A Complete Guide to Open a Company in the Netherlands
Starting a business in the Netherlands can be rewarding, especially considering its strategic location in Europe and highly competitive business environment. With over 200,000 new companies registered yearly, the Netherlands is known for its low tax rates and strong infrastructure. The Dutch economy has grown consistently, and the country offers entrepreneurs various opportunities, particularly in high-tech, logistics, and agriculture industries. Whether you want to establish a small startup or a large enterprise, the Netherlands provides a business-friendly ecosystem. In this blog post, we will learn how to open a company in the Netherlands, covering everything from legal structures to tax registration.
Why the Netherlands?
The Netherlands is one of the most attractive places to open a business in Europe, and many foreign entrepreneurs are drawn to the country due to its strong business climate. The country offers several advantages that make it an ideal destination for setting up a company:
Business-friendly environment
The Netherlands consistently ranks high on global business indices thanks to its efficient legal framework, low corruption, and stable economy. The Dutch government encourages entrepreneurship and offers various tax benefits, particularly for small and medium-sized enterprises (SMEs).
Strategic location
Located in the heart of Europe, the Netherlands provides easy access to over 500 million consumers in the European Union. Its world-class logistics infrastructure, including the Port of Rotterdam (the largest in Europe), makes it a central hub for international trade.
Skilled workforce
The Netherlands has a highly educated and multilingual workforce. Nearly everyone speaks fluent English, making it easy for foreign entrepreneurs to communicate and integrate into the market.
Innovative and tech-savvy economy
The Dutch economy is characterised by high levels of innovation, particularly in sectors like technology, renewable energy, and life sciences. This provides a dynamic environment for new businesses.
Types of Business Entities in the Netherlands
When opening a business in the Netherlands, the first decision you must make is the type of legal entity that best suits your business needs. The structure choice will affect your legal responsibilities, tax obligations, and liability. Here are the most common options:
Sole proprietorship (Eenmanszaak)
A sole proprietorship is the most straightforward business structure in the Netherlands. It is ideal for freelancers and small businesses that operate with minimal overhead. This structure requires no initial capital, and the owner has complete control over the company.
- Pros: Simple to set up, no minimum capital required, and the owner has complete control.
- Cons: The owner is personally liable for any debts or legal issues.
Private limited company (BV)
The private limited company (Besloten Vennootschap, or BV) is the most common legal structure for Netherlands small-to-medium-sized businesses. It provides limited liability for its shareholders, protecting their assets in the event of bankruptcy or lawsuits.
- Pros: Limited liability, tax advantages, and more credibility with investors and clients.
- Cons: Requires a minimum share capital of €1, with higher setup and maintenance costs than a sole proprietorship.
Public limited company (NV)
The NV is suitable for large businesses that want to raise capital from the public by issuing shares. This structure has strict regulatory requirements and is ideal for companies with significant funding needs.
- Pros: Ability to raise capital through public share offerings.
- Cons: High capital requirements (€45,000 minimum) and a more complex regulatory environment.
Partnerships (VOF and Maatschap)
A partnership (Vennootschap Onder Firma, or VOF) is another option for businesses where two or more individuals share responsibility. In a VOF, all partners are personally liable for the business’s debts.
- Pros: Simple structure, shared responsibility, and flexibility.
- Cons: Partners are personally liable for the business’s obligations.
A Maatschap is a professional partnership used mainly by independent professionals (e.g., lawyers, doctors, or consultants).
Branch office
Foreign companies wishing to expand into the Netherlands can establish a branch office. A branch is not a separate legal entity but operates under the parent company’s legal structure. The branch will be liable for any debts and legal matters.
- Pros: Easier to establish than a new company, and direct link to the parent company.
- Cons: Limited autonomy and the parent company is responsible for the branch’s obligations.
Visa and Residency Requirements
For entrepreneurs planning to establish a business in the Netherlands, visa and residency requirements depend on whether you are an EU/EFTA citizen or a non-EU citizen.
For EU/EFTA citizens
EU and EFTA citizens do not need a special visa to live and work in the Netherlands. They can simply register with the Dutch authorities, obtain a Citizen Service Number (BSN), and start their business.
