Profitable business in the Netherlands

Do you want to start a business in the Netherlands as a foreigner?  here is a complete guide as well as the legal requirements for starting a profitable business in the Netherlands.

Well, by providing an in-depth analysis of the Top 50 Opportunities for Small Businesses in the Netherlands and a range of sample business plan templates from the industry; Now we will analyze in detail the legal requirements, the feasibility of the market and everything you need to start a business in the Netherlands. So put on your entrepreneur hat and let’s move on.

A recent report released by the World Bank and the International Monetary Fund shows that the Netherlands was the 18th largest economy in the world in 2012, while the country has a population of around 17 million. Its per capita GDP is around $ 48,860, making it one of the richest nations in the world. Between 2096 and 2000, annual economic growth (GDP) averaged over 4%, well above the European average.

Why start a business in the Netherlands?

When it comes to the ease of doing business, you can rest assured that you are in good hands, with the Netherlands ranking 28th out of 200 countries in the World Ease of Doing Business Survey 2021, which is in line with the ranking of the previous year. p72>

Essentially, the Amsterdam Chamber of Commerce provides interested entrepreneurs who want to start a business in the country with access to start-up resources including seminars and business events in marketing, finance, and administration.

If you are looking to start your business in the Netherlands, it is important to note that regardless of the city in which you decide to register a business, the registration of the company is relatively the same in all countries. a country. In most parts of the Netherlands, the local branch of the Chamber of Commerce is always ready to offer professional help and advice to foreigners who want to start a business there.

Here are some steps to follow if you are planning to start a business in the Netherlands;

Building a Profitable Business in the Netherlands as a Complete Guide for Foreigners

Step one: check if you are eligible to start your business in the Netherlands

What is the point of traveling from your country to the Netherlands in order to start a business only to understand that you are not allowed to set up a business in the country or that you are not allowed to set up a business in the sector that interests you. This is why it is important to verify your eligibility before going ahead.

If you are unsure of your right to set up a business in the Netherlands, you should read the information below;

EU / EEA / Swiss citizens who want to start a business in the Netherlands enjoy the same benefits as Dutch citizens as they do not need to obtain a residence permit (MVV) or work permit ( TWV) whatever their activity.

This includes citizens of Belgium, Bulgaria, Cyprus, Denmark, Germany, Estonia, Finland, France, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Norway, Malta, Austria, Poland, Portugal, Romania , Slovenia, Slovakia, Spain, Czech Republic, United Kingdom and Sweden.

Under certain circumstances, Swiss citizens are classified as EU / EEA citizens when their employers are exempt from the need for a separate work permit in Holland, but new EU members still need to obtain a work permit Dutch, which is currently applicable to Bulgarian and Romanian citizens.

A personal registration number (BSN number) is usually issued to citizens of the EU / EEA / Switzerland after registration with the local municipality. Your BSN acts as a social security and tax number.

For non-EU / EEA / Swiss nationals or third country nationals who wish to set up a new business in the Netherlands, they will need to follow Dutch immigration procedures and obtain a residence permit (MVV) or work permit (TWV).

If you want to apply for a residence permit as an independent entrepreneur, you will need to prove that your business meets the requirements of a Substantial Dutch Interest and earns a certain number of points in a points-based application. Please note that investors including entrepreneurs from the United States of America and Japan are exempt from the points system through certain agreements and may follow a less strict process.

Step two: choose a niche for your business and a name for your business

Once you have proved your right to start a business in the Netherlands, the next step is to choose a niche for the business and a name for your business. The truth is that when it comes to choosing a name for your business, you have to be creative because whatever name you choose for your business will go a long way in creating a perception of what it is. company.

Before choosing a name for your business, you don’t need to go online and find the names of the major brands in the industry that you are going to be starting a business in in order to get proper advice.

In order to get the right solution, you can contact the Benelux Office for Intellectual Property (BOIP or Benelux-Merckenbureau) to verify that your company name and even your trademark are correct if you plan to register it.

Step three: write a feasible business plan

Part of the requirements for registering a business in the Netherlands is the preparation of a comprehensive business plan document. The truth is that in order to run a successful business you must have a good, workable business plan.

So, if you want to start your own business in the Netherlands, you need to write a detailed business plan that can pass a reality check when submitted; you should be working with facts, figures, and other industry metrics in regards to where you are going to start your business.

The whole idea of ​​writing a business plan isn’t just about having a business. the document is in place; but a detailed guide on how to effectively run your business. Your business plan should describe the strategies by which you plan to run your business.

The rule of thumb when writing a business plan is to try as realistic as possible and never overdo it when calculating income. and profit, etc. In fact, when writing a business plan, it is safer to underestimate so as not to get discouraged when the reality presents itself.

