Setting up business

There are several ways to start your own business in the Netherlands. The most common ones are:

Freelancing
As a freelancer you work independently, you invoice your clients and in most cases, VAT is applicable. Business expenses you make can be offset against your turnover. At the end of the year, the profit has to be declared in your tax return, and income tax is due. You can be a freelancer besides your regular employment.

Self-employed
as a self-employed person you are doing the same things as a freelancer, except that you spend most of your time on your business and it is reasonable that you can make a living out of it.

Self-employed deduction
If a self-employed person spends at least 50% of their time and more than 1,225 hours on their business, the self-employed person is entitled to the ‘self-employment discount’. This discount depends on the profit and will run from EUR 4,412 for a profit above 57,360 to EUR 9,096 for a profit of less than EUR 13,465. A self-employed person who has just started their business doesn’t have to spend at least 50% of their time in his business, but will have to meet the 1225 hours.

Over the first three years, the starting entrepreneur will also be entitled to the starting business discount. This is a fixed discount of EUR 2,035

Investment deduction
If a self-employed person invests more than 2,100 per year on assets with an independent value of more than EUR 450 per item, he or she will be entitled to an investment deduction. The deduction is a percentage of the total amount of investments and runs from 25% for investments as of 2,100 till 1% for investments to EUR 236,000. If you invest for more than EUR 236,000, no investment deduction is applicable.

MKB profit discount
The profit after the above-mentioned discounts will be reduced by 10% in order to determine the taxable result.

Setting up a B.V.
if you want to set up a legal company, you will usually end up with a B.V. This has to be incorporated through a notary. In order to obtain the shares in the B.V. a minimum deposit of EUR 18,000 has to be made. The total procedure of incorporation takes around 4 to 6 weeks.

Setting up a UK Ltd
If you set up a UK Ltd in the UK you can have it officially registered in the Netherlands. The Limited will then have the same obligations and advantages as a B.V. Setting up a Limited can be done within 1 week and a minimum deposit of EUR 18,000 is not required.