Everything the international entrepreneur desires is present in the Netherlands. From a strategic location in Europe, state-of-the-art digital infrastructure and a business environment where English is spoken, everything is available. However, it also has plenty of bicycles, rain and endless paperwork, which means that preparation is essential.
You don’t have to reside in Amsterdam to set up your Dutch business, but failing to lay the necessary groundwork leads to expensive delays. This guide covers all you need to learn first, what structure to choose, what documentation to prepare and what taxes to pay.
What Should You Know Before Setting Up a Dutch Company?
Foreign founders have a definite and unique process. By knowing these factors at the outset, one avoids surprises and maintains momentum.
Residency and Work Permits
Nationals from the European Union, the European Economic Area and Switzerland can work in the Netherlands freely. Other nationals require permits to live in the country.
Substance Beats a Mailbox
It doesn’t matter where a business is registered, tax officials will look for the location where a business is actually managed. The equation is simple, decision-making done from abroad equals more difficulties for your business. Intercompany solutions can act as a lifesaver for multinational corporations.
Banking Takes Real Patience
The opening of an account at a bank in order to run one’s business will require time in case one is not a citizen of the country. It is best to start early and have all the necessary paperwork ready.
Licences for Regulated Sectors
For some kinds of business, like financial or food service, licensing or registration is required before starting up. Ensure this is taken care of beforehand since it will do much more harm than good afterward.
Hire a Local Accountant
Dutch accounting, VAT regulations and reporting procedures are complicated and you will not have flexibility with deadlines. Yes, we all know hiring an accountant is a costly affair, but think of the mess and costs you have to deal with if there is any missed step.
Choose Your Name Carefully
You must check the availability of your selected brand names before finalising and moving to the next step. You can check the availability by making sure the names are not registered at the KVK. Just make sure that the name is available prior to choosing it as the wrong choice will cost you a lot.
Which Dutch Business Structure Should You Choose?
BV (Private Limited Company)
BV is the preferred option for many of the international founders. The shareholders do not have any personal liabilities regarding business debts and there is no minimum share capital required.
Branch of a Foreign Company
A branch enables a current foreign corporation to do business in the Netherlands without the need for forming a new company. The parent is responsible for all the obligations of the branch.
Sole Proprietorship (Eenmanszaak)
It is one of the easiest formats, which is registered directly at the KVK. But since it involves personal liability for business debts, it is better suited to self-employed individuals rather than startups.
General Partnership (VOF)
VOF is perfect for multiple people operating a business in association with each other. In this case, all partners will be individually responsible for the debts; therefore, select partners prudently, such as your spouse.
What Documents Do Foreign Founders Need?
Valid Passport or ID
It is important for the notary to verify the identities of all founders and directors of the business. Make sure you carry a passport or national identification card that the notary can inspect.
Dutch Business Address
To be able to register your company with the KVK, you will need a registered address within the Netherlands. Either a physical office or a registered office can help you in doing so; however, a mailbox from your hometown won’t be enough.
Articles of Association
The Notarial Deed is the legal document which constitutes the creation of your business. Such regulations determine the structure and management of your company. Your notary prepares the document on your behalf; however, you have to review the document before signing it.
Shareholder and UBO Details
The registration of the ultimate beneficial owner must take place, which is the real person to whom the ownership or control of the entity belongs. You need to provide their full name, date of birth, citizenship and percentage of ownership.
Power of Attorney
Can’t make it in time for the signing? A power of attorney allows an authorised individual to sign on your behalf at the notary public. Check whether an apostille is required first.
Key Taxes and Obligations in The Netherlands
Corporate Income Tax
The rates of corporate taxation for profits below €200,000 are 19%, while for those above 200,000 euros are 25.8%. This has not changed, and applies to all the income earned by the Dutch firm, regardless of where it is earned.
VAT Registration and Returns
The VAT rate is 21%; however, the tax is imposed on only a few goods at a rate of 9%. Registration is compulsory for all taxable supplies and returns can be filed on a quarterly or monthly basis.
Payroll and Employee Obligations
If workers are recruited, then their income and social security payments must be taxed prior to reporting the same to the Dutch Tax Administration. Additionally, employment contracts will adhere to the laws of the Netherlands.
Annual Accounts and Filing
BV must prepare its accounting statements each year and submit them to the KVK. Maintain accurate records throughout the year, since last-minute record preparation is nobody’s favourite pastime.
Conclusion
Incorporation of a Dutch company is rewarding for those who do their homework and adhere to the deadline. The process will move fast when it is planned and realistic expectations are set.
