The Netherlands is a top destination for entrepreneurs in Europe because of its strategic location, strong government support, and innovation-driven economy. This country offers low corporate tax rates, well-developed infrastructure, and skilled labour forces.
The Netherlands presents a diverse market for entrepreneurs looking to launch new businesses or expand existing ones. People may overlook the practical aspects of setting up a business, but the Netherlands offers many advantages for entrepreneurs.
Strategic location with well-developed infrastructure
The Netherlands’ central position in Europe makes it an ideal hub for international trade and logistics networks, providing access to key markets in Germany, Belgium, and the UK. World-class infrastructure like the Port of Rotterdam and Schiphol Airport enhance logistics and trade capabilities.
World-class innovation ecosystem
Ranked among the top in the Global Innovation Index 2024, the Netherlands fosters innovation through collaboration, particularly in nine key sectors. This includes horticulture and propagation, agri-food, water, life sciences and health, chemicals, high technology, energy and power, logistics, and creative industries.
The Top Sector Alliance for Knowledge and Innovation (TKI) promotes collaboration between the government, private sector, universities, and research institutions, driving advancements and knowledge sharing. Businesses can benefit from shared resources and expertise while expanding their network with this alliance.
Extensive government support
Access to networks and partnerships is facilitated by the government and industry associations. Trade missions and platforms like the government’s official site help businesses connect with new markets and potential partners.
Moreover, the country has simplified compliance processes, including faster permitting and greater use of digital tools. These changes are designed to help businesses start or expand in a new market.
Special benefits for new businesses
The Netherlands also encourages entrepreneurs to establish businesses in the country with lucrative incentives. These incentives encompass the incorporation process, supporting programmes, and ease of entry.
Simplified incorporation process
The Dutch Chamber of Commerce (KVK) offers an efficient registration process, allowing entrepreneurs to establish their new legal entity. For instance, a BV (private limited company) with minimal bureaucracy and transparent incorporation fees. Notary fees for setting up a BV range between €1,250 and €1,500.
Many companies can complete their registration within three weeks. This will reduce barriers to entry and enable a focus on growth rather than administrative hurdles.
Special programmes for startups
Business incubators, co-working spaces, and mentorship programmes provide affordable solutions and guidance. These resources significantly enhance the likelihood of startup success during the critical early stages of development in a competitive landscape.
Entrepreneurs can access funding programmes, grants, and tax incentives aimed at supporting innovation and sustainability. For example, the Dutch Enterprise Agency (RVO) offers grants and loans specifically for tech startups, with €75 million for initiatives allocated for early-stage financing and scale-up support.
Facilitated entry for international entrepreneurs
The Netherlands offers a startup visa programme for non-EU entrepreneurs looking to establish innovative businesses.
This one-year residence permit allows entrepreneurs to develop their ideas with the support of a recognised facilitator who guides operational management, marketing, and investment acquisition. It simplifies the immigration process and integrates international entrepreneurs into the Dutch startup ecosystem.
What are the financial considerations?
All business expansion incurs a cost, and it’s not an exception in the Netherlands despite the incentives offered. Entrepreneurs planning to explore opportunities in the Dutch market should consider costs linked to compliance and their daily operations.
Business registration fees
New businesses operating in the Netherlands must register with the KVK. As of January 2025, this one-time fee will be €82.25 and is tax-deductible.
The registration fee is subject to annual adjustments based on inflation rates. Small entrepreneurs whose annual turnover is below €1,800 are exempt from registering with KVK and will automatically benefit from the small businesses scheme (KOR).
Incorporation cost
Incorporation is the procedure of constituting an organisation as a legal business. The cost varies depending on the type of company.
Standard limited liability company's (BV) incorporation cost is around €1,500, excluding Value Added Tax (VAT). This fee includes standard articles of association translated into English.
Public limited company (NV) faces incorporation costs ranging from €1,800 to €3,100, excluding VAT.
