You can always quit your business or cease trading. You do not need permission for this. There is a lot to consider with company closure (also called liquidation). But what rules and permits will you have to deal with? What are the tax implications? What should you do with your registration in the Trade Register of the Chamber of Commerce? Read on this page which are the most important steps you need to take to end your business.

Let customers and suppliers know that you are going to stop
Contact your customers and suppliers. First, take a good look at which contracts or agreements you have with them. Only then let your customers know that you are quitting.

Dismiss staff
Do you have personnel? Then there are obligations that you must meet. If you need to fire staff, you must apply for a dismissal permit. You can record agreements in a social plan, such as severance pay.

Check whether you are eligible for a discontinuation allowance
Are you selling your business and is it profitable? In that case, you must pay tax on the profit (discontinuation profit). You may be eligible for a discontinuation allowance. You then pay less tax on the strike profit.

Check whether you are entitled to benefits
If you quit your business, you as an (older) self-employed person may be able to get financial help from your municipality through

- the Self-Employed Assistance Decree (Bbz)
- the Income Provision for Older and Partially Disabled Self-Employed Persons (IOAZ).
One of the conditions is that you are still registered in the Trade Register of the Chamber of Commerce.

Deregister from the Trade Register
Deregister your company from the Chamber of Commerce. How you do this depends on the legal form of your company. To deregister a legal entity, you must first dissolve it.

The Chamber of Commerce will inform the Tax Authorities that you are stopping. The Tax and Customs Administration will send you a letter about the consequences for VAT. Would you like to apply for benefits? Then wait a while before unsubscribing.

Stopping a business with debt
Are you forced to quit your business? For example, because creditors have filed for bankruptcy. See if you can settle your debt. And check what to do with your staff.

Settle for VAT (sales tax)
The Chamber of Commerce will pass on your details to the tax authorities. The tax authorities will send you a letter if you are an entrepreneur for VAT purposes. If you still have to make a final VAT return, this will be stated in this letter.

Pay for income tax
You must settle with the tax authorities for tax purposes. This means that you close the administration of your company. You draw up the balance sheet and pay for all tax types. Have you built up an old age reserve? Then you settle it for income tax. Do you still have stock in the warehouse? You have to pay VAT for your own use.

Cancel your business insurance and subscriptions
If you quit your business, you must cancel your business insurance. Also consider cancelling permits, telephone numbers and subscriptions. And also cancelling current contracts, for example for an office space.

Cancel (the domain name of) your website
To cancel a .nl domain name, contact your hosting provider (also known as 'registrar'). The latter will pass on the change to the Stichting Internet Domeinregistratie Nederland (SIDN).

Keep your records
After your business has ended, you must keep your administration for at least 7 years. You may also scan your paper administration and only keep it digitally.

Facts and figures: how many companies quit per quarter?
The graph shows the number of business closures in the Netherlands per quarter.

Interested in reading more on closing a Dutch BV company? See our other article.

Source:
https://ondernemersplein.kvk.nl/stoppen-met-uw-eenmanszaak/

https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/belastingdienst/zakelijk/ondernemen/onderneming_wijzigen_of_beeindigen/u_staakt_uw_onderneming/

If you have ambitions to start a Dutch company, chances are you might also have to hire employees. Of course this depends a lot on the type of business you choose. For example; if you open an e-commerce business, you might be able to take care of all business activities yourself, or with the help of a few freelancers. Larger corporations, however, will inevitably need qualified and well-educated personnel. We will explain and outline how hiring staff in the Netherlands works exactly, and all information you will need to be aware of.

Which alternatives can you choose from as a business owner?

If you suspect you might need extra staff to carry out daily business activities, then there are a few options you can choose from. This is especially relevant if your Dutch business is in the growing stages, and you need someone to help you maintain the same pace. Before you hire personnel on a contractual basis, there are some less complicated options you can choose from that we will outline below.

Asking family and friends for assistance

If you just set up a company or are planning this in the near future, it is advisable to ask friends and family for help. If you have teenage children, they might also find it fun to participate and learn about owning a business. This might help them later in life, plus you reduce the costs of hiring employees in the beginning stages of your company.

Hire a freelancer for a defined period

If you work together with another freelancer for a defined period of time, you can hire someone from all over the world. There are 4 ways to achieve this:

• You hire a freelancer directly, i.e. without the intervention of second party. Check whether you want to use a model agreement
• Via a freelance platform such as Upwork or Fiverr. You pay the freelancer directly, but the platform takes a percentage out of the total sum
• Through an intermediary, such as an employment agency or secondment agency. This agency hires a freelancer and rents the freelancer out to you, this way they make a profit over the freelancer. The self-employed person invoices the intermediary
• Through a payroll company. The payroll agency pays the self-employed person

Work together with other freelancers

Are you planning on working with another freelancer for a longer period of time and also on a structural basis? Then maybe consider incorporating the joint activities into one legal form. Think of possibilities such as a general partnership, cooperation or private limited company. You can convert your own legal form to another legal form or set up a new legal form together with other freelancers.

Temporary agency workers and payrolling

A temporary worker is employed by an employment agency. You pay the temporary employment agency, and not the temporary worker. The employment agency handles the recruitment and delivers the employee. With payrolling, your employee is employed by the payroll company with which you conclude an agreement. You then recruit your staff yourself, determine the salary and the employee falls under your responsibility. In both cases, the employment agency and the payroll company provide, among other things, remuneration, an employment contract, an annual statement, salary administration and pension accrual.

Hiring staff officially via your own company

A more permanent solution and often for a longer term is to hire an employee. This can be part-time or full-time and via a contract for a definite or indefinite period of time. If you are going to hire staff for the first time, there are a number of legal obligations that come with this responsibility. Your company form then changes from self-employed to employer. You can also hire an on-call worker, via an on-call contract. This can be a zero hours contract or a min-max contract. This is useful, if you cannot guarantee an employee sufficient work (yet).

Requirements for hiring staff in the Netherlands

Hiring staff involves more red tape than you might think. You need to be mindful of plenty of Dutch laws, as well as have your payroll in order. There are some things you need to know if you are planning to take on new employees. You can only employ official staff if the person who works for your company meets several requirements. Someone is considered an employee when he or she:

• Has worked for your company for three consecutive months
• Worked for payment every week, or at least twenty hours a month

Furthermore, there must be a certain authority relationship, wages must be paid, and an obligation to perform work. If your answer to all the above is 'yes', you can get started with the following things because this means that you are eligible to hire employees.

Hiring staff for the first time: information and a checklist

If you are hiring an employee for the first time, you need to immediately register as an employer with the Dutch Tax Authorities. You must also pass this on to the Dutch Chamber of Commerce. Make agreements about the terms of employment and record these in writing in an employment contract or in the collective labor agreement.

How to register as an employer?

If you hire an employee for the first time, you must register as an employer with the Dutch Tax Authorities and Chamber of Commerce. When you register as an employer with the Tax Authorities, you will receive a payroll tax number. You need this, because you have to withhold payroll taxes from your employee's salary and file a tax return. Use the ‘change form’ to inform the Chamber of Commerce that you are hiring staff. You must always notify the Chamber of Commerce of changes in your workforce according to Dutch law.

Hiring staff with a sole proprietorship: is that possible?

If you are the owner of a sole proprietorship, it might seem as if you cannot hire staff, but you actually can. The legal entity is named this way, because there is only one owner present at all times. This doesn’t mean you cannot hire employees, however. This means, that you do not have to change your legal form if you want to hire staff with a sole proprietorship. If you want to know more about hiring staff with a sole proprietorship, Intercompany Solutions can assist you with advice and the registration process.

Always check and file your employee's identity

When you hire personnel, you are required to always ask for proper identification. You also need to keep a legible copy of the valid proof of identity in your payroll administration at all times, for possible audit and administration purposes. The copy of the identity document must contain all personal data, as is showed on the original. The citizen service number (BSN) must be clearly visible on the copy as well.

Drafting an employment contract: necessities

Once you decide on hiring a possible employee, you will need to sort the necessary paperwork to actually hire them. First, you must agree on an employment contract with your potential staff member. You can make verbal agreements, but it is better to record the agreement in writing. You do this in an employment contract. The terms and conditions of employment are often already established in a collective labor agreement (CLA). You can make additional agreements about the conditions. These may not differ from Dutch law or the collective agreement. The following factors can or must be covered in the employment contract:

• Name (initials, prefix, surname), date of birth, address and place of residence of the employee and name, address, place of residence of the employer
• Place(s) where work is carried out
• Employee's job title and primary duties
• Time of entry into service
• Duration of the employment contract (if it has been concluded for a definite period)
• Holiday entitlements
• Wages and payment period
• Usual working hours (per week or per day)
• Participation in a pension scheme (if applicable)
• Whether a CLA applies (and which one it concerns)
• Any probationary period
• Notice period (or its calculation)
• Incapacity for work and illness
• Possible right of recourse
• Identification obligation
• Competition/relationship clause (only applicable for higher or specific positions)
• Cost of personnel

In addition to the monthly gross salary of your staff, you may have to deal with additional costs such as:

• Holiday pay
• Thirteenth month
• Medical expenses
• Education
• Pension fund
• Travel expenses

Is it possible for an employee to work without a contract?

If you let an employee work for you without a written contract, this doesn’t mean immediately that there is no contract whatsoever. This is because you automatically have a verbal employment contract, if you agree to hire an employee verbally. Nonetheless, you are legally obliged to record a number of matters in writing no more than one month after your employee has started work in your company. Keep in mind that some agreements are only valid, if they are confirmed in writing. That is why most employers prefer a contract, next to employees as well. At least that way everything is certain, and you don’t get into ugly legal conflicts by being unclear.

Adhere to and keep in mind the statutory minimum wage

Like in many countries, these is a minimum wage in the Netherlands by law, in order to protect its citizens from exploitation. The wage is not high, so it should not be a problem to adhere to it when you set up a business in the Netherlands. You must pay your employee at least the statutory minimum wage, or the minimum youth wage depending on your employee’s age. The minimum wage applies to employees aged 21 and over. The minimum youth wage applies to employees between the ages of 15 and 21. Wages are adjusted every six months; this happens on January 1 and July 1. You can find the current minimum wages in the Netherlands via this link.

Adjust your administration accordingly to your new situation

Make sure you process all mandatory data in your administration before your employee starts working for you. This applies in particular to the details of payroll taxes, a copy of the employee's identity and the wage statement. You can download an example from Belastingdienst.nl, in order to make a wage statement yourself. If you make a wage statement yourself, it must contain the same data as in the example.

