In the Netherlands, freelancers, entrepreneurs, and one-person startups are recognized as ZZP’ers (zelfstandige zonder personeel) or self-employed persons without employees.
The procedure for starting an entrepreneur is very similar to the procedure for opening a business or registering a company.
To become a ZZP’er, you will need to have certain documents (residence permit, address, etc.) among other required documents. The IND (Immigration and Naturalisation) Service and the Netherlands Chamber of Commerce KvK can advise you in more detail about your situation.
To register an entrepreneur, it is necessary to perform several steps:
- Select a business name.
- Organize a workplace or check that your place of residence is a viable (and legal) workplace for the work you intend to do.
- Register your business at the Chamber of Commerce and Industry. Registration is mandatory for every enterprise.
- Get a sample agreement to clarify your tax status. When a ZZP’er works for a company or a client, it is often difficult to determine whether it works in the traditional sense. To clarify your position, you may need to use a pre-approved or individual “standard agreement”. This statement explains the ZZPer’s income status and whether the company must withhold fees and premiums. The model agreement system replaces the previous VAR statements and came into force on 1 May 2016.
- Resolve issues with the tax administration (filing a VAT return/btw). Most freelancers are required to charge VAT (by the way) at 21% or 6%, depending on the service. You can do it yourself or hire an accountant. VAT returns are usually submitted quarterly.
- Pay attention to the possibility of obtaining special permits or licenses depending on your profession.
Insurance coverage for freelancers is also important in the Netherlands. There are many different types of insurance, including business liability, health, unemployment, and pension insurance.
Insurance can be expensive, but it’s recommended for beginners with no prior freelancing experience. One option is to become a member of ZZP Nederland.
It is a specialist body that provides advice and information on all matters relating to freelancing, as well as member discounts on ZZP-related insurance policies.
Regarding the tax burden. Bookkeeping is an important factor and hiring an accountant will help you pay your taxes efficiently and take advantage of deductions where possible.
You have to pay value-added tax every quarter and also pay tax on your income every year.
As a freelancer, you are personally responsible for any damages or failure to perform and comply with established agreements.
To ensure this, you can take out professional indemnity insurance.
It is also important to know that registered freelancers must have a minimum of three employers (clients) per year.
It is also not desirable to receive more than 70% of your income from one client – if you exceed this value, the tax authorities will treat it as a traditional form of employment, and therefore subject to the payment of taxes and social insurance paid by the employer.
A nice bonus is that if you are interested in starting a business and working as a self-employed professional or entrepreneur, you may be eligible for a temporary residence permit called the “start-up scheme”, which gives ambitious entrepreneurs one year in the Netherlands to start an innovative business under the leadership of a mentor from the Netherlands.
The benefits of registering as an entrepreneur include flexibility, the ability to develop your own business and access to international markets.