When you want to start a private company, it is important to know what a BV in the Netherlands entails and what the pros and cons are. Therefore, in this article the concept ‘BV’ will shortly be introduced, and the pros and cons will be listed. A BV, or a private company, is a company with a legal entity and as a director you are employed by the company. This means that when you make any damage you are not liable for this damage. You can set-up a BV alone but also together with other people. The owners of the BV in the Netherlands will be the shareholders and have main power in the company. It is possible to buy power. When you buy shares from the company you invest in the company and you become co-owner. Every year, the company gives dividend to its shareholders.
First steps of starting a BV in the Netherlands?
When you start a private company, you need three things: a business, a director, and a starting capital. The starting capital is quite easy. In the Netherlands, the minimum starting capital is one euro. The director is also relatively easy. As founder you can be the director of your own BV in the Netherlands. Besides founder and director you can also be shareholder. If you are willing to invest (with a minimum of one euro) in your company, you are a shareholder. However, it is of course recommended to invest more money in your company since then you are able to buy an office and set-up your business. The last item, the business, can be more difficult. Before starting a BV in the Netherlands, you need a good idea so your business will be profitable. When you have a business, a director and a starting capital you must write a company’s articles of association, where some arrangements are listed. This company’s articles of association must be checked and signed by a notary. Subsequently, the notary will register the BV in the Netherlands with the Chamber of Commerce. When everything is arranged, you can start legally with your business. As the founder and also the director of your private company, you are employed by the company. Therefore, you will be paid by the company. You can withdraw your wage from the profit of the BV.
Pros and cons
There are pros and cons for starting a BV in the Netherlands. Below there are some advantages of a private company
- The starting capital is only one euro cent
- Possibility of many tax benefits
- Insured for social insurance in the Netherlands
- Minimum of one founder needed
However, there are also some disadvantages. First, it will cost you a lot of time to set-up your own BV in the Netherlands. It is possible to hire an external company and they are able to handle all the administrative tasks. This will save you a lot of time and you are sure that everything is done correctly. However, it will cost you more money. Another disadvantage is the taxes. Although there are some tax benefits, there are also some tax disadvantages. For example, in the first years you will probably have a low profit and a relatively high tax burden.