Dutch Tax Blog

Dutch Tax Blog

Starting your own business

General Dutch (Tax) NewsPosted by Mike de Gruijl Fri, November 18, 2016 13:03:07

Starting your own business,


Is something a lot of people/expats dream about. So many people so many reasons they have for starting their own business.
What is the best way to start your won business? In this article I will not bother you with all the preparations like a good business plan, containing at least a SWOT analysis, or telling you that you must have your financial situation all planned well and a good knowledge of your financial situation. These matters don't need any additional explanations because without taking care of this you will be certainly facing a hard time starting.

Dutch BV

Having done all the calculations and finished your business plan it is time to make a decision on which legal form you should choose.
Strangely enough a lot of people dream about opening a Dutch BV (a company with a limited liability) and again for may different reasons. For example:

- Status (a BV is usually an established company)
- Liability reasons (with a BV your private assets are protected against creditors in case of issues)
- Retaining the 30% ruling (only when you incorporate a BV you can retain your 30% ruling)
- Because they were told it was the best option
- They are thinking about hiring employees

All different reasons of which some are legitimate and others only are based on ideas or thoughts.

Eenmanszaak

What many people don't realize is the fact that there are much better and cheaper ways in starting your own business. Most expats have heard about the ZZP'er but don't really know that a ZZP'er is not a legal status and in fact only a popular way of saying someone has a business with the legal status of "eenmanszaak" (one-mans business) and does not have any employees working for him/her.

For Dutch people a one-mans business is the most common way of starting your own business. Why?

- Easy to start (going to a local chamber of commerce with your id is sufficient)
- Cheaper administration services (your profit is your taxable income)
- Tax purposes (there are several tax advantages when being a one-mans business)
- They don't have the intension of taking high risks in doing business (liability issues)

Facts

A fact is that starting a business as a one-mans business doesn't mean you can't have any employees working for you. You can have as many employees working for you as you like.
Another fact is that you can profit lots of tax credits as a one-mans business which are not available for a BV and his/her shareholder(s) The thumb rule is that you must make more than € 150.000,- profit to start thinking about changing the legal status into a BV to have more profit of being a BV instead of being a one-mans business.

Aren't there any disadvantages you might think?

Yes of course, the biggest disadvantage of being a one-mans business is the liability matter. When being a one-mans business you can be held fully liable for all your private assets when doing business. This means, in a worst case scenario, that creditors can claim all your private assets (like your house etc) when there are major financial issues with your business. Therefore you must always consider the risks you are willing to take when doing business. If the risk is part of your business it can be a smart idea to see if there are insurances who cover liability issues involving your regular work to prevent getting into trouble in private when doing business.


Future

If your business grows in the future or changes, it is always good to know that changing your legal status into a BV.

Tax & Service Solutions is your partner in making the right choices in business matters not only for starting but also for the future. More information can be found at https://www.tssolutions.nl

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