You also need to arrange a pension scheme for your employees

You are obliged to offer your employee a pension scheme if there is an industry-wide pension fund for your sector available. If there is no industry-wide pension fund, you can choose whether to offer your employees a pension scheme. Ask an independent advisor for advice in this case like intercompany Solutions, because a pension scheme helps employees to have the necessary funds to live after they reach the pension age.

An extensive checklist regarding hiring personnel

There are some things you need to take into account when you want to hire people to work for you. In the content above we have described all the basic obligations you need to be mindful about, but there are many more factors to consider when hiring personnel. We will provide you with a checklist as found on the website of the Dutch Chamber of Commerce, which will help you decide whether you can take on, and, handle the responsibility of other people and employees working for you.

Explore possibilities for your Dutch company

As your business gets busier, you might be looking for staff. But when is that useful? And do you opt for temporary staff or permanent employees? There are many ways to find good employees, for example via recruitment websites, but also by informing your network you need staff. Take some time to explore all your options, and what feels most right to you. You can hire someone indefinitely, for a project or for a certain amount of time. Intercompany Solutions can assist you in finding the best possible way to acquire staff, as well as direct you to the right channels hereto.

The recruitment process

Recruitment and selection is quite an extensive process, since you need to match your preferences with a possible ideal candidate. This means you need to do your homework and make a list out of everything you might possibly need from a new employee. This entails information like previous work experience and education, their personal assets and liabilities, and how their background matches your preferences and company ideals. We strongly advise outsourcing the process, if you have no experience with hiring staff whatsoever. It is quite a complicated process and investing money instead of time often works better for (starting) entrepreneurs, if you would like to limit the amount of risk you are willing to take.

Suitable wages for your staff

We already discussed the topic of adhering to the Dutch minimum wage, for obvious reasons regarding the basic necessities of your employees. Next to the minimum wage, you will also need to become competitive with other companies that operate within your sector; especially regarding the salary you offer. For many employees, salary is the most important employment condition. Ensure an appropriate wage that meets the legal requirements, in order to make sure your employees are treated fairly.

Good working conditions are essential

If you want to hire employees, you don’t just deal with paying appropriate wages but you also have to take care of realizing good working conditions. If you are trying to start a business in a certain industry, it would be advantageous if you read about the laws and regulations you will need to adhere to. Different sectors have different rules and laws to take into account, which is why you will need to do the necessary research to comply to these rules. At the very least, employees need to be safe, which means you need to regulate the working conditions in order to properly ensure their safety. A package with good secondary employment conditions also has advantages, next to a competitive and good wage.

Arrange a trial period if you can

You can agree a probationary period with your new employee for a maximum of two months, in order to see whether you and the employee are a good fit. This can enable a good working relationship, provided that both parties do their best to work together. A trial period provides you as an employer with the necessary tools to possibly end the working relationship, if one or both parties don’t live up to each other’s expectations. Especially if you are hiring a long-term employee, the trial period will help you in deciding whether you can work together for a long period of time or not.

Determine wage costs and income tax

You must withhold payroll taxes from your salary. You must remit these payroll taxes to the tax authorities. The wage costs for you are approximately 30% higher than the gross salary that your employee receives. After all, you also pay part of the insurance and other additional costs. In addition to the pension, these are often the holiday pay (usually 8% of the gross salary) and the thirteenth month. This is subject to wage tax and premiums, which you must pay as an employer.

Maintain payroll for your company

Apart from the contract mentioned above and tax obligations, there is also a lot of extra administration involved, particularly payroll. This goes especially if you don’t hire staff via agencies, but decide to hire the employees yourself as a company. Payroll administration consists of various forms and calculations. You have to think of forms such as the wage statement, the payslip and the annual statement. These are all forms that are important for calculating wages and amounts due. A correct payroll and administration is absolutely necessary, since the Dutch Tax Authorities need this information regularly, especially via declarations and during possible audits.

Screening staff in certain sectors

There are multiple sectors in which screening is a necessary step of the recruitment process. This involves disciplines such as national security and Police, but also jobs that involve taking care of innocent and older people and thus; require a little bit more extra safety. Every employee can request a screening, which is called a ‘Verklaring omtrent het Gedrag’ in Dutch. This document is necessary for acquiring reliable personnel. You can find information about the way you can request this document here.

Collective labor agreement (CLA)

If you hire staff, there is a good chance that you as an employer must adhere to a collective labor agreement (CLA). Collective labor agreements exist in order to protect the rights of employees, and are often interdisciplinary organizations that operate for certain sectors specifically. If you don’t need to adhere to any CLA by Dutch law, we still advise you to look up a CLA of the sector you will be active in. Employees can reject certain working conditions if they are subpar to an existing CLA, which is why it is wise to at least adapt similar working conditions for your own company.

Paying premiums for (social) insurances

As an employer, you pay the premiums for employee insurances (WW and WAO/WIA) to the tax authorities yourself. These premiums will protect an employee, should you fire them. It will enable them to enjoy temporary income whilst they are in between jobs. You can find more information about this in the payroll tax manual. You will receive this from the tax authorities when you register as an employer, or you can read in chapter 5.1 of the Wage Taxes Handbook which premiums exactly these are. UWV provides the benefit to the employee, in case they will need it.

Establish a non-compete clause with any new employee

With a non-compete clause you protect your company if your employee leaves, especially if this happens on bad terms between both parties. It will ensure that an employee will not abuse the knowledge they acquired at your company, for example by selling it to other companies or taking your clients to their new company. This is never a nice subject as ideally, you would rather trust an employee of course. We strongly advise incorporating a non-compete clause in every contract though, just to be sure about the future.

Arranging health and safety services

As an employer, you must be supported by a health and safety expert (for example, a company doctor or health and safety service) when employees start to work at your company. This is essential in circumstances such as the employee becoming ill, sometimes this can also happen due to problems in the workplace. A health and safety expert can mitigate between the employer and employee in such cases, as well as provide help and mediation for both parties involved.

Protect the data of your personnel at all times

In our present day, sensitive data can relatively easy be hacked by maleficent outside third parties. It is essential that you invest in efficient cybersecurity apps and tools, in order to prevent the data of you and your employees to be stolen. In general, it’s best to hire a specialist such as an IT professional, even a freelancer, in order for you to know sure that your data is protected. You can also ask a professional IT company for help. In any case, we strongly suggest you invest time and effort in data protection to avoid data leaks.

Paying salary and the payslip

There are rules for the payment of salary, which every employer needs to adhere to. This involves regulations about which information always needs to be stated, the way it needs to be stated and why. This also involves what you may, or may not include in your salary. With the periodical payslip you inform your employee about how the pay is built up, and which taxes and insurance premiums have been deducted.

The right to receive holiday pay

The Dutch law states that your employee is legally entitled to at least 8% holiday pay, and this must be paid by the employer. In fact, that amounts to slightly less than a gross monthly salary. In principle, the employer cannot deviate from this in the employment contract. An exception to this are employees who earn more than three times the minimum wage (about EUR 4,500 per month). It can be agreed in writing, that they will receive no or less holiday pay. It can also be laid down in a collective labor agreement for all employees; that they receive less or no holiday pay.

Need help with hiring Dutch employees for your company?

Intercompany Solutions specializes in helping foreign entrepreneurs with setting up a Dutch company. We can assist you during every step in the process; from company registration with the Dutch Chamber of Commerce and Tax Authorities, to registration as an official employer. We can also assist you with any questions you might have regarding the setting up and successfully maintaining of a company. Feel free to contact us anytime for more information and helpful advice.

Sources:

https://ondernemersplein.kvk.nl/voor-het-eerst-personeel-aannemen/

https://www.kvk.nl/advies-en-informatie/personeel/personeel-inhuren-als-zzper/

So, if I inherit a company in the Netherlands, do I have to pay inheritance tax or gift tax?
Yes, if you inherit or receive a business as a gift, you pay tax. How much? That depends on the value of the company. And sometimes you get an exemption.

If you continue the business, you can get an exemption from inheritance tax or gift tax
For example, if you take over the family business from your parents. This scheme is called the business succession scheme(1). You then pay less or no tax.

When can you make use of the business succession scheme?

• The business must be an active, ongoing business. If it only concerns investments, this is not covered by this scheme.
• Furthermore, the previous owner must have owned the company for at least 5 years, although if the owner has deceased, this period is only one year.
• Finally, the company must not stop shortly after the takeover. You must continue with the company's activities for at least 5 years. Have you acquired shares in a company? Then you must remain the owner of those shares for at least 5 years.

How do you make use of this business succession scheme?
You have to file a gift tax or inheritance tax return and state that you want the exemption. We strongly advise you to engage an advisor if you are taking over a company. They can also help you determine the value of the company for inheritance or gift tax.

Are you the heir of an entrepreneur? After the death of the entrepreneur, you will have to deal with various tax issues, such as inheritance tax and substantial interest. An executor can provide you with good services in settling the inheritance.

Substantial interest in Dutch law
Owning at least 5 percent of the shares of a BV company or NV is called a substantial interest. In the event of death, the substantial interest passes on to you as heir. You do not have to file a tax return for the profit from a substantial interest. This only applies if the shares become part of your private assets, and you are liable for tax in the Netherlands.

If after you acquire the shares you decide to emigrate or place the shares in another (holding) company, the tax authorities will consider this a taxable event.

Inheritance tax
As soon as the estate has been settled, you as heir must settle on the inheritance tax (a tax on the value of the shares or depository receipts thereof). With a high business value, this often means a large amount per heir. This can endanger the survival of the business if the inheritance tax is paid from it. The law provides for deferment of payment under certain conditions. Then this tax must be paid in 10 equal annual installments.

Continuing the business
Do you want to continue the inherited business? If you take advantage of the business succession facility, you do not have to pay tax on much of the value of the business assets. View more information about the business succession facility.

Sources:
https://ondernemersplein.kvk.nl/belastingzaken-bij-erven-van-een-onderneming/

https://www.bedrijfsopvolging.nl/kennisbank/bedrijfsopvolgingsregeling-borbof/

https://www.erfwijzer.nl/onderneming.html

A lot of entrepreneurs all over the world choose to start an affiliate company. International multinationals such as Amazon.com have proven to be a very effective and safe method of earning an income, whilst not being subject to some of the risks that starting an entirely new company can entail. In the Netherlands Bol.com has made quite a name for itself, by now also internationally. This Dutch equivalent of Amazon.com is constantly growing and evolving, meaning that foreign entrepreneurs can profit from becoming an official partner-seller. In this article we will outline the details regarding becoming a Bol.com partner, as well as provide you with all the necessary regulations that you will need to adhere to. If you would like personal advice, feel free to contact Intercompany Solutions for extra tips & tricks.

Relevant article: Starting an Amazon store in The Netherlands.

Why sell products via Bol.com in the Netherlands?

