Starting a business in the Netherlands as a start-up company
We have already provided you an overview of how to start a business in the Netherlands.
In this article, we like to focus on the most important considerations when starting a business in The Netherlands as a start-up.
What is a start-up, and what does it take to take-off as a startup in The Netherlands?
In case you are starting a business in the Netherlands, in order to expand your business, and grow your turnover, we speak of the potential of scaling up your business. During your startup phase, when you're designing and developing your services or products you might expect to grow fast.
But even if you are not aiming at exponential growth, and you don’t expect to be the next Uber, as an SME company you have a lot in common with the ‘modern-day’ startup. You are probably new to the arena of setting up a business, and secondly, your budget will be limited. You can’t afford to waste your time, or money, on dealing with complicated legal procedures. The information in this article will help you decide on the most efficient launch for your Dutch company.
What will it cost to start a Dutch business as a start-up?
Theoretically, you can be ‘up-and-running’ in The Netherlands within a budget of about 300 EUR per month. This would provide you with a Flexi-desk service at an innovation hub like B. Amsterdam or Cambridge Innovation Center, and get your basic administrative support. In order to register sole proprietorship or a branch in The Netherlands, you need to consider a one-off registration fee of € 50, charged by the Chamber of Commerce (kvk.nl).
If you plan to establish a legal entity, then you need to consider a budget of around 1.000 - 1.500 EUR in notary fees, depending on the complexity of your structure and formation.
Do I require to have a local address in The Netherlands when starting a business?
Technically no, you don’t need a local address in The Netherlands to get your business registered. However, at the very least you need to be able to show that you are planning to establish a physical location in The Netherlands, while you are using your overseas address in the meantime as a legal address.
For practical reasons, such as the opening of a Dutch bank account, it’s advised to use a Dutch legal address.
7 Useful tips when starting a startup in The Netherlands
Tip #1 The cheapest way to start a business in The Netherlands
A common technique for startups is to stay as lean as possible. Therefore as a startup, your first plan would probably be to look at the cheapest and quickest way to set up a company in The Netherlands. However, setting up a company at a low fee might come at a high price.
The easiest way to register a company in The Netherlands as a startup would be to register a ‘branch’ (liaison office) of an existing overseas company, or register a sole proprietorship. In both scenarios, there is no notary involved, and the formation fees are close to zero (excluding professional guidance). We do suggest to discuss with a legal professional about your plans for the next 12-24 months, to avoid any expensive and/or unnecessary restructuring of your business, as soon as you reach your first milestone.
Tip #2 Start doing business without any local company registration
In case you are not planning to relocate to The Netherlands, and you are not performing any activities in The Netherlands yet, you are able to create a Dutch ‘virtual office’. A Dutch virtual office would consist of a local phone number, mailing address, and maybe even a phone answering service. A virtual office would allow you to explore the market and test your marketing strategy, or product-market fit before you invest in a fully-fledged office.
Tip #3 Prepare to involve investors and new shareholders
It’s difficult to grow a company. And it’s even more difficult to grow it all by yourself. It’s likely that your company will attract investors or shareholders at some point, that will help you grow. If you decide to start your business as a sole proprietorship, while you are planning to attract investors, you will be certain of the fact that you will have to adapt your corporate structure to this new situation. Because an investor would not be able to take any equity in a sole proprietorship, for the simple reason that a sole proprietorship has no shares to be divided. It’s not considered a ‘company limited by shares’.
Even if you do establish a ‘company limited by shares’, it’s not unlikely that you will have to negotiate the contents of your Articles of Association, or shareholders agreements, once you onboard an investor. This means that you can already consider the extra expenses of implementing these changes, with the help of a notary public in The Netherlands.
Tip #4 Limit your (personal) liabilities
Keep your liabilities at a minimum, at all times. Especially when you are incorporating a company in a new market, of which you don’t fully understand the tax and legal requirements yet. Although it can be cheap to register a branch in The Netherlands, if you decide to do so, make sure you have a full understanding of your risks and liabilities, so you can reduce them as much as possible.
Tip #5 Apply for a Dutch Start-Up Visa
In case you are a non-EU national, and planning to start a business in The Netherlands, then the Startup Visa could be ideal for you! The Startup Visa allows innovative entrepreneurs to easily get a residency permit in The Netherlands, to grow their business. Read more about the Startup visa in our Business Toolkit.
Tip #6 Get a tax calculation and filing requirements timeline!
Once you have decided that you like to start a company in The Netherlands, we advise you to prepare a full timeline of the administrative requirements of your company and the expected taxes that you are likely required to pay. Of course, you might not have a good expectation yet on the amount of turnover or profit that you might achieve, but aside from that, you can consider any salary taxes, VAT, and the appropriate filing dates (to avoid penalties).
Tip #7 Find a professional partner to keep your company in Good standing
Apart from the tax filing requirements, you need to make sure that your company complies with Dutch Company law. It’s important that you prepare proper Financial Statement, and file these statements at the Chamber of Commerce, after being approved during an Annual Shareholders Meeting.
In case you use the services of a Business Center, it’s important that the Business Center has a manned reception during working hours, and that they are able to contact you within a reasonable time. Even if you are residing overseas yourself.
INCO Business Group can appoint a dedicated Company Officer, to ensure that your company fully complies with all Dutch laws and standards.
What does it cost to launch a start-up in The Netherlands?
The costs of launching a startup depends on the exact corporate setup, your (corporate) housing requirements, and possible mentoring support that you need. The registration of a branch costs 450 EUR with the help of INCO, while you should consider a budget of about 150 EUR for a Flexi-desk at a startup hub. In case you are planning to apply for the startup-visa, you should consider a budget of 2.000 EUR for the residency application. The administrative fees for a startup are typically low, at 100 - 125 EUR per month.
Why is INCO Business group the ideal partner in The Netherlands for start-ups?
INCO Business Group has a lot of experience with startups, and we have assisted hundreds of SME companies to expand overseas. Via our cooperation with B. Amsterdam, we have assisted numerous of their Startup Visa entrepreneurs, and as a partner of Breda Startup Awards, we assist Dutch startups to grow overseas. Read more about us here.
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