For Non-EU citizens
Non-EU citizens must obtain the appropriate residence permits before starting a business in the Netherlands. There are several options:
Startup visa
This visa is designed for entrepreneurs who wish to start an innovative business in the Netherlands. Applicants must have a viable business plan and be supported by a recognised Dutch facilitator (such as a mentor or business accelerator).
Self-employed entrepreneur visa
Non-EU citizens who wish to start a business without external funding can apply for this visa. They must prove that their business will contribute to the Dutch economy.
Both visa options allow entrepreneurs to live and work in the Netherlands while developing their business.
Choosing and Registering Your Business Name
Choosing a business name is important in opening a company in the Netherlands. The name should be unique and reflective of your business while following legal requirements:
- Before finalising your business name, check with the Dutch Chamber of Commerce (KvK) to ensure it’s available and not already used by another company.
- The name must not be misleading, reflect the type of business, and comply with Dutch regulations.
Once you’ve selected a name, you can begin the registration process.
Registering with the Dutch Chamber of Commerce (KvK)
Registering with the Dutch Chamber of Commerce (KvK) is crucial in establishing a business in the Netherlands. It provides your company with official recognition and ensures compliance with Dutch regulations. The registration process is designed to be accessible but requires thorough preparation to avoid delays. Here’s a detailed look at how to complete the process:
Preparing for registration
Before initiating the registration process, you must gather the necessary documents and information. This includes your business details, identification documents, and proof of your business address in the Netherlands. If you are a non-EU citizen, ensure you have any required residence permits or visas, which will be checked during registration.
Completing the registration form
The registration form is the foundation of your application. It requires comprehensive details about your business, including the chosen legal structure, trade name, and address. Additionally, you’ll need to outline your business activities and expected turnover. The process is relatively simple for sole proprietorships, but businesses like BVs or NVs may require more detailed information, including shareholder details and initial capital.
Submitting a business plan (if applicable)
Submitting a detailed business plan is mandatory for those applying under specific visa schemes like the startup visa. Your plan should clearly define your business idea, market strategy, and financial forecasts. Highlight how your business will contribute to the Dutch economy or the industry you are entering. While this step is not required for all business types, a robust business plan can also help secure financing or partnerships.
Paying the registration fee
Registering your business with the KvK involves a one-time fee, typically ranging from €50 to €100, depending on the type of business and services required. This fee covers administrative costs and includes your registration in the Dutch business register. Payment is usually made during the registration appointment, either online or at the KvK office.
Receiving your KvK number
Once your registration is approved, you will be assigned a unique KvK number. This number serves as your business identification within the Netherlands and is used for all official and legal purposes, including invoicing and correspondence with Dutch authorities.
VAT registration
If your business is subject to VAT (Value Added Tax), your details will automatically be forwarded to the Dutch Tax and Customs Administration. They will issue a VAT identification number required for invoicing and tax filings. Ensure you understand your business’s VAT obligations and register for quarterly returns.
Benefits of KvK registration
Registering with the KvK legitimises your business and provides access to essential resources. You’ll gain entry into the Dutch business directory, which can enhance your credibility and visibility. Additionally, the KvK offers support services, including workshops and advice, to help new entrepreneurs navigate the Dutch market.
Setting Up a Business Bank Account
Setting up a business bank account in the Netherlands is essential to streamlining your company’s financial operations. It is a legal requirement for specific business structures like BVs and NVs and crucial for managing your business finances efficiently. Here’s a detailed guide to help you navigate this process:
Importance of a business bank account
A business bank account separates your personal and business finances, which is critical for maintaining clear records and complying with tax regulations. It also enhances your business’s credibility, making it easier to manage transactions, pay suppliers, and receive customer payments. Additionally, most Dutch banks offer online banking and accounting integration, simplifying financial management.
Required Documentation
To open a business bank account, you must provide the following documents:
- KvK registration number
- Proof of identity
- Business address
- Shareholder details (if applicable)
Prepare these documents in advance to avoid delays in the application process.
Choosing the right bank
The Netherlands has several reputable banks offering business accounts, including ABN AMRO, ING, and Rabobank. When selecting a bank, consider the following factors:
- Account features
- Fees
- Branch accessibility
- Support for foreign entrepreneurs
Each bank has unique advantages, so aligning its offerings with your business needs is essential.
