Starting a Business in the Netherlands – Part 3

Business Forms

Sole Proprietorship (eenmanszaak)

In the case of a sole proprietorship, you are the sole manager of the company. This can be the case if you engage in self-employment, such as being a notary or a general practitioner, or if you are the sole owner of the business. Even if you employ staff, your company can still remain a sole proprietorship. If you meet the criteria, you will be registered as an entrepreneur in the tax authorities’ system and, accordingly, you will be obliged to pay taxes on your business activities. Please note that if you have employees, you are also obligated to pay employer contributions.

A sole proprietorship is not considered a legal entity. If you run a sole proprietorship, you assume responsibility for the company’s obligations.

BV (Besloten Vennootschap, Private Limited Liability Company)

This is the second most common form of company chosen by new businesses in general. In this case, the business is jointly managed by one or more partners. When establishing such a company, it is important that each partner contributes something to the business, such as capital, goods, labor, etc.

The contract concluded upon the establishment of the company must include the following:

• The name of the company
• The purpose of the company
• The contributions of the parties involved, whether in financial or material assets, labor, know-how
• The distribution of profits and losses
• The allocation of positions
• Provisions for sickness and accident
• The division of roles in the absence of members of the company

Company Administration and Bookkeeping

It is mandatory to keep accurate records of your business activities. You must retain your records for a period of 7 years, either in paper or electronic format, including all records, business documents such as cash books, invoices, purchases, bank statements, contracts, and any other documents, software, or databases related to your business. Your company’s administration must accurately reflect the amount of turnover tax you must pay and the amount you have paid to the tax authorities. Therefore, it is also important to retain the following documents for 7 years:

• Issued invoices
• Receipts to be paid
• Business expenses
• Income
• The private use of goods and services of the company

Your issued invoices must be numbered consecutively, and they should contain the following information:

• Date and invoice number
• Name and address of the customer (if the business partner is from another EU country, their tax number)
• Description, quantity, and specifications of the delivered goods
• Price of the goods excluding turnover tax
• Rate of turnover tax

 

Invoicing Requirements

• If you receive services or purchase goods, you should receive an invoice from your supplier. This invoice must meet several requirements.

The invoice should include the following information:

• Name and address of the supplier/seller
• Tax identification number (btw nummer) of the seller
• Your name and address
• Name of the invoice
• Date of invoice issuance
• Date of goods delivery or service completion
• Type, quantity, and quality specification of the delivered goods
• Nature and type of the provided service

The following information should also be included on the invoice:

• Unit price, excluding turnover tax (btw)
• Discounts or deductions not included in the price
• Percentage of turnover tax (btw)
• Total price excluding turnover tax
• Amount of charged turnover tax
• Payment deadline if it does not coincide with the date of invoice issuance

In some cases, as a buyer, you may also need to include your tax identification

number (btw nummer), especially when exporting goods within the EU.

Additionally, if the sale falls under special tax regulations, it should be indicated on the invoice.