- Deciding on which countries to expand your business in can be a complex and difficult decision. As an aspiring entrepreneur, you might have heard of the lucrative business environment of the Netherlands and might be wondering whether you should choose to register a new company in the Netherlands. In this article, Tetra Consultants has provided 9 important tips for opening a business in Netherlands so that you may better understand this business phenomenon and make a more informed decision about whether you should register company in Netherlands.
- The Netherlands, being a center of global investment and a worldwide marketplace, is one of the top countries for launching a business. With excellent physical and technological infrastructure, liberal Dutch culture, and an accessible and strategic position, it is simple to explain why to start a business in the Netherlands. However, for many entrepreneurs, the question remains how. This article addresses such important points in the form of key tips when contemplating opening a business in Netherlands.
9 Important Tips for Opening a Business in the Netherlands
1. Understand the business environment: The Netherlands is a gateway to several profitable businesses. Banks, insurance companies, and investment organizations are among the most lucrative businesses in this nation. These companies generate a lot of money by offering in-demand services. Technology enterprises, food and beverage industries, and retail businesses are also doing well in the Netherlands.
The Dutch economy is performing well generally, and this is reflected in the performance of these businesses. If you are looking for company ideas to start in the Netherlands, there are lots of possibilities accessible, even if you do not have a lot of initial capital to start a small business with a small team. A variety of elements influence whether or not a business may be successful in the Netherlands. They include the weather, the judicial system, and market competitiveness. Yet, some of the most important elements influencing business performance in the Netherlands are as follows:
- The climate: The weather in the Netherlands is ideal for establishing and maintaining a business. The nation enjoys a mild environment with relatively low temperatures all year. This makes it a great location for starting a business and making money specifically when it comes to starting a business related to agriculture.
- The legal system: The Dutch legal system is complicated, but that does not make it impossible to start a business. Yet, numerous Dutch businesses have been established successfully under complicated legal regimes.
The competition: In order to be successful in the Dutch business, you will need to be able to compete with other businesses that are operating in the same market space. You will also need to be able to provide good value for your customers.
Consult on the eligibility of starting a business in the Netherlands: Entrepreneurs specifically who intend to stay in the Netherlands for operating a business must satisfy a number of conditions along with the options for Work permits/visas. For example, If you are not an EU citizen, you will usually need to apply for a temporary (MVV) and permanent residence permit. Perhaps you are an innovative startup – in that case, you may have a startup visa.
2. Local corporate bank account: Further, when doing business in the Netherlands, you will also need to have or apply for a business bank account (IBAN). The Dutch Banking Association (Nederlandse Vereniging van Bankenspan>) is an association that helps understand the eligibility criteria for the same.
- Tetra Consultants’ team of business experts can help you navigate the process of applying for various business visas after analyzing your business needs and goals. Additionally, our banking team under our corporate bank account opening services assists international clients with opening bank accounts in local banks by leveraging our years of experience and global banking network.
- Draft a business plan: When starting your own business, it is beneficial to prepare a business plan. You should consider company formation and the legal business structure you wish to use while writing your business plan. What will you make or sell, who will be your customers, and how will you secure funding? Is there a market in the Netherlands for your goods or service? If you want to have a chance of succeeding, you must have thought about all of these issues before starting.
- Drafting a business plan is always recommended when expanding your business internationally. However, doing it alone without prior and proper research of the country can be an overwhelming process. You can always rely on Tetra Consultants’ team of lawyers, chartered accountants, and company secretaries to help you draft a business plan that addresses all the aspects of your prospective business in the nation.
- Understanding different types of business structures: In the Netherlands, the business structure is a very important part of starting and running a business. There are many different types of business structures, and it can be hard to decide which one is right for your business. There are three main types of business structures in the Netherlands: joint ventures, limited liability companies (LLC), and trademark/copyright companies.
- Dutch BV: Setting up a Dutch BV (Besloten Vennootschap) or Private Limited Company is rather simple. It is the most popular choice for international investors wishing to start a business in the Netherlands. It does not need a minimum capital contribution, a local shareholder, or a local director. However, the services of a Dutch notary are required to notarize the articles of incorporation and register company in Netherlands.
