but due to a recession this turned out differently. The freelancer has to ?ll out
the form to the best of his knowledge and should not deliberately misrepresent the state of affairs.
If this should afterwards be proven to have been the case, the Tax Administration will recover the
indebted taxes and premiums from the freelancer. Some of the questions need a ‘yes’ or ‘no’ only;
choose the nearest suitable.
Relation employer/former employer
As a part-time independent entrepreneur / part-time employee you could get involved in a
con?ict of interest with your (former) employer. If you intend to provide services, comparable to
the ones he provides, you better ask his permission/advice to run your own business. Starting a
business as a full-time independent entrepreneur you should be aware of a possible con?ict of
interests as well. You probably signed a non-competition clause within your employment contract
that remains valid after termination of employment. In any case it is wise to contact/consult your
(former) employer about your intentions.
14 15
In order to accommodate the starting entrepreneur or professional, Dutch law recognizes various
legal forms, such as a one-man business, a private limited company (BV), a partnership or a limited
partnership. The main issues at stake are the matter of liability if your enterprise should run up
debts, and which tax regime applies.
A. One-man business
One-man business is also referred to as sole trader or sole proprietorship or independent contractor.
If you start a one-man business you will be the fully independent founder and owner. More than one
person may work in a one-man business, but there can only be one owner. A one-man business can
also employ personnel.
Setting up
You can establish a one-man business without a notarial deed. Registration in the Trade Register
is mandatory. As a private individual you can only register one one-man business. However, you
can have more than one trade name and carry out various business activities under different trade
names. These activities can be carried out at the same or at another address, as a branch of?ce of
the one-man business.
Liability
As the owner of a one-man business you are responsible for everything concerning your enterprise; for
every legal act and all its assets and liabilities. No distinction is made between private and business
property. Thus, business creditors can seek recovery from your private property and private creditors
from your business property. If your one-man business goes bankrupt, you yourself go bankrupt as
well. If the owner of a one-man business should be married in a community of property regime, the
creditors may also lay claim to the partner’s property. Partner liability can be avoided by a prenuptial
or a postnuptial agreement drafted by a civil-law notary. However, since partners are usually
requested to co-sign when taking a loan, the agreement may not offer the protection expected.
A civil-law notary can provide more information.
5 Legal forms
The majority of starting entrepreneurs either choose a one-man
business or a general partnership as the legal form for their
business, according to their preference for doing business by
themselves or in cooperation with others.
Taxes and social security
The pro?t made in a one-man business is taxed in box 1 – income tax. If the Tax Administration
fully considers you an entrepreneur, you are entitled to tax allowances such as the entrepreneur’s
allowance, investment allowance and the tax-deferred retirement allowance. The owner of a one-
man business cannot claim social bene?ts under the Sickness Bene?ts Act, the Work and Income
Act and the Unemployment Insurance Act. Therefore, it is advisable to take out insurances to
cover these risks. You will qualify for the following national insurance schemes:
• General Old Age Pensions Act;
• Surviving Dependants Act;
• Exceptional Medical Expenses Act;
• General Child Bene?t Act.
Continuation of the business activities and business succession
With a one-man business no distinction is made between private and business. If you die, both
business and private property will fall into your heirs’ estate. You will need to make provisions to
guarantee your business’ continuity. A tax consultant could provide more details.
B. General partnership, the ‘VOF’
A general partnership is a form of cooperation in which you run a business with one or more business
partners. You and your partner(s) are the associates or members of the general partnership. One of
the characteristics of this legal form is that each partner contributes something to the business:
capital, goods, efforts (work) and/or goodwill.
Setting up
A partnership contract is not a statutory requirement for the formation of a general partnership,
but it is, of course, advisable to put down in writing what you and your business partner(s) have
agreed upon. A partnership contract could arrange the following matters:
• name of the general partnership;
• objective;
• contributions by partners in capital, know how, goodwill, assets and efforts (work);
• distribution of pro?ts and offset of loss;
• allocation of powers;
• arrangements in case of illness;
• arrangements for a partner’s days’ holiday.
16 17
Liability
An important characteristic of the general partnership is the joint and separate liability of the partners.
Each partner can be held fully liable – including private property – if the general partnership fails
to meet its obligations, even if these obligations were entered into by another, authorised partner.
Creditors of the partnership may seek recovery from your business property and your private property
and the property of the other partner(s). Restrictions agreed upon in the partners’ authority have to be
of?cially registered in order to gain legal effectiveness towards third parties. The general partnership
usually has ‘separate capital’, i.e. the business capital contributed by the partners, which is kept apart
from their private property and capital. This capital is to be solely used for business purposes. Should
one or more creditors seek recovery from the partnership – for instance in the case of bankruptcy
– they could do so from the separate capital. If this should be inadequate to pay the partnership’s
debts, creditors may seek full recovery from the partners’ private property. If so, you could hold the
other partner(s) liable for having failed to meet their obligations, but only after the creditors have
been paid. In private matters creditors of partners cannot seek recovery from the partnership’s busi-
ness assets or the private property of the other partner(s). Because of this partners’ broad liability it is
advisable to have a prenuptial or postnuptial agreement drafted if you are married under a community
of property regime. A civil-law notary could provide you with more information.
Taxes and social security
Each partner will pay his own income tax on his pro?t share. If the Tax Administration sees the
individual partner as an entrepreneur, he is entitled to all kinds of tax allowances, such as the
entrepreneur’s allowance, investment allowance and the tax-deferred retirement allowance.
As far as social security is concerned, the same rules apply to the entrepreneur – partner as to
the owner of a one-man business.
Continuation of the business activities and business succession
Under Dutch law the general partnership ends when one of the partners resigns or dies. In order
to secure the continuation of the general partnership, the partners can include a clause in the
partnership contract arranging for the other partners to continue the general partnership – with
or without a new partner – or to terminate it.
C. Limited partnership, the ‘CV’
A limited partnership, the ‘CV’, is a special type of general partnership (VOF). The difference is that
the CV has two types of business partners: general, and limited or sleeping partners. The latter
are only ?nancially involved; they cannot act on behalf of the partnership. Besides, the name of a
limited partner cannot be used in the trade name of the limited partnership.
