Legal forms with legal personality (separate entity):
These forms create a separate legal entity apart from the owners. The company itself can own assets, incur debt, and is usually liable for its obligations, offering owners limited liability business.gov.nlbusiness.gov.nl.
Key types:
BV (Besloten Vennootschap, Private Limited Company)
A popular choice once businesses grow or seek investment. A BV is a company with shareholders (which can be just you alone or multiple people).
It must be established via a notarial deed of incorporation, after which it gets a new KvK number business.gov.nlbusiness.gov.nl.
Liability is limited: if the BV goes bankrupt, the BV’s assets are used to pay debts and your personal assets are protected kvk.nl (except in cases of egregious mismanagement or personal guarantees). The BV’s profits are subject to corporate tax (vennootschapsbelasting), and if you as founder take a salary or dividends, those are taxed separately (more on taxes below). BVs also allow for easy transfer of ownership by selling shares, which is useful for bringing in co-founders or investors.
Coöperatie (Cooperative Association)
A cooperative is an entity owned by members who can be individuals or businesses. It has a legal personality and members have limited or no personal liability (depending on the coop’s structure). Coops are sometimes used in startup contexts (for example, a group of freelancers forming a coop, or startups with a community-driven model). A cooperative can distribute profits to members or reinvest them. This is a niche choice but can be useful for specific collaborative ventures.
Stichting (Foundation)
A foundation is an entity with no owners, used for non-profit goals or holding assets (some startups use a stichting to hold intellectual property or for a dual-company structure). A foundation cannot distribute profits to founders (only to further its purpose), so it’s not a trading business vehicle by itself, but it can own a BV or be part of a structure. It has a legal personality and the board manages it. Generally not the main operating form for a startup, unless you have a social enterprise or open-source project component.
In summary:
Most Dutch startups begin as either an eenmanszaak (if one founder) or a VOF (if multiple founders), due to ease of setup and tax perks when profits are low business.gov.nl. As the business grows, many consider transitioning to a BV for its liability protection and potential tax advantages at higher profit levels kvk.nl.
Key Differences: Liability, Tax, and Administrative Burden
The legal form you choose affects how you pay taxes, how much personal risk you take on, and how much paperwork you’ll need to deal with.
Liability and Asset Protection:
This is often the biggest concern for founders. In a sole proprietorship or VOF, you (and your partners) are personally liable for all business debts kvk.nlkvk.nl. This means if your startup runs into financial trouble or gets sued, personal assets (savings, house, etc.) could be at risk.
In a BV, by contrast, the company is a separate legal person, the BV is liable for its debts, not you kvk.nl. Your private assets are safe unless you, for example, commit serious mismanagement or sign a personal guarantee kvk.nl. (Banks might require you to personally guarantee a loan to a new BV; and if the BV fails due to proven mismanagement or fraud, directors can be held personally liable kvk.nl.) Overall, a BV greatly reduces personal risk.
A quick scenario: if you’re doing something high-risk (say, developing hardware that could cause injury or working on large contracts), a BV can shield your personal wealth in case of claims.
Tax Treatment
Taxation differs significantly between the forms. As an eenmanszaak or VOF partner, profits are taxed as personal income. You’ll pay income tax in Box 1 at progressive rates (ranging roughly from 37% up to ~49.5% for high incomes). The upside is you can often use entrepreneur tax deductions to reduce taxable profit: for example, the zelfstandigenaftrek (self-employed allowance) and MKB-winstvrijstelling (SME profit exemption of 14% of profit) kvk.nl.
These deductions can save thousands in tax, especially in the early years (starters get an extra startersaftrek in the first 3 years)berekenhet.nlberekenhet.nl.
This means that at lower profit levels, a sole proprietorship/VOF is usually more tax-efficient than a BV business.gov.nl.
In a BV, the company’s profit is subject to corporate income tax (vennootschapsbelasting). As of 2025, the corporate tax rates are 19% on the first €200,000 of profit, and 25.8% on any profit above €200,000 belastingdienst.nl. These rates are generally lower than the top personal tax rate. However, when you want to take money out of the BV for yourself, you face additional tax: typically, you (as a shareholder) pay dividend tax (Box 2 income tax on dividends) on distributions of profit, or income tax on salary if you pay yourself a salary from the BV business.gov.nl.
Important: if you own a BV and work in it, you are considered a DGA (director-major shareholder) and the tax law requires that you pay yourself a “reasonable” salary, known as the gebruikelijk loon (customary wage). In 2024/2025 the minimum DGA annual salary is set at €56,000(unless you can justify lower) belastingdienst.nlkvk.nl. That means even if your BV doesn’t earn much, you’re in principle expected to attribute about €56k of its income to your own salary (which is taxed via payroll/income tax).
If the BV genuinely can’t afford that in the beginning, you can request approval for a lower salary from the Tax Administration kvk.nl.
As the BV’s owner, you’ll pay income tax on that salary (just like any employee) and typically Box 2 tax (26-31% range) on any dividends you take. Also, as a DGA you do not qualify for the personal entrepreneur allowances (no zelfstandigenaftrek etc.) business.gov.nl.
So which is better tax-wise?
At modest incomes, an eenmanszaak usually pays less tax due to the deductions and because all profit is taxed once as income. A BV faces double taxation (corporate level + dividend tax) and the DGA salary rule, which can make it less attractive at low profit.
