Setting up and registering a sole proprietorship at the Chamber of Commerce
The only thing you'll need to do to set up a sole proprietorship [Dutch: eenmanszaak] in the Netherlands is register with the Chamber of Commerce [Dutch: Kamer van Koophandel (KvK)]. This lists you in the Business Register [Dutch: Handelsregister]. The KvK sees to your registration at the Tax and Customs Administration.
You can only set up one eenmanszaak, but you can operate under various trade names, perform different commercial activities and work from multiple premises.
Running an eenmanszaak, you're liable for all your actions and finances. No difference is made between your personal and business assets. Creditors are therefore entitled to make a claim on your personal assets. You'll also have to file for personal bankruptcy if your eenmanszaak is declared bankrupt.
You'll have to pay income tax [Dutch: inkomstenbelasting] on your sole proprietorship's profits. Various rates apply in the Netherlands according to how the Dutch Tax and Customs Administration [Dutch: Belastingdienst] categorises income.
There are three categories that are referred to in Dutch as boxes – Box 1, Box 2 and Box 3. Profits from your sole proprietorship are taxed under 'Box 1 – Taxable income from employment and home-ownership' [Dutch: belastbaar inkomen uit werk en woning].
If the Belastingdienst recognises you as a business owner, and you meet a minimum working-hour requirement, then you'll be entitled to certain tax benefits such as 'self-employed persons' relief' [Dutch: zelfstandigenaftrek] and 'SME profit exemption' [Dutch: mkb-winstvrijstelling].
Start-ups who qualify for 'entrepreneurs' allowance' [Dutch: ondernemersaftrek] may also be able to benefit from 'new businesses' allowance' [Dutch: startersaftrek].
Sole proprietorship or private limited company?
If you're unsure about whether to do business as a sole proprietorship [Dutch: eenmanszaak] or as a private limited company [Dutch: BV], list the differences and determine what's most important to you in your situation. Taxes may be lower for a BV, but the annual costs may be higher. Liability can also play an important role in opting for one legal form or the other.
Additional information to help you decide between a eenmanszaak and a BV (in Dutch).
Social security and national insurance contributions
In the Netherlands, you'll have to pay national insurance contributions [Dutch: volksverzekeringen] and you'll be entitled to an old-age pension [Dutch: AOW] once you reach 65. This pension is a minimum income, which you'll have to supplement yourself.
The sole proprietorship and employees
Even as a sole proprietor, it's possible to employ staff. The Dutch term 'eenmanszaak' (literally 'one-man business') simply refers to the legal form, and has nothing to do with the number of people employed by your business.