As opposed to starting your own webshop, becoming a Bol.com partner has quite some perks. You immediately reach 10 million potential customers, as Bol.com is the number one platform to-go in the Netherlands. You acquire an online store without any start-up costs, plus you only need to pay for the items you actually sell. This eliminates the whole necessity of an inventory, making this option practically risk-free. You are very free in choosing the specific products you like to sell. From experience we know that becoming an affiliate always works best, if you have any specific or prior knowledge about the products you want to sell. So take this into consideration, especially if you want to redirect clients via blog sites and affiliate sites.

Tips for creating referral websites to your webshop

If you are making special websites to redirect people to your Bol.com store, there are some tips and tricks to consider to make this a successful endeavor.  One of the most important contributing factors is a good-looking website, since it will be your website that will pull potential customers to your store. We also cannot stress enough how important it is to write flawless articles and blogs. A lot of errors and typing mistakes can diminish a potential client’s interest. Make sure you offer a nice range of products, since a broader product assortment is beneficial for your conversion and turnover. Make sure that you write informative articles and referrals, often a comparison of some products you sell works very well. Also make sure that your items comply with Bol.com’s assortment policy and the laws and regulations.

Compliance with the Bol.com service standards

It is important to meet customer expectations by providing adequate service, since this ensures customers coming back to your webshop. That’s why Bol.com has several service standards with which all sellers need to comply.  The aim is to form the best shopping platform in the Netherlands and Belgium together with Bol.com, that ensures a standard minimum quality and thus, makes every client feel safe and secure regarding their shopping on the platform. In order to be able to guarantee stellar service, a number of service standards apply to the Bol.com shopping platform.

What are the Bol.com service standards exactly, and how do these work?

In order to guarantee the overall quality of Bol.com as a website and platform, a number of service standards are applied which apply to the entire shopping platform. The main deal is, that the better you perform on these service standards, the better you can sell. And thus, the more sales you achieve and the more likely your assortment is to get the desired attention. These service standards apply to all sellers, and are measured via different routes. We will explain these standards in detail below.

1.     On time delivery for a minimum of 93% of all ordered items

To ensure a high quality of service to its customers, the service standard 'Delivered on time' applies. This states that at least 93% of the ordered items must be delivered to the customer on time. This applies to both the assortment of Bol.com itself as well as your own. If three or more items have been delivered late during one week, and your weekly score is 93% or lower, you will receive a so-called strike for that week. The higher your score is, the better your chances of successfully selling items are. So it makes sense that you should always try to deliver within the promised due date. In your sales account you have a good view of your delivery performance and you can see where there is still a profit to be made for you to optimize the 'Delivered on time' score. This service standard is measured by two methods, namely deliveries measured by Bol.com or deliveries measured by the customer you are sending items to. We will outline both methods below.

Deliveries measured by Bol.com

If a delivery is carried out by Bol.com itself and can be followed by the platform, the on time delivery will be measured by Bol.com as well. In such cases, Bol.com will check whether the first delivery attempt falls within the promised delivery due date indicated by you. This applies to orders sent with Dutch postal service PostNL, DPD, DHL and Bpost. Is the customer not at home when the package is offered? Or did the customer change the delivery address? Then these situations will not affect your score. Keep in mind in your delivery promise, that the time at which the customer placed the order is leading. So when the customer orders an item at 15:57 where the delivery promise is 'ordered before 16:00, delivered tomorrow', the customer really assumes that he will have the item at home tomorrow. Even if you don't receive this order until 16:03.

Deliveries measured by the customer

Some orders cannot be followed by Bol.com. This happens with products that have been sent by letter post or by another carrier. In such cases, the customer will receive a delivery confirmation by e-mail on the delivery deadline. Via this e-mail the customer can indicate if and when he has not yet received the order. This email will directly reach you as the seller, which means you will have to respond. Is the customer responding? Then this is seen as an item that has not been delivered on time. If you receive no response whatsoever, then the item is measured as delivered on time. To help you determine a realistic delivery promise, Bol.com publishes historical data weekly on the average delivery times of different carriers.

2.     Maximum percentage of 2% cancellations

It can be very disappointing for a customer if their order is cancelled, and therefore the percentage of cancellations counts in the Bol.com service standards. If three or more items are cancelled during one week and the percentage of cancellations is therefore higher than 2%, you will receive a strike. Within the service standard 'Cancellations', two aspects are measured, namely cancellations by you as a seller and cancellations by the customer after the promised delivery date. We will outline both scenarios shortly below.

Cancellation made by you as a seller

If you wish to do so, you can cancel any order that you receive from a customer. However, please keep in mind that almost any customer will experience this negatively, since they obviously buy your products because they want to receive them. Thus, Bol.com wants to prevent cancellations made by sellers as much as possible in order to facilitate a stable and reliable shopping environment for all customers. That is why 'Cancellations' is one of the service standards every seller needs to adhere to.

Cancellation by the customer after the promised delivery date

Any customer will assume that their order will be delivered on the promised delivery time, so when this does not happen, a customer will inevitably be disappointed. The dissatisfaction increases, when a customer cancels an order that has not yet been delivered. That is why this also counts as a cancellation and will affect your overall score. Does the customer cancel the order before the promised delivery date? Then this cancellation will not count towards your score. Are you unable to deliver an order on time? Then cancel the order as soon as possible, making it possible for the customer to search for an alternative.

3.     Always provide a Track & Trace number for all parcel shipments

If you send a parcel to a customer, the customer generally likes knowing where the parcel is at any given time. By providing a track & trace number with every order, you enable the possibility of clients being able to follow their order. Sometimes people aren’t home at the promised delivery time, which will make it easier for them to switch their activities and be home when the carrier delivers their products. Therefore, we advise to always add it to your packages. For letterbox post, a track & trace number is not mandatory, however it is highly desirable to provide these clients with the same service.

4.     You need a customer rating of an 8 or higher

The customer's opinion is essentially the most important factor when doing business. Because a satisfied customer comes back faster, but will also be inclined sooner to post a positive review about you. Other potential customers look at these opinions, that your customers post for you. The rating for customers is a measure of a partner's quality and customers take this into account in their purchase consideration, in addition to the delivery time and selling price. With a good rating, customers are much more likely to choose to buy an item from you. In your Bol.com sales account, you can see your average ratings. You will also find tips and advice about how to maintain and improve your rating. For a good performance on the service standard 'Rating figure' we use an 8 as the lowest limit. If you have an 8 or higher as an average during the past three months, this means that your customers are really satisfied.

5.     Telephone accessibility for 90% of all call attempts by Bol.com

In some cases, Bol.com will try to reach you if they need certain information from you. This can be about handling orders, customer questions or complaints and such subjects. In order to be able to serve the customer as quickly as possible, it is important that you respond to at least 90% of the call attempts during office hours, Monday to Friday, from 9:00 to 17:00. If you structurally don’t pick up the telephone, this will result in a lower rate for you as a seller.

6.     Questions from customers

In order to provide customers with the best possible service, it is important to inform them as fully as possible about anything you sell. This means providing information such as product characteristics, or the current status of their order. Because this can prevent questions from the customers that you might have to answer, if you don’t provide them with sufficient information beforehand. This can cause a lot of extra work, which is why it’s important to provide detailed information about your services. You would also do this, if you had made a unique webshop. A personal dynamic standard is used for the number of customer questions you receive, regarding the total number of orders. This information is based on the items you sell and can be found on the 'Performance' page in your future Bol.com sales account. The expected percentage of customer questions based on your sales is your personal 'dynamic standard'.

If you exceed this standard, you will receive an email from us in able for you to make a change. At this time, this service standard does not include calculating your future performance score. It is always very important to help the customer as soon as you can. Ideally also satisfactory, providing that you:

• Respond to customer questions within 24 hours
• You can always be reached by telephone on working days between 9:00 and 17:00

Do you receive a lot of customer questions? Then look at which questions could have been prevented by providing sufficient information, and how you can prevent such questions in your information provision to subsequent customers.

7.     A response time of 90% of customer questions handled within 24 hours

Responding quickly to customer questions has a positive effect on customer satisfaction. For this reason, Bol.com measures your response time. The platform expects every partner to handle 90% of customer questions within 24 hours. If you have not given an initial response within 24 hours in one week out of ten or more new customer questions, you will be sent an email about this, so that you can improve your response time. Unfortunately, it sometimes happens that you receive a customer question twice. For example, because the customer service of bol.com forwards a follow-up question to you. Bol.com expects you to provide an answer to all duplicate customer questions, so that the response time to all these customer questions is well measured.

8.     NPS after customer contact of 10 or higher

The NPS (Net Promotor Score) after customer contact is a recommendation score that indicates how satisfied customers are with the service, in response to their customer question answered by you. When you close a customer question, the 'NPS after customer contact survey' can be sent to the customer 24 hours later. Amongst other elements, customers answer a recommendation question and they do this by giving a grade on a scale of 0 to 10. The higher this figure, the more satisfied and loyal customers are in general. The NPS is then calculated by deducting the percentage of 'detractors' (customers who give a 0 to 6) from the percentage of 'promoters' (customers who give a 9 or 10). This results in an NPS score between -100 and +100. For a good performance on the service standard 'NPS after customer contact', Bol.com uses an NPS after customer contact of 10 as the lowest limit. At this time, this service standard does not count in calculating your overall performance score.

9.     Returns and how to handle these

Even when you have a solid webshop and great products, returns are essentially inevitable. There will always be some customers who won’t be satisfied, so it’s important to provide clear and concise information about the products you offer in order to prevent as many returns as you can. Everyone benefits from preventing returns; it is good for customer satisfaction and it saves you time and money. Insights into the amount of returns and the expected return percentage can help you keep a grip on your returns. Bol.com calls your personal 'dynamic standard' the expected return percentage based on your sales. If you exceed this standard, Bol.com will inform you about this by e-mail, so that you can adjust to it. Do you get a lot of returns? Then use the return reasons in the sales account to find out how to prevent returns in the future.

How are all these service standards calculated?

Every week the Bol.com platform checks whether you have met the three most important standards: 'Delivered on time', 'Cancellations' and 'Response time'. This is due to the fact that these service standards are most important for customer satisfaction. You get a strike for the 'Delivered on time' service standard when the weekly score is less than 93% for 3 or more late items. There is an absolute lower limit in numbers; if you do not meet the service standard for only 1 or 2 late items per week, then this will not be counted towards your overall score.

To ensure you have as much insight as possible into your own performance, your scores are updated daily in your Bol.com sales account. This way you always have an up-to-date overview of your seller performance, so that you always know where there is still profit to be made. However, these scores are not immediately definitive because they won't be until after a week and a half, on Wednesdays. This is because scores such as 'Delivered on time' are not immediately known.

