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The Netherlands

Running a business in NL

The legal form of business

General partnership or Vennootschap Onder Firma (VOF).

A general partnership is a business structure with one or more partners. It is advisable to put down in writing what all business partners have agreed upon. Partners are classed as self-employed entrepreneurs and are liable for business (financial) obligations individually. Liability may also extend to spouses although a marriage contract can protect assets. Each partner will pay his or her own income tax on his or her profit share.

Limited partnership or Commanditaire Vennootschap (CV).

This is a business structure with one or more general partners and one or more limited partners. Limited partners tend to be financial investors (and do not need to register with the Chamber of Commerce) while general partners are active in the day-to-day operations and decisions of the business. The contract should arrange the distribution of profit between general and limited partners. General partners can be held fully liable if the partnership fails to meet its obligations. The 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.

Professional partnership or 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 rather than cooperation established for the purpose of doing business. Partners should write down their agreements with the other professionals in a partnership contract. Each partner pays income tax on his or her profit share.

Private company with limited liability or Besloten Vennootschap (BV).

A BV is classed as a legal entity, thereby limiting the risks to the owner(s), and must be registered with the Chamber of Commerce. The BV itself is seen as the entrepreneur, whereas the person who is appointed director merely acts on behalf of the BV and cannot be held personally liable for their acts. As of 2012, there is no minimum amount of start-up capital required to register a BV, but start-up costs usually range between €1,500 and €2,500 (excluding VAT) – naturally, set-up costs will vary depending on the structure and size of the business, so are not limited to €2,500.

One-man business, also known as a sole trader or eenmanszaak.

In a one-man business, there is one fully independent founder and owner, although the business may employ personnel. Business obligations apply to sole traders, and may also apply to spouses. No distinction is made between private and business property. Thus, business creditors can seek recovery from the owner’s private property and private creditors from the business property. A self-employed entrepreneur also covers the term freelancer or ZZP-er. Although the legal entity is the same as that of the one-man business, the term relates to those who are self-employed without staff.

More info: https://www.iamsterdam.com/en/business/setting-up/types-of-company

What steps must a company take to set up an existing/new business online?

The steps vary depending on the type of business, however, the steps to set up an online business typically include.

• Registering with the Business Register kept by the Chamber of Commerce and with the Tax Administration. On registration with the Business Register, the Chamber of Commerce passes on the relevant details to the Tax Administration, so a separate registration is not needed.
• Setting up the legal entity, if the business is to be in such a form (for example, a private company with limited liability (besloten vennootschap). Some forms of legal entities require a notarial deed.
• Registering a domain name by applying to a domain name registrar. The registrar submits a registration request on the company’s behalf to the organization that administers domain names (SIDN).
• Designing and building the website and contracting with a hosting company.
• Making sure the company’s website complies with all applicable legislation, such as information obligations obtaining the prior consent of the website user before placing cookies (if needed), and comply with geo-blocking restrictions pertaining to the accessibility of the website by customers that reside in another EU member state
• Drafting the terms of use and a privacy policy for the website.
• If the online business includes an online shop, the steps include:
  • drafting the general T&Cs;
  • making sure the online shop complies with the applicable online sales
  • regulations (mostly relating to B2C contracts);
  • arranging for secure payment options by contracting with a payment service provider (such as iDeal);
  • observing the rules on email advertising.

More info: https://uk.practicallaw.thomsonreuters.com/w-006-9683

Bank account, banking regulations

Foreigners with an international passport, EU passport, or any Dutch ID can open a bank account in the Netherlands. You also need a BSN to open a bank account.

More info: https://www.abnamro.nl/en/personal/payments/open-an-account/index.html

You can open up a non-resident or international account with some Dutch banks. … Most of the main Dutch banks, however, don’t allow overseas accounts to be opened online. This means that, if you can’t visit a bank branch in the Netherlands, you’ll need to visit a branch of the bank in your home country (if there is one).

Opening a bank account in the Netherlands is not a legal requirement, and it’s possible to live in the country and manage your finances from an overseas bank account. However, this can prove difficult as well as expensive, so it makes sense to open a Dutch bank account.

More info: https://www.expatica.com/nl/finance/banking/banking-in-the-netherlands-102753/

Tax rules: Corporation tax

Business owners in the Netherlands must pay taxes in the Netherlands, which can include taxes on income, turnover and profit, municipal taxes, and environmental taxes. If you own an international business, you may also have to pay import levies. Contact the Dutch Tax and Customs Administration (Belastingdienst) for detailed information on Dutch taxes and tax matters.

