Forms of ownership in the Netherlands
05.04.2019Each person who has decided to open his own business first of all thinks about what form of ownership to choose. And, of course, it is important to make the right decision right away in order to protect yourself from unnecessary risks and costs.
Despite the fact that any business can be transferred from one form of ownership to another, this process can be too time consuming and expensive. It is much easier to change the address, type of activity, name, even the manager than the form of ownership, so this choice must be taken very responsibly.
We recommend that you carefully study the information provided, and if you are already ready to open and have formed a list of specific questions, we invite you to sign up for a consultation with us. You can sign up by:
By e-mail info@nalog.nl;
By phone: 085-5400200, 065-0128355; for calls not from NL (+31) 85-5400200, (+31) 65-0128355.
or via form on our website
The consultation is conditionally paid. This means that you pay for the consultation and at the same time receive a discount coupon for the same amount. The coupon is valid for 6 months. If at this time you either use our services for opening an enterprise (legal entity), or conclude a subscription service contract with us (at least 1 year), you will refund the full cost of the consultation. In the future, when concluding a subscription service contract, a certain number of consultation hours will be included in the subscription free of charge.
The most widely known only two, the most common forms of ownership are eenmanszaak (IE) and BV - beslotenvennootschap (JSC). In fact, there are many more forms of ownership, although these two are undoubtedly in the lead. We also want to note that there are no analogues of LLC (limited liability company) in IP.
In this section, you can find out:
– What you need to pay attention to when choosing a form of ownership;
– What forms of ownership exist in the Netherlands;
– The main difference between entrepreneurship and law. face;
– Comparison of characteristics of different forms of ownership.
What to look for when choosing a form of ownership
In order to correctly determine which form of ownership is more suitable for your business, you need to weigh many factors. Sometimes the solution lies on the surface. For example, if you are a journalist, hairdresser or insurance agent, of course the form of a self-employed person (eenmansaak) suits you best. If you are a large wholesaler, import-export company planning to open branches, then you need to consider options for a joint stock company or a cooperative. If you are planning to do charity or investment, then you have to choose between a foundation (stichting) and an association (vereniging).
If you still cannot plan the speed and volume of growth of your business, or you are just navigating the issue, then you definitely need to pay attention to the following factors:
- Share of responsibility (we will discuss this issue in more detail below)
- The company's image (this is especially important for firms working in the post-Soviet space)
- Registration cost (the need for a notarial deed, the presence of a legal and postal address, the presence of a sworn translator during registration)
- The presence of a statutory fund (currently only relevant for NV (open joint stock company)
- Tax incentives (there are more for private entrepreneurship)
- Tax rates (see section Business and taxes)
- The impact of having a business on a personal situation (consequences in case of divorce, inheritance)
- The impact of having a business on a personal financial situation (benefits, subsidies, tax on savings in Box 3, obtaining social housing, the possibility of obtaining a loan or mortgage, the ability to invite a non-EU partner, etc.)
- Accounting and administration (the requirements for private business are softer)
- Cost of Service
- Obligation to keep records with the help of an accountant (sometimes also obligation to conduct an audit)
- The ability to maintain a simplified form of accounting
- The ability to change the composition of participants (founders)
- Opportunity to involve staff or other assistants and the commitment involved
- Compliance with mandatory rules (for example, payment of the minimum wage for a director-shareholder)
In the chapter Comparison of characteristics, we tried to collect for you a general overview of different factors for different forms of ownership.
What forms of ownership exist in IP.