Choosing a carrier for transportation

Bol.com spends a lot of effort in customer satisfaction and thus, the carrier you choose will greatly impact your performance as a partner. It is known that the delivery process has a lot of influence on customer satisfaction. You are of course free to decide for yourself, which carrier you have your orders shipped through. However, Bol.com cannot track parcels sent through a party other than the delivery services affiliated with bol.com – PostNL, DPD, DHL or Bpost – and also letter mail. In the interest of the customer, Bol.com thinks it is important to have insight into the 'Delivered on time' score. That is why the delivery confirmation has been introduced. This method has been extensively investigated and proved representative. At the article level, differences sometimes arise, but these deviations are as often positive as negative. As long as all the results are counted, a realistic picture of reality is created and therefore no corrections are made.

Intercompany Solutions can assist you with setting up a Dutch webshop

Becoming a Bol.com partner is a safe way to make money overseas, due to the small amount of risk you take. As you can see, however, becoming a Bol.com partner does require research and hard work. You will have to meet the service standards continuously, in order for customers to find you and come back to your webshop. We also strongly advise to research the types of products you want to sell. Knowing what you sell makes it easier to actually sell items, as you can provide customers with plenty of information about the products. Make sure you invest time in customer relations and always keep your webshop up-to-date, and you should be able to successfully make money via Bol.com this way. If you have any questions regarding setting up a Dutch webshop, whether it’s via Bol.com or directly, please feel free to contact our team anytime for more extensive information about the subject.

Source: https://partnerplatform.bol.com/nl/hulp-nodig/prestaties/servicenormen-bol-com/

Do you have certain ambitions about starting a company oversees? Then the Netherlands definitely proves to be a very attractive and competitive destination. Whilst some potential entrepreneurs have very detailed and personalized business plans and ideas, some others might have a harder time coming up with a fitting goal or business idea. In such cases, starting a franchise might prove to be a profitable way of making money overseas.  We will outline more information about this option below. If you would like personal advice, never hesitate to contact Intercompany Solutions directly.

Why become a franchise owner?

Sometimes as a starting entrepreneur, you can experience a lot of competition. Especially in specific sectors such as the food and beverage industry and the textile industry. This especially goes for countries where all industries are thriving, such as the Netherlands. In such cases, it can be lucrative to join forces with an already established company or brand. Once you start a franchise, you basically enter into a contract with the owner of a trade name. You can then legally open a company under this name, generally when you invest a certain amount. These trade names are often well-known brands or concepts, which makes it easy for customers to find you as a new company. These are proven success concepts, that give you a good start as an entrepreneur.

What is a franchise exactly?

Franchising is in essence a method of selling services or products via a franchiser. This franchiser already established a brand and trade name, as well as a profitable business system. If you decide to start up a franchise, you are appointed as a franchisee. The terms and contract are often similar, in most cases you will pay an initial fee and royalties to be able to do business within this franchiser’s system of conduct. The franchise itself is the brand under which you operate and as such, the franchise is the binding part in the contract. The entire practice of brand creation and distribution within the system is named franchising.

There are roughly two types of franchising. The most commonly known type is known as business format franchising. In this format, as a franchisee you will not only operate under a certain brand name to sell goods and/or services, but also will be provided with a system in order to operate the business properly. In other words; most of the work is already cut out for you to do. In most cases, you will acquire all the necessary material such as development support, a marketing strategy and operating manuals and learning material. Another possibility is product distribution franchising. This is a separate sector which often involves the automotive industry, bottling and other manufacturing industries. Both options provide you with start-up information, commodities and resources, which is ideal for starting entrepreneurs.

How to choose the right brand?

One of the toughest parts of starting a franchise business is choosing the right chain to invest in. One of the best and most straightforward ways to find out if a chain is suitable for you, is simply contacting the company itself and talking to already existing franchisees. Practical information often trumps theory, especially if you would like to know if previous franchisees are happy with their decision to join a certain chain. Try to find out via social media if you know any people who invested in a franchise. It might just provide you with the very information you need.

It is also a very good idea to ask a possible franchiser to look at their Uniform Franchise Offering Circular (UFOC), which should include information such as:

• A history of the franchise
• Expected fees and royalties to be paid and the approximate initial costs of starting the franchise
• All civil, criminal or bankruptcy actions that the directors have been involved in or worked towards with third parties
• A complete summary of the officers, directors and other executives
• The standard terms of the franchise agreement
• Any reasons a franchiser can terminate the contract before it expires

Always keep in mind that the franchiser is responsible for providing material and support, such as a suitable location, training materials, planning the opening of the location, marketing and communication advice and general support. Make sure to discuss these terms in detail once you have chosen a preferable chain, so you know what you can expect from each other in the near future.

Advantages and disadvantages of a franchise business

As briefly mentioned in the introduction, as a franchise entrepreneur you immediately benefit from brand recognition. Customers are familiar with the trade name and know what to expect from your company. This means you won’t have to spend as much time on marketing and promotion as in a regular situation, where you have to set up an entirely new brand as an entrepreneur. In addition, you run less risk, since the concept has already proven itself and as a franchisee you often have access to professional knowledge provided by the franchiser. The marketing is also arranged for you.

Are there any disadvantages? In some respect, there are. For example, as a franchisee you have less freedom to make decisions because you follow a certain formula. The degree of freedom also depends on whether it concerns a soft franchise formula, or a hard franchise formula. With a soft franchise formula, the rules are less strict and the franchisee is fairly free to run his/her own business. Of course, the entrepreneur must also adhere to a number of rules in such cases, but aspects such as advertising, marketing, purchasing and stock are generally not recorded. The franchisee is therefore free to fill in these aspects. With a hard franchise formula, the rules are quite strict and aspects such as house style, stock, purchase location and media expressions are fixed. Provisions have been drawn up for this by the franchiser, which limit the franchisee in this regard. In addition to a limited freedom, you as an entrepreneur must take into account that you also have to pay part of the turnover to the franchisee for using the trade name and the services that are provided.

Factors to take into account

The first step in becoming a franchise entrepreneur is making a choice: in which industry do you want to start your business? It is helpful, if you already have some work experience in this industry since it will make starting your business a lot easier. Do not focus on one franchise formula, but orient yourself well in the industry of your choice. If you provide sufficient comparison material, you can make a well-informed choice that suits you best. You can also decide to start in an entirely new market or sector, but please keep in mind that most franchisers require a minimum amount of knowledge and experience of their sectors.

How much will you need to invest?

If you are thinking about setting up a franchise business, you need starting capital to set up your company. These are costs such as the building in which you settle, any furnishing, training and other necessary materials. You often have to pay an entrance fee as well, which is a one-time fee to join the existing formula. The costs differ a lot per formula. Usually you can predict that the more successful the formula is, the higher the entrance fee will be. In addition, you pay a periodic franchise fee, which is laid down in the franchise contract. This fee consist of an amount for the services your franchiser provides to you. Make sure you set up a solid financial plan that covers all these costs.

Starting your franchise business in the Netherlands

When you have made a choice and the franchiser wants to enter into a partnership with you, you will both consult. During this consultation, you will discuss the franchise agreement and the franchise manual. Investigations must also be carried out, such as a location study and a feasibility study. These examinations are mandatory. In this start-up phase, make use of a specialized lawyer and accountant, so that you can be sure that your business has a chance of success. When all this is completed, you both sign the contract, and you can start immediately. You will start with specialized training to prepare you for everything within your franchise formula. After completing this training, you will start the company at your chosen location.

If you would like personal advice on starting a business in the Netherlands, Intercompany Solutions can aid you. We have assisted a wide plethora of foreign entrepreneurs and investors in any imaginable sector, which means we can assist you with specialized information tailored to your specific sector of choice. Intercompany Solutions can also prepare a financial plan for you and help with the periodical and yearly tax return. Please contact us directly if you would like to know more about the services we offer, or if you would like to receive a personal quote.

Sources:

• https://business.gov.nl/amendment/regulations-franchise-sector
• https://www.boip.int/en/document/benelux-convention-on-intellectual-property-bcip

Hiring staff involves more red tape than you might think. Here are the things you need to know if you are planning to take on some new employees.

You can only employ official staff if the person who works for your company meets several requirements. Someone is considered an employee when he or she:

- Has worked for your company for three consecutive months
- Worked for payment every week or at least twenty hours a month

Furthermore, there must be a certain authority relationship, wages must be paid, and an obligation to perform work. If your answer to all the above is 'yes', you can get started with the following things.

Payrolling needs to be performed in the country where the work takes place. If you have workers in The Netherlands, the payroll needs to be filled in The Netherlands.

Drafting an employment contract
First of all, you must agree on an employment contract with your potential staff member. In theory, this is allowed orally, but preferably in writing: that way, the agreements are clear to all parties. The following matters can or must be covered in the employment contract:

Name (initials, prefix, surname), date of birth, address and place of residence of the employee and name, address, place of residence of the employer
Place (s) where work is carried out
Employee's job title and primary duties
Time of entry into service
Duration of the employment contract (if it has been concluded for a definite period)
Holiday entitlements
Wages and payment period
Usual working hours (per week or per day)
Participation in a pension scheme (if applicable)
Whether the CLA applies (and which one it concerns)
Any probationary period
Notice period (or its calculation)
Incapacity for work and illness
Possible right of recourse
Identification obligation
Competition/relationship clause (only applicable for higher or specific positions)
Cost of personnel

In addition to the monthly gross salary of your staff, you may have to deal with additional costs for:

Holiday pay
Thirteenth month
Medical expenses
Education
Pension fund
Travel expenses

The existing collective labour agreement in your field plays a vital role in this. Almost all collective labour agreements contain agreements about the terms of employment for specific industries.

Determine wage costs
The wage costs for you are approximately 30% higher than the gross salary that your employee receives. After all, you also pay part of the insurance and other additional costs.

In addition to the pension, these are often the holiday pay (usually 8% of the gross salary) and the thirteenth month. This is subject to wage tax and premiums, which you must pay as an employer.

Paying pension contributions
Social insurances apply to every employee about pension rights (AOW and ANW). As an employer, you can offer additional pension provisions. You usually share the premium for this with the employee.

In most cases, this is already regulated in the collective labour agreement or the pension fund industry. You are obliged to report this to the new employee.

Payroll taxes and registration with the tax authorities
As an employer, you also have to deal with payroll taxes from the tax authorities. Payroll taxes are a collective term for:

Payroll tax / national insurance contributions
Income-related healthcare insurance contribution (Zvw)
Employee insurance premiums (WW and WAO / WIA)
You can find more information about this in the payroll tax manual. You will receive this from the tax authorities when you register as an employer. You can also view this manual online by downloading it from the Tax and Customs Administration website.