Numerous tax schemes are available to business owners in the Netherlands, but everyone still needs to pay tax. For example, anyone in business has to file annual tax returns – either income tax (inkomstenbelasting) or corporation tax (vennootschapsbelasting).

Your business will be automatically registered with the Tax and Customs Administration when you register with the Netherlands Chamber of Commerce (KVK) in the Commercial Register (Handelsregister). It’s a mandatory requirement to register your company if it has any form of a permanent establishment in the Netherlands. If you represent a foreign company that is not listed in the Dutch Commercial Register, i.e. does not have a permanent establishment, and you perform services on its behalf in the Netherlands, you’ll have to register with the Tax and Customs Administration yourself. You’ll find the foreign registration form on the Tax and Customs Administration website.

Most common taxes

Below we’ve listed the most common taxes you’ll have to deal with in the Netherlands.

BTW: Turnover Tax / Value Added Tax (VAT).

Value added tax or VAT (BTW) is a form of turnover tax (omzetbelasting) that you add to most – but not all – goods and services your business sells in the Netherlands (0%, 9%, or 21%). You can usually reclaim the VAT that your business pays on the goods and services it purchases. Turnover tax returns can be filed either monthly, quarterly, or annually. Read how to file your VAT return.

If your business is established outside the Netherlands, but trades in the Netherlands, you’ll still have to deal with Dutch VAT rules. The rules that apply to businesses outside the Netherlands differ from the rules applicable to businesses in the Netherlands.

Income Tax.

If you are a sole trader or a partner in a commercial partnership (Vennootschap onder Firma, vof), and the Tax and Customs Administration considers you to be in business (read more about that in the article Are you an entrepreneur?), you’ll have to pay income tax (inkomstenbelasting) on your business profits. The Tax and Customs Administration applies various criteria to determine your exact status, e.g. anticipated profitability, business practices, autonomy, personal risk, etc. Read more about filing your income tax return.

Corporation Tax.

If you own a private limited company or public limited company (besloten vennootschap, BV / naamloze vennootschap, NV), you’ll have to file corporate income tax returns on behalf of your company (vennootschapsbelasting). Foundations, charities and associations only have to file corporation tax returns in specific situations. You may be exempt, depending on your profit levels. Read more about filing your corporate tax return.

Dutch Dividend Tax

As a private or public limited company (besloten vennootschap, BV / naamloze vennootschap, NV) you may decide to distribute profits to your shareholders. This usually takes the form of a dividend. If so, you’ll also have to pay Dutch dividend tax (dividendbelasting).

Tax advice for foreign businesses.

If you already own a business outside the Netherlands and are planning to open a branch in the Netherlands, get in touch with the Netherlands Foreign Investment Agency (NFIA). The NFIA has brochures about the Dutch tax system and has offices located around the world where you can talk to an advisor in person.

More info: https://business.gov.nl/coming-to-the-netherlands/living-in-the-netherlands/paying-taxes-in-the-netherlands/

VAT registration thresholds

For foreign businesses trading in the Netherlands that are VAT/GST/Tax registered in their home state, the VAT registration threshold is nil.

For EU VAT registered companies selling goods over the internet to consumers in the Netherlands, the VAT registration threshold (distance selling) is €100,000 per annum.

More info: https://www.avalara.com/vatlive/en/country-guides/europe/netherlands/dutch-vat-registration.html

Customer preferences

Willing to buy from foreign sellers

Although the Dutch love to shop online, they tend to choose for local online retailers instead of shopping cross-border. Almost a third of Dutch consumers buy online sometimes in other EU countries, while the majority only shops at Dutch retailers. This could have something to do with the fact the number of Dutch online stores has increased drastically: from about 15 thousand in 2010 to over 32 thousand last year.

A similar trend can be seen in the rest of the EU, although Luxembourg is the absolute exception: almost 90 percent of online shoppers in this country buy their goods and services in other countries. Only 28 percent of Luxembourgers shop at local online stores.

More info: https://ecommercenews.eu/71-dutch-shop-online-prefer-local-retailers/

Most popular countries for import of goods

If Dutch people decide to shop online, they rather choose products from EU countries, especially Belgium, UK, Germany.

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