– Freelancer (freelancer)
An entrepreneur without registering a business with a chamber of commerce. Actually, this form of business does not exist. For the tax authorities, this is an individual who is engaged in part-time jobs and declares income from these part-time jobs as "income from other jobs." He is not entitled to issue invoices, just as he is not a VAT payer (BTW) and is not entitled to benefits for entrepreneurs. Freelancer leads his administration. This form is recommended if part-time jobs are not regular, clients of invoices do not require and the total income from these part-time jobs does not exceed 6-7 thousand per year. In case of registration with the KVK (chamber of commerce), the freelancer becomes EMZ (eenmanszaak) and is considered a ZZP (zelfstandigzonderpersoneel)
Forms of ownership without a legal entity
– Eenmanszaak(Private Entrepreneur)
One of the two most common forms of business. Ideal for a small business with an income of 20-50 thousand per year. Is a VAT payer (for some types of business it is exempt). Draws out invoices. Obliged to keep records, can do it independently, or maybe with the help of an accountant. Eligible to have up to three trade names (see section "How to open?"). The ability to hire staff. The ability to involve family members (partner, children from 15 years old) to help. Is a payer of income tax on favorable terms. There are a lot of benefits for entrepreneurs and work. Possibility of "postponement for old age", while exempting part of the profit from taxes. In the event that it works without hired personnel, it is considered a ZZP (zelfstandigzonderpersoneel). If hires workers, it ceases to be a ZZP, remaining a private entrepreneur (EMZ)
– VOF- Vennootschaponderfirma (private enterprise or private firm)
Several (at least 2) private entrepreneurs working together under the same name. All the same responsibilities as a private entrepreneur, but because each of the owners is an independent individual. person, then everyone is entitled to entrepreneurial tax benefits, which is very beneficial. The distribution of profits between partners is decided by a mutual agreement signed by both parties. This agreement can also be certified by a notary, but is not required. If there is no agreement, profits (or losses) are distributed in equal shares. The agreement can indicate both percentages and fixed shares (in amounts, in hours worked, other methods of distribution can also be indicated). However, the share of each of the participants must be greater than zero. With this type of property, an additional tax unit arises, which submits reports and pays VAT (BTW), as well as, if necessary, other taxes (excise, social insurance of hired personnel, etc.) After calculating the profit, it is distributed among the participants according to an agreement or equal shares and already each participant pays his own income tax. Because personal circumstances are different, then with an equal distribution of profits, taxes payable for participants may be different. Losses are allocated in the same way as profits. The ratio of the distribution of profits can be revised no more than once a year (from the beginning of the new reporting year) or in case of a change in the composition of participants. In any case, a written document is drawn up and certified by all participants.
– Man-vrouwfirma(VOF) – Family private enterprise
In fact, this is the same VOF (Vennootschaponderfirma), in which husband and wife are partners.
In terms of taxes, it is very profitable, but the tax authorities are particularly interested in such firms. In order to be such a company, you need to pass the so-called "test of independence", that is, to prove that you are equal partners. If one person cannot work without the other, then he is not considered an equal partner.
It is much easier for parents and adult children to run a family business. From a tax point of view, children over 18 are a separate taxation unit (as opposed to spouses), so there are fewer checks. However, if you are planning to start a family business, we recommend that you draw up an agreement that clearly spells out not only the distribution of profits, but also the functions and responsibilities of each co-owner. Otherwise, during the audit, the tax office may deprive the used benefits and also reconsider the relationship as an "employer-employee", and this is unprofitable.
– CV (commanditaire vennoten) – Limited partnership
Despite the similar name, this is not an LLC, but a completely unusual form of ownership. CV only exists in the Netherlands and Belgium. Suitable for those who want to open a private business, but do not have their own money for investments.
There are two different types of owners in this partnership (you need at least one of each type to open). The first type, the so-called sponsor, is essentially a contributor of money, has the right to receive a share of the profit, while remaining anonymous. The registration documents indicate only the total number of "sponsors" and the total amount of contributions. The second type is “general,” or working. It is directly the person or people who will run the business. Their names are included in the registration documents, and they bear all responsibility. In the event of bankruptcy, sponsors lose only the invested money, while managers go bankrupt together with the enterprise, that is, they bear full personal responsibility.
A partnership can be of two types: “open” and “closed”. In an open one, a participant can transfer his share without the consent of the other participants. You can't do this indoors. Accordingly, depending on the “openness” of the partnership, it is considered by the tax authorities. The open one submits a profit declaration, the closed one submits an income tax declaration for all participants. Sponsors are also required to show their share of profits for tax purposes, however, because Since they are not directly engaged in entrepreneurship, they do not have rights to entrepreneurial benefits. If the sponsor decides to participate in the management of the business, he can be considered an entrepreneur (subject to the fulfillment of conditions), and also becomes personally responsible for the debts and obligations of the company. The sponsor may also be not a private person, but a legal entity (including a foreign one); in this case, income tax is also filed. Other taxes (VAT, wage taxes, excise duty, etc.) are calculated in the general manner.