Setting up
A partnership contract is no statutory requirement for a limited partnership, but, again, partners
better put down the agreements. Apart from the matters mentioned in the VOF, the contract
should arrange the distribution of pro?t between general and limited partners. When registering
a limited partnership in the Trade Register, the personal details of the general partners are listed;
the details concerning the limited partners are restricted to total number and their contributions
in the partnership.
Liability
General partners can be held fully liable if the partnership fails to meet its obligations. Bankruptcy of
the limited partnership will automatically lead to the general partners’ bankruptcy (not applicable to
limited partners). A limited partner can only be held liable for the maximum sum contributed to the
partnership. However, should the limited partner act on behalf of the partnership, he will be seen as a
general partner and fully liable, in which case creditors of the partnership can lay claim on his private
property as well. Restrictions agreed upon in the partners’ authority have to be of?cially registered in
18 19
order to gain legal force towards third parties. The general partners’ liability in a limited partnership
is quite broad, so, if partners are married under a community of property regime they are advised to
have a prenuptial or postnuptial agreement drafted. A civil-law notary could provide more information.
Taxes and Social security
General partners pay income tax on their share in the pro?t. If the Tax Administration sees the indivi-
dual partner as an entrepreneur, he is entitled to various tax allowances, such as the entrepreneur’s
allowance, investment allowance and the tax-deferred retirement allowance. As far as social secu-
rity is concerned, the same rules apply to the entrepreneur – partner as to the owner of a one-man
business [link to c – Social Security under one-man business]. Limited partners, who cannot be held
personally liable for the enterprise’s debts, are not seen as entrepreneurs by the Tax Administration.
Continuation of the business activities and business succession
Under Dutch law the limited partnership ends when one of the partners resigns or dies. In order
to secure the continuation of the limited partnership, the partners can include a clause in the
contract arranging for the other partners to continue the partnership – with or without a new
partner – or to terminate it.
D. Professional partnership, the ‘maatschap’
The partnership referred to as ‘maatschap’ under Dutch law differs from the general partnership
and the limited partnership in that it is a form of cooperation established by professionals such
as doctors, dentists, lawyers, accountants, physiotherapists etc., rather than a cooperation
established for the purpose of doing business. The partners are referred to as ‘maten’ instead
of ‘partners’. Each ‘maat’ contributes personal efforts, capital and/or assets. The purpose is to
share the income earned on the one hand and the expenses incurred on the other.
Setting up a professional partnership
A partnership contract is no statutory requirement for the formation of a professional partnership, but
partners better lay down their agreements with the other professionals in a partnership contract. This
partnership contract could arrange the following matters:
The Chambers of Commerce can answer your questions about
the legal environment of your business. Seminars and other
regular services are available.
• contributions made by the partners;
• distribution of pro?ts, pro rata each partner’s contribution – distributing all pro?t to one partner
is not allowed;
• allocation of powers – each partner is entitled to perform management acts, unless agreed upon
otherwise; as from 1 July 2008 the professional partnership has to be registered in the Trade
Register. This does not apply to partnerships that act internally only, such as a partnership in
which costs are pooled.
Liability
Each authorised partner can enter into a contract, thus binding the partnership: all partners. Each
partner can be held liable for an equal part. If a partner should act beyond his authorization, the
other partners will in principle not be held liable: the partner in question is the only partner that has
bound himself. A professional partnership has no ‘separate capital’ from the private assets of the
partners. Creditors having a claim on the partnership can only seek recovery for equal parts from
the individual partners; these creditors do not rank above creditors who have a claim on the private
assets of a partner. To a married partner the same reservations apply as to the general partners in
general partnerships and limited partnerships. They are advised to have a prenuptial or postnuptial
agreement drafted. A civil-law notary could provide more information.
20 21
Taxes and social security
Each partner pays income tax on his pro?t share. If the Tax Administration sees the individual partner
as an entrepreneur, he is entitled to various tax allowances, such as the entrepreneur’s allowance,
investment allowance and the tax-deferred retirement allowance. Regarding social security the same
rules apply to the entrepreneur - partner as to the owner of a one-man business.
Continuation of the business activities and business succession
Under Dutch law the professional partnership ends when one of the partners resigns or dies. In
order to secure the continuation of the partnership, the partners can include a clause in the contract
arranging for the other partners to continue the partnership – with or without a new partner – or to
terminate it.
E. Private company with limited liability, ‘BV’
In contrast to the legal forms described above - enterprises run by natural persons - the private
limited is a legal person: a person having rights and obligations, just like a natural person. The
natural person who has incorporated the private limited cannot be held liable, in principle, for
the debts incurred by the private limited. The BV itself is seen as the entrepreneur, whereas the
natural person who is appointed director merely acts on behalf of the BV and cannot be held
personally liable (with the exception of certain situations) for his acts. A private limited company
can be incorporated by one person – a sole shareholder BV – or by more persons. The capital of a
private limited is divided in shares.
Incorporating
This involves a number of statutory requirements, most important of which: Incorporation takes
place through a notarial deed. This should include the articles of association of the company.
The civil-law notary will check the legal contents of the articles.
Liability
The shareholder’s liability is limited to the total sum of his participation. Since the BV is a legal
person, having its own independent rights and obligations, the persons involved - directors and
supervisors - cannot be held liable for the debt of the company. In other words: the company’s
creditors can never seek recovery from the private assets of these of?cers. However, a company
director or of?cer may be held liable as a private person if he has acted negligently or culpably.
If he is responsible for the company’s bankruptcy because of wrongful or fraudulent behavior in
the company’s policy, creditors of the company may ?le a claim against him. In the formation
phase of the company, a director may be liable for the company’s acts. This liability ends as soon
as the legal person is incorporated and the acts are con?rmed by the company. As long as the
company has not been registered in the Trade Register, directors’ and of?cers’ liability continues.
In practice, limited liability often does not apply because banks require the director and principal
shareholder of the company to co-sign for loans taken out on behalf of the BV.