Maintain payroll
Apart from the contract mentioned above and tax obligations, there is also a lot of extra administration involved, particularly payroll.

Payroll administration consists of various forms and calculations. You have to think of forms such as the wage statement, the payslip and the annual statement. These are all forms that are important for calculating wages and amounts due.

But don't let all this put you off. There is plenty of advice available should you need it. Contact Intercompany Solutions for more information.

Starting a company oversees can involve many important choices, such as choosing the most profitable location and country for establishment. The Netherlands has been holding top positions in many economic and financial listings, due to the stable nature of the Dutch economy. In this article we will outline some interesting facts about the economy in the Netherlands, trending topics and current developments. This will provide you with enough information to seriously consider the Netherlands to branch out your business, or establish an entirely new business.

The current Dutch economic situation in a nutshell

The Netherlands is the sixth-largest economic power in the eurozone and the fifth-largest exporter of goods. The Netherlands, as a trade and export nation, is very open and therefore vulnerable to fluctuations in the global economy. In recent years, the recovery in the European Union (EU) has enabled the Dutch economy to grow dynamically. However, the uncertainty of world trade, the Brexit process and, above all, the spread of the COVID-19 pandemic led to a decline in the Dutch economy. In addition, exports and imports decreased by 3.9% and 5.3% respectively in 2020 compared to the previous year.

Political developments in the Netherlands in 2021

This year, acting PM Mark Rutte won the election with his center-right 'Party for Freedom and Democracy'. It is his fourth consecutive election victory (2010, 2012, 2017, 2021). He has even gained a little more with 22% of the vote compared to 2017 and has a clear lead with 34 seats in the 150-seat parliament. The big surprise of the latest elections is Sigrid Kaag of the left-liberal Democrats 66 and currently acting Minister for Foreign Trade and EZA. It became the second-strongest political force with 14.9% of the vote and 24 seats.

In the past, the formation of a government in the Netherlands took an average of three months. In 2017, it took as much as 7 months. This time, all parties, especially the VVD, want a quick result in terms of the pandemic. Until a new government is appointed, Rutte will continue to do business with his current government. This means that no new trade agreements or restrictions currently apply, enabling foreign investors and company owners to steadily do business with the Netherlands.

Many interesting opportunities for foreign companies

Many foreign companies which have generally successfully gained a foothold in different countries through a healthy product and quality policy, also find opportunities in the Netherlands. There Is a wide plethora of sectors to do business in, such as the organic products sector in particular, which shows very good absorption potential. E-commerce and online businesses are also rapidly gaining in popularity, this is partly due to the effects of Covid as well. Many small entrepreneurs are selling unique goods online, which makes the Netherlands a perfect country to invest in if you have original or handmade products to sell.

Focus sectors within the Netherlands

There are many sectors within the Netherlands that offer potential for foreign entrepreneurs. These can vary from agriculture, technology to the food and beverage industry and clean energy. The Dutch always try to be at the forefront of innovation, providing efficient solutions for interdisciplinary problems. We will outline a few sectors that are particularly popular right now and, thus, provide a stable basis for investment.

Furniture and interior design

The Dutch furniture industry is located in the middle and upper price segment, where the market demands quality and luxury. About 150,000 people are employed in the furniture industry. The furniture industry in the Netherlands had 9,656 stores in 2017. The housing sector generated 7% of sales in the retail sector in 2017, with sales of EUR 7.9 billion. The housing industry faces major challenges in the coming years. House and apartment prices in 2018 (excluding new buildings) have risen by an average of 8.9% compared to 2017. In the future, consumers expect a business to be more accessible, meaning the opportunities will continue to extend to digital communication. If you have a talent within this sector, the Netherlands offers ample opportunities in the form of both small projects and large corporations.

The food and soft drinks industry

The Netherlands is one of the world's largest producers of cheese, dairy, meat, charcuterie, fruit and other consumer goods. The majority of the smaller supermarket companies have merged into the shopping cooperative Superunie, which is part of EMD. Supermarket chain Albert Heijn (Ahold) has the largest market share of 35.4%, followed by Superunie (29.1%). Sales of Dutch supermarkets amounted to 35.5 billion euros in 2017. The Dutch consumer is currently increasingly interested in business models in which a shop simultaneously functions as a supermarket, snack bar, traiteur and an electronics or clothing store. The boundaries between LEH, hospitality and lifestyle are rapidly blurring. This makes it an excellent possibility for foreign companies to profit from this interdisciplinary approach.

Renewable energy

In the field of renewable energy the Netherlands amounts to almost 6% of the total usage nationwide. Although the use of solar energy has increased significantly since 2011, it still accounts for less than 5% of renewable energy sources(1). This has motivated the Dutch to invest in renewable energy solutions. EU Directive 2009/28/EC set a binding target of 20% share of renewable energy in energy consumption by 2020; in the case of fuels, the share of renewable energy sources should be 10%. These measures are expected to increase the share of renewable sources by 27% by 2030(2). Energy is one of the top nine sectors formulated by the Government to play a leading role internationally. The Netherlands is leading the way in the field of electro-mobility.

If you would like to become involved in the renewable and clean energy sector, the Netherlands can offer you all the tools and knowledge you need. Even though the Netherlands has a lot of catching up to do regarding renewable energy, there is an ample amount of funds being invested in new solutions and inventions. This creates opportunities for foreign companies in areas such as energy saving for new buildings, decentralized energy generation such as wind energy, smart grids and also infrastructure projects, innovative soil remediation and waste processing techniques and flood protection. The Netherlands also offers environmental subsidies for certain green technologies and investments.

Want to invest in the Dutch economy?

Next to these sectors, the Netherlands also provides opportunities in many other areas. If you are thinking about setting up a company in the Netherlands, Intercompany Solutions can assist you during the entire process. If you are not a citizen of an EU member state, we can also help you with the applications for necessary permits. Feel free to contact us for professional advice or a quote.

Sources:

1. https://www.statista.com/topics/6644/renewable-energy-in-the-netherlands/
2. https://www.government.nl/topics/renewable-energy
3. https://longreads.cbs.nl/european-scale-2019/renewable-energy/

If you would like to set up a business in the Netherlands, you will need to take into account that this means you will also have to pay several business taxes. The exact amount and type(s) of tax(es) you will need to pay depend on the legal entity you choose, your business activities and several other formalities. To give you a head start, we have compiled basic information about Dutch business taxes and the implications this has for your possible business venture in the Netherlands. For personal advice on this matter, you can always contact Intercompany Solutions.

When is someone considered an entrepreneur for Dutch income tax purposes?

Not everyone who wants to be a Dutch entrepreneur actually is an entrepreneur for income tax purposes. If your activities take place in the economic sphere, and if you can expect a profit, you have a source of income and you may be an entrepreneur for income tax purposes. If your activities take place within the hobby or family sphere, you are not an entrepreneur for income tax purposes.

In order to qualify for income tax, there are 3 sources of income:

• Income from business
• Salary from employment
• Results from other activities such as investments and real estate

The source of your income depends on a number of factors. The law and case law set certain requirements that entrepreneurs must meet. After you have registered your company, we will assess whether you meet these requirements on the basis of your circumstances. The Dutch Tax authorities pay attention to several factors, which we have outlined below.

How independent is your company?

A business generally implies a certain measure of independence, as you don’t work for someone else but yourself. This means you should be the one that determines general management, daily activities and the goal of your business. If others determine how you should organize your company and how you carry out your activities, there is no solid basis for independence and thus; there is usually no independent company.

Are you making a profit? If so, how much?

Generally, the main goal of any business is generating profit, unless you want to establish a Dutch business in the non-profit or charity sector. If you only manage to make a very small profit or suffer structural losses that outweigh the profit, it is unlikely that you will make a real profit. In that case your activities won’t be marked as a business.

Do you own any capital?

Since the introduction of the Flex-BV, you don’t have to deposit an obligatory amount of capital anymore to start a Dutch business. Nonetheless, capital is necessary for many types of companies in several industries. You might have to invest in machines, advertising, hiring employees and insurance, just to name a few examples. Sufficient capital to start a business and running it for some time indicates that you might have a business as per Dutch law.

Who will be your clients?

The best thing for any business is a stable client base. The more clients you have, the more you will be able to reduce payments and certain continuity risks. With a full client database you also don’t depend on just a few clients anymore, increasing your independence as a business owner and thus, making it more viable for your business to survive.

How much time will you put into your work?

The amount of time someone spends on business activities is also a deciding factor. If you spend a lot of time on an activity without yielding returns, you usually don't own a business on paper. This essentially means that you must spend enough time on your work to make it profitable. If this is the case, your business can be seen as valid. Also keep in mind that you may be eligible for certain types of entrepreneurial deduction. For some of these entrepreneurial deductions you must meet the Dutch “urencriterium”, which is loosely translated as hours criterion or the reduced hours criterion.

“Urencriterium” or hours criterion conditions

Someone usually meets the hours criterion if you meet the following 2 conditions:

• You spend at least 1,225 hours on your company during a calendar year. Did you interrupt your work as an entrepreneur due to pregnancy? In that case, the hours not worked over a total of 16 weeks still count as hours worked.
• You must spend more time on your business than any other activities (for example paid employment). If you haven’t been an entrepreneur in 1 of the 5 previous years, then you do not have to meet this condition.

How do you publicize your company?

You depend on clients for your company’s existence. In order to be an entrepreneur, you must make yourself sufficiently known, for example through advertising, an internet site, a sign or your own stationery. Your company needs to be distinguishable from other brands and competitors, next to being uniquely tailored to your goals and ambitions. The more people know about your company, the higher the chances of success.

Are you liable for your company's debts?

If you are liable for the debts of your company, then you may be an entrepreneur. This is a tricky subject, though, as some Dutch legal entities profit from a division between personal debt and corporate debt. If you are the owner of a Dutch BV, for example, you will not be personally liable for any corporate debts you make. This doesn’t mean you don’t have to pay those debts though; any debts you make with your company need to be paid in full.

Can you be affected by an 'entrepreneurial risk'?

An entrepreneurial risk involves certain factors that can be troublesome and unexpected with any business. Is there a chance that your clients will not pay? Do you use your good name for the performance of your work? Are you dependent on the demand for and supply of your products and services? If you run 'entrepreneurial risk', this generally means you probably have a business.

When are e-commerce activities considered being (part of) a business?

A lot of people are currently interested in setting up an e-commerce business, due to the flexibility and freedom of movement this option provides. The Netherlands is especially a stable and reliable country to set up an e-commerce business, since the country provides a very competitive and financially profitable market. Do you have an internet site which you regularly use to advertise on the internet for business purposes? Or do you earn money with your internet site, such as by selling goods or services online, or with activities as an affiliate? If the answer to these questions is 'yes', then you are probably an entrepreneur. But whether this is really the case depends on several factors. For example, there are differences between being an entrepreneur for income tax and being an entrepreneur for VAT.