Step 4: choose a business structure (corporate legal form)) for your business

The industry you want to work in, and of course the size of the business you want to start, are key ingredients that should help you choose the business structure you want. build your business. In the Netherlands there are different legal rules and forms for different business structures. If you are self-employed, you are considered a sole proprietorship or a sole proprietorship, and a limited liability company or BV is considered a standard enterprise.

In the Netherlands, unincorporated business structures and merged business structures are the two most common legal forms (speech). Unincorporated businesses are called “rechtvormen zonder rechtspersoonlijkheid” (legal forms without registration), which means that you are responsible for your business income and potential debts.

In other words, there is no distinction between your private assets and your business assets. With registered companies or “rechtvormen met rechtspersoonlijkheid” (legal forms with registration) you have separate accounts and debt protection for your business.

Here are the different types of unincorporated businesses in the Netherlands

  • Sole proprietorship / private enterprise (Eenmanszaak or ZZP)
  • Limited liability company (Sponsor vennootschap or CV)
  • Full partnership (Vennootschap onder firma or VOF)
  • Commercial / professional partnership (Maatschap).

Here are the different types of companies registered in the Netherlands:

  • Limited liability company: ltd. and Inc. (Besloten vennootschap or BV)
  • Public limited company: plc. and company (Naamloze vennootschap or NV)
  • Cooperative and mutual insurance company (Coöperatie en onderlinge waarborgmaatschappij)
  • Foundation (Stichting)
  • Association (Vereniging).

Please note that in the Netherlands there are clear differences between legal requirements and corporate structures. For example, a sole proprietorship or “freelance” and “ZZP” (zelfstandige zonder personeel or independent without staff) can be created without a notarial act (although the registration of the company is still compulsory), while a larger company (BV or NV) requires a notarial deed of registration.

NV require a minimum start-up capital of € 45,000. BV and NV must have shareholders, and the capital requirement for BV was lifted in 2012, although start-up costs are estimated to be between € 1,500 and € 2,500 and above, depending on the structure of the company.

Fifth step: register your business with the Chamber of Commerce (Kamer van Koophandel or KvK)

Once you have accepted a business structure, the next step is to register your business with the Chamber of Commerce (Kamer van Koophandel or KvK).

It is assumed that you meet the basic requirements and need to pay € 50 to register, provide valid ID (residence permit, Dutch driver’s license or passport), company name and map complete business, and proof of ownership of the business you wish to do.

To successfully register your business, you will also need to provide:

  • recent bank statement (no more than 30 days)
  • For home offices – proof of your home address
  • Rental contract (or official letter of intent) when renting a room.

Please note that when your registration is approved, you will receive a unique business registration number which you can use on all your outgoing business documents, invoices and mail, etc.

Step six: register your business with the Dutch Immigration Office (Immigratie en Naturalisatiedienst or IND)

Once you have successfully registered your business with the Chamber of Commerce (Kamer van Koophandel or KvK) and are a citizen of an EU / EEA country, you need to register with the Dutch Office of immigration (Immigratie en Naturalisatiedienst or IND).

They can issue you special “Burger van de Unie” stamps on your passport if and when certain conditions for paid work are met. To verify the requirements, you can contact the IND for more information.

Step Seven: Register your business with various Dutch tax authorities

Once your business should be successfully registered with the Chamber of Commerce, by default your business details will be transferred to the Dutch tax office (Belastingdienst). Your business will receive a VAT registration number (BTW number).

As a business owner in the Netherlands, you will have to pay taxes to both the government and the municipality. You are expected to pay various taxes, such as payroll tax (loonbelasting), income tax (inkomstenbelasting), national insurance premiums (volksverzekeringen), employee insurance premiums (werknemersverzekeringen) and VAT (omzetbelasting).

Dutch corporation tax has to be paid by sole proprietorships (ZZP) as well as by businesses. According to the Ministry of Finance, “individuals (eg the self-employed) pay taxes on their profits through their income tax returns”.

Please note that if you are an independent contractor in the Netherlands, you are responsible for registering your business with the Dutch tax office (Belastingdienst) and then filing your own tax returns. Of course, corporate taxes in the Netherlands can seem daunting for the self-employed, but in a nutshell, Value Added Tax (BTW) returns, also known as sales tax, must be filed quarterly and income tax must be filed annually.

As a new business in the Netherlands you are required to file VAT returns, you must obtain your VAT number from the Dutch tax office; Unincorporated businesses / ZZP can obtain their VAT number when registering their Dutch business with the KVK. Currently the standard VAT rate in the Netherlands is 21%, which means you have to charge an additional 21% on each invoice sent to customers.

In order to ensure that VAT is paid on time, Dutch law requires that you send an invoice no later than the 15th of the month following the month in which you made the purchase of the product or service for the customer. VAT refunds are submitted electronically, no later than one month after the last day of each quarter, and any additional VAT arrears must be paid at the same time.