Taxes and social security
The private limited pays corporation tax – also referred to as company income tax – on the pro?ts
earned. The BV’s director and shareholder is employed by the BV His eligibility for social security
under the Dutch social security laws depends on the relation of authority between himself and
the private limited. A relation of authority is considered not to exist if:
• the director, possibly with his or her spouse, can cast more than 50% of the votes in the share-
holders’ meeting;
• two thirds or more of the shares are held by the director and/or close relatives up to the third degree;
• the director cannot be dismissed against his will.
Without a relation of authority, the director and shareholder cannot rely on the social security
insurances. He will have to take out his own insurances; to him the same rules apply as to the
owner of a one-man business.
Continuation of the business activities and business succession
Continuation of the company is secured by the fact that the BV is a legal person that exists
independently from the persons having incorporated or managing the private limited. When the
director dies, the continuation of the enterprise is not at risk, viz. the enterprise is run by the BV
and a new director will have to be appointed. A private limited can be sold in two different ways:
• BV’s shares are sold;
• BV’s enterprise (machines, inventory, stocks, etc.) is sold.
If the shares are sold, the proceeds are subject to income tax (box 2) if the shareholder has a
substantial interest (holder of a minimum of 5% of the shares). If the enterprise is sold, the BV
will have to pay corporation tax on the pro?t or book pro?t on the sale. If the shareholder of the
BV selling the enterprise is a BV itself, the structure is referred to as a holding – advantage of
which: the holding will in principle have to pay taxes on the proceeds.
22 23
Legal forms
Schematic representation of legal forms
Legal forms One-man business Private Limited
Company (BV)
Public Limited
Company (NV)
Partnership
(Maatschap)
Establishment Free Notarial deed of
incorporation
Notarial deed of
incorporation
Free, preference in
writing / (notarial)
contract
Capital
required
None € 0,01 € 45.000 None
Governance Owner Executive board Executive board Partners
Other bodies None Shareholders
(possibly board of
directors)
Shareholders
(possibly board of
directors)
None
Liability Private 100% Board of directors
(in case of negligence
or unjust payment to
shareholders)
Board of directors
(in case of negli-
gence)
Private for equal
amount if partner-
ship does not ful?ll
obligations
Taxation Income tax, SME
pro?t dispensation,
employer deduction
(if hour quota is met)
Partnership tax, in-
come tax over board
member salaries and
over dividend
Partnership tax, in-
come tax over board
member salaries
and over dividend
Income tax, SME
pro?t dispensation,
employer deduction
(if hour quota is
met)
Social
security
No employee
insurance
No employee
insurance, unless
resignation against
will of director-share-
holder is possible
No employee
insurance, unless
resignation against
will of director-share-
holder is possible
No employee
insurance
Schematic representation of legal forms (continued)
Legal forms Commercial Partnership
(VOF)
Limited Partnership (CV) Foundation (Stichting)
Establishment Free, preference in writing /
(notarial) contract
Free, preference in writing /
(notarial) contract
Notarial deed of incorpo-
ration
Capital
required
None None None
Governance Partners Managing partners Board of directors
Other bodies None Limited partners None
Liability All partners privately
for 100% if Commercial
partnership does not ful?ll
obli gations
Managing partners privately
for 100%, Limited partners
have limited liability
Board of directors
(in case of negligence)
Taxation Income tax, SME pro?t
dispensation, employer
deduction (if hour quota
is met)
Managing partners; Income
tax, SME pro?t dispensation,
employer deduction (if hour
quota is met)
Possibly partnership tax
Social
security
No employee insurance No employee insurance Board is not in paid
employment
24 25
Before you are allowed to start your business operations, you will have to register your enterprise
in the Dutch Trade Register, which is administered by the Chambers of Commerce. Registrations
in the Trade Register are public; everyone can check whether a particular person is authorised to
act on behalf of an enterprise and which legal form it has: a one-man business, a partnership or a
private or public limited.
How to register your enterprise
Registration requirements
Once you have decided upon your business’ legal form, you can have your enterprise registered
at the local Chamber of Commerce. Registration should take place within a period of one week
preceding, and one week following the actual commencement of business activities. Without
registration in the Population Administration of the municipality, you will need to submit
authenticated proof of your residential address abroad. The person registering the business has
to submit a valid proof of identity, which document has to be personally submitted at the
Chamber of Commerce. The following documents are accepted as valid IDs:
• a valid travel document (passport or European ID card);
• a valid Dutch driving licence (non-Dutch driving licence not accepted);
• a residence permit issued by the IND;
• a Dutch refugee passport;
• a Dutch aliens passport.
If you do not start your business at your home address but at a location you have e.g. rented, you will
also be requested to show the lease to con?rm the business address. Once the registration has been
completed, you will be given a unique eight-?gure registration number. This CoC number should be
referred to on all your outgoing mail. Because we do not have any English forms available please dial
the following number for more information 088 585 15 85 – option 3.
Who can register the enterprise
When an enterprise is registered at the Chamber of Commerce, it is of the utmost importance that
the registration forms which are submitted have been signed by the right person. Depending on the
legal form of the enterprise, the forms can be registered in the Trade Register by:
• the owner of the one-man business (registration of a one-man business);
• the partners (registration of a general partnership, VOF, and a professional partnership, ‘maatschap’);
5 Registration
• or the general partners (registration of a limited partnership, ‘CV’);
• If the enterprise is a legal person, a BV, the civil-law notary will usually see to the registration
formalities.
The persons who should register the enterprise and sign the registration forms can also be held
responsible in the event an enterprise is not registered.
In special circumstances other persons may be authorized and/or obliged to see to the registration
of an enterprise. The Chamber of Commerce can advise you on these circumstances.
Registration forms
The registration forms can be downloaded from the Chamber of Commerce website (www.kvk.nl).
As a statutory requirement, all forms are in Dutch and have to be completed in Dutch. Translations
in English of forms 6, 11 and 13 are available to assist you while ?lling out in the Dutch form to be
handed in. Registration is not free of charge. When you register a company you will have to pay a
one time registration fee of 50 euro.