When are you not considered as an online entrepreneur?

If you have an internet page or a website, this doesn’t automatically make you an e-commerce entrepreneur. Do you offer goods or services for free? Or only in the hobby or family atmosphere? Then you are not an entrepreneur according to Dutch law. This is due to the fact that you do not have to pay VAT, and, you also do not have to state anything in your income tax return.

E-commerce entrepreneur for Dutch income tax

Do you sell goods or services online? And can you realistically expect a profit from these goods and/or services? Then this is seen as income and you may be an entrepreneur for income tax purposes. Do you want to register your company in the Netherlands as an online entrepreneur? Then Intercompany Solutions can assess for you whether you meet the requirements for entrepreneurship on the basis of your circumstances. Often, entrepreneurship can only be assessed after the end of a business year for income tax purposes.

Not an entrepreneur, but receiving income?

Do you have income from your internet activities that cannot be considered a hobby? And do you lack any basis of paid employment, but you cannot be considered an entrepreneur either? For Dutch income tax purposes, this is qualified as 'results from other activities'. Your profit is calculated in the same way as with entrepreneurs. But you are not entitled to certain schemes for entrepreneurs, such as the self-employed deduction or the investment deduction. In such a case it would be wise to consider establishing a formal company and possibly benefit from deductions and premiums.

E-commerce entrepreneur for Dutch BTW (VAT)

If you are not an entrepreneur for income tax purposes, you can still be an entrepreneur for VAT purposes. This is mainly the case, when you carry out activities independently and earn income from these activities. In order to find out whether you are an entrepreneur for VAT, we can assess certain facts for you and help you find the best way to do business.

Business taxes in the Netherlands

Once you are officially considered to be an entrepreneur or company owner according to Dutch law, you will need to pay an assortment of various business taxes. Meaning you cannot escape the tax authorities, but this is generally the case in any other country. Not everyone pays the same type and/or amount of taxes. As a Dutch entrepreneur you are required to file a quarterly and yearly tax return, pay tax and sometimes you get something back as well. But what kinds of taxes will you face?

Dutch BTW or sales tax (VAT)

In the Netherlands you pay a certain amount of VAT over services and goods, so as a company owner you will have to charge your customers tax too. This is called Dutch BTW, which is the same as VAT. The abbreviation VAT means 'Value Added Tax'. It concerns the tax you pay on sales made. You charge VAT on your invoices. And vice versa; if you pay invoices, they also state  the amount of VAT that you have to pay. The standard rate for VAT is 21%. In some cases special rates apply, these are 6% and 0%. Exemptions may also apply. You pay the VAT that you owe to the tax authorities per month, quarter or year. The Dutch Tax Authorities will let you know exactly how often you have to file a return. In most cases, entrepreneurs file a quarterly VAT return.

Dutch corporate tax

Dutch corporate income tax is a tax that is levied on the profits of companies, which are mostly qualified as a B.V. or N.V.. These companies and organizations must file an annual corporate tax return. Natural persons such as sole proprietorships pay tax on the profits through income tax. This is different for companies. Public companies, private companies and sometimes also foundations and associations pay corporate tax. In some cases, exemption from corporate tax is possible. Think, for example, of an association or foundation that mainly obtains its income through the efforts of volunteers or where the pursuit of profit is of additional importance.

Dutch dividend tax

If your company is a N.V. or B.V. and makes a profit, you can distribute part of that profit to the shareholders. This is usually done in the form of dividend. In that case, you pay dividend tax to the Dutch Tax Authorities. Does your company pay dividends to shareholders? In that case, you must withhold 15% dividend tax on the dividend you pay out. You must declare and pay within one month of the day on which the dividend is made available. In a number of cases you may be eligible for a (partial) exemption or refund of dividend tax.

Dutch income tax

You pay Dutch income tax on your taxable income if you have a sole proprietorship or partnership under firm. This is your income, minus all operating costs settled with any deductible items and tax arrangements. You must declare this to the Dutch Tax Authorities before the 1^st of May every year. You only have taxable income if you make a profit with your business. This taxable income is the basis for your income tax. With your tax return, you can deduct deductible items and tax arrangements from your profit. This reduces the profit and therefore you pay less income tax. Examples of these deductible items and tax schemes are: the entrepreneur's deduction (consisting of the self-employed deduction and any starters deduction), general tax credit, investment deduction, SME profit exemptions and employed person's tax credit.

Dutch wage tax and national insurance contributions

If you employ staff, you inevitably need to pay your employees a salary. You need to deduct payroll tax from those salaries. These payroll taxes consist of the withholding of payroll tax and the payment of national insurance contributions. National insurance policies are legally required social insurance policies, that insure your employees against the financial consequences of old age, death, special medical expenses or having children.

The benefits of outsourcing accounting activities

Any entrepreneur establishing a business in the Netherlands can choose to their own administration, and therefore also their tax return. In such cases, it is desirable that you are well informed of any fiscal, financial and economic changes. The (partial) outsourcing of your administration and periodical declarations may initially seem expensive. But experience has shown, that an administration office or accountant actually earns you money.

When starting a business, you can include various scenarios in your business plan that include expectations of costs, including those of taxes. If you write a business plan, you can look at different financial scenarios together with the expert and see what influence the taxes have on the liquidity within your company. Intercompany Solutions can assist you during every step of this process; from the registration of your company to accountancy services. Please feel free to contact us for professional advice or a clear quote.

Read further: Company Formation Netherlands

If you decide to expand your business to the Netherlands or even start an entirely new business, there are many legal entities you can choose from. Most entrepreneurs choose the Dutch BV, since this business type by far outweighs many other legal entities in terms of financial and fiscal benefits. But some business activities are better suited with a more specialized legal entity, that tailors certain specifics uniquely to the business ideology and goals. A foundation, which is named ‘stichting’ in Dutch, is often your best option if you want to start an endeavor with a more idealistic goal. We will provide you with more information about this legal entity in this article.

What is a Dutch foundation company exactly?

A foundation is a type of Dutch legal form with its own legal personality. The main purpose of a foundation is to strive towards achieving a social endeavor or idealistic goal. This inevitably means, that a foundation should not aspire to generate profit. If any profit is made, it should be allocated to achieve the purpose for which the foundation was established. Foundations do not have to pay taxes unless they operate as a business. In this case a corporation tax has to be paid. Additionally, foundations that have more turnover than six million euros, for a duration of two years consecutively, have to file their annual accounts.

More information on the foundation company

Every foundation must at least have a board of directors, similar to the Dutch BV. A supervisory board which monitors the board of directors may be appointed within the statutes. A foundation does not have any members and is thus not required to hold a members meeting to make important decisions. Since foundations are a legal entity, the board of directors is usually not personally liable. This is also comparable to the Dutch BV. The exceptions to this are:

• When a foundation is not yet registered with the Dutch Chamber of Commerce
• When a foundation is not established through an official notary and the deed isn’t deposited at the Chamber of Commerce
• In case of mismanagement
• When a foundation is unable to pay their taxes and fails to report this to the Dutch Tax Authorities within two weeks

All board members of the foundation have signing authority. Specific rules may be established in the statutes, but only  as long as these are amended by an official notary. Furthermore, others may also be granted singing authority through the power of attorney. Foundations may hire staff and are obligated to pay taxes and social security contributions for its staff. In case a foundation is to hire staff, they must also register as an employer with the Dutch tax authorities. Board members may be on the payroll of a foundation, except if the foundation has an ANBI status. We will explain this in more detail later.

Next to that, on the 27th of September 2020 a new law regarding foundations will go into effect. This rule will require anyone within the foundation deemed as: “ultimate beneficial owner(s)” or UBO, to be included in a so called UBO register. UBO’s are persons within the foundation that own more than 25% of the shares and voting rights, or who have the final say when taking company decisions. This act is a measure against fraud in an ongoing government effort regarding the Prevention of Money Laundering and Terrorism Financing Act, also known as the Wwft.

How to establish an NGO in the Netherlands?

A foundation may be started alone, with others and also with other legal entities. A foundation may even be started in your name, by someone else after your death (as long as this is clearly stated in your will). A foundation must be started by drafting a deed and amending it by an official notary. This deed will be deposited at the Dutch Chamber of Commerce. Some examples of what this deed should include are statutes, the name of the foundation including the “stichting” suffix and also its location. Intercompany Solutions can assist you during the entire registration process due to years of experience withing the field of setting up NGO’s.

What is the Dutch ANBI status?

ANBI is a Dutch abbreviation for: “Algemeen nut beogende instellingen”, which can be translated to institutions with a public benefit for the common good. ANBI’s usually are devoted entirely to serving a public benefit, such as a charity, cultural or scientific institution. The aim is not to generate profit, but to improve society as a whole or certain societal causes.

Tax benefits

ANBI’s may enjoy a variety of tax benefits. Some examples of these advantages include not paying inheritance or gift tax (when used for the public benefit), a (partial) refund of energy tax and more. Additionally, donors may also enjoy certain benefits such as subtracting the financial donations from their taxes. The ANBI status has to be requested through the Dutch Tax Authorities and is subject to strict conditions.

Conditions

In order to be eligible for ANBI status, an organization has to meet all conditions and criteria set by the Dutch Tax Authorities. These conditions are as follows:

• 90% of all business activities need to serve the public benefit
• ANBI’s may not pursue to generate any profit except for funding the public benefit
• All members and personnel have to meet strict integrity requirements (a statement of good conduct may be requested). ANBI status may be revoked if any person of importance within the ANBI is convicted or has been during the past four years
• No one may manage ANBI funds as if it were their own, additionally no single person may have a majority voice in the management of ANBI funds
• The ANBI may not possess more funds than reasonably required for performing its needed activities
• Board members may only receive (non-excessive) travel and attendance compensation
• An up to date policy plan has to be in place (this plan encompasses the way in which an ANBI wishes to achieve its goals)
• The balance between management costs and expenditures has to be reasonable
• Any funds that are left after dissolution of the ANBI have to be spent on an ANBI of a similar type
• The ANBI must comply with all of its administrative obligations
• The ANBI must publish specific information (such as name, contact details, global policy plan, remuneration policy and more) on either their own or on a publicly owned website

ANBI’s may lose their status, if they no longer comply with conditions and requirements as set by the Dutch tax authorities. This can have serious consequences for the continuity of your business, so if you want to acquire the ANBI status, it is advisable that you are absolutely sure you can comply with all the legally necessary requirements.

What is a Dutch SSBI?