The relationship between sponsors and working managers is determined by the contract. This agreement is optional, but it is highly recommended to be certified by a notary. The agreement prescribes not only the distribution of profits, but also the conditions for the withdrawal of participants from the enterprise, the conditions of responsibility, the possibility of transferring management or sponsorship share to third parties, the possibility and conditions of hiring personnel, insurance, etc.
Because this type of property is not very common and often causes many disputes, including with the tax authorities, but you have decided that exactly what you need, we strongly recommend that you sign up for a consultation with us before opening.
– Maatschap(community)
This type of property is usually used to bring together entrepreneurs of similar professions. For example, a law office. It looks like one enterprise, but in fact there are several small law firms working there. This is convenient when you can jointly buy or rent a room, use one and the same equipment in turn, promote a name, and so on. Allows equity participation in projects that a small business cannot pull alone. Also, due to the pooling of resources, it makes it possible to provide a wider range of services. Distribution of investments and profits takes place by agreement, while no one can own 100% or 0%. Each member of the community has the right to act, conclude contracts on behalf of the entire community. Relations within the community are governed by the charter. There is an open and closed community. In a closed one, everyone works under one name, in an open one, everyone works under his own name, having the right to use a common brand.
Forms of ownership with a legal entity
– BV (beslotenvennootschap) – CJSC (closed joint stock company)
Legal entity with limited personal liability. Owners are shareholders who are recorded in the “register of shareholders”. An appointed director manages the enterprise. He can also be a shareholder. The minimum number of shareholders is one. Obligatory registration with a notary. The statutory fund is 1 monetary unit (that is, it can be 1 euro). Changes in the address, type of activity and replacement of the director are made at the chamber of commerce. Changes in the statutory fund and in the composition of shareholders - only at the notary. Shareholders can be residents of any country. Managing director (director) is a person who has the right to work in the EU. Both individuals and legal entities can be shareholders and managers. A private enterprise cannot be a manager, because it consists of entrepreneurs who for tax nat. faces. An entrepreneur (as an individual) can simultaneously be a manager or shareholder of another enterprise, but this cooperation has a very large impact on its taxation (the risk of losing entrepreneurial benefits).
If the manager is also a shareholder (at least 5% of the total number of shares) of the company, then the minimum wage rule applies.
BV is a payer of income tax (20-25%), as well as other taxes (VAT, deductions from salaries, excise tax, etc.) on a general basis. The profit remaining after taxes can be paid to shareholders in the form of dividends or left for the development of the company.
– Flex-BV - a type of BV, introduced in 2012 under the program to optimize forms of ownership within the EU and to simplify entrepreneurship.
In fact, this is the same BV and upon registration it does not differ in any way from the usual one, the difference is reflected only in the charter. Therefore, you must declare that you want to use the capabilities of Flex-BV BEFORE registration, otherwise you will receive a standard charter for a regular BV.
So FlexBV disposes of new types of shareholders - a shareholder without the right to vote (but with the right to profit) and a shareholder without the right to profit (but with the right to vote). A shareholder cannot be limited in both voice and profit at the same time.
The blockade restriction on the sale of shares has also been added. Under the old law, if a shareholder (or his heir) wants to sell his shares, he must first offer them to the other partners, and has the right to sell them to third parties only with the consent of all shareholders. The new rules for FlexBV allow for a departure from this norm.
As an additional plus, it also became possible to make decisions without a general meeting of shareholders and the ability to hold such meetings abroad.
