Start a Business in the Netherlands as a Foreigner | Complete Guide (2024)

Starting a business in the Netherlands is an exciting opportunity, especially for foreigners seeking to leverage the country’s business-friendly environment, robust legal framework, and strategic location in the heart of Europe. With its favorable tax system, skilled workforce, and open attitude towards foreign investments, the Netherlands stands out as a prime destination for entrepreneurs. This article will guide you through the steps and considerations involved in starting a business in the Netherlands as a foreigner, covering legal structures, permits, taxation, and more.

Why Choose the Netherlands?

The Netherlands is recognized for its strategic geographic position, being a gateway to European markets. It’s home to one of the largest economies in the EU, driven by a competitive corporate sector, advanced infrastructure, and a strong focus on innovation. Here are some compelling reasons why the Netherlands is a preferred business hub:

• Favorable Tax System: The Netherlands offers an attractive corporate income tax rate, starting at 15% for profits up to €245,000, and 25% for anything exceeding that. Additionally, businesses can benefit from several tax incentives, such as the participation exemption regime, which allows tax exemptions on dividends and capital gains under specific conditions. This makes the Netherlands an ideal location for setting up holding companies or expanding through branches.
• Double Tax Treaties: The Netherlands has more than 100 double-tax treaties, protecting businesses from paying taxes in multiple jurisdictions. These treaties help mitigate tax burdens and boost cross-border trade and investments.
• Skilled Workforce and Infrastructure: The Netherlands boasts a highly skilled workforce with excellent English proficiency, a well-connected logistics network, and a top-tier financial services sector, making it easier for companies to grow and succeed.
• Access to Incentives: The country offers a variety of business incentives, particularly in research and development. Programs like the “Innovation Box” allow businesses to benefit from reduced tax rates on profits derived from intellectual property.

Process to Start a Company in the Netherlands as a Foreigner

The following steps to start a company in the Netherlands as a foreigner includes:

Step 1: Choose the Right Legal Structure

Choosing the right legal structure is a crucial decision when starting a business. Each business form has its own legal and financial implications. In the Netherlands, the most common business structures include:

1. Dutch BV (Private Limited Company): This is the most popular structure for both local and foreign entrepreneurs. It requires a minimum share capital of €1 and allows for significant flexibility in the management and ownership of the business. The Dutch BV is suitable for small, medium, and large enterprises, offering liability protection for its shareholders.
2. Sole Proprietorship (Eenmanszaak): This is an ideal structure for individual entrepreneurs looking to start a small business. It’s easy to set up but offers no liability protection, meaning the owner is personally responsible for business debts.
3. General Partnership (VOF): A business entity formed by two or more partners who share profits, losses, and liability. Partners are jointly responsible for the company’s debts.
4. Public Limited Company (NV): Suitable for larger companies planning to raise capital through the stock market, the NV requires a minimum share capital of €45,000. This structure is ideal for businesses with significant capital investments.
5. Branch or Subsidiary: Foreign companies can also set up a branch or subsidiary in the Netherlands. While a subsidiary is an independent entity, a branch is considered an extension of the foreign company.

Once you’ve chosen a business structure, you can proceed with the registration process.

Step 2: Register Your Business

All businesses in the Netherlands must be registered with the Dutch Chamber of Commerce (KvK), which administers the Dutch Trade Register. The process involves several key steps:

1. Choose a Business Name: The first step is to select and register a unique business name that reflects the nature of your business. The name should be distinctive and must comply with Dutch naming conventions. A name check can be performed with the KvK to ensure that no other company is using the same name.
2. Prepare Incorporation Documents: You will need to prepare several documents, including the Articles of Incorporation, shareholder agreements, and other statutory documents. These must be notarized by a Dutch public notary.
3. Submit Documents to the KvK: After preparing the necessary documentation, submit them to the Dutch Chamber of Commerce (KvK) to officially register your business. Along with the documents, you will need to provide identification for all shareholders and directors (such as a passport or residence permit), proof of a registered Dutch address, and a description of your business activities.
4. Receive a KvK Number: Upon successful registration, you will be assigned a KvK number, which must be included on all official documents, invoices, and correspondence.

Step 3: Open a Corporate Bank Account

Once your business is registered, the next step is to open a corporate bank account in the Netherlands. A separate business account is required for taxation and financial administration purposes. Most Dutch banks require a copy of your KvK registration, identification documents, and proof of your business address to open an account.

Step 4: Secure Necessary Permits and Licenses

Depending on the nature of your business, you may need additional permits or licenses to operate legally in the Netherlands. For example:

• Environmental Permits: Businesses involved in manufacturing, construction, or agriculture may need to obtain environmental permits.
• Sector-Specific Licenses: Certain sectors, such as healthcare, financial services, or hospitality, may require industry-specific licenses.

It’s important to check with local authorities to ensure that you meet all regulatory requirements before starting operations.