Limited partnership (CV) usually pays incorporation costs of approximately €1,250, excluding VAT.
Operational considerations
Entrepreneurs should also consider several operational aspects before kick-starting their business. Securing suitable office space and necessary equipment is crucial for any business setup.
Renting commercial space in larger Dutch cities will be more expensive than in smaller towns, but the business opportunities it presents are more varied. At the beginning, you must purchase office equipment. Then, when the office has been set up, you must pay utilities, such as electricity and water.
Labour expenses should also be factored into overall budget plans. The average monthly salary in the Netherlands ranges from €3,000 to €3,500 gross, though net earnings post-tax and social security contributions typically fall between €2,100 to €2,600.
Insuring workers is also mandatory. Entrepreneurs have alternatives like joining a Dutch fund (AOV) or using private insurance for basic coverage.
Navigating business regulations in the Netherlands
Complying with local regulations is essential for long-term success. Compliance proves the business’ professionalism and credibility, which appeals to current and prospective customers.
Labour law and regulations
Employment regulations are important to ensure fair treatment and create a good work environment. Labour laws in the Netherlands cover various aspects such as wages, working hours, leave mechanisms, and employee rights.
Working hours and rest periods
The Working Hours Act applies to all employees aged 18 and older, including trainees and agency staff. It regulates night shifts, Sunday work, and on-call duties to ensure fair working conditions and sufficient rest periods. Employers must also provide flexible schedules and extra breaks for pregnant employees.
Minimum wage and salary regulations
The government sets minimum wage laws that vary by age group. Starting January 1, 2025, the statutory minimum wage will increase to €14.06 per hour for adults, with corresponding adjustments for younger workers. Employers must also provide accurate salary slips and adhere to legal requirements regarding deductions.
Leave and holidays
Furthermore, employees are entitled to various forms of leave, including annual leave, maternity and paternity leave, sick leave, and unpaid leave under specific circumstances. The Working Hours Decree or Arbeidstijdenwet (ATW) allows for sector-specific exceptions to standard regulations in emergency situations.
Protecting intellectual property (IP)
The Dutch system offers a stringent process for IP protection. This includes registrable rights such as trademarks, patents, design rights, and plant breeders' rights, which require formal registration to enhance enforceability.
Additionally, automatic rights like copyright, trade name rights, and database rights are granted automatically but benefit from proper documentation.
To safeguard your business innovations, maintain detailed records and use tools like i-DEPOT. This approach can strengthen your legal position in disputes.
Tax obligations for entrepreneurs
VAT must be filed quarterly, with rates varying between 0%, 9%, and 21%, depending on the goods or services. The 9% VAT rate, for instance, applies to essential goods like medicines and food. Entrepreneurs can also benefit from various tax credits, including the private business ownership allowance and SME profit exemption, to reduce their tax burden.
Certain professions, such as physical therapists, are VAT-exempt. Income tax is calculated on gross profit, with rates set at 36.93% for income up to €73,031 and 49.5% for higher earnings in 2023.
Business licensing
Most businesses in the Netherlands do not need a general business license, but specific types require certain licenses. For example, restaurants need an alcohol license, while transportation companies must obtain haulage or safety licenses.
To obtain a business license, you typically need to provide documentation, including proof of business identity (KVK number), registration with the Dutch tax authorities, and financial statements or a business plan.
Business permits
In addition to licenses, businesses may also require various permits based on their activities. For instance, renovations or advertising installations require permits from local authorities, like the Environmental and Planning Permit (omgevingsvergunning).
Non-EEA businessmen typically need both work and residence permits to work in the Netherlands. These permits show your contribution to the Dutch economy and are subject to specific conditions.
Residence permit: Required for stays exceeding 90 days, this document proves your business serves a significant interest to the Dutch economy. Conditions vary depending on your nationality and business type.
Work permit (TWV): Most foreign employees need a TWV to work in the Netherlands. Entrepreneurs may integrate work permit requirements into their residence permit application based on their stay duration.