SSBI is the Dutch abbreviation for “Sociaal belang behartigende instellingen”, which can be translated as social interest promoting institutions. SSBIs are usually organizations which serve the interest of their members, or a small target group. Additionally, SSBI’s may also have a social benefit. Some examples of SSBI’s consist of (but are not limited to) choirs, dance groups, sports organizations, hobby clubs, petting zoos, playgrounds, associations for staff, elderly and the neighborhood.

Tax benefits

SSBI’s are not required to pay gift or inheritance taxes, as long as they apply for exemptions thereof by filing their gift taxes. If you own an SSBI, you also do not have to pay any profit tax.

Conditions

In order to be eligible for SSBI status an organization has to meet all conditions as set by the Dutch tax authorities. These conditions are as follows:

• Pursuing a social interest, this needs to be evident from the statutes or regulations of the organization
• Actual activities are in line with the pursuit of the social interest as per statutes and regulations
• The organization does not pay profit tax or is exempt from this
• Board members only receive (non-excessive) travel and attendance compensation
• The organization has to be located in the European Union, BES Island, Aruba, Curaçao or Sint Maarten
• Any donations or inheritances received are used in pursuit of the social interest of the organization

Intercompany Solutions can set up your Dutch foundation in just a few business days

Intercompany solutions can identify which legal form is best fitted for your interests and arrange all legal formalities needed for starting your own NGO. We can also help you with any questions you might have in this regard. If you require more information or would like some personal advice, you can contact us to discuss your options.

Sources:

https://ondernemersplein.kvk.nl/wat-is-een-ngo-en-hoe-start-u-er-een/

https://ondernemersplein.kvk.nl/de-stichting/

In a country such as the Netherlands, with an enormous amount of skilled personnel, the recruitment business is almost always booming. This might offer some interesting opportunities for people who have a talent for finding the right people for the right job. If you are interested in the possibilities of opening a recruitment company in the Netherlands, please read on for more information about the benefits, the procedure of registering as an employer and some extra information about Dutch wage and payroll taxes.

Necessary skills and experience to open a recruitment company

The recruitment business, especially in the Netherlands, is incredibly competitive. Since there are so many qualified, highly educated and generally bilingual people in the country, including expats, there is always a high level of supply and demand within this sector. This means that any new recruitment company will have to stand out from the crowd, in order to make a real shot at success. The best way to do this is by either specializing in a very specific sector, or be highly skilled in connecting potential candidates and businesses. A combination is preferable, but either way you will need to put some work into the company if you want it to flourish.

Some standard skills that owners of recruitment companies often share are commercial instinct, an extrovert personality, having a high amount of ambition and socializing skills, determination and a positive attitude. If you want to focus on a specialist sector or one with highly qualified personnel, then it is also advisable that you have finished a university degree yourself. This makes it much easier to match and acquire projects.

Benefits of owning a Dutch recruitment company

Since the digitalization of society, it has become much easier to work from a remote location. Almost every sector benefits from a more digitalized approach, this goes for recruitment companies as well. There is not an immediate need anymore to own a physical office in the Netherlands, since you can execute the entire recruitment process from your own current location. Interviews can nowadays be done via platforms like Skype and Zoom, next to that the entire documentation process can be digitalized. The only important factor is ownership of a Dutch company with a registration address. This is mainly due to the taxes you will have to pay when you hire personnel, next to corporate and income taxes.

Registration as an employer in the Netherlands

If you want to start a company in the recruitment business, you will need to register as a Dutch employer. This obligation basically starts the moment work is being performed by employees, because that moment the obligation to pay Dutch income tax and social security premiums starts as well. If an employer has a taxable presence in the Netherlands, officially registering as an employer and maintenance of a payroll is obligatory. A taxable presence means the company either has a permanent establishment or a representative in the Netherlands.

Dutch payroll taxes

If you are going to pay salaries, then there will also be Dutch payroll taxes involved. The Dutch payroll tax is named “Loonheffing” in Dutch and is collected monthly as a withholding tax. This means, that you pay the required percentage every month to the Dutch Tax Authorities and other applicable institutions. During the next year, the employee will have to send in their income tax declaration. At that point, the tax authorities will do a calculation and either pay the employee overpaid funds back, or collect a possible deficit. In any case, this tax consist of several components:

• Dutch wage tax
• National social insurance contributions
• Employee insurance contributions
• A Care Insurance Act contribution that is income dependent

Dutch wage tax

The Dutch wage tax is essentially a tax payment that is paid in advance for the Dutch income tax. The tax withholding system in the Netherlands has been instated as a safeguard for taxpayers, in order for them not having to pay a very large amount of taxes once per year. Instead, wage tax and social security contributions are levied every month, by being subtracted from an employees monthly salary. This way of dealing with tax also provides the Dutch Tax Authorities with substantially more certainty that income tax will indeed be paid and reported by taxpayers.

The wage tax is calculated with multiple withholding tables as a basis. That take into account several distinct factors such as:

• The age of the employee
• The current progression of the Dutch income tax rates
• Standard tax deductions and allowances

If an employee has non-periodical salary components such as bonuses or a severance payment, then specific withholding tables may have to be applied. In most standard cases, meaning the only income a certain employer has is the income from his or her employment and the employee is not entitled to certain special forms of tax deductions or allowances, the wage tax that is withheld every month will essentially be equal to the Dutch income tax. Due to this fact, a lot of people don’t even receive an invitation to file the annual tax return. In many cases employees and business owners still choose to do so, often because they can benefit from other tax deductions such as the interest on a mortgage or money invested in education.

Tax payment obligations in the Netherlands

According to Dutch law, wage tax returns need to be filed within a month after the last payment with the Dutch tax authorities. This applies to the payments too of course. So if you, for example, pay your personnel the 20^th of each month, you will have to file this information before the last day of the next month. There is an exemption to this rule, namely the period when an employee starts to work at a company, but the Dutch Tax Authorities haven’t granted a wage tax number yet. Once this number is granted, the Dutch tax authorities then confirm all the filing and payment deadlines of historical wage tax returns.

Set up your new recruitment company in the Netherlands in just a few business days

If you are interested in the recruitment business, there is a good chance that the Netherlands will offer you the necessary possibilities of achieving success. The highly skilled workforce together with an excellent fiscal and economic climate, provide excellent conditions for this specific sector. In order to register your company with the Dutch Tax Authorities, you will first need to register your company in the Chamber of Commerce. Once that is settled, you can start your business activities. If you would like to receive more information on the subject, Intercompany Solutions can assist you with professional advice and practical information.

The Netherlands is known worldwide as a very stable country economically, with a healthy fiscal and political climate. A few mentionable reasons that have led to this image are the fairly modest tax rates when compared to neighboring countries. Furthermore, clear and efficient administrative processes and the innovative use of IT and technology in order to facilitate tax compliance also contributed to this end. Compared to the rest or the European Union (EU), the Netherlands has a very competitive corporate income tax rate, which is 25% for yearly profits exceeding 245,000 euros and 15% for profits below that amount.

This year (2021) the corporate tax rates will be further reduced to and 15% instead of 16,5%. The tax system in the Netherlands has many attractive features and benefits, which especially attracts foreign companies and investors. Nonetheless, this doesn’t mean that nothing dubious ever happens. The country has experienced some difficulties in the area of tax avoidance, both by national as well as international companies, which is mainly due to the beneficial taxation system.

The Netherlands has a competitive fiscal climate

The Netherlands is a major hub for foreign multinationals, investors and entrepreneurs. This didn’t happen without a reason; the Dutch tax regulations and ruling practice have been around for more than 30 years and thus, provide international company owners with proper clarity when they decide to branch out to the Netherlands. The stable government also attracts many multinationals due to the stability it provides. The Dutch Tax Authorities are considered to be both cooperative and accessible, which makes foreign business owners feel safe and secure. Unfortunately, like with all good things, there are also investors and companies that use the profitable system to avoid certain financial obligations.

Fraud is still prevalent in all layers of society

Some people are not familiar with the extraordinarily large amount that is invested in the Netherlands by foreign companies and investors. During 2017, for example, the total amount of foreign investment totaled 4,3 trillion euros. The shocking fact is though, that the majority of this money wasn’t invested in the Dutch economy at all, only 688 billion euros of the original 4,3 trillion. That is only 16% of all total foreign investments. The other 84% went into subsidiaries or so-called shell companies, which are basically only set up to avoid paying taxes elsewhere.

Looking at these enormous amounts, it becomes clear immediately that this is not done by small players to hide some illegal profits from taxation. Only the largest multinationals and richest individuals in the global economy can pull such vast amounts off. This includes Dutch companies like Royal Dutch Shell, but also many foreign multinationals such as IBM and Google. These companies have established branch offices, headquarters or other operations in the Netherlands so the payable amount of tax in their country of origin is reduced. Some well known brands and companies are technically Dutch, as they established their headquarters in the country for the sole purpose of tax avoidance.

In order to visualize this, here is an example. The Netherlands is a very small country with a relatively small number of inhabitants, compared to the rest of the world. And yet, in 2016 16% of all foreign profits claimed by US companies were accountable to the Netherlands. This would seem as if the Dutch order a huge amount of goods and/or services from the US, but reality is a bit more shady. The companies in essence parked the money in their Dutch subsidiaries in order to avoid taxation, or they moved the money via so-called letterbox entities, which transfer the profits to other suitable tax havens. This way, they can funnel it to locations with a 0% corporate tax rate and avoid taxation altogether. It’s a clever trick that has been going on for quite some time, but the government is finally doing something about it.

The EU and the Dutch government are both taking action

The Dutch State Secretary of Finance has proposed to put forward a new tax policy agenda, which the government has agreed to adopt in order to put an end to such practices. The first priority of this agenda is thus tackling the evasion and avoidance of taxes. The other priorities are the reduction of the tax burden in the labor sector, the promotion of a competitive Dutch tax climate, making the tax system green and also more workable. This agenda is aimed towards a better and more resilient tax system, in which loopholes such as the current tax evasion are not possible to construct anymore. The Secretary aims for a simpler, more comprehensible, more workable and also fairer tax system.

A withholding tax to counter tax avoidance

During this year (2021) a new system of withholding taxes will be introduced, that focuses on interest and royalty flows to jurisdictions and countries with low or 0% tax rates. Suspicion of abusive tax arrangements is also included in this system. This is to prevent foreign investors and company owners from using the Netherlands as a funnel to other tax havens. Unfortunately, due to the evasion and avoidance of taxes this way the country has been in a somewhat negative spotlight recently. The Secretary wants to improve the situation by tacking tax evasion and avoidance head-on, in order to make a swift end to this negative image.

EU directives on tax avoidance

The Netherlands is not the only EU country that has been taking measures to eliminate tax fraud, as the EU adopted Directive 2016/1164 already during 2016. This directive lays down multiple rules against tax evasion and avoidance practices, which inevitably negatively affect the internal market. The rules are also accompanies by several measures to tackle tax avoidance. These measures are focused on interest deductibility, exit taxation, anti-abuse measures and Controlled Foreign Companies.

