BUSINESS IN THE NETHERLANDS
Over the past few years, Holland has finally recovered from the global financial crisis of 2008-2009 and today the country's GDP shows a stable positive dynamics. The Kingdom of the Netherlands is the sixth largest economy in the European Union. And both industry and agriculture are equally well developed.
It is not without reason that business in the Netherlands attracts investors from different parts of the world. The country has access to the sea, borders with Germany and Belgium. It ranks 9th in the world in terms of exports. In addition to border states, the main flow of goods is directed to Great Britain and France. In general, the development of trade relations with European countries is at the highest level. In 2024, unemployment in the Netherlands is in the region of 3-4% and inflation is only 2%.
Higher education in Holland is considered one of the best in Europe, so the labour force is very skilled. The products of local companies easily enter the world market and are in high demand. Business immigration to the Netherlands serves as an excellent way of travelling to Europe for permanent residence with the possibility of subsequent registration of Dutch citizenship. Next, let's look at the main points of doing business in the Netherlands for foreigners.
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How to start a business in the Netherlands
In order to run a business and stay in the country legally for more than 3 months, foreign entrepreneurs from third countries (from outside the EU) will need to open a visa and obtain a residence permit in the Netherlands. In general, the local authorities are interested in attracting foreign investment, so there are no special restrictions on areas of activity. Nevertheless, some procedural requirements will have to be faced.
The issues of granting residence permits are supervised by the Dutch Immigration and Naturalisation Service (IND), and the compliance of a businessman with Dutch criteria is a special division of the local Ministry of Economy. First of all, a foreigner will need to open his own company or become a co-owner of a business (at least 25%), which will be of interest to the Dutch economy and bring profit. As a rule, the application for residence permit is submitted after 12 months of operation of the company.
For accelerated registration of a residence permit in Holland, a businessman needs to gain a certain number of points, which are awarded for the following positions:
Business experience.
Competent business plan.
Contribution to the local economy (job creation, amount of investment, quality of innovation).
The Ministry of Economy staff reviews each application and makes a judgement. The residence permit is issued for two years with the right to extend and allows you to bring your family to Holland. In addition, talented foreign entrepreneurs to promote a start-up project can obtain an annual visa and, if successful, subsequently apply for a full residence permit. More detailed information is available on the official IND website.
To run an effective business in the Netherlands, do not forget to familiarise yourself with the peculiarities of the local business culture and the mentality of the Dutch. As you know, this is one of the most free, democratic and law-abiding nations. Many things, such as corruption and other illegal actions, are unacceptable in this country.
Procedure and cost of company registration in the Netherlands
According to the Doing Business agency, Holland ranks 42nd out of 190 countries in terms of accessibility of starting a business. In general terms, the stages of company registration are as follows:
Choosing a unique company name that complies with the local law ‘On Trade’ and the requirements of the Chamber of Commerce and Industry (hereinafter – CCI) of Holland. The procedure is free of charge.
Notarisation of the Act of Incorporation of the company. The cost of services depends on the notary, on average about 1750 euros.
Registration of the company with the CCI and obtaining a registration number. Carried out online within a few hours, or by mail or in person, in which case it may take up to 5 days. The cost is 50 euros.
Registration with the tax authorities. Documents are submitted within a day, but the period of providing the certificate can stretch up to 1-1.5 months.
In case of hiring workers, registration with the social insurance office.
During and after business registration in Holland, in most cases, you will need to use the services of local accountants, lawyers and auditors.
Forms of ownership in the Netherlands
One of the main steps when registering a company in the Netherlands, and even at the initial stage of business creation, is to choose the most effective form of ownership for future development. Local laws provide foreigners with a wide list of company types almost on par with Dutch businessmen. Let's dwell on the most popular ones:
Private company with limited liability (BV). There are no minimum requirements for the authorised capital, earlier (until 2012) it was stipulated not less than 18 thousand euros. Shareholders are liable in the amount of their personal contributions. Holders of more than 5 per cent of shares are vested with additional liabilities, e.g. in the form of dividend payments or profits from the sale of securities.
General partnership (VOF). A VOF involves the joint conduct of a business by several persons. Usually a special agreement is drawn up which regulates the shares of contributions, distribution of income and other obligations of the partners.
Individual entrepreneur (Eenmanszaak). As a rule, the activities are carried out by one person, although it is allowed to hire employees. Liability for the company's obligations is fully transferred to the owner's property.
In addition to the above forms of ownership, foreign businessmen can establish in Holland foundations, co-operatives, branches of foreign companies, associations, partnerships and corporations. Everything depends on the professional goals and the amount of investment.
Taxes in the Netherlands
The Dutch taxation system is quite flexible, in particular, there is a progressive income tax scale, many different rates depending on the scale of business, types of activity and so on. In order to optimise the process of calculating and paying taxes, a foreign entrepreneur will most likely have to use the services of local consultants or hire a dedicated employee.
Rates of main taxes in the Netherlands in 2024
Corporate income tax – 25.8% (from 1 January 2019). For companies engaged in innovative activities, at the level of annual income less than 200 thousand euros, the rate is 19%. VAT. The basic rate is 21%. Reduced rates – 0 and 9% apply, for example, for food products, pharmaceutical products, printed publications and some other services. Tax on dividends – 15% Income tax. Progressive rates depending on the level of annual income:Up to €75,518 – 36.97%
Over €75,518 – 49.50%
The Netherlands has signed agreements with a large number of countries for the avoidance of double taxation and co-operation in the search for tax evaders.
Business destinations in the Netherlands
Active involvement in trade relations with the most powerful economies of the European Union, such as Germany and France, allows foreign businessmen in Holland to enter large markets with high purchasing demand of local residents. The Dutch territory is also considered one of the most densely populated in Europe. In 2024, the population of the Netherlands is about 17.6 million people. These are all potential consumers of goods and services with a high level of income.
On the other hand, competition in various niches is also very high. In some spheres it is not realistic to break through at all. The most attractive direction for opening a business in Holland for foreigners is considered to be the food industry. The country is the world leader in terms of agricultural exports. Other sectors of production – mechanical engineering, oil and chemical spheres are also in great demand.
Today, the opening of various start-up projects in Holland is gaining popularity. In addition, local authorities encourage young and talented foreign entrepreneurs in this sphere in every possible way. In recent years, in Amsterdam alone, about 1,000 new startup companies and several thousand investors have been registered, which in turn creates hundreds of new jobs for Holland. Analysing the local market, a good business idea and start-up capital are the main ingredients for starting a business and subsequently immigrating to the Netherlands.