Step 5: Tax Registration

After registering your company, you must also register with the Dutch Tax and Customs Administration for tax purposes. This includes obtaining a Value Added Tax (VAT) number, as well as registering for payroll taxes if you plan to hire employees.

The VAT rate in the Netherlands is 21%, with reduced rates of 9% and 0% applying to specific goods and services. Corporate income tax applies to all profits, with a two-tier system: 15% for profits up to €245,000, and 25% for profits above that threshold.

Foreign-owned companies in the Netherlands are subject to the same tax rates as local businesses, although they may benefit from exemptions under double tax treaties.

Step 6: Hire Employees (if applicable)

If your business requires hiring local or foreign employees, there are specific regulations you must follow. Employees are protected by Dutch labor laws, which cover minimum wage, working hours, holiday entitlements, and more.

Foreign workers from outside the EU, EEA, or Switzerland will need a work permit and residence visa. Additionally, all employees must be registered for social security and health insurance.

Step 7: Residence Permits for Non-EU Entrepreneurs

For non-EU citizens who wish to reside in the Netherlands, a residence permit is required. There are several types of permits available for entrepreneurs:

• Self-Employed Residence Permit: This permit is available for third-country nationals looking to establish an innovative business in the Netherlands. Applicants must meet specific criteria related to personal experience, business plans, and their contribution to the Dutch economy.
• Startup Visa: The Dutch startup visa offers ambitious entrepreneurs a one-year temporary residence permit to develop a business plan and launch their company in the Netherlands.

Both types of permits require a solid business plan and evidence that the business will contribute to the Dutch economy.

Step 8: Utilize Available Business Support

The Netherlands offers a range of support services and incentives for entrepreneurs. For example, the Netherlands Foreign Investment Agency (NFIA) provides assistance to foreign companies setting up in the country. Additionally, various tax incentives are available to businesses, particularly in research and development, sustainability, and innovation.

Costs to Establish a Business in the Netherlands

• A company incorporation fee of around €50, as required by the Dutch Companies Register.
• A virtual office service fee, starting at approximately €70 per month, depending on the chosen services.
• Accounting services are available, with fees starting at about €75 per month.
• No mandatory minimum share capital is required at registration, allowing business owners to decide on the amount to invest.
• If opting for assistance from Dutch specialists, the full company formation cost begins at around €1,400 for a fully operational setup.

Timeline to Register and Incorporate a Company in the Netherlands as a Foreigner

The process of registering and incorporating a company in the Netherlands, especially for foreigners, involves several steps and generally takes a few weeks to complete. Here is a timeline for the main phases:

1. Business Name Reservation: The process begins with selecting and reserving a company name with the Dutch Chamber of Commerce (KvK). This step can be done online and typically takes a few hours to complete.
2. Document Preparation and Notarization: You need to prepare the incorporation documents, such as Articles of Incorporation and shareholder agreements. These documents must be notarized by a Dutch notary, which can take 1-2 days, depending on the complexity.
3. Submission to KvK: After notarization, submit your documents to the KvK. Once submitted, the registration process usually takes 1-2 days, and you will receive your KvK number, making your company officially registered.
4. Tax Registration: After receiving your KvK number, you must register with the Dutch Tax and Customs Administration for VAT and corporate taxes. This step takes about 1-2 days.
5. Corporate Bank Account Opening: After registration, opening a corporate bank account is required, which can take a few days to complete depending on the bank.

Overall Time Frame:

The entire process typically takes around 2-3 weeks for full registration and incorporation. However, certain steps, like finding a physical office, might extend this timeline depending on your business requirements.

Conclusion

Starting a business in the Netherlands presents numerous opportunities for entrepreneurs, thanks to the country’s favorable tax policies, skilled workforce, and open business environment. From selecting the right legal structure to navigating the registration process, following the outlined steps will ensure a smooth and efficient start to your business journey.

Be sure to consult with incorporation specialists from On Demand International’s Dutch incorporation desk to ensure compliance with Dutch laws and maximize the benefits available to you. 

Frequently Asked Questions

1. What are the steps to register a company in the Netherlands?
To register a company in the Netherlands, you must first consult with a Dutch notary. For a fully online incorporation, contact an incorporation specialist who will help set up the BV (Besloten Vennootschap) according to your instructions and register it at the Company Registry (KVK). There is no need to visit the Chamber of Commerce separately.

2. What is the cost to register a company in the Netherlands?
The cost of registering a company in the Netherlands can vary based on several factors including the type of company structure, legal fees, notary fees, and any additional services required. It’s advisable to get a detailed quote from an incorporation specialist or notary for accurate costs.

3. How can an American start a business in the Netherlands?
An American looking to start a business in the Netherlands should follow these steps: ensure you meet the residency conditions, write a business plan, research the market and set your strategy, create a financial plan, choose a trade name, select a legal business structure, and maintain proper business records.

4. Can a foreigner open a company in the Netherlands?
Yes, foreigners can open a company in the Netherlands. The Dutch government supports foreign entrepreneurs through the “start-up visa,” which grants a provisional residence permit for one year to establish a successful business.