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Starting my Business in the Netherlands Part 1

paperworkI really wanted to hold off on writing this article until I had officially registered with the Kamer van Koophandel (KvK; Chamber of Commerce), but I’ve been so invested in the process over the last week or so that it is short-circuiting my brain’s ability to write about anything else. So here is Part One of “Starting my Business in the Netherlands”.

Step One: Find a need, Fill it.
So the basics of starting a business in the Netherlands is more or less the same as starting a business anywhere else. You need to identify a need in a market and then determine to to fill that need with a service or product. The KvK offers the Starters Center, a Dutch-language website to help new entrepreneurs, but I found that the Small Business Association‘s resources for the USA were just as helpful for the conceptual stage.
(Update/Caution: I took a closer look at the Starters Center and found a lot of broken links.)

I sort of fell into the services I’m offering based on my archivist background and writing this blog actually. I am providing copyright research to publishers and writing/administrative services to other organizations. I want to help clients take control of the information around them, and I can do that best through writing, organizing resources, and website building. My business website will be ready as soon as I complete the registration process since I don’t want to inaccurately represent my business name without knowing if it is available.

Step Two: Write a business plan
Business plans are a pain to write, but there are a lot of resources out there for it and English resources will get you through many of the sections. I checked the KvK’s section on writing a Business Plan to make sure I could answer the questions most pertinent to them:

  • What am I marketing and why?
  • Who are my clients?
  • How will I connect with them?
  • What are my costs?
  • What are the anticipated outcomes?

“What” you are selling is also important for zoning. Some residences cannot be used to start a businesses. We spoke with the Bedrijfscontactpunt (Business Contact Point) office at the Gemeente and they said there should be no problem for me as a freelancer. Apparently some people try to start clothing stores or chocolate shops out of their apartments.

Step Three: Be sure you can get at least 3 customers.
I’ve been toying with starting a business for months, but it wasn’t until a got a second client lined up that it stopped being so scary for me. As a freelancer service provider in the Netherlands, its important to always have a minimum of three clients per year. Otherwise the tax office could deem you the employee of one of your clients and create a whole mess of employee taxes, pension payments, benefits, and so on. The advice I received from another local freelancer is to define my freelance activities broadly. The economy hasn’t been good to freelancers in the past year or so, so a breadth of services helps keep your options open.

Step Four: Identify a business structure.
I’m still working on this step and will be visiting the KvK in person this week in hopes of nailing it down. For my current circumstance there are three possibilities:

  • A ZZP’r or Freelancer: This is probably the structure I’ll go with since it is the simplest and only requires me to submit taxes once per year. However, I cannot have employees.
  • A Sole Trader: Is a one-person business that can hire on help when needed. It requires more frequent submission of taxes, but otherwise is similar to a zzp (or rather, a zzp is similar to a sole trader).
  • Partnership: This is where things get a bit complex for us. Dan also has a new project that needs to be registered as a business. I think it would be easier if we could register our businesses as one partnership, but I’m not sure if that’s an option since my info services and Dan’s webcomic are very different.

There are also Limited Liability structures available, but for my needs they are off the table for now.

Steps Five – ??: Register your business.
I still need to go through these steps, but they are very important since unlike in the US you shouldn’t start freelancing without registration in the Netherlands. There is a minimum income required for taxation, but the state wants to be able to track your obligation (and theirs). You may also be eligible for monetary start-up assistance. Registration involves registering with the Trade Register and the tax authorities to receive a VAT number. Your business name is checked against others in the database to make sure there are no conflicts.

My best advise is to try and talk to people at the KvK directly. While there is basic information on their website in English, it isn’t really enough to make final decisions about your own circumstances. Or at least is hasn’t been for me. All the legal forms are in Dutch so I’ll also be needing assistance filling those out.

More on starting my business and a proper soup-to-nuts post or three on the subject coming soon!

2 Responses to “Starting my Business in the Netherlands Part 1”

  1. Dave Hampton says:

    Best of luck starting the new business! There are lots of good resources out there, but I had the same experience when I started a business here last summer: the KvK people were very friendly when I visited them (and very apologetic that everything was in Dutch).

    The accountants and legal folks told me that I needed to get a full BV (corporation) to support my residency application through the DAFT process, and to avoid the freelance route. In the end, I ended up with a different structure than you have, so I’ll be interested in hearing how yours goes.

  2. locusta says:

    I’m glad to hear you’ve had good experiences with the KvK. I’ve been having trouble figuring out who can give me information about what and sadly I do find their English-side to be lacking. What I probably really need is an accountant. My residency is assured for now via my husband’s work contract, so we don’t have to worry about that, but something I hadn’t thought of before. I’d be interested in learning more about what it means (on the ground, as it were) to have a BV vs. a ‘sole trader’ or non-limited liability ‘partnership’.