– Holding BV – holding closed joint stock company
From a legal point of view, a holding CJSC is the same CJSC. The difference is that the main activity of this BV is the ownership and management of securities and other assets. Most often these are shares of another company. It can also be money that is waiting in the wings to be invested in a business, it can be patents, copyrights, licenses, it can be real estate or land, as well as any other assets. The main difference is that the Holding does not conduct any business activity. That is, it distributes funds between subsidiaries (if any) and distributes dividends to shareholders. Such a sleeping firm, custodian of values.
In some cases, this type of BV is very profitable, for example, if you want to invest in a business, but have not yet decided where, but do not want to have it in a private account. It is quite easy to transfer a holding company into a working enterprise, if necessary.
The holding is also convenient for the redistribution of assets and funds between several businesses. The holding has one property that is very attractive for businessmen: according to Dutch law, dividends received by the hosting company from investments in subsidiaries are not taxed.
Because the holding does not conduct business, then its taxation is usually simplified. In many cases, he is not a VAT payer (BTW), the manager does not need to calculate the salary. That is, in practice, only a profit report is submitted once a year. That, accordingly, significantly reduces the cost of servicing such an enterprise.
– NV (naamlozevennootschap) – Open joint stock company
Very similar to BVs, they are almost identical in terms of taxes and liability, but there are also important differences. For example, the need to have at least 2 shareholders.
Unlike a closed joint stock company, there are no restrictions on the sale and transfer of shares. NV shares can also be traded on the exchange. Among the significant advantages is the absence of a mandatory minimum wage for a managing shareholder. Of the minuses - the mandatory statutory fund is at least 45000.
Also, like with BV, mandatory registration with a notary, entry in the register of shareholders, decision-making by the general meeting of shareholders.
– Coöperatie(onderlingewaarborgmaatschappij) – Cooperative (mutual insurance community)
The mutual insurance community is a type of cooperative. A cooperative is an association that allows individual entrepreneurs to enjoy the benefits of teamwork. The members of the cooperative enter into an agreement with each other. This allows the other entrepreneur to do some of your work if you get sick, so customers don't have to wait long. Also, members of the cooperative can jointly purchase the necessary equipment or materials at lower prices.
– Vereniging – Association
The association must have at least 2 members, the main decisions are made at a meeting of the members of the association, and a board is appointed there, which usually consists of elected members of the association. At the meeting, each member of the association has one vote. The board usually consists of a chairman, secretary and treasurer. The main document is the charter, no start-up capital is required. There are two types of associations: an association with full legal capacity and an association with limited legal capacity (in the absence of a notarial deed). In the latter case, the director bears full personal responsibility.
– Stichting – Foundation (National Organization)
If your activity is related to a specific public or social goal, such as protecting nature, helping others or spreading culture, then a foundation may be a good idea. The fund must be registered through a notary, and it does not require any start-up capital.
The foundation has a board but no members. Usually the board consists of a chairman, a secretary, a treasurer, and possibly other board members. But it doesn't have to be that way. The fund can have a business, but the profits can only be used for the main purpose of the fund. The director of the foundation can also be hired by the foundation, but this is rather rare, most often the director is reimbursed only for the expenses incurred. In a foundation that has ANBI (Public Benefit Institution) status, the director cannot have an employment contract with ANBI. The foundation can also hire staff. The charter can also determine the presence of a supervisory board.
The main difference between a private enterprise and a legal entity
All business in IP can be roughly divided into "private entrepreneurship" and "business with the creation of a legal entity." Or, in other words, a business with full personal responsibility and partial personal responsibility.
It is responsibility that is the main determinant.
All private business, be it a self-employed person (eenmanszaak), a private firm (VOF) or a community (maatschap), from the point of view of the Dutch tax authority, are not separate tax units for determining income tax. For the Dutch tax authority, a self-employed person is a private person who has income from a business. All the profit of entrepreneurship in this case is the income of a particular private person (or distributed among a group of private people). At the same time, it does not matter at all whether he took out his personal money from the business account or, on the contrary, invested it there. After all, all the money in the account of his enterprise remains his personal money. As well as a car, computer, and other things bought for the enterprise. The movement of funds and assets between a private enterprise and the entrepreneur himself is not regulated in any way, because, in fact, this movement from one pocket to another does not affect the amount of taxes in any way. A self-employed person is a regular income tax payer. Of course, he has certain benefits, he is obliged to submit an extended declaration (more on this in the section taxes for entrepreneurs), but this does not affect the essence. The income (or loss) from entrepreneurship falls into box 1, is added to the rest of the income (for example, benefits) and deductions (for example, a mortgage deduction) and the result is taxed at the usual progressive rate from box 1 (see tax rates in the useful information section).
