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Expanding Your Startup: Tips for Scale-Ups in the Netherlands with House of Companies



In this article, we'd like to focus on the most important considerations when initiating a startup or scale-up enterprise in The Netherlands. If you're commencing a new venture or expanding an existing one in the Netherlands as part of your growth strategy—increasing turnover—we refer to this as scaling up your business or startup in the Netherlands. (In general, we consider the ‘scale-up’ as a definition for companies that have grown their turnover (or FTE’s) with about 20%, of each of the last 3 years. Which could very well be your goal as a traditional SME company!)

Scaling up your activities implies that you're on the lookout for avenues to broaden your market presence and fuel growth - a common initiative for startups and scale-ups.


What are the advantages of setting up a business in The Netherlands for a scale-up company?

In order to scale-up your business, it’s all about infrastructure. To initiate a successful startup in the Netherlands, you require the right talent, efficient logistical processes and resources, access to funding, and a promising market opportunity. All this, while maintaining your enterprise undisturbed by excessive bureaucracy and exorbitant taxes.

Whether you are in IT services, recruiting staff, or into trading (import and export) of goods, The Netherlands offers a great entrepreneurial climate for you to scale your business.It’s very common for scaling companies to already have customers (or partners) in the region where they like to establish a company. You might have customers already in The Netherlands, or Germany, or even Belgium. If your customers currently only reside in Germany and Belgium, it's still a viable initiative to consider the Netherlands as your enterprise's point of entry. In fact, we have assisted dozens of entrepreneurs to start a business in The Netherlands, after they first contacted us to know more about setting up a business in a country like Germany.


As a successful startup or scale-up enterprise, it's likely that you're exploring multiple countries for potential expansion.

To explain you, why The Netherlands is interesting, it might be good to provide you a comparison with Germany.


Because an ‘entrepreneurial climate’ is a rather abstract definition, we can become more concrete when we look at the actual fact & figures of both countries.


Description

Netherlands

Germany

Minimum Capital Deposit

No Required

minimum 50% of 25.000 EUR

(Local) Bank Account requirement

No, bank account can be opened AFTER formation, and OUTSIDE Netherlands

Yes, the bank account must be opened BEFORE company formation, and INSIDE Germany

Registered Office requirement

Not required during formation, but advised. Typically 50- 100 EUR pm

Yes, typically 120-150 EUR pm

Formation Fees

€ 1.500, including notary fees

(based on standard Formation Deed)

€ 2.000 including notary fees (based on standard Formation Deed) (< 3 shareholders/directors (non-corporate entities))

(Entrepreneurial) Diploma Required for Formation?

No

No

Translation Required (of Formation Documents)

No, but preferred

Yes, unless the person speaks German. The notary might check if the shareholder understands the Formation Deed fully in its own language.

Time Frame Formation

2 weeks on average

2-3 weeks

Remote Formation Possible

Not possible

Not possible

Corporate Taxes

16% upto 200.000, 21% above 200.000

Approx 30-35% depending on the 'State' in region

Withholding Taxes

0% on royalties, 15% on dividends, 0% on interest. Over 100 treaties applicable.

Withholding tax of 25%, plus 5.5% solidarity surcharge (giving an effective rate of 26.38%), is applied to dividend and interest payments.

15% plus solidarity surcharge on Royalties.

Chamber of Commerce Contribution

50 EUR per year

150-200 EUR per year

Requirement to understand the local language

No, everybody in Netherlands speaks English well, and the authorities/banks/notaries are very cooperative

Preferred, with the English language in Germany, its difficult to get the assistance of most authorities/banks/notaries

Non Resident Director Allowed

Yes

Yes, however a work permit can be required before the formation of the company

Non Resident Shareholder Allowed

Yes

Yes

Tax Free Investments/Holding/Charity

Yes, possible (Dutch Foundation)

No

Accounting Requirements

Bookkeeping Requirement, Filing of Annual Report, No Audit Requirement up to turnover of 8.8 million (or similar conditions)

Bookkeeping Requirement, Filing of Annual Report, No Audit Requirement up to turnover of 4.8 million (or similar conditions)

Accounting/Bookkeeping Fees

125 EUR per month, which includes 4 quarterly VAT Return, Annual