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How to register your business in the Netherlands

How to register your business in the Netherlands
netherlands corporate tax rate

So you’re not a job person, right? You always wanted to run your own business? If you’re already doing one in your native country and planning to move to the international platform, which country will be your first preference? What do you think about a registered business in Netherlands? We have heard that the market price and consumer rate is growing rapidly there, so it would be a great opportunity to expand your business there. Do you know about the steps we need to take while establishing a business in foreign countries, specifically the Netherlands?  If not, let’s find out in this article!

The very first thing you should acknowledge when expanding business internationally is to know about the market rate and environment of the country you choose. Let’s take a quick overview of the market of the Netherlands first!

Market Environment

In terms of economy, Netherlands is the sixth-largest economic power in the Eurozone and the fifth-largest exporter of goods. Its market value always provides opportunities to starters and entrepreneurs who like to establish their own companies. The country holds an open trade system that is getting diverse from time to time. The Dutch economy was increasing steadily but since the COVID-19 pandemic occurred, the GDP of the Netherlands faced a decline of 8.5% in 2020. According to the recent January 2021 update of the World Economic Outlook, the IMF has declared the GDP of the Netherlands to 3% in 2021 and 2.9% in 2022. This country presents a very high income per capita which is equally broken down relatively therefore many people want to open their business companies there.

register business netherlands
netherlands tax

Why registration is important?

Whether you are a native or an international citizen, everyone in Netherlands is required to register at his home address. If you’re planning a startup there, you will need to register your business address also in the most cost-effective and least time-consuming way possible. Now, one might ask that ‘why do we need to register our business as well?’ It is because:

  • You will only have the authority to stay and work in the Netherlands after registration.
  • Depending upon the type of economic activities you perform, you may need certain permits and licenses.
  • Companies register helps in recording and updating information on new and existing companies in its jurisdiction.
  • The registry of a business provides benefits if we operate it on a one-stop-shop, online platform, or comprehensive electronic database.
  • Registration of your business promotes consumer protection in “high risk” industries like pharmaceutical and food businesses require permits that the food they provide is healthy.

Steps how to register your business in the Netherlands

Establishing your business in the Netherlands may require you to register with the Netherlands Chamber of Commerce (KVK), Commercial Register, and the Dutch Tax and Customs Administration. There can be several rules and regulations as well set up by the government to ensure your safe business startup. If you want to start a business with your colleagues and entrepreneurs, a general partnership would be the best option for you. This limited partnership will help you in providing your services more efficiently. UBO is the natural person which owns or controls an entity but it is not a legal entity.

To have your Dutch Companies recognized, you will need to contact the competent authorities under your profession list to help you. Many times, foreign entrepreneurs choose the private company and limited company of Dutch version because it seems feasible to them. But apart from the limited company, you can have several other options as well. But in the case of a limited company, you will also have to file your annual account with the business register. Overall, the step by step procedure of registering the foreign companies includes:

Checking the conditions

Entrepreneurs who intend to stay in the Netherlands to operate Dutch businesses must fulfill several conditions. If you are not a European citizen, you will need to apply for a temporary (MVV) and permanent residence permit. But if you have an innovative startup, you will require an innovative visa. You will also require an IBAN to create your bank account in the Netherlands. For such a purpose, Dutch Banking Association will help you in determining if you are eligible to register yourself or not. Before registering, make sure to find business premises.

Writing a Business plan

This step is not obligatory but it helps to an extent. In a business plan, you list out your plans and think about the company formation and its legal structure. Which products will you sell and who will be your clients? What will be the location of your office? How will you find a financial budget for your business? Determine your business opportunities in the Dutch market? You will answer all these questions in your business plan.

netherlands company register
how to register business netherlands

Selecting a legal form for your business

Once you are done with the business plan and condition, the next thing Dutch companies require is a legal form. The business selects the legal form for the organization. It is important because it determines the liability for your business debt and tax obligations from tax authorities. The investors can submit the contact form to the local authorities after obtaining the tax number. You will also need to pay the payroll taxes in some cases. It can be a bit complicated for you but this procedure includes all the professional services which will help you out in the formation of foreign companies. The acceptance of your legal form may take some time because it gives access to a whole organization to operate.

Appointment at KVK

After the acceptance of your legal form, you have become an organization with full legal capacity; you will need to schedule your appointment at the KVK branch. When you get the date and time for your appointment make sure to bring the following documents:

  • Your accepted legal form
  • A payment (usually 50 euros)
  • Valid permit or license
  • Your business details and address

Once you finalize your registration, you will be given a unique business number, known as the KVK number which you will use on all the invoices and outgoing posts for your new business. It can also take some time therefore you need to the patient throughout this process.

Business taxes

The new business entities also need to pay the taxes to Dutch Tax Office to work efficiently. There are several types of taxes that are imposed on startups and organizations including income tax, BTW, Payroll tax, and Cooperation tax. BTW is compulsory to pay for all the entities including organizations and startup companies whereas income tax is imposed only on businesses. It is a little difficult at the start to set up your income tax because the revenue seems pretty low in the beginning but then things get solved with time. Business insurance is very important for public companies as well as for shipping companies.

Conclusion

For foreign entities, if plan to expand business in the Dutch government, the first procedure is a company registration process. Different unincorporated business structures perform different business activities and therefore they have different registration processes. International entrepreneurs should follow the above given step-by-step procedure to expand their business.  After the complete registration process, the company follows income tax purposes. Cooperating with professional partnerships can make the organization work more efficiently. If the entrepreneurs plan to stay in the Netherlands, it is recommended that they should apply Visa for entrepreneurs. A company can develop new strategies for its growing market through the meeting of shareholders and the board of directors. It should engage with efficient business partners to grow more and more.

dutch trade register

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