The Netherlands has a well-established legal system that protects the interests of businesses and investors. The country is also known for its favorable tax regime, which makes it an attractive destination for setting up a company. To set up and register a company in the Netherlands, it is important to be aware of the legal and tax requirements that apply.
This guide provides an overview of the key laws and taxes that you need to know about when setting up a business in the Netherlands.
So, how to start a business in the Netherlands?
Check Whether You Are Legally Entitled
The first step for company formation in the Netherlands is to check whether you are legally entitled to do so. If you are a citizen of an EU member state, European Economic Area, or a Swiss national, you are automatically entitled to set up a company in the Netherlands.
If you are a citizen of a non-EU country, you will need to obtain a work and residence permit. There are experts who can help you with the legal norms to set up a company in the Netherlands. You can apply for a work and residence permit through the Dutch Immigration and Naturalisation Service (IND). You can also consult with an experienced business lawyer to find out if you are legally entitled to set up a company in the Netherlands.
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Choose the Legal Structure
When setting up a company in the Netherlands, you will need to choose the legal structure of your business. The most common structures used by businesses are sole proprietorships, partnerships, and limited liability companies (LLCs). Each of these structures has different legal and tax implications, so it is important to choose the right one for your business.
Think of a Business Name
Once you have chosen the legal structure of your business, you will need to think of a name for your company. Your company’s name must be unique and cannot be confused with another company. Check the availability of your chosen name through the Benelux Office for Intellectual Property.
Write a Thorough Business Plan
No business is successful without a detailed business plan. Your business plan should include information on your company’s products or services, marketing strategy, financial projections, and management team. You should also include a SWOT analysis. This will help identify your company’s strengths, weaknesses, opportunities, and threats.
Register Your Company
The next step in company re-domiciliation in the Netherlands is to register your business with the Netherlands Chamber of Commerce. Registration can be done online or in person, based on your preferences. If you want to register in person, you will need to book an appointment online. Depending upon the type of business you want to register, you will need to fill out different forms. You will also be asked to pay a registration fee.
After you finish your registration, the government will list your company in the Dutch Commercial Register and give you an eight-digit KVK number as confirmation of your registration.
Apply for a Business Licence
If your business is regulated by a professional body, you will need to obtain a license before you can start operating. For example, if you are setting up a financial services company, you will need to obtain a license from the Dutch Central Bank. You can find out if your business requires a license by contacting the Chamber of Commerce or a business lawyer.
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Open a Business Bank Account
Once you have registered your company, you will need to open a business bank account. This is necessary to start operating your business. You can open a business bank account with any Dutch bank. However, it is important to compare the fees associated with different banks before you make a decision.
No company formation is complete without insurance. There are several different types of insurance that you will need to consider, such as liability insurance, property insurance, and business interruption insurance. You can obtain quotes from different insurers before you make a decision.
Finally, if you are planning to hire employees, you will need to obtain a work permit from the Dutch Immigration and Naturalisation Service (IND). You can also consult with an experienced business lawyer to find out if you are legally entitled to hire employees in the Netherlands.
Once you have completed all of the above steps, you will be ready to start operating your business in the Netherlands.
Now, let’s look at the various tax implications of setting up a company in the Netherlands.
If you are running a business by yourself or with a partner, you will have to pay income tax on the profits your company makes. It must be filed before the 1st of May every year. Moreover, you must make sure your employees receive their annual income statement on time, well before the 1st of April. This ensures that your employees can file their private tax returns before 1st May as well.
If you own a private limited company or a public limited company, you will have to file returns for corporate tax in the Netherlands on behalf of your company.
Dutch Dividend Tax
While operating as a private or public limited company, you may opt to distribute profits among your shareholders. If this is in the form of a dividend, you will also be required to pay the Dutch dividend tax.
National Insurance Contributions
Not only must you withhold national insurance contributions from your employees’ wages, but you must also pay these directly to the Dutch Tax and Customs Administration.
Import and Export Taxes
You may also be required to pay import and export taxes if your company imports or exports goods. These taxes are levied on the value of the goods being imported or exported.
As you can see, there are many different taxes that you will need to consider when setting up a company in the Netherlands. It is important to seek professional advice from tax advisors to ensure that you comply with all the relevant tax laws.
We hope this guide has helped give you an overview of the process of setting up a company in the Netherlands. If you do not have the resources and time to navigate the legal system and prepare the paperwork, you can always consult professional agencies to assist with company formation in the Netherlands.
While it is a complex process, it is definitely possible to do it on your own. However, we recommend that you seek professional advice to ensure that everything is done correctly.
How much does it cost to set up a company in the Netherlands?
The cost of setting up a company in the Netherlands depends on some factors, such as the type of company you want to set up, the amount of share capital you are planning to raise, and whether you are hiring employees.
How long does it take to set up a company in the Netherlands?
The time it takes to set up a company in the Netherlands varies depending on the type of company you want to set up. For example, setting up a private limited company can take anywhere from a week to two months.
What are the taxes that I need to consider when setting up a company in the Netherlands?
There are a number of taxes that you need to consider when setting up a company in the Netherlands, such as income tax, corporate tax, Dutch dividend tax, and import and export taxes.
Do I need to hire a professional to set up my company in the Netherlands?
While you can set up your company on your own, we recommend that you seek professional advice for the Netherlands’ company registration to fill the gaps and avoid last-minute surprises and re-work.