Several global entrepreneurs and investors have considered starting businesses in the Netherlands.
The Netherlands welcomes foreign investors and entrepreneurs, ranging from small and medium enterprises to Fortune 500 multinational corporations. It boasts of an active economic climate facilitated by advanced technology, innovation, and infrastructure. Moreover, the Dutch tax system favors foreign investors and entrepreneurs.
Benefits of starting a business in the Netherlands
Apart from being an open economy, the Netherlands is an excellent business destination owing to many benefits, some of which are outlined below:
- An easy way into the European market: the Netherlands is the second biggest digital data hub in Europe, giving it primary access to the EU market.
- Exceptional logistics infrastructure: the Netherlands has credible airports, seaports, rails, roads, and telecommunication networks.
- Excellence workforce: the vast working population of the Netherlands outranks its companions in the standard of education, productivity, and pragmatic labor laws.
- Strategic location: as one of the world’s more developed economies, the Netherlands blends first-rate infrastructure with a strategically advantageous position in mainland Europe.
- Competitive tax rates: the country has competitive tax rates and pro-business policies, and its taxation policy endorsed foreign direct investments.
- Innovation: the Netherlands have a decent framework in place to support innovation and foster business expansion.
Requirements for starting a business in the Netherlands
Residence and work Permit
Entrepreneurs and investors from the EU, EEA, and Switzerland have the same rights as the Dutch ones and they are not obliged to obtain a residence permit or a work permit to start a business in the Netherlands.
But non-EU citizens, who are interested in starting a business in the Netherlands, are required to observe the local immigration laws and they are expected to obtain a residence and a work permit.
Special passes allowed to foreigners to start a Business in the Netherlands
The Dutch government launched a startup package with inducements to encourage multinational startups to set up companies in the Netherlands. It includes the following:
- Dutch startup visa: this is a one-year resident permit for non-EU entrepreneurs granting innovative products and services in the Netherlands and registered in the Trade Register of the KVK.
- Orange Carpet: this is a facility that makes it simpler for business travelers and staff of companies with economic interests in the Netherlands to obtain a visa.
- Self-employment scheme: this is for independent entrepreneurs who wish to resume business activities in the Netherlands after their startup visa expires(also with a residence permit).
Write a business plan for your Dutch company
Another significant step in initiating a successful business in the Netherlands is writing up a business plan to lay out objectives and plans for the new business. The business plan should summarise the mission of the business, the legal business structure you want to choose, what you are going to sell or produce, who will your clients be, how will you find financing, and so on.
Select the suitable types of companies
Business owners have several options to start a business in the Netherlands. They may choose to open in the Netherlands either of the following legal entities:
- Private Limited Liability Company (besloten vennootschap or BV): in this type of structure, you are not jointly and severally accountable for any debts made by the company, because the BV is a legal entity under the provisions of the Commercial Law. Because the money comes from numerous individuals, they can only lose the money invested.
- Public Limited Liability Company (naamloze vennootschap or NV): this business structure is similar to a private company. For this type of structure, the names of the shareholders aren’t required to be stored in a register. The shares may even be bought by anyone or sold, which allows anyone to own an NV.
- General partnership (Vennootschap Onder Firma or VOF): a general partnership in the Netherlands is a business structure with one or more partners.
- Limited partnership (Commanditaire Vennootschap or CV): this is a Dutch business structure with one or more general partners and one or more limited partners.
- Professional partnership (maatschap): this type of business structure is a form of cooperation established by professionals.
- Sole trader (eenmanszaak): this is a one-man business, and under this structure, there is one fully independent founder and owner, but the business may also employ personnel.
- The Subsidiary or Branch Office
If you already have a business outside the Netherlands and now wish to move the business to the Netherlands, you can set up a subsidiary company or branch. A subsidiary company of a foreign entity is comparable to a local Dutch company with an independent structure.
Alternatively, you can establish a branch of the foreign company. The Dutch branch opened is not separate from the foreign legal entity and the rules and regulations of the foreign legal entity apply to it.
Choosing a trade name for the company
After concluding the business structure, business owners can then choose a company name (also called a trade name). The company name is compulsory in order to register the company in the Dutch Business Register (Handelsregister) at KVK.
Registering your Dutch company
All new businesses in the Netherlands must register with the Dutch Business Register at the Netherlands Chamber of Commerce (KVK).
Once the company is registered in the Business Register, KVK will pass on the company details to the Dutch Tax and Customs Administration (Belastingdienst).
Private and public limited companies have to register via a civil-law notary. The notary will handle the registration at the Dutch Tax Administration on the owner’s behalf.
After finalizing the steps to incorporate your company in the Netherlands, you will receive a business number or KVK number. This number can then be used on all invoices and outgoing posts of the newly incorporated company.
Register your business bank account
Since it’s common to incur expenses before the official launch of the business, it’s highly recommended to create a business bank account as soon as possible. In the Netherlands, you are legally required to maintain bank accounts and retain them for seven years.
Cost of your company registration in the Netherlands
Investors and entrepreneurs looking to register companies in the Netherlands should also consider the costs associated with it upon starting the business. Generally, the following costs will be included:
- the company incorporation fee charged by the Companies Register
- the virtual office cost
- the share capital
- the company formation cost if you choose to work with Dutch specialists, and
- the accounting services fees
A lack of local understanding when venturing into the Netherlands to start a new business can result in financial liabilities. So, when you’re ready to expand your business to the Netherlands, it’s highly recommended to work with an experienced partner. In other words, let’s go ahead and contact your Damalion expert now to start your business in the Netherlands.