After registration
Once the enterprise has been registered, it is the owner’s or partner’s responsibility to keep the
information up-to-date. With a BV the manager authorised to act on behalf of the BV is responsible.
Permits and Licences
Most business activities can be performed without any permits or licences, but for some activities,
like catering business, transport or taxi ?rm, you do need a licence. And an environmental permit
may be required if your products or business operations negatively affect the environment. Permits
and licences can be applied for at the municipality or at the provincial authorities. Some sectors re-
quire registration with an industry board or a product board. Registration is a statutory requirement,
based on the Act on Business Organisations. An industry board is a kind of interest group for a
speci?c sector. The same applies to a product board, which includes all enterprises in a production
chain, from producers of raw material to manufacturers of end products.
Registration in the Dutch trade register is compulsory for every
company and every legal entity, including ‘freelance’ and ‘zzp’
(‘zelfstandige zonder personeel’ self-employed without staff).
26 27
Termination / dissolution of the enterprise
When transferring or selling your company, you will have to comply with a number of rules and
regulations. You should also enter information about the sale into the Trade Register and reach a
settlement with the Tax and Customs Administration. A business transfer within family involves
several other tax aspects.
A self-employed entrepreneur is responsible for his own tax affairs. It is important to know all about
the taxes that will have to be paid and which deductions and exemptions may apply. Another aspect
of this responsibility is the obligation to keep records of your business administration for the Tax
Administration to inspect – if this should come up.
The Tax Administration
The Tax Administration should be noti?ed as soon as it is known when the enterprise starts doing
business. If you start a one-man business, a professional partnership, a limited partnership or a
general partnership, you can register your enterprise for the Tax Administration and for the Trade
Register at the same time. Both registrations take place at the Chamber of Commerce. A ‘Registration
Form Foreign Companies’ is available on the website of the Tax Of?ce. You can complete this form
and take it and the Registration forms of your company to the Chamber of Commerce. You will have to
submit the form personally.
If you start a legal person, for example a private limited (a BV), you will also have to notify the
Tax Administration. The relevant form, the ‘Statement of information for starting up a business’ is
available on the website of the Tax Administration. Since incorporation of a BV can only be effec-
ted by means of a notarial deed, you will have to go to a civil-law notary before you can register
the company.
You should register for the Tax Administration at an early stage, because of certain tax facilities.
New businesses can often claim a VAT refund on investments, because in the beginning usually
more VAT is paid than actually charged.
New businesses are likely to be visited by a tax inspector, who checks whether the business records
and administration meet the standards required. You can also make an appointment yourself for
and For entrepreneurs who do not have to.
Taxes to be paid
The different taxes described below – apart from the corporation tax – are payable if your business
is a one-man business, a professional partnership, a general partnership or a limited partnership.
The taxation rules applying for an incorporated business, a BV, will not be described in detail.
7 Taxes
28 29
• the number of clients your business has;
• the degree of independence of your business;
• the activities performed as expressed in time and in money;
• who bears the entrepreneurial risks;
• the business’s position in the market;
• liability for debts incurred by the enterprise;
• whether pro?t is made and the amount of pro?t made.
If you meet these standards, you will be ‘introductory visit’. return large sums of VAT, the regulation
entitled to the ‘entrepreneur facilities’.
These are allowable deductions before taxes, such as investment allowance, tax-deferred retire-
ment reserve and entrepreneur’s allowance. The entrepreneur’s allowance consists of:
• self-employed persons’ allowance and starters’ allowance;
• allowance for research and development work;
• co-working partner’s relief;
• SME pro?t exemption – exemption for small and medium sized enterprises;
• discontinuation relief.
To be eligible for the ?rst three allowances you will also have to meet the ‘hour criterion’: you must
be active in your business for at least 1,225 hours per year. This means, for example, 50 weeks of
24.5 hours per week. For persons un?t to do other work, the number of hours is 800. If you happen
to have run a business once before in the last ?ve years, the rule is that you will have to work for
more than 50% of your working hours in your own business. An exception is made in case of preg-
nancy. For the statutory period for pregnancy and maternity leave – a minimum of 16 weeks – the
Tax Administration will apply the average number of hours you worked in the period preceding the
pregnancy leave.
Income earned from other proceedings (Resultaat uit overige werkzaamheden ROW)
You worked and earned income which does not fully qualify as pro?ts from business activities
or income as wage. The income can be taxed in two ways: according to the pro?t system or the
payroll system.
A. Value added tax (VAT)/ Turnover tax
It is compulsory for businesses to charge VAT (in Dutch: BTW) when invoicing their clients. There
are exceptions, however. If you teach educational courses or provide educational training, you may
be VAT-exempted for these activities. Services rendered by journalists, composers and authors are
also VAT-exempt, just like medical services and products. The VAT rate is 6% or 21%, depending on
the type of product or service. The rate may be 0% if you trade internationally outside the EU. The
VAT you charge and which is paid by your client must be returned to the Tax Administration. The VAT
which your suppliers charge can be offset against this. If you do not charge VAT, you cannot offset
VAT. You should check with the Tax Administration if you are not sure whether you should charge
VAT or not. VAT is paid either on a monthly or on a quarterly basis, depending on the type of busi-
ness you have and the level of turnover. A more speci?c indication will be provided.
‘Kleine ondernemersregeling’
‘Small-sized entrepreneurs’ applies. If this regulation is applicable in your situation, you will pay
less VAT or no VAT at all. You could also request an exemption for VAT declaration. The regulation
will apply to your business if:
• the VAT to be returned to the Tax Administration on an annual basis – after deduction of input tax
– is less than € 1,883;
• the business you run is a one-man business, a professional partnership, a general partnership or
a limited partnership.
You meet the administrative requirements for VAT, such as maintaining invoicing records. If this
regulation should apply to your business, you will have to add this advantage to your income tax
declaration.
B. Income tax
Pro?t system
The Tax Administration applies the following criteria to determine whether you are to be seen as an
entrepreneur when paying income tax:
The Trade Register will provide you with a BTW (VAT)-number.
You’ll need this to offset VAT with the Tax Of?ce periodically
(usually every 3 months). Take care of charging your clients VAT.
