When is BV better than EMZ?

In the Netherlands, many aspiring entrepreneurs choose the EMZ form of business. It's simple, fast, and inexpensive. EMZs also offer tax benefits that help reduce budget contributions. However, there are situations when opening a BV is more cost-effective and safer. Here's a true story.

Alexey came to the Netherlands from Ukraine and works as a freelancer in IT. He earns a good income and wanted to formalize his business. Initially, he considered EMZ—almost everyone does that. But during a consultation with Nalog.nl, it became clear that almost all of his income came from a single large client.

In such cases, the tax authorities may consider the business a fictitious one: the individual may appear to be working as a freelancer, but in reality, it resembles a standard employment contract. This can lead to problems not only for the entrepreneur but also for their client, including fines and questions from tax authorities.

Alexey is indeed self-employed, but proving it is difficult. To avoid risk, we offered him another option: registering a private limited company.

And it turned out to be not only safer, but also more profitable! Alexey's annual income is approximately €150,000. Starting at €120,000, a BV becomes a more reasonable option: the corporate tax rate is lower than the income tax rate, and the standard EMZ tax deductions no longer offset the difference.

As a result, Alexey not only opened a private limited company with us, but also entrusted us with his company's accounting. Now he can focus on his favorite work, while we worry about taxes.

If you are also thinking about opening a BV, but are afraid of getting confused by the rules, come to our Seminar "Business in the Netherlands: Opening a BV", where we'll explain all the nuances, advantages, and answer all your questions personally.