The Netherlands has chosen to implement both the first and the second EU anti-tax avoidance directives (ATAD1 and ATAD2), although the Dutch will implement even stricter standards than the standards required in the EU directives. Some examples include the absence of so-called grandfathering rules applying to existing loans, the lowering of the threshold from 3 to 1 million euros and the exclusion of the group exemption in the earnings stripping rule. Next to that, banks and insurance companies will be confronted with a minimum capital rule in order to ensure a more equal situation concerning debt and equity throughout all sectors. This will lead to a healthier economy and more stable companies.

The importance of transparency

One of the main factors that contribute to a healthy and viable tax system is transparency. This is particularly true when the need arises to tackle difficult problems such as tax evasion and avoidance. For example; fines that can be attributed to culpable negligence shall be made public, which in turn will also push accountants and tax advisors to execute their tasks with more diligence and honesty. If you want to establish a company or branch office in the Netherlands, we advise to choose a stable partner that knows all the necessary rules and regulations. Intercompany Solutions can assist you with the entire registration process, furthermore we can also help you along the way with accountancy services. You can contact us anytime for more information and friendly advice.

The most commonly chosen legal entity in the Netherlands is the BV company. The BV offers many interesting opportunities for business owners, especially if you expect to earn more than the 245,000 euros threshold. In this article we will explain in detail why the Dutch BV is a good choice as a legal entity, and we will also explain the history of the so-called flex BV. This will provide you with an ample amount of information in order to make a grounded decision regarding the legal entity to choose for your Dutch company or branch office.

The advantages of a Dutch BV Company

When you establish a Dutch business, you are required to choose a legal entity. Choosing the wrong or a not fitting legal entity in your situation can have unpleasant consequences for your business. Changing the legal form in a later stage is possible, but it is also expensive. In addition, it is basically a waste of money if you have to do this immediately after the company’s creation, because you have not sufficiently studied the possibilities beforehand.

In short, setting up a BV has the following advantages:

1. The BV is a legal form with limited liability
2. The compulsory starting capital is only 1 euro cent
3. You only pay 15% or 25% tax on the profit of your BV
4. You can divide your properties and financial risks between multiple BV’s via a holding company
5. You can attract new investors through shares
6. A BV emanates a professional impression

1.      Liability

A BV enjoys limited liability. This means that it is not the board of directors, but the BV itself that is liable for any debts. A director of a BV can only be held liable if there is evidence of improper administration. This applies when the accounts are not in order, or if the annual accounts have been submitted too late to the Dutch Chamber of Commerce.

2.      Low mandatory starting capital

This is one of the main benefits of a flex BV, which we will elaborate on later in this article. During the past, it was mandatory to invest a minimum starting capital of €18,000 when establishing up a BV. Nowadays, you can already set up a BV with a starting capital of only 1 cent. The threshold of high investment is therefore no longer applicable, which makes this legal entity much easier accessible to people who don’t own a large amount of starting capital.

3.      Low corporate taxes

When you own a sole proprietorship, you pay income tax on the profits. The highest tax bracket is currently 52%. The corporate tax rates that are calculated over your profits are substantially lower; currently only 15% or 25%. As stated above, this will drop even further this year. Please keep in mind that you will still need to pay income tax, when you choose to pay yourself a salary as director/shareholder. We can also assist you with our accounting services.

4.      Spreading risks via a holding company

If you choose to set up a BV, you will also be able to merge multiple BV’s into a so-called holding structure. By setting up a holding company, you indicate that several BV’s fall under one parent company. However, the holding structure is set up in such a way that these all remain separate BV’s. You therefore avoid the risk that all your companies will go bankrupt, if one of the BV’s goes down.

5.      New investors via shares

One of the main concerns of starting entrepreneurs and also already existing business owners is how to raise capital efficiently. If you own a BV, you can raise new capital fairly easily by issuing shares. Many investors prefer this way to invest their money, as being a shareholder means being at limited risk. All shareholders are only liable in a BV for the amount they have invested.

6.      A Dutch BV makes a professional impression

Setting up a BV includes much more work than setting up a sole trader company, for example. You will need to meet a certain number of requirements, and you have to have the deed of incorporation passed by a notary. This notary also has the duty to investigate the BV if he believes that something is not right. In addition, a BV must have its administration in order and an annual overview must be submitted to the Dutch Chamber of Commerce in the form of annual accounts. The chances that a BV has its business in order are therefore much greater, than in the case of a VOF or a sole proprietorship. The average Dutch person also knows this and thus, this contributes to the professional character of your company.

More information about the flex BV

Flex BV is a term used for all private companies that were established after 1 October 2012. On that date, new regulations regarding the BV were introduced. The requirements to be able to set up a BV were then relaxed, hence the term flex BV. A flex BV is a regular BV. The reason that two terms have entered circulation is due to a change in the law. The law on simplification and flexibility of existing BV law meets long-expressed demands in many areas. Because of the simplified rules and procedures surrounding the establishment of a BV, the BV was quickly renamed flex BV as a legal form.

Introduction of the Dutch flex BV

The flex BV was introduced by a bill that was passed by the Dutch Senate on June 12, 2012. The bill concerns the introduction of the flex BV and a change in governance and supervision. The law became legally binding on 1 October 2012, and the establishment of BV’s changed from that moment. Some things that haven’t changed are the notarial deed of incorporation of the flex BV, stating the name, registered office and purpose. The declaration of objection also does not have to be mentioned, after previous abolition. Furthermore, the contribution of a minimum (nominal) value of the shares in the flex BV, placed at the time of its formation, will not change either.

However, from 1 October 2012, it is sufficient that the notary receives knowledge by means of a bank statement, which share capital has been transferred to the BV from the private bank account of the founder. Before 1 October 2012, this procedure was a lot more complex. As a result, the process of setting up a Dutch BV is now much faster. In a number of situations, the auditor’s report has been abolished. This was necessary, if a transaction between the founder and the flex BV was carried out in the first two years after the first registration of the BV in the trade register.

Minimum capital to start a flex BV

One of the largest changes that has taken place concerns the capital of the flex BV. The previously required minimum capital of €18,000 has been completely abolished. However, the BV will have to continue to issue shares upon incorporation. The shares indicate to whom the profits and assets of the flex BV belong. This is especially important, when the flex BV has several shareholders. The new law states that the nominal value of the shares will be linked to the determinability of the share and therefore also to the relationship between the shareholders. The nominal value of the shares is determined during incorporation. A minimum amount of 1 euro cent will have to be paid, according to the explanatory memorandum. For pragmatic reasons, we always set the minimum share capital at 1 euro. You are no longer obliged to hold the euro as the currency for your share capital, however.

Profits of a flex BV

The goals and destination of the profits of the flex BV will be determined by the General Meeting of Shareholders. If the Meeting wishes to pay the profits to the shareholder(s), the board will first have to carry out a distribution test contrary to the situation before 2012. This test determines whether the benefits do not jeopardize the progress of the flex BV. If the board opposes the profit distribution, it will not be allowed to continue. If the profit distribution does take place, the board will be liable for any possible negative consequences of the profit distribution. In addition, the shareholder(s) who receive the dividend may be required to return the profits. This provided that the shareholder knew about the objections to the distribution of profits, or could have reasonably suspected that the BV would not be able to continue to pay its debts after the profit distribution. The distribution test will be applied to all forms of distribution, except for the distribution of profits in shares (stock).

What else has changed?

Next to the abovementioned test and the lowering of capital, other things have changed too. The organization of the articles of association has been simplified. You can increase the share capital now without the need for an amendment to the articles of association, that aims to increase the share capital. The indication of the share capital in the statutes is no longer mandatory. The ‘nachgründung’ has also been abolished. As a result, the restrictions that applied regarding the transactions (such as assets/liabilities transactions) between founders and the established BV expire within 2 years after the registration of the BV in the trade register transactions.

It has also become easier to buy your own shares. The financial assistance ban has been abolished. As a result, it is no longer prohibited to provide security for the purpose of taking shares in the capital of the BV and to grant loans only to the extent permitted by the freely distributable reserves. In the event of a capital reduction, a creditor’s move is no longer possible.

Regarding the rights and obligations of shareholders

It is allowed to issue shares without voting rights and/or profit rights (dividend). For example, it might sometimes be easier to reward employees with shares. However, you must state in your articles of association whether or not meeting rights have been granted for this particular employee. The blocking rule is also no longer mandatory but optional. As a result, if you wish – if one of the shareholders leaves the BV– the shares no longer have to be offered to the other shareholders before they can be sold to someone else.

In order to enable you to act faster, decisions may henceforth be taken outside the general meeting. If the articles of association so provide, general meetings may also be held abroad. The notice period of shareholders and other shareholders for a general meeting is shortened from 15 to 8 days. As a result, the notice period in the articles of association is also automatically shortened to 8 days. This does not require a change in the articles of association. Articles of association can be changed more easily even if the BV has already been established. “Old BV’s” (meaning founded before 1 October 2012) are also covered by the Flex BV legislation, since a BV is essentially the same as a flex BV as we previously mentioned.

The transfer of shares for a certain period of time can be excluded from the articles of association. The shareholders may give instructions to the board, however the board is not obliged to follow them if this would be contrary to the interests of the company. Shareholders or shareholders who alone or jointly represent at least 1% of the subscribed capital may request the board (and supervisory board) to convene the general meeting. Shareholders may, under certain circumstances, be obliged to provide financing to the BV or to provide certain services/products to the BV if this is included in the articles of association. The articles of association may determine the voting ratio with regard to the taking of certain decisions and to what extent a shareholder can appoint, suspend or dismiss his own director or supervisory board member.

Regarding profit distributions (dividends)

Distributions can only be carried out, if the owned funds exceed any statutory and statutory reserves. Furthermore, benefits can only be made if the benefit test is met. The board’s approval for the distribution is required. Directors who knew or could reasonably have foreseen that the company would not be able to pay its due and payable debts afterwards are joint and severally liable for the amount paid out, unless proof to the contrary is provided. The shareholder or profit-holder is also obliged to repay the benefit he received, should the BV go bankrupt within one year of the payment.

Intercompany Solutions can inform you about all the benefits of a Dutch BV

You probably noticed that the creation of a flex BV has become much easier since the changes in the Dutch law system, which has made setting up a Dutch BV more attractive for many entrepreneurs. However, as far as liability is concerned, the legislator continues to strictly monitor any improper administration. If you want to know more about liability within a BV, how to set up a Dutch BV or how to branch out to the Netherlands, feel free to contact us for in-depth information and advice.