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    • Sole proprietorship or limited company? Your options in the Netherlands
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    Sole proprietorship or limited company? Your options in the Netherlands

    Pabio Posted on

    If you decide to quit your job and go it alone, or start your new life in the Netherlands as an entrepreneur, you need to start by deciding what type of business to start first. So what are your choices?

    “People often think they can just start a business and that’s it,” says Mark Bastiaans, founder of Dutch tax advicea boutique office that helps small businesses and individuals navigate the corporate tax minefield. “But it’s much more complex. They might simply forget that they also need a tax identification number and that they need to pay their taxes on time, for example.”

    Although there are different types of companies you can set up in the Netherlands, the most common are a sole proprietorship, or ZZP’er, and a limited company, or BV.

    The main reason to create a BV is that it limits your liability. If you decide to register as an individual entrepreneur, or ZZP’er, you will be responsible if anything goes wrong. “If you end up with debt, for example, you could end up in private bankruptcy, and that’s not a good thing,” says Mark. “A BV protects you against this. But it also has tax benefits, depending on your income as well as other factors.

    A BV or a ZZP?

    If you are large enough to have staff, for example, then it makes more sense to be a BV. There is, according to Mark, a tipping point that is difficult to calculate and depends on many different conditions.

    As a BV owner, you are employed by your company. Being employed allows you to qualify for the tax break if you earn enough and meet other rules such as being hired or having been hired overseas.

    “We can roughly say that a BV starts to make tax sense from a profit level of €100,000,” he says. “If you qualify for the 30% rule, the tipping point is much lower.”

    Investment

    To start a BV, you only need to invest a €1 token, but this is something Mark often advises against. “It’s good to have enough money in your BV to cover your first expenses,” he says. “So if you think you’ll need to spend €10,000 to get up and running, then we would say invest that into the business and a little bit more.”

    It is important to remember that as the owner of a BV you must receive a formal salary and your BV will have to pay social insurance premiums on your behalf. There are also salary requirements that you must meet. “You need to earn at least €56,000 full-time, but this amount can be reduced if you work part-time,” says Mark. “But remember, you have to be able to afford it.”

    Another issue that people need to consider is the new legislation that the government is implementing to eradicate fake self-employment. The DBA legislation is complex and there are still many uncertainties about how it will be applied. But it’s worth talking to your tax advisor about how you conduct your work, to make sure your relationship with your clients qualifies to be considered true self-employment.

    Total benefit

    Dutch Tax Advice offers its clients who wish to create a BV the complete packageincluding a notary, and payroll services to cover salary administration. “We take care of quarterly value added tax declarations, annual accounts and reports and submit the necessary balance sheet to the Chamber of Commerce,” explains Mark. “We can also file the owner’s personal tax return. »

    Ultimately, Mark says, it’s all about trust. “We like to meet our customers first and find out what they are like. Our customers provide us with a lot of personal information. And both parties need to know who they are dealing with.”

    You do not need to wait until you have moved to the Netherlands to start and create a BV. Mark and his team can help you prepare things before your arrival. Contact Dutch tax advice for more information.

    Pabio
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