In the Netherlands, you need to choose a legal form when you start a business. You cannot operate as an entrepreneur without choosing a legal form. You shall have made a choice at the moment you register at the Dutch trade register of the Chamber of Commerce (Kamer van Koophandel or KVK) Your choice will determine key issues of doing business such as liability and tax regime.
Self-employed or freelancer?
If you want to work as a self-employed person or freelancer, you will have to choose if you wish to work from within a legal form or not. You will still have to choose before you can register at the Dutch Chamber of Commerce. Most entrepreneurs act as sole proprietors or have a private limited liability company (a BV).
Which form suits your business?
There are several business structures to choose from, as listed here below. Which one suits you best will depend on your circumstances. There are business forms with and without corporate (legal) personality.
Business structures without corporate (legal) personality are:
– Sole proprietor or sole trader (in Dutch eenmanszaak);
– General partnership (in Dutch VOF or vennootschap onder firma);
– Professional partnership (in Dutch maatschap);
– Limited partnership (in Dutch CV or commanditaire vennootschap).
Legal structures with corporate (legal) personality are:
– Private limited liability company (in Dutch BV or besloten vennootschap)
– Public company limited by shares (in Dutch NV or naamloze vennootschap)
– Cooperative (in Dutch coöperatie)
– Association (in Dutch vereniging)
– Foundation (in Dutch stichting)
When you set up a business form with legal personality, a civil law notary has to draw up the relevant company formation documents, including your registration at the Dutch Chamber of Commerce (KVK). If you choose a business form without legal personality, you will be personally liable for the debt of your business, with your private assets. This is most often not the case when using a business form with legal personality.
If your business consists of a legal entity or partnership, it will be granted a RSIN number when it will be registered at the Dutch trade register. This is fiscal number of the entity.
Filing financial statements
Certain types of business forms are required to file their financial statements with the Dutch trade register. The size of the company determines how much information shall be made public. submitted. It can be wise to have a Netherlands accountant assess the size of your company before set up. In case there will be consolidation or audit requirements, you can check if any exemption could be applied.
European legal forms
European legal forms offer enable your business to work together across borders with companies from other jurisdiction within the European Union. There are three European legal forms:
– European Economic Interest Grouping (EEIG);
– Societas Europaea (SE, European public limited liability company);
– European cooperative company (ECC).
Changes in the business form
Changing from one business form to another is sometimes legally allowed. Sole proprietors often convert their sole proprietorships into limited liability companies when the turnover is growing and as a consequence, liabilities also increase. A conversion will have fiscal and administrative consequences. Changes must be reported to the Dutch Tax and Customs Administration (Belastingdienst) and the Dutch trade register. You might have to re-apply for certain licences from your municipality. Sometimes it is easier to simply liquidate the old business form and then start doing business in the new business form instead of a conversion whereby the old business is continued.
Assistance with choosing a business form
There are quite a few considerations to be taken into account when making the choice for a business form. Even a structure consisting of more than one legal entity, such as an operational BV with on top a holding BV, could be the best option. Most commonly used business forms are the sole proprietorship (ZZP) and the private limited liability company (BV). It is even possible to apply a legal form from outside the Netherlands for your Dutch business. Though please note that this often make that banks will be hesitant to open bank accounts. Contact us to get support from a professional party.
By starting with a shared office Netherlands you can begin your business with low expenses and a short term contract. ABiLiTieS Trust | Corporate Services, a corporate services company in the Netherlands can also provide you with a nominee director enabling your business to start in a cost effective way. Our attractive priced packages contain directorship, address, legal, accounting and tax support.