Banking for international transactions
You may need banking services tailored for global operations if your business involves international trade or clients. Key considerations include:
- Favourable exchange rates
- Low transaction fees
- Multi-currency accounts
Alternatively, services like Wise or Revolut may be beneficial for handling international payments at reduced costs.
Online application and appointments
Most Dutch banks allow you to start the account opening process online by filling out a preliminary application form. After submitting your details, you may need to schedule an in-person appointment at the bank branch to verify your documents and complete the process.
Timeframe and activation
The process of opening a business bank account typically takes a few days to a week, depending on the bank and the completeness of your application. Once your account is active, you can start managing your business transactions, setting up direct debits, and linking your account to payment systems like iDEAL, widely used in the Netherlands.
Taxation System in the Netherlands
The Netherlands offers a well-defined taxation framework that supports while ensuring compliance with public service needs. Below is a detailed breakdown of the central taxes applicable to companies.
Corporate tax rate
The corporate tax system in the Netherlands operates on a progressive scale, favouring small and medium-sized enterprises. Businesses are taxed 15% on profits up to €395,000, while profits exceeding this amount are subject to a 25.8% tax rate. This structure allows smaller companies to retain more capital for reinvestment while ensuring that larger corporations contribute proportionally. These competitive rates make the Netherlands an attractive destination for local and international businesses.
Value added tax (VAT)
VAT, or omzetbelasting, is a significant tax for businesses operating in the Netherlands. It applies to most goods and services, with a standard rate of 21%. Essential items, such as food, medicines, and books, benefit from a reduced % VAT rate of 9%, making them more accessible to consumers. A 0% VAT rate also applies to exports and specific intra-EU transactions, promoting international trade. Businesses must register for VAT with the Dutch Tax Administration and submit quarterly returns detailing the VAT collected and paid.
Income tax for sole proprietors
Sole proprietors in the Netherlands are taxed on their earnings, ranging from 9.45% for lower-income brackets to 49.5% for higher incomes. This progressive system ensures fairness and encourages entrepreneurial activity. Sole proprietors can also take advantage of tax benefits, such as the self-employed allowance (zelfstandigenaftrek) and the small business scheme (Kleinschaligheidsinvesteringsaftrek), which help reduce their taxable income.
Other taxes
In addition to corporate and income taxes, businesses may encounter other obligations. Payroll taxes are mandatory for employers, who must deduct income tax and social security contributions from employees’ wages. These funds support essential services, including healthcare, pensions, and unemployment benefits. Companies selling assets or investments may face capital gains tax, depending on the nature of the transactions. Furthermore, local municipalities may impose levies, such as property tax (onroerendezaakbelasting) or environmental fees, based on the business’s location and industry.
Importance of professional guidance
Navigating the Dutch taxation system can be complex, particularly for foreign entrepreneurs unfamiliar with local regulations. Consulting a tax advisor or accountant is highly recommended to ensure compliance, maximise tax benefits, and avoid penalties. Professional advice is especially valuable for managing VAT obligations, payroll taxes, and international tax treaties. Taking a proactive approach to understanding tax requirements will ensure legal compliance and contribute to your business’s financial health and stability.
Hiring Employees
When hiring employees in the Netherlands, being familiar with Dutch labour laws is important. Employers must comply with several regulations regarding contracts, working hours, benefits, and tax deductions:
Employment contract
All employees must have a written contract outlining their employment terms, including salary, working hours, and benefits.
Social security contributions
Employers must contribute to employee social security, which covers health insurance, pensions, and unemployment benefits.
Paying employees
Employees in the Netherlands are entitled to a minimum wage, and businesses must ensure they adhere to this and other labour laws.
Insurance and Legal Requirements
In the Netherlands, businesses must have certain types of insurance to operate legally. These may include:
Public liability insurance
To cover any damages caused to third parties by your business activities.
Employee insurance
If you hire employees, you must provide insurance for employee benefits, including health and pension insurance.
Additionally, it’s essential to ensure that all contracts, terms of service, and legal documentation comply with Dutch law.
Support for Foreign Entrepreneurs
The Netherlands is known for its entrepreneurial ecosystem, which provides various resources for foreign entrepreneurs looking to set up their businesses. Whether you are a first-time entrepreneur or an experienced business owner, there are several support systems to help you thrive:
Government grants and incentives
The Dutch government supports businesses through grants and incentives to promote innovation and international trade. Examples include the Innovation Box regime, which offers tax relief for innovative companies, and the WBSO (Research and Development Tax Credit), providing financial assistance to businesses engaged in R&D activities.