After registering with KVK, self-employed workers will receive an email with a username and password that will take you to the tax website where you can view the status of your tax return or file a digital tax return.

If you are an independent entrepreneur in the Netherlands, you must pay annual income tax and file an income tax return declaring all taxable income for the year. Taxable income includes your business profits (income minus deductible expenses such as equipment, travel and supplies), wages and salaries from employment contracts, and freelance work as a side activity.

Since the tax is compulsory for all business owners, the Netherlands grants private entrepreneurs a number of additional tax deductions known as the “entrepreneur deduction” (ondernemersaftrek), as well as general tax relief and a tax. on the work. the loans.

Retention of entrepreneurs allows the following tax advantages:

  • General deduction benefit for self-employment (zelfstandigenaftrek)
  • Research and Development (Aftrek) Speur- Ontwikkelingswerk)
  • retention of a cooperation partner (meewerkaftrek)
  • initial deduction in the event of incapacity for work (start aftrek bij arbeidsongeschiktheid)
  • liquidation retention (stakesaftrek).

Step eight: set up your commercial / administrative structure

Part of the process of starting a business in the Netherlands includes setting up your business structure (business administration procedures). Even if you come in as a one-person businessman, you are required by law to keep on top of all aspects of running your business, including invoices, bank statements, contracts, and business expenses, as required by the Dutch tax authorities.

Invoices require a specific format and must contain specific information. Online accounting software can help you do this in person and also help a Dutch chartered accountant with administrative and tax needs.

In the Netherlands, a legal invoice, called an invoice, must include:

  • Invoice date and unique sequence number
  • Delivery date, service or date payment was made (if different from invoice date)
  • the name and address of your client
  • your company number indicated in KvK
  • your VAT number (by the way, number) and the amount of tax to be paid
  • Where applicable, the nature and quantity of the goods or services (excluding VAT).

You must also comply with the Dutch procedure for processing personal data. In addition, the processing and storage of personal data is governed by the General Data Protection Regulation (GDPR) (Algemene Verordening Gegevensbescherming, AVG).

Please note that before you even officially start your business in the Netherlands and often incur costs, make sure you set up your business accounts in a well-structured way. This will help you, because in the Netherlands, the law requires every business owner to keep accounts and keep them for seven years.

Step Nine: Sort Your Insurance Policies Check If You Need Insurance

As a business owner in the Netherlands, if you live in the Netherlands or earn money here, it is compulsory to take out health insurance and pay contributions to the Dutch national insurance fund . As an independent contractor, you are not covered by any of the company’s insurance plans, so you are responsible for insuring us.

In addition, there are several ways to insure your business assets for civil liability or any other risk that you cannot afford to cover.

You will need different types of personal and professional insurance: Dutch health insurance, corporate liability, pension and unemployment insurance. ZZP Nederland provides information for freelancers in the Netherlands as well as discounted ZZP insurance products, although there are many providers depending on your needs.

Step 10: Choose a location for your business / business

If you are done with most of the administrative issues, you are ready to start your business and you cannot work without choosing a location to open your office or factory. Depending on the nature of the business you want to do, Amsterdam, which is the capital of the Netherlands and certainly the largest city, offers many options when it comes to office space, from modern collaboration spaces to business centers. launch at the central sales area. to fully equipped corporate facilities.

If you are new to the city of Amsterdam, you can contact a real estate agent to help you choose a location for your office, or you can view commercial property listings for businesses online. be sure to consult the city zoning plan, as your choice of business location should match the municipal zoning plan.

It is also expected that you will take into account the environmental regulations associated with the location where you plan to open an office. The truth is, if your business activity has an impact on the environment, you must file an environmental management notice with your local municipality.

Finally, you should consider the fire safety requirements for your commercial space. If you are in business, you must take fire safety measures. In most cases, you must submit a notice of settlement to your local municipality. If your business has a higher fire risk, you should also apply for an all-in-one physical permit (Omgevingsvergunning).

Please note that after leasing your business, you want to make changes or renovate your business premises, you will need to apply for and obtain an all-in-one physical permit (Omgevingsvergunning). You can obtain this permit from your local municipality.

Step 12: Open your doors and start welcoming customers

If you’ve passed the first step up to ten, you’ve really come a long way and it shows that you are really up for business. You cannot generate sales from your products or services if you do not open your doors for business. Basically, the last step when starting a business in the Netherlands is to make sure that you open your doors for business.

In conclusion, it is important to note that this article only covers the main stages of starting a business in the Netherlands and other legal issues, as well as financial accounting requirements such as setting up accounting procedures, acceptable software applications, money laundering issues, obtaining necessary business or commercial licenses and notification. regional authorities which are not covered, but also important procedures when setting up a business in the Netherlands.

We will advise you to contact lawyers or business consultants to guide you through the process of starting a business in the Netherlands.

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