30 31
The pro?t system is most common. So you should keep up-to-date administration. Business costs
are deductible according to the entrepreneurs’ ruling. You are, however, not entitled to all entrepre-
neurs’ ?scal facilities. (such as self-employed deductions and starters’ deduction).
In the payroll tax system or opting-in ruling principal and freelancer can agree that the ?rst will
submit payroll tax on behalf of the latter: this is the so-called ‘opting-in’.
In this regime, the freelancer will not be able to deduct any costs, but the principal could provide
the freelancer with certain allowances without ?scal consequences. Beware however: this system
does not make the ‘freelancer’ an ‘employee’ in the common, daily practice sense. The principal
will not deduct any employed persons’ insurance scheme contribution. This opting-in ruling has to
be announced beforehand with the Tax Administration.
C. Payroll tax
If you have employees in your enterprise, you, as the employer, will have to deduct payroll tax at
the source and pay this to the Tax Administration. The payroll taxes are composed of the following
elements: wage tax, national insurance contributions, employed persons’ insurance scheme contri-
bution and income-dependent Care Insurance Act contribution.
The administration of the business – keeping records
Your enterprise is by law obliged to keep a good and proper administration. Besides, you have to
keep the records for a period of 7 years: all information recorded either on paper or electronically,
such as cashbook administration and receipts, sales and purchases ledgers, invoices received and
copies of invoices sent, bank statements, contracts, agreements and other such documents, soft-
ware and databases. Your administration must also show how much VAT you have to pay or have
paid to the Tax Administration. So, you also need to keep records of:
• invoices sent;
• invoices to pay;
• expenses connected with business activities;
• income;
• private use of goods and services.
Your invoices should be numbered in consecutive numbers. The invoices should state:
• date and number;
• name and address of the supplier or customer (and the VAT identi?cation number when trading
with another EU country);
• description of the goods delivered or service provided;
• prices exclusive of VAT;
• the VAT amounts, split into VAT rates.
32 33
An independent entrepreneur runs risks unknown to employees, like not having any income when
unable to work because of illness or accident. An employee’s income is guaranteed in case of
illness and disability. Besides, an entrepreneur may be held responsible for mistakes or damage
caused, or his business premises may get burglarized or damaged by ?re.
Before starting up an enterprise, you should evaluate the possible risks in your particular line of busi-
ness and insure these. An insurance consultant will be glad to provide more detailed information.
A. Personal insurances
Healthcare
Every resident of the Netherlands pays a nominal premium of approximately € 1,300 per year on a
basic health insurance. This premium is paid directly to the health insurance company of your choice.
Extra insurance is needed to cover various risks. Apart from the nominal premium to be paid to the
insurance company, the Tax Administration collects an income-dependent Insurance Act. If you are
a part-time entrepreneur and part-time employee, your salary as an employee will ?rstly be taxed in
accordance with the rules that apply to employees. This contribution is paid by the employer, after
which the income-related contribution you have earned as an entrepreneur is calculated.
If your income is below a certain standard, you will receive a ‘care allowance’ from the government,
which can be applied for at the Tax Administration.
Incapacity for work and invalidity
An independent entrepreneur is not covered by compulsory invalidity insurance in the context of
the Work and Income Act (the WIA ). He is not entitled to a bene?t if unable to work as a result of
illness or disability. A part-time entrepreneur combined with employment will be covered partially,
so, he will receive a pro rata bene?t.
To cover this ?nancial gap risk, an entrepreneur could take out invalidity insurance, either a private
invalidity insurance or a voluntary invalidity insurance.
Private invalidity insurance
First of all, before taking out private invalidity insurance, the allowance needed on an annual basis
should be determined, for which 80% of income is the rule of thumb. The amount can be changed
during the insurance term, or you could stipulate for payment to be increased by a certain percentage
8 Insurances
every year. It has to be decided when the insurance starts making payments and when payments
should end. You could choose to have the payments start within a couple of weeks after you have
fallen ill, but you may also have certain resources of your own that will keep you going for some time
without relying on your insurance right away. Any time between fourteen days and three years is
possible; the payments could end any time between your 50th and 65th birthday. The sooner the
insurance starts making payments, the higher the premium, of course. First of all: if and at what price
you qualify for an invalidity insurance depends among other things on the branch you work in, your
age and your health.
Voluntary invalidity insurance
If you meet the requirements posed by the Employee Insurance Agency (UWV) you could take out
voluntary invalidity insurance at the UWV to cover illness and invalidity. These insurances are similar
to the employee insurances for illness and disability, the Sickness Bene?ts Act (ZW) and the Works
and Income Act (WIA). The voluntary ZW insurance pays up to a maximum of 104 weeks (2 years); after
this period you can take out WIA insurance.
The (maximized!) payments under both insurances are based on the daily income you earn as an
independent entrepreneur. A voluntary insurance can only be taken out if you previously had a
compulsory insurance against the ?nancial consequences of illness - for at least one year, for example
34 35
as an employee. For taking out a voluntary insurance, you have to report to the UWV within 13 weeks
after the compulsory insurance has ended. After this the UWV will no longer be obliged to insure you.
Accident insurance
An accident insurance pays out a lump sum if you become partially or completely disabled as a
result of an accident.
Pension insurance and annuity policies
Every inhabitant of the Netherlands aged over 65 (in the nearby future the age of 65 will become
67) receives AOW, national old age pension. This is a basic pension, which may not be suf?cient to
live on. Therefore, be advised to build up a supplementary pension through a pension insurance
scheme. You could take out an annuity policy or another type of savings scheme.
Entrepreneurs and pregnancy
Female entrepreneurs are entitled to a pregnancy and maternity bene?t for a minimum of 16 weeks.
This is the Maternity Bene?t Scheme for the Self-employed (ZEZ) and the female entrepreneur is
entitled to the statutory minimum wages. Independent female entrepreneurs, who worked at least
1,225 hours in the year preceding their application for a ZEZ bene?t, will receive a full bene?t. For
entrepreneurs who worked fewer than 1,225 hours, the ZEZ bene?t will depend on their income
during the year preceding their application for the ZEZ bene?t. The bene?t is paid under the Work
and Care Act (Wazo) and administered by the UWV.
