Are you thinking of establishing your business in the Netherlands? There are a lot of benefits if you are going to register a company in the Netherlands. Below are some benefits you can receive if you ever want to start a business in this country.
Competitive Tax Rate
The standard Corporate tax in the Netherlands is 25.8%. There are two taxable income brackets in this country. The top rate is 25.8%, but the basic rate will rise in 2023. The top rate will rise from 15% in 2022 to 19% this 2023. This basic rate will only apply up to a taxable amount of 200,000 compared to the previous year, in which the basic rate will apply up to 395,000 euros.
It Has a Strategic Location
With a customer reach of a total of 170 million within 500km and a total customer reach of 244 million, there is a potential for a market in the Netherlands which is located in continental Europe. In addition to that, the country offers a positive business climate.
How Do You Start a Business in the Netherlands?
For you to start a company in the Netherlands, certain processes and procedures must be followed and observed.
Fulfill the Conditions Needed for Staying in the Netherlands
For entrepreneurs who intend to stay in the Netherlands, there are several qualifications you must fulfill. In the case that you are not an EU citizen, you must apply for a temporary and permanent residence permit. A start-up visa is needed for start-ups, so keep that in mind before doing business in the Netherlands.
Choose the Name of Your Business or Company
Company formation in Netherlands start here. Starting your business also means thinking of a name that will embody your goals and visions. Your company's name should be registered in the Dutch Business Register at KVK.
Registering your business in the Dutch Business Register
Certain steps must be followed in registering a company in the Netherlands. The first step would in registering a company in the Netherlands is choosing the dutch legal structure of the business you want to build. The legal form you choose will determine how your business will operate and what other steps are needed to register your business.
The following legal forms of business are required to register in the Business Register:
Sole Proprietor
Private Limited Company
Public Limited Company
General Partnership
Limited Partnership
Foundation
Association With Notarial Deed
Professional Partnership
Cooperative and Mutual Insurance Society
After choosing the suitable legal form for your business, the next step would be checking if your business must register with UBOs. UBOs are the owners or the people who are effectively in charge of an organization. This is not just in the Netherlands; every EU country has to own a UBO register. You register your UBOs with the Chamber of Commerce in the Netherlands, KVK.
The next steps would be to fill out an online form that can contain the following information:
The business owner’s details
The contact details for your business
The description of the company you want to establish
Making an appointment with the KVK would come next. During the appointment, the KCK registration number will be given to you. There is also a one-time payment. The payment would be 75 euros, but it is subject to changes this 2023.
The last reminder would be for the business owner to register in time. You can register your business during the following periods:
Not exceeding 7 days after starting your business
7 days before starting your business
Register the Business With the Dutch Tax Administration
Sometimes you don’t have to register with the dutch tax administration personally. After registering your business with the KVK, they will pass on your details to the Dutch tax administration. The only legal form of business that personally needs to register in the dutch tax administration is private limited companies and public companies. Companies in Netherlands that have the aforementioned legal forms will have to register via a civil law notary. The notary will be the one to take care of the registration with the tax administration.
How Do I Start a Company Remotely in the Netherlands?
The first that you will need to establish a company remotely in the Netherlands is a special power of attorney. This special power of attorney gives authority to a local representative to act on your behalf before the country’s relevant authorities.
The relevant authorities will also check whether you have sufficient economic activities in the Netherlands. Doing this may require supporting evidence, which is why it is advisable to be ready with all the documents that the authorities might need. You can also send your registration to the Netherlands chamber of commerce attached to it are the following supporting documents:
Legal copy of any valid ID
Proof of business address - a copy of the signed lease or sales of contract
Official copy of the civil status record. This is a reminder that this extract is only valid for 1 month.
What Challenges I Might Encounter While Doing Business in the Netherlands?
Source Freepik
The Cost of Living Can be Expensive
The cost of living in the Netherlands, especially in the city can be expensive. The cost of living in the country should be considered properly in your business plans. This is because house prices and rentals are high, and there is a high tax rate on income and consumption.
Taking this into consideration, the business plan could change. An example would be changing the place of your business from the city to a place where the cost of living will be a bit more manageable for the company.
You Must Fully Understand the Tax System
The Netherlands tax is intricate. It can be overwhelming as there are a lot of tax subsidies and deductions. Taking the step to fully understand how the tax system work can be an advantage for your company.
This is because when you are fully equipped with the knowledge of the tax system, it can help the company save and allocate its resources. Managing a company in Netherlands takes a lot of knowledge and expertise and mastering the tax system is one of them.
Frequently Asked Questions
How Do I Register My Business in the Netherlands?
There are certain steps to register your business in the Netherlands.
Fulfill the conditions needed to stay in the Netherlands
Choose the name of your company
Register your business in the chamber of commerce
Register your business in the dutch tax administration
What Benefits Will I Receive When I start My Business in the Netherlands?
The benefit is that the country has a competitive tax rate of 25.8% with a basic rate of 19%. Its strategic location also allows you to attract and gain more customers within 500km and 1000km.
What Kind of Challenges Will I face While Doing business There?
The cost of living in the Netherlands is high, which is why it should be considered when drafting your business plan. Another challenge would be understanding the complex tax system which could help your business in the long run.
How Do I Establish My Business Remotely?
You can establish your business remotely by issuing a special power of attorney. You can also send the documents to the chamber of commerce attached with additional evidence that you have sufficient economic activities to start a company in the Netherlands.