Setting up a business - in the Netherlands

How do you setup - a business in the Netherlands?

Setting up a business in the Netherlands is no easy task, steps need to be fulfilled and regulations are to be complied with. This page hopes to make this process a little easier and hopefully more enjoyable.

At the moment, you may have no clue where to begin, let’s start at the beginning.

Where to begin when setting up a business in the Netherlands

Your starting point for setting up a business in the Netherlands is dependent on your current situation.

If you are employed and wish to stay employed whilst setting up your business in the Netherlands you will need to consult your employment contract. There may be arrangements that will prevent you from starting a business. If you plan on leaving your occupation you are not on safe ground yet, there may be a non-compete clause requiring your consideration. Persons such as students and individuals with an occupational disability may be able to benefit from special benefits, research and find out.

Whereas, if you are planning to introduce an already existing foreign legal entity into the Netherlands, you do not need to convert it to a Dutch legal entity and therefore this page will be of less relevance to you. The easiest route will be to introduce it as a branch of the foreign entity.

Now that we have established where you stand and where to begin, let’s start looking at the process.

How to set up your business in the Netherlands

When setting up a business in the Netherlands, there are three main aspects which will require your attention.

I. Residency in the Netherlands

Citizens of a member state of the EU, the EEA and Swiss citizens enjoy the same rights as a Dutch citizen in relation to starting a business and are therefore free to start a business of their own in the Netherlands.

If this does not apply to you, registration at Dutch Immigration Services (IND) is necessary. A permit to start a business will be granted by guidance of the following conditions, whether you are qualified to run a business, by reviewing the business plan and whether your business will contribute to the Dutch economy.

II. Selecting a legal form for your business in the Netherlands

Selecting the right legal form in the Netherlands is crucial to your business’ success. There are two categories of legal forms to choose from, limited liability and non-limited liability. The crucial difference rests in the fact that a non-limited liability company does not make a distinction between your private or business assets. In case of bankruptcy, your business assets as well as your private assets are at risk of being seized. Limited liability is therefore often preferred, but it is attached to higher maintenance and costs. Below you will find a brief description of all the legal forms.

Limited liability legal forms exist of the following four:

1. Naamloze Vennootschap (NV or private limited liability) is a form generally adopted by well-established larger companies, who can manoeuvre through the greater restrictions. It can issue shares that in turn can be listed on the stock exchange.
2. In contrast, BV’s (public limited liability) are privately owned and designed with flexibility in mind. They are not subject to the same strict capital protection standards, provided that at least one share is issued to an entity other than the company itself or its subsidiaries. As a result, they have greater freedom in managing their corporate structure and Articles of Association. For more information about BV’s and NV’s visit our How do you start a company page.
3. Vereniging (association) is a partnership between two or more people. Profit is allowed to be made but can only be invested for the achievement of the common objective.
4. Stichting (foundation) is a legal person without members. The aim of a foundation is to achieve its objective outlined it the Articles of Association. The profit made can be allocated only in restricted ways.

Non-limited liability legal forms exist of the following four:

1. Eenmanszaak (sole-proprietorship), as its name suggests, only has one owner who is entitled to all profits.
2. Commanditaire Vennootschap consists of two types of partners, those who are active and those who are limited. The active partners concern themselves with the running of the business whereas the limited partners usually finance the business. As a result, sleeping partners also bear less risk.
3. Vennootschap Onder Firma (partnership under common firm) exists of partners bound by a partnership contract. This contract outlines the rights and obligations of each party, such as their limits of authority.
4. Maatschap (partnership) is popular amongst professionals such as doctors and lawyers.

III. Register with the Dutch Tax Administration and Dutch commercial register

Once the company is registered at the Dutch Tax Administration and the Dutch commercial register, the respective authorities will issue a VAT number which is used for tax deductions and a company registration number used for outgoing invoices and mail. The registration can take place anywhere from one week before the business is started. In order to register our business at the commercial register you will need a trade name that does not infringe the trade name rights of others.

Other matters to keep in mind when setting up your business in the Netherlands

As you are setting up your business in the Netherlands, there are several other matters you will be confronted with throughout the process.

It is sensible to keep these matters in mind and to start thinking about them as soon as possible:

1. the location of your business premise and zoning plans
2. safety requirements for business premises (fire)
3. environmental regulations
4. compliance with personal data processing regulations, and
5. keeping accurate records of your business accounts.