B. Professional insurances
Business and professional liability insurance
An entrepreneur runs speci?c risks when doing business. A client may hold you responsible for the
delivery of defective goods or for not having performed the services correctly. If actually liable for the
damage caused by defective goods and services, you will have to pay compensation. Liability for
damages is not restricted to purely material damages; you may also have to compensate for damage
caused to your client’s property while working for him. Or anyone working for you might claim loss of
income when he or she can no longer provide in its own income as a result of an accident happened
while working for you. Or you may be held responsible for environmental damage. ‘The polluter pays’,
has taken root in Dutch jurisdiction. It truly is expedient to take out a business or professional liability
insurance to cover all possible risks. The insurance company only pays out if you are insured at the
very moment the damage occurs; there is no way of insuring retroactively. The premium due depends
on the size of enterprise and the sector or industry.
Business liability insurance
Business liability insurance covers the damage occurred while running a business. If you, so to say
a building constructor, drop a brick on a parked car, you are responsible for the car’s damage. The
insurance will pay for the damage you caused. The insurance, however, does not cover all damages
you are responsible for. If the construction you have built turns out to be of bad quality and the
client claims compensation, you cannot recover this from your insurance company. Claims arising
from breach of contract will not be compensated by the insurance company either. These claims are
considered to be entrepreneurial risk. If you have to pay a ?ne because of late delivery, for example,
this will be for your own expense.
Professional liability insurance
If you are a professional – consultant, lawyer, civil-law notary, physiotherapist, etc. – your client
may suffer (immaterial) damages as a result of inaccurate acting or incorrect information on your
part. If you, being a consultant, should advise a client to undertake speci?c action, which has
adverse effects, your client may suffer considerable damages. If the client holds you responsible for
these damages and you are actually liable, your insurance will pay the compensation, because it is
a professional risk. The premium depends on your profession and the size of your enterprise. Some
36 37
professions insurance companies may not be eager to cover, because of the high risks at stake.
E.g. a ?aw in a software program could bring about enormous damage. In case of gross negligence
or intent on your part the insurance company is unlikely to pay.
Legal Expenses Insurance
Con?icts and disputes easily arise in business. This may lead to unexpected expenses, especially if
the dispute ends up in court. If you have a legal expenses insurance, your insurer will see to it that
you will be assisted by a lawyer. The expenses incurred will usually be paid or reimbursed by the
insurance company. Not all legal assistance is covered by legal expenses insurance; do check with
the insurer which type of disputes is included and which costs will not be reimbursed.
Insurance for goods, machinery and equipment; buildings insurance
At your own risk are all goods and products you have in store, all machinery, equipment, of?ce
inventory and computers at your premises. Things like a ?re breaking out or your business pre-
mises getting burglarized could bring about a considerable loss. Analyse the existing risks, take
out proper insurance and check the conditions of the insurance company carefully. Security or ?re
prevention measures, like sprinklers, are usually required.
If you are the owner of the building, you probably wish to insure the premises with a building
insurance that covers damages caused by, for example, ?re, lightning or explosions. Damage to
windows is not covered by a building insurance; you will have to take out separate glass insu-
rance. Not only the insurance company, but banks as well may pose certain conditions before
granting you a loan for investing in your business. If you have a bank loan to ?nance the business
premises or machinery, equipment, etc., the bank often stipulates that you take out buildings
insurance.
Loss of pro?ts insurance
This insurance will cover the losses you suffer as a result of temporarily having to shut down your
business, for example after a ?re.
Partner or associate insurance
This insurance will cover the risk you run if your business partner or associate can no longer work in
the business in case of, for example, illness.
Machinery breakdown insurance
This insurance will cover the repairs of machinery. Machinery breakdown as a result of wear and
tear or bad maintenance is not covered.
Computer insurance
This insurance covers any damage that may result from improper use, viruses or power cuts. Both
hardware and software are covered, which means that loss of data is covered as well.
Insurance for goods transport
During transportation goods may be damaged. You need a transport insurance if you are responsible
for the transportation of the goods until they arrive at their destination. If your business transports the
goods itself, insurance should also be taken out to cover the risks during transportation.
Credit insurance
Not all debtors will pay the invoices you send them; they may be involved in bankruptcy proceedings,
or suspension of payments has been granted. A debtor could also dispute an invoice and refuse to
pay. Credit insurance will pay the invoiced amount, but the insurance company will probably check
your accounts receivable portfolio before insuring you. The insurance company will not accept
invoices sent to clients with bad creditworthiness.
General Terms and Conditions
Applying General Terms and Conditions (GTC) to all the contracts with your clients or customers
makes clear to them what terms and conditions you apply for services, payments, purchase or sales
orders, etc. GTC may help to avoid awkward discussions or con?icts, because each party’s rights
and obligations are de?ned. Please realise that especially larger companies and organisations
usually apply their own GTC and may, therefore, be unwilling to accept yours.
The following terms and conditions are usually included in the GTC:
• offer – free of obligation or not, term for acceptance;
• transportation – responsibility for transportation costs, insurance and import duties;
• delivery term – de?nition of circumstances beyond a party’s control;
Make general terms and conditions known to your clients before
closing the deal. Be sure to have them ?t to your liability insurances.
38 39
• retention of title – when will the other party become the goods’ owner (e.g. after payment);
• guarantee – if a guarantee is provided, terms and conditions;
• dispute resolution – competent court or arbitration;
• liability – limitation of liability, total amount of damages to be paid.
Under Dutch law GTC may not be unreasonably onerous – i.e. you may not impose terms and
conditions that would not be fair on the other party. Just like your customers and clients will not be
allowed to apply unreasonably onerous terms and conditions to the contract you enter into with
them. If you apply GTC, make sure that your customer or client has been informed about your GTC
before closing the contract, because only then they will become valid. If your customer or client also
applies GTC, do negotiate whose GTC will apply to the contract involved. If you are in a position to
do so, be the ?rst to reject the applicability of the other party’s GTC!