Business incubators and accelerators
The Netherlands hosts numerous incubators and accelerators offering mentorship, funding, and networking opportunities. These initiatives are particularly valuable for startups and tech companies aiming for growth and success.
Access to a global network
With a highly international business community, the Netherlands allows entrepreneurs to connect with global investors, partners, and clients, fostering worldwide business growth.
Startup visa program
The Startup Visa program allows non-EU entrepreneurs to establish innovative businesses in the Netherlands. The visa grants a one-year stay, with the potential for extension if the company succeeds.
Challenges in Opening a Company in the Netherlands
While the Netherlands is an excellent place for entrepreneurs, specific challenges require careful planning and foresight. These hurdles are manageable with the proper knowledge and resources but may pose difficulties for those unfamiliar with the Dutch business landscape.
Navigating local bureaucracy
The Netherlands has a well-organised but detailed bureaucratic system. New entrepreneurs may face challenges when dealing with specific administrative processes, such as municipal registration, obtaining necessary permits, or fulfilling sector-specific compliance standards. Each step can vary depending on the municipality, requiring additional time and effort to understand local nuances.
Taxation complexities
Although the Netherlands offers favourable tax incentives, navigating the tax system can be overwhelming for new business owners, especially foreigners. Understanding VAT, corporate taxes, and income taxes is critical. Additionally, certain tax credits or deductions might not be easily accessible without consulting a tax professional familiar with Dutch regulations.
Competitive market landscape
The Netherlands is known for its vibrant economy, which means high competition across various industries. To attract customers, standing out in tech, agriculture, or logistics sectors may require innovative strategies, comprehensive market research, and unique value propositions.
Hiring and managing employees
The labour market in the Netherlands can be challenging for businesses, especially those new to the country. Although Dutch labour laws are employee-friendly, they have strict regulations surrounding contracts, working hours, and termination. Entrepreneurs must understand these laws thoroughly to avoid legal pitfalls. Furthermore, attracting talent in a competitive labour market with low unemployment rates can pose difficulties.
Cultural differences and business norms
Understanding Dutch business culture is essential for foreign entrepreneurs. The Netherlands values direct communication, punctuality, and professionalism. Adapting to these cultural norms, especially when negotiating contracts or dealing with clients, can be a learning curve for newcomers.
Banking and financing challenges
Although opening a business bank account is part of the process, securing financing for a new venture might be complex. Many banks have stringent startup requirements, and foreign entrepreneurs may need to provide additional documentation or collateral.
Environmental regulations
Environmental regulations in the Netherlands can be demanding for businesses involving sustainability standards, managing waste, and reducing carbon footprints, which are often mandatory and require extra investment and compliance measures.
Addressing these challenges with proper preparation, expert advice, and a proactive approach can help entrepreneurs establish a successful business in the Netherlands.
FAQs
Can a foreigner start a company in the Netherlands?
Yes, foreigners can start a company in the Netherlands. EU/EFTA citizens face minimal requirements. Meanwhile, non-EU citizens must obtain a residence permit, such as a startup or self-employed entrepreneur visa, depending on their business type and goals.
How much does it cost to open a company in the Netherlands?
The cost varies based on the business structure. Registration with the Chamber of Commerce costs around €50–€100. Additional costs may include notary fees, legal services, insurance, office space, and any required capital, especially for a BV or NV setup.
Is the Netherlands startup-friendly?
The Netherlands is highly startup-friendly offering tax incentives, grants, and a strong startup ecosystem. With innovation hubs, access to skilled talent, and programmes like the startup visa, entrepreneurs find an excellent environment to grow their businesses.
Do companies in the Netherlands sponsor visas?
Many Dutch companies sponsor visas, especially for skilled professionals in high-demand sectors like tech and healthcare. Sponsorship depends on the job role, and the employer must be recognised as a sponsor by the Dutch Immigration and Naturalisation Service (IND).
Who can sponsor me in the Netherlands?
Recognised organisations, such as companies registered with the IND, can sponsor you for work or business purposes. Additionally, Dutch residents, including family members or partners, can sponsor individuals for specific residence permits, depending on the circumstances.
