Sole proprietorship vs BV: choosing a legal structure in the Netherlands
Starting a business in the Netherlands as a foreign entrepreneur? Choosing between a sole proprietorship and a BV affects your liability and taxes.
What's the real difference between a sole proprietorship and a BV?
Choosing between a sole proprietorship and a BV in the Netherlands determines how you're liable for business debts, how much tax you pay on profit, and how much administration your business requires.
One of the first decisions when starting a business in the Netherlands is choosing a legal structure. A sole proprietorship (eenmanszaak) is simple and cheap to set up, but exposes your personal assets to business debts, with no separation between business and personal wealth. A Dutch BV, comparable to an LLC or Ltd in other countries, limits your liability to the capital invested, but comes with more administrative obligations and a different tax structure: 19% corporate tax up to 200,000 euros in profit, 25.8% above that.
Which structure fits best depends on your expected profit, your risk tolerance, and how much administration you're willing to take on. At EenvoudigRecht, we help you get the right documents in English for whichever structure you choose, for a fixed price.
Veelgestelde vragen
What's the main difference in liability between a sole proprietorship and a BV?
A sole proprietorship (eenmanszaak) exposes your personal assets to business debts, with no separation between business and personal wealth. A Dutch BV, similar to an LLC or Ltd elsewhere, limits liability to the capital invested in the company.
How does taxation differ between the two structures?
As a sole proprietor, you pay personal income tax on the profit, with deductions like the self-employed deduction available if you meet the hours criterion. A BV pays corporate tax, 19% up to 200,000 euros in profit and 25.8% above that, and you pay separate tax when you pay yourself salary or dividends.
At what profit level does a BV become more tax-efficient?
There's no fixed threshold, but a BV often becomes more tax-efficient somewhere around 100,000 to 130,000 euros in annual profit, since corporate tax can work out lower than personal income tax at that level.
Can I switch from a sole proprietorship to a BV later?
Yes. Many entrepreneurs start as a sole proprietorship for simplicity and low cost, then convert to a BV later as profit grows or liability risk increases. This conversion can happen tax-neutrally under specific conditions.
How much does it cost to get documents for my chosen structure?
We work with a fixed price you know in advance. You answer a few questions online about your business, and receive documents in English tailored to the legal structure you choose.
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