Long-distance sales and purchases
If you are involved in the long-distance selling of products or services in the Netherlands (e.g.
selling via the Internet, via a web shop, by telephone, by fax or by post) you must comply with rules
such as the business’ obligation to provide information and the customer’s right to return what he
or she purchased. www.answersforbusiness.nl/regulation/long-distance-sales-and-purchases.
A considerable number of part-time and full-time entrepreneurs run their enterprises from their
home address. Others lease commercially exploited of?ce space, a shop or other premises where
they have their registered business. Whichever you choose, please bear a few things in mind.
Zoning plan
Do check the local zoning plan in which the municipality determines what the designated use of
premises or locations is. The designated use of most houses – including terraced houses and
semi-detached houses – is ‘residentially’. Strictly speaking, you cannot start a business at that
address. In practice, setting up an enterprise at an residential designated address is permitted
provided that:
• the type of business you run can be classi?ed as an of?ce;
• your clients do not visit the house;
• you do not cause any nuisance to your neighbours;
• only a small part of the house is used for business activities.
A shop, a hairdresser’s salon, beauty parlour or a mechanic’s workshop, are not very likely to be seen
as businesses which can be run at your home address.
If you rent business premises, you should also check with the municipality whether you are allowed to
run the intended business at those premises. In case you intend to run a café at those premises, the
zoning plan should list the designated use of this location as ‘catering industry’. If the zoning plan has
another designated use, you will not be allowed to open a café at that address. Requesting a change
in designated use may be a lengthy procedure.
Tax-deductibility of accommodation costs
The costs incurred for renting business premises are fully tax-deductible. If your enterprise is at your
home address, tax-deductibility of the costs is not always possible. The Tax Administration only allows
you to deduct costs if:
• the of?ce space is an independent part of the house, with its own entrance, for example;
• at least 70% of your income must be earned in the home of?ce space if you also have of?ce space
somewhere else.
Without a working space elsewhere, at least 30% of your income must be earned in the home of?ce.
9 Business premises
40 41
If you meet these conditions, a maximum of 4% of the value of the of?ce space and a pro rata part
of the costs of the of?ce space are tax-deductible. The Tax Administration will inform you on the
tax-deductibility of accommodation costs in your situation.
Professional accessibility
Renting or buying business premises only makes sense if you are a full-time entrepreneur. Running
a business at your home address will be a lot less expensive than renting business premises, but
do realise that a business run from your home may look less professional to your clients. It will be
ef?cient to have a business telephone number attached to your trade name, next to a private (family)
telephone number. Another way of smoothing the clients’ way to contact you is to engage a bureau
providing secretarial services. Answering your phone, taking messages or putting calls through will
then be taken over in your absence. For business meetings and appointments you might consider to
temporarily rent space at a business unit or park, instead of receiving at your home address.
Renting business premises
Depending on the type of business premises you rent, your rights and obligations may differ. Renting
a shop, you have more protection if the owner wants to terminate the contract than when renting
an of?ce. Renting an of?ce space in a large of?ce building where temporary of?ces can be rented is
different again.
Premises for retail and catering business
Retail businesses (e.g. shops) and catering businesses (e.g. cafés and restaurants) operate different-
ly. Retail and catering business are accessible to the public, whereas of?ces can usually only be visi-
ted upon invitation. The rules that apply to these business premises differ as well. The law concerning
premises for retail and catering business provides the entrepreneurs with a right to security of tenure,
i.e. protection against termination of the contract by the lessor. In commercial rental law the party
that rents the premises is referred to as the lessee and the owner of the premises or the party that is
entitled to let the premises is referred to as the lessor.
Business premises
Publicly accessible locations where goods or services are delivered directly to the public are referred
to as business premises.
In Dutch: ‘middenstandsbedrijfsruimte’. Examples are shops, cafés, restaurants, traditional enter-
prises such as greengrocers’, butchers’ and bakers’, garages, dry-cleaners’ and collection and delivery
services. The rental law that applies to renting business premises stipulates that the entrepreneur
who rents the premises will be entitled to security of tenure for an initial period of 5 + 5 years or a
initial period between 5 and 10 years. If you should not wish to take on long-term obligations, you
could opt for a short-term contract with a maximum of 2 years.
Termination
The lessor can only terminate a rental contract when he has good reasons to do so, and termination
can only take place if the statutory notice period and other statutory rules are observed. It would be
getting too far off the subject – start doing business – to confront you with all caveats. Summarizing:
mutual agreement and understanding are essential aspects in renting and letting premises and espe-
cially the termination of a contract should be handled precisely. In case of indistinctness or doubt, do
not hesitate to consult either your local Chamber of Commerce or a real estate professional or lawyer.
Other business premises
Premises used by entrepreneurs to run a business which cannot be classi?ed as retail and catering
business, ‘bedrijfsruimte’ (as described above), are referred to as other business premises, ‘overige
bedrijfsruimte’. For instance: factories, of?ces, banks, travel agencies, bicycle lock-ups, car rental
?rms, workshops not freely accessible to the public, casinos, law ?rm of?ces, advisor bureaus,
doctor’s surgeries, funeral undertakers; sports centers, gyms and garage boxes as well. If you rent
premises like these, the contract does not have to comply with any statutory rules on the term of the
42 43
lease. Lessor and lessee are free to enter into any form of contract they like. The rent to be paid cannot
be changed during the term of the contract, not even by requesting the court to permit this, but parties
can include a clause on interim rent review. If lessor and lessee have not agreed otherwise, the lease
is supposed to be for an inde?nite period of time.
Termination of the contract must take place by giving notice. If a notice period has not contractually
been agreed on, the notice period will be the same as the payment term for the rent. So, if the rent is
paid on a monthly basis, the notice period will be one month. If the rent is paid twice a year, the noti-
ce period is six months, unless parties have agreed on another notice term. When the lessor has given
notice of termination, the lessee does not have to vacate the premises immediately, but is given two
months to request the court to extend the vacation period (period after which he has to leave). The
court can extend this to one year maximum. After the ?rst request for suspending the vacation period,
the court can grant another two extensions, to maximum one year each. If a lessee fails to meet his
contractual obligations, e.g. if he does not pay the rent, the court may not grant any extensions.
