Starting a Business in the Netherlands
Embarking on the journey of starting a business in a new country, especially one with unfamiliar rules and language, can be both thrilling and daunting. Employor, your international tax specialist in Amsterdam, has been assisting professionals, entrepreneurs, and expats for over 25 years in achieving their financial goals.
In this guide, we unravel the essential aspects of initiating a business in the Netherlands - answering the most frequently asked questions we have received about the topic by offering insights into registration processes, tax implications, and sharing valuable tips for a smooth transition.
Starting a Business Netherlands: Where to Begin?
Starting a business in the Netherlands is an exciting venture, but it requires a clear understanding of the legal structures available. There are various options, such as sole proprietorship, partnerships, limited partnerships, and legal entities with limited liability (B.V.). Each structure has its pros and cons.
A summary of the different type of businesses in the Netherlands is elaborately explained on the website of the Dutch government. However, choosing what business to register in the Netherlands can be challenging to figure out yourself, since there are many factors to consider. Our experts can provide tailored advice to ensure you choose the most suitable option for your unique situation.
Registering a Business in the Netherlands
Once you've decided on a business structure, the next step is registration. When registering your business with the Chamber of Commerce (KvK) in the Netherlands, a crucial step for international companies, you receive a registration number, initiating the process. Typically, the Chamber of Commerce informs the tax office, leading to the allocation of a VAT number. Alternatively, you can directly request a VAT number from the tax office.
Upon registering a business in the Netherlands, the tax office automatically registers your business, providing a confirmation with login credentials for their secure portal. This portal facilitates VAT return submissions. Broadstreet's specialists, adept in handling tax filings, can streamline this process for you, offering assistance and answering queries related to business registration in the Netherlands.
The Benefits of Starting a Business in the Netherlands
There is a reason why companies like Wieden + Kennedy, Philips, Unilever, and ING group are registered in the Netherlands; the Netherlands offers a conducive environment for international businesses. Although this list is not extensive, here are some key benefits of starting a business in the Netherlands - both tax-related and general.
The Netherlands offers a conducive environment for international businesses. Broadstreet emphasizes the benefits, including strategic geographic location, a highly educated workforce, advanced infrastructure, and a favorable business climate. These factors make the Netherlands an attractive destination for businesses aiming to establish a global presence. Our team can provide further insights and assistance in leveraging these advantages for your business growth
Tax in the Netherlands
Embarking on a business venture in the Netherlands introduces entrepreneurs to the intricacies of the Dutch Value Added Tax (VAT), or BTW in Dutch. As a fundamental part of starting a business, VAT registration is imperative for those supplying goods or services within the country. Aligned with EU directives, the Netherlands' VAT system, a universal consumer tax, is applicable to all goods and services. The VAT rates, ranging from 0% to 21%, encompass various categories, including international public transportation, exports, and services such as bike repairs and hairdressing.
Taking that a step further, understanding VAT exemptions and transfer regulations is crucial for businesses providing consultancy and advisory services beyond Dutch borders. Notably, if serving clients within the EU/EER, the VAT obligation can be transferred, contingent upon the client having a VAT number. Compliant invoicing with a clear declaration of "VAT transferred to the customer" facilitates these transactions. Quarterly VAT returns, due with set deadlines, require meticulous attention, as failure incurs penalties.
Payroll and Tax in the Netherlands
In tandem with VAT considerations, payroll becomes a pivotal aspect, especially for international businesses seeking to establish themselves in the Netherlands. Payroll, in the context of business operations, refers to the compensation a company disburses to its employees within a specified period. In the Netherlands, managing payroll involves tracking hours worked, calculating pay, and distributing payments through methods like direct deposit or checks. The intricacies of payroll, influenced by variables like overtime and sick pay, underscore the importance of accurate and efficient payroll management for businesses, impacting both financial stability and tax liabilities.
Navigating payroll and tax considerations in the Netherlands can be challenging but it is crucial for the success of your business in the Netherlands. Among others, incorporating payroll tax is complicated by the variety of tax rates that are applicable to employees, that are based on their salary. Furthermore, wage tax credit (‘loonheffingskorting’) is something to consider. Wage tax credit reduces their tax burden. They can request this credit from their employer, which results in higher take-home pay for them. However, if they have multiple jobs, we advise them to apply for this credit with only one employer to prevent overpayment, as this could lead to owed taxes later on.
We offer tailored solutions to expats and globally operating companies, providing expertise in tax, accounting, and financial support. When setting up in the Netherlands and lacking the necessary legal structure for payroll administration as well as in-depth knowledge about tax in the Netherlands, we are happy to help, as a recognised sponsor with the Dutch immigration office.
Tips for International Companies Starting a Business in the Netherlands
Over the years, we have collected quite some knowledge about the topic in question, resulting in a long list of tips for starting a business in the Netherlands. Most of them are personalised, as we strongly believe every business is unique and requires a tailor-made advice and approach. However, as a starting point, here are a few of our best tips for starting your business in the Netherlands.
- Choose the right legal structure. As briefly outlined, there are different legal structures, of which the decision depends on expected turnover, type of activities, and risks, among others. Make sure you know you are choosing the legal structure that fits your business in the Netherlands best.
- Keep updated on bookkeeping principles. While in general the expenses you incur for your business activities can be offset against your turnover, the rules and details frequently change. For example, in 2024, new rules were introduced with regard to climate policies and (income) tax box 3. Make sure to stay up to date on all the changes that might affect your Dutch company.
- Leverage tax advantages available to entrepreneurs. Are you taking advantage of deductions such as investment deductions, deductions on minimum time spent, self-employment deductions, retirement reservation, or small companies discounts? The tax advantages are one of the biggest benefit of starting a business in the Netherlands. Be aware of all the legal tax advantages that are available when you are running or starting your business in the Netherlands.
- When in doubt, partner up with an expert. Navigating through the Dutch tax rules can be daunting, especially if you are not from here and do not speak the language. We are your partner in making informed decisions, providing comprehensive support to ensure your business thrives in the Dutch market.
Considering Starting a Business in the Netherlands?
If you are considering starting your business in the Netherlands, we hope this article has provided you with a starting point. We would love to help you further. Our extensive experience and commitment to assisting international businesses position us as your trusted partner in navigating the complexities of starting and running a business in the Netherlands. Contact us for personalized advice and seamless assistance throughout your entrepreneurial journey in the Dutch business landscape.
