The Netherlands
In order to start a business legally in the Netherlands, you have to meet certain conditions and follow strict and thorough laws, rules and regulations. If you wish to set up a new business in the Netherlands, you must observe various government and other rules. Some of these laws might be sector specific so you would need to check within the sector-specific information for your business to see what applies to you and your business.
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For starters, Entrepreneurs who intend to stay in the Netherlands must fulfil a number of conditions. If you are not an EU citizen, you will also need to apply for a temporary (e.g. Visa) and permanent (e.g. Dual Citizenship) residence permit simultaneously. On top of that, If you plan to start doing business in the Netherlands, you will also need to have or apply for a business bank account (e.g. IBAN). Writing a business plan is not a necessity when starting a legal business, however it does help to do so. When it comes to a business, you always need to select a legal business structure and the said structure determines such issues as liability, tax obligations and many more. Briefly talking about the legal business structures, some examples that can be given is a Sole Proprietor or a Private Limited Company.
Private Limited Company
One option is to create a legal entity in the form of a 'private limited company'. The main advantage of a P.L.C. is that it's an autonomous entity.
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The P.L.C. is generally speaking liable for any debts, rather than you as an individual. As a director, you're an employee of the P.L.C. and you act on its behalf.
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It's possible to set up a P.L.C. on your own or with other individuals and/or legal entities (an example that can be given is Area 071)
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A private limited company's equity is divided into shares that are owned by shareholders (The company owners still run the daily errands and the business itself)
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Starting a private limited company, or changing your sole proprietorship into a private limited company, has grown a lot easier over the years dues to the flexibility and growth in the Entrepreneurship market.
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Running a private limited company, you’re in theory not personally liable for your business’s debts. However, banks generally ask that as a director and major shareholder you co-sign for loans as a private individual for protection and a form of insurance.
Sole Proprietor
Most people decide to set up a 'sole proprietorship', when starting a business for themselves.
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Setting up as a sole trader has some advantages - it's quick and easy to do, and often offers more tax benefits than setting up a private limited company, especially in the early years.
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A disadvantage of establishing yourself as a sole trader is that you're personally liable for your business debts.
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The only thing you'll need to do to set up as a sole trader in the Netherlands is register with the Netherlands Chamber of Commerce, and this process costs €50.
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You can only set up one sole proprietorship, but you can operate under various trade names, perform different commercial activities and work from multiple premises.
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Running a sole proprietorship, your business is not a legal corporate entity. This means you're liable for all your actions and finances.
Logically, the next step would be to choose an appropriate “Trade Name” for your company. In order to progress any further, you need one to register your company in the Commercial Register. The name has to be original and not plagiarising any other major or minor brand/company. As aforementioned, you need to register your name with the Commercial Register but there are more legal entities coming into the picture, such as the Tax and Customs Administration. If your business structure is sole proprietor or partnership, you will be issued with a VAT-number, so you don’t have to register with the Dutch Tax and Customs Administration separately. Private Limited Companies have to register via a civil-law notary, who will take care of the registration at the Dutch Tax and Customs Administration on your behalf.
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When starting a business your intent is always to grow and expand. Growth and expansion mean getting more people involved in your cause i.e. hiring people. If you intend to hire staff, you will first need to register as an employer with the Dutch Tax and Customs Administration.
In most cases, you will not need a degree or a professional qualification to start a business, however, in some cases, certain professions require degrees or professional qualifications.
In terms of a business, establishing a physical location plays a big role. A zoning plan needs to be considered in order to progress with your business. If you plan to establish your business at a particular location, this choice of location must be in line with the municipal zoning plan. If this is not the case, you can apply for an “All-in-one Permit for Physical Aspects” to carry out your plans anyway. After a preferred location has been considered in a municipal area, the next step before establishing a business is to consider environmental regulations which may have a negative impact on the environment (e.g. Waste, endangering wildlife/public, etc.). If you think that this could be the case, you must submit a notification of environmental management to your local municipality unless you are in possession of an “All-in-one Permit for Physical Aspects” beforehand.
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However, sometimes choosing a new location for your business might not be ideal if you plan to start small or do not require an excess of space. Essentially, you could start a business from your own house and if you plan to run a business from your home, you are normally obliged to report this plan to your local municipality. You must also bear in mind various tax and mortgage issues.
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An essential part of this journey is to have health insurance and if you live in the Netherlands or earn income here, you are obliged to take out health insurance. You are also obliged to pay Dutch National Insurance contributions. Additionally, there are several ways to ensure your business’s assets in the event of legal liability or any other any other risk you can’t afford to cover. When it comes to Personal Data Processing, the storing and processing is regulated by the General Data Protection Regulation.
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If you have never dealt with such procedures and legal entities in the past, the local government will be more than happy to provide guidance, support and ensure everything is done as smoothly as it can.