Renting of?ce space in a large of?ce building
An alternative to renting of?ce premises or working from home is to rent of?ce space in an of?ce
building with of?ce units for small enterprises. The advantages are the relatively low rent and
?exible conditions.
Networking
When you run a small business you should try and avoid situations where you are no longer availa-
ble for particular clients because you work for one client exclusively for a period of time. Clients
and potential clients are likely to turn to larger, more ?exible ?rms and business opportunities run
to waste. Working together with other small businesses in similar circumstances could mean a way
out of this dilemma. Passing on or taking over contracts makes you more ?exible and you will never
have to sell ‘no’. Cooperation agreements with fellow self-employed entrepreneurs are well worth
considering. It goes without saying that you should inform your client about the partners with whom
you will be doing (his) business.
Examples
• 5 + 5-year contract. You rent the business premises for an initial 5-year period, to be
extended with a subsequent 5-year period. If you or the lessor does not give notice of ter-
mination before the expiry of the initial 5-year period, the contract will automatically be
extended for another 5-year period. If notice of termination is not given at the end of this
second 5-year term, the contract will automatically be renewed for an inde?nite period of
time. There are legal restrictions for the lessor to terminate the contract.
• Contract for a period of 5 - 10 years. If you rent the business premises for an initial period
of 5 to 10 years, notice of termination may be given, either by the lessor and the lessee,
taking effect by the end of each year, i.e. at the end of year 5, the end of year 6, etc. If
notice of termination is not given in any year, the contract will be automatically extended
by a number of years to the total period of 10 years. So, an initial contract of 7 years will
be extended by 3 years.
• Long-term contract. If you rent the business for an initial term of 10 years or more, the
5 + 5 term does not apply. If notice of termination is not given before the end of this
period, the rental contract will remain in force for an inde?nite period of time. Short-term
contracts. You can enter into a rental contract for a maximum of 2 years if unsure whether
your business will be successful at a speci?c location. The contract term rules do not
apply, neither does security of tenure. The contract automatically ends – no notice has to
be given – when the contractual term expires. But, if the contract is continued after the
initial 2-year period, it will be automatically extended to a total of 5 + 5-year period.
44 45
Building up a network is obviously important to every entrepreneur. Especially one-man business
entrepreneurs are eager to exchange information and share experiences. You could become a
member of a network organisation or an association of entrepreneurs. There are associations for
speci?c branches and special interest groups for young entrepreneurs, female entrepreneurs or
entrepreneurs with a non-Dutch background. The local shopkeepers’ association and an interest
group for business park enterprises are other examples. The Chamber of Commerce gladly provides
information on such organisations and associations in your area.
Legal aspects of doing business in the Netherlands
Bilingual edition, 2007 (English & Chinese)
This booklet aims to provide a basic understanding of Dutch business law to foreign entrepreneurs
and their legal service providers, who are about to start, or are engaged in business operations in the
Netherlands. Areas covered are the legal framework, regulatory and antitrust matters, tax aspects,
labour law, intellectual property, spatial planning and environmental issues and insolvency. Search at
www.loyensloeff.com news, publications for book title.
‘Doing business in the Netherlands’ is a practical guide providing relevant information to start
up a business in the Netherlands. It will help to decide upon the most optimal legal form for your
business; how to make smart use of the available subsidies; whether to lease or buy a business
property; whether to hire local personnel or bring your own staff from abroad. The guide also
provides useful insight into the Dutch tax system. Search for ’doing business in the Netherlands’ athttp://eng.mazars.nl/ or at a search machine.
Memorandum on the 30% tax ruling
An expatriate transferred to the Netherlands will become subject to Dutch income tax either as a
resident or non-resident taxpayer. Such transfers will often incur signi?cant additional costs (like
double housing costs, relocation costs, losses on the sale of assets, etc.) due to a temporary stay
outside the home country. Since it may be dif?cult for an expatriate to prove the deductibility of
said costs according to the Dutch tax law, the Dutch tax authorities have issued the 30% ruling
the latest revision of which is effective from January 1, 2001 (article 15 letter k Wage tax act 1964).
Search for memorandum tax ruling at www.horlings.nl.
Publications in English
46 47
Answers for business
Answers for Business is the starting point of the Dutch government for entrepreneurs. See at a glance
which rules, permits, taxes and subsidies apply when you do business in The Netherlands.
> www.answersforbusiness.nl/guides
Government.nl
Government.nl is the central access to all information about governmental organisations
in the Netherlands.
>http://government.nl
Dutch Immigration authorities
The IND (Immigratie- en Naturalisatiedienst) has the governmental task to carry out the
vimmigration policy.
>https://ind.nl/en/individuals/residence-wizard
Dutch Ministry of Foreign Affairs (BuZa)
The of?cial website of the Dutch Ministry of Foreign Affairs offers speci?c information for newcomers
in the section ‘coming to the Netherlands. It also offers a selection of expat websites.
> www.minbuza.nl/en/you-and-netherlands
Taxes
A brief outline of all taxes in the Netherlands is to be found at:
>http://english.min?n.nl en www.belastingdienst.nl, English, business
Insurances
The Ministry of Social Affairs and Employment has made available brochures in different languages
with information on working in the Netherlands, the minimum wage, and rights and obligations of
employees from EU countries.
>http://government.nl/ministries/szw
Dutch Central Bank
>Search at www.dnb.nl view Register of supervised/regulated Banks.
Dutch Bankers Association
> www.nvb.nl look at the English publications, general banking conditions, Association of Banks.
Chambers of Commerce
The Dutch Chambers of Commerce provide information on starting a business, legal forms,
registration in the trade register, international trade etc. We accumulate knowledge, contacts and
partnership. Partnership, making us the essential reference point for every ?rm doing or seeking to
do business.
Would you like to contact the Chamber of Commerce?
Find an of?ce nearby at www.kvk.nl/kantoren
Dutch government websites
KVK.NL
doc_343562445.pdf