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If you ever dreamed about setting up an your own business as a young entrepreneur, the Netherlands might just be the place to initiate your endeavor. Not only will you have access to the entire European single market, but this technologically advanced country offers many benefits that will quickly help your business grow. There are many opportunities available, for example to start an online business; you just need to know where to look and when to take action. Read on for some tips and valuable information that will help you during the process of setting up a Dutch online business as a young entrepreneur.

Why choose the Netherlands to start a new business?

The Dutch have continuously proven to be stable, dependable and welcoming to foreign investors and entrepreneurs. But Holland also excels in innovative technologies, IT and e-commerce. If there is a new gadget, app or tool on the market; chances are at least part of it might have been developed here. This makes the Netherlands extremely suitable for an online business. The Dutch population is also known to be quite internet savvy and knowledgeable, making them perfect potential clients.

Young entrepreneurs have the advantage of naturally being comfortable with many technologies and having an edge over older organisations. This is especially true with disruptive innovations, new approaches and innovating business models in the web and IT sector.

Access to amazing marketing companies

The Netherlands is home to an enormous amount of excellent marketing companies and sales operations. Thus, the online industry is thriving and offer many possibilities for new entrepreneurs. You can count on finding the perfect commercial partner to boost your business to a high level. This will make it possible for you to reach a large amount of national as well as international clients, as most marketing companies offer bilingual or even trilingual services.

The Dutch have access to a high quality IT infrastructure

One of the main factors you will probably be looking for is a technologically advanced country with an excellent infrastructure. An online company cannot exist without these basics, which makes Holland the perfect fit. The Netherlands has multiple airport and seaports, a fantastic road and rail network and a digital telecommunications network that is seen as one of the best in the world regarding speed, quality, and reliability. In other words; you will have access to one of the best infrastructures worldwide. [1]

Lots of opportunities for young freelancers

Online businesses are very versatile nowadays, which means you can sell practically every imaginable product and service online. Especially creative freelancers benefit from the internet as a medium, because it became a lot easier to sell your products to a much wider audience. Creative freelancers will have a grand time in Holland, as the country is bursting with likeminded creative professionals and companies. If you are looking for interesting possibilities for collaboration; look no further. The Dutch creative sector ranks among the world’s top 10 in terms of job opportunities, brands and trade options. [2]

E-commerce and affiliate marketing for startups

Another market that has been thriving is the e-commerce business. In the Netherlands web shops are booming, since a large portion of the population actually prefers to do their shopping online. You can easily create a startup to sell unique handcrafted products, as well as general wholesale items. Another option is to set up a blogging site and become an affiliate for already existing large corporations like Bol.com for example. This is basically a hugely successful Dutch version of Amazon. Becoming an affiliate will allow you to make money by referring clients to their website. The only thing you need is a Dutch online company with a chamber of commerce number and you are good to go.

Economic advantages of youthfull entrepreneurship

The Dutch government is stimulating (youth) entrepreneurship to help combat unemployment and stimulate the economy. It does so by making the regulations increasingly simple, attractive for starting entrepreneurs as well as provide decent possibilities of education in terms of small business management.

So how can our government further improve if effort? Youth Business International made a study with Yecontexts to answer just this question. Providing guidance, performing research on effectivity and identifying the opportunities. Some of these opportunities include;

Setting up an online business in the Netherlands is fast and easy

Intercompany Solutions can set up your online company in just a few working days. It’s wise to do some research about the products you wish to sell, if your plan is to set up a web shop. There are certain restrictions or products that require a permit. In all other cases you can start making money almost immediately. If you are interested, you can always contact us for detailed information.

Also see our complete Guide for starting a business in the Netherlands

[1] Infrastructure assets in the Netherlands can help your company grow. Link: https://investinholland.com/infrastructure/

[2] Netherlands Enterprise Agency, RVO. How to start an online business - a checklist. Link: https://business.gov.nl/starting-your-business/checklists-for-starting-a-business/how-to-start-an-online-business-a-checklist/

Tax on income generated by substantial shareholding (Income tax box 2)

If a resident of the Netherlands has a “substantial shareholding” (“aanmerkelijk belang”) with respect to an eligible foreign or Dutch corporation, then the income generated by this shareholding needs to be declared in Box No. 2 of the tax return form for personal income.

In case a taxpayer holds directly or indirectly a substantial share of a corporation, then any income obtained from loans or asset provisions to the corporation is taxable and needs to be reported as derived from other labour in Box No. 1 of the tax return form for personal income.

Read more on Box 2 for Foreign shareholders.

What is a substantial shareholding?

Taxpayers are considered as substantial shareholders if they own, indirectly or directly, alone or with their fiscal partners:

  1.  a minimum of 5% of the company’s total share capital (except repurchased shares that will be cancelled);
  2. have the rights to acquisition of ≥ 5% of the shares mentioned above;
  3. profit shares (or “winstbewijzen” in Dutch) giving entitlement to ≥ 5% of the annual profit or ≥ 5% of any liquidation proceeds;
  4. a minimum of 5% of the rights to a vote in a Cooperative (or “Coöperatie” in Dutch) or an Association on a Cooperative Basis (“coöperatieve vereniging”).

The criteria listed above are valid both for legal and economic ownership in its various forms.

The rules for substantial shareholdings apply to options to acquire profit shares / shares in the same manner as to underlying profit shares / shares.

The principles of taxation of substantial shareholdings are basically the same for Mutual Funds (FGRs), Cooperations and Associations on a Cooperative Basis: all these entities are treated as corporations.

In case one corporation owns shares of different classes, the 5% criterion is valid for each class separately. Share classes are determined by special rules.

In case a taxpayer is classified as an indirect or direct substantial shareholder, other owned profit shares / shares issued by the subsidiary also belong to the substantial shareholding and therefore are subject to the same rules.

Substantial shareholders’ taxable income

The substantial shareholders’ taxable income is formed by the regular profits generated by the shareholding (e.g. dividends) minus allocable expenditures and by the capital gains obtained through transfers of shares included in the shareholding. Personal allowances can be deducted from this income.

If certain conditions are fulfilled, the income received from inherited substantial shareholdings can be subtracted from the price of acquisition of the shareholding for a period of two years.

Can we help you?

Our qualified tax advisors can provide consultancy on your tax position. They can also prepare and file your yearly income tax report and handle other issues related to tax compliance in your name. If you need further information or assistance, please, contact us.

Dedicated to support entrepreneurs with starting and growing business in the Netherlands.

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