So what about responsibility?
Here is the most important thing: For private entrepreneurship, the entrepreneur himself is responsible with all his property. And vice versa. That is, if the entrepreneur, for example, did not pay honey. insurance for his wife, then the court collector has the right to arrest the business account and take money from there. Or if, for example, an entrepreneur did not pay the supplier and he turned to the collection bureau, the collector has the right to describe the property, take the car, house, TV and other property in order to pay the debt. If there is no marriage contract between the spouses, then, accordingly, the spouse's property (regardless of where it is located) is subject to the risk of being confiscated.
Usually people think that this can only happen if the company goes bankrupt. This is mistake. Debt can arise out of the blue. For example, you have a guest from the Baltic states in his car, which, of course, he did not register. The guest left, and you received several thousand fines both for speeding and for an unregistered car. And this visit could kill your nascent business. Variant the other way around: A person has registered an enterprise, does not conduct any activity and does not submit any reports, throws out letters from the tax office. This is a very dangerous situation, because the tax office will calculate taxes itself, add fines and rents, and you can easily lose your car, although it seems that you “did nothing”. Therefore, be very careful and take filing reports seriously if you decide to choose a private enterprise. Although private entrepreneurs are not obliged to conduct accounting with the help of an accountant, we strongly advise you to contact specialists in order to avoid unpleasant surprises.
Creating a business in the form of a Legal Entity saves you from the problems described above. In this case, the company and its owner are two different units of taxation. There is a cooperation agreement between these units, which, among other things, determines the degree of responsibility. As a standard, only the enterprise is responsible for the company's debts in the amount of funds and assets on its balance sheet. In the event of bankruptcy, only what is on the balance sheet of the enterprise is subject to confiscation. Personal cars, real estate, and other property of the owner is not affected by this procedure. And, accordingly, on the contrary, the firm is not responsible for the owner's debts.
Why, after all, is “partial” personal responsibility? As with every rule, there are exceptions. If it is proved that the owner or manager deliberately brought the company to bankruptcy, or, for example, withdrew profit in the form of dividend payments, and the company after that turned out to be insolvent, then the dividends received will have to be returned and the fines paid out of personal pocket. And, it is possible to pay off with personal property. In this case, the degree of responsibility (or negligence) is determined by the court.
Another option when private responsibility works, which is often forgotten. This is the period until the authorized capital is paid. Until 2012, it was not possible to open a company until at least 20% and at least 18000 euros were deposited into the account. Now the authorized capital can be 1 euro, the rate of 20% has remained the same, and no one checks the reality of the contributed capital. And here lies the trap! If during the onset of debt obligations the authorized capital is not paid, then the manager is personally liable for the debt. Therefore, always! Always deposit your capital into the account, even if your share is 1 cent. It must be transferred from a personal account (or deposited in cash at a bank) with the indication "statuutkapitaal".
A legal entity and an individual-owner (manager) submit separate different declarations. The firm submits income tax reports, where the director's salary will appear as an expense of the enterprise, and dividends paid to shareholders as distribution of profits. The firm itself pays income tax, and what is left can be paid as dividends, or it can be left for development.
The director, like the shareholders (it may be the same person), submit their own personal declarations of individuals, which will indicate income in the form of salaries received at the enterprise or dividends received.
In this case, you cannot simply invest or withdraw money from an enterprise for personal use. Let’s talk about what methods of monetary relations exist between legal entities. persons with its owners, read in the section “accounting and administration”
Despite such a difference in the definition of responsibility, we still advise, when choosing a form of ownership, to be guided by an integrated approach, assessing the totality of all the pros and cons, as well as taking into account personal circumstances.