- Dutch NV: The Dutch NV (Naamloze vennootschap) or the public limited company is an alternative to the Dutch BV. To start a public business in the Netherlands or a Dutch NV, an investor needs at least €45,000 as a starting capital. This is the only legal entity in the Netherlands that can get listed on the stock exchange.
- Dutch branch: A company’s Dutch branch is not considered a legal entity in the Netherlands. Needless to say, to register a Dutch branch, there must be an existing company overseas. Foreign investors usually take this option to enter the Dutch market. To set up the branch, it must be registered at the Chamber of Commerce. It does not require paid-up capital, but registering a Dutch branch requires the translation of legalized company documents.
- Comply with business name requirements: You are allowed to have an unlimited number of trade names (business names). All company names must, however, adhere to the guidelines outlined in the Netherlands’ Trade Names Act. You must update your registration in the Netherlands Business Registry through the Netherlands Chamber of Commerce (KvK) if you have chosen a new or alternative name.
- The trade names of legal entities (private limited company, foundation, public limited company, organization, cooperative) and personal partnerships (general partnership, professional partnership, and limited partnership) must adhere to strict guidelines. For instance, for a limited liability company (BV) name can only be changed when the articles of the entity are duly notarized by a public notary.
- Analyze the regulatory system of setting up a company structure: According to the World Bank, the Netherlands is one of the simplest European nations in which to start a business. Thanks to the modern internet system made available to investors by the Dutch government, the business registration process may be finished in a matter of days. Furthermore, foreign businesses that desire to relocate here do not need to meet any further conditions other than getting residency permits. Further, the requirement of having a resident director can be filled by a nominee. Tetra Consultants team can assist with the provision of nominee director services who will not be involved actively in your business operation.
- Understand the taxation system: Taxation is one of the main concerns when opting to expand business globally. There are various taxes that are applicable to businesses in the Netherlands
- Depending on their size, type of business, and location, businesses in the Netherlands are subject to a range of taxes. Tetra Consultants’ team of tax experts can address all your tax concerns during our first consultation call by providing an overview of some of the most significant taxes collected by the Dutch government is provided in this blog post.
- Companies in the Netherlands are required to pay social insurance contributions, value-added tax (VAT), company tax, and individual income tax. An organization must pay the corporate tax on its profits. The individual income tax is charged on the incomes of Dutch nationals who earn more than €75,000 per year. All products and services purchased in Dutch stores are subject to the value-added tax (VAT), which is a type of sales tax. Contributions to social insurance are made to assist society as a whole.
3. Fulfill post-registration compliance: Businesses once registered with the Netherlands Chamber of Commerce (KvK) are required further register with different tax authorities and obtain the relevant business license to officially start business operations in the nation. Accordingly, your new business also needs to be registered with the Belastingdienst (Dutch tax office). Tetra Consultants can assist you in obtaining the tax identification number with respect to Income tax as well as VAT so that you can claim VAT deductions on the investments you make to start the business.
- Tetra Consultants will check whether there are licenses applicable to your company. For example, register with the social security authorities and with the pension fund for employment purposes. Tetra Consultants is proficient with obtaining various offshore financial licenses. We will apply for the relevant license based on the nature and scope of your business activity.
- Navigating the country of the Netherlands’ complex business climate as an entrepreneur planning to register a company in the nation might be a challenging process – a hassle to say the least. As such, Tetra Consultants hopes that this article has provided you with a much better understanding of the business culture of the Netherlands so that you can truly decide whether you should do so yourself. So, what are you waiting for?
- Contact us to find out more about the process of starting a business in the Netherlands, and our dedicated and experienced team will respond within the next 24 hours.
- Tetra Consultants will not only empower you by helping to navigate the different regulations of the Netherlands but also aid in facilitating the registration of your company there while providing invaluable, nuanced insights into any potential challenges.