At higher profit levels, however, a BV can be more tax-efficient.
BV also allows some tax planning advantages: you could retain earnings in the company at the low corporate tax rate instead of drawing them all as personal income. For example, you can leave profits in the BV (for future investments or to build a cash reserve) and you won’t pay personal tax on that retained profit until you decide to distribute it. You can even have the BV contribute to your pension or other long-term plans pre-tax. In other words, a BV lets you defer personal taxes by parking money in the company (paying only the 19–25.8% corporate tax on it)kvk.nl.
In a sole proprietorship, all profit is immediately considered your personal income and taxed as such each year, whether you spend it or save it. This ability to shelter and reinvest profit can be a big plus for growing startups.
3. Administrative Burden and Costs:
Simplicity is where the sole proprietorship shines. An eenmanszaak or VOF is quick and easy to set up. All you need is to register with the Kamer van Koophandel (KvK) and pay the registration fee (currently €51.95). You don’t need a notary or any complex legal paperwork. For a VOF, it’s strongly recommended to draw up a partnership contract, but it’s not legally required to file it with the KvK.
Ongoing admin is pretty light: you keep proper bookkeeping, file your quarterly VAT returns (if applicable), and submit an annual income tax return. There’s no obligation to prepare formal financial statements for the public, and you don’t need to appoint any directors or officers. In short, going the freelance or VOF route keeps things simple and affordable, one of the main reasons many founders choose this path at the start.
A BV, on the other hand, comes with more formal requirements.
To start a BV, you must go through a civil-law notary, who will draft the deed of incorporation (akte van oprichting) and the articles of association (statuten). The notary also handles the registration with the KvK (Chamber of Commerce), after which you’ll receive a new KvK number for your company. This setup process usually costs between €500–€1,000 in notary fees, depending on the provider. The KvK registration fee (currently €51.95) is typically included in that cost or paid separately.
You’ll also need to open a business bank account in the BV’s name, with a minimum share capital of €0.01.
An additional step when forming a BV is registering the Ultimate Beneficial Owner(s) (UBOs) in the Dutch UBO register. This means identifying the real owner(s) or controllers of the company, usually you, as the founder. This step is required for anti-money laundering compliance and is not applicable to sole proprietorships, where the owner and the business are the same legal person. Failure to register UBOs can result in fines, so it’s an important part of the BV formation process. Usually, the notary or the KvK will prompt you to complete this registration.
Ongoing obligations for a BV include a bit more structure and paperwork than a sole proprietorship.
You’ll need to maintain proper double-entry bookkeeping, prepare annual financial statements, and file them with the KvK. Small BVs can submit simplified versions, but filing is still required. You’re also expected to hold an annual shareholder meeting to approve the accounts, even if you’re the only shareholder, it’s good practice to document this with a brief written resolution.
BVs must also file corporate tax returns, and if you’re paying yourself a salary as a DGA (director–major shareholder), the BV needs to run payroll, including monthly wage tax filings and payslips. That adds some extra admin compared to an eenmanszaak, which is why many founders get support with their accounts, taxes, and payroll.
If you’re unsure where to start, Startup Accounting can help you handle all of this, so you can stay compliant without getting buried in paperwork.
4. Flexibility and Growth:
In terms of bringing on co-founders or raising funding, a BV offers far more flexibility than a sole proprietorship.
An eenmanszaak is tied to one natural person by definition; it can’t have co-founders or shareholders. So, if you start solo but later want a business partner to join, you can’t simply "add" them to your eenmanszaak. You’d need to form a VOF (if you both want to be owners), or more commonly, switch to a BV.
A BV makes it easy to issue shares to co-founders or investors, which is why it’s the standard legal form for startups that plan to raise capital. If you think you’ll need outside investment at any point, you’ll almost certainly need a BV, investors won’t invest in an eenmanszaak, since it offers no equity to purchase.
When it comes to selling the business, a BV also makes the process smoother. You can sell your shares in the company, which is generally more straightforward and tax-efficient than selling the assets of a sole proprietorship. In a sale, buyers typically prefer to acquire a company as a whole rather than having to transfer contracts and assets one by one.
In summary;
Eenmanszaak/VOF = easy, low-cost start, full personal liability, personal income tax with initial tax perks, best for small scale or testing the waters.
BV = limited liability, scalable with investors and employees, possible tax advantages once profit is high, but more complex and costly to maintain. Many founders start as a freelancer/VOF and later transition to a BV when it makes sense. So, when does it make sense? Let’s explore that next.
5. You’ve outgrown the tax benefits
The early tax perks for freelancers don’t last forever. The startersaftrek only applies for the first few years, and the zelfstandigenaftrek is being phased out. As these disappear, the tax difference between a sole proprietorship and a BV narrows, or flips entirely in the BV’s favour.
If you’ve moved beyond the initial set up phase, hired staff, or signed a long-term contract that makes you more like a company than a freelancer, it might be time to formalise your structure.
So... when’s the right time to switch?
Ultimately, the decision depends on your profit level, risk exposure, and growth plans. It’s not just about tax, it's about long-term strategy, peace of mind, and flexibility.
Which Legal Form Fits My Startup?
(Freelancer to BV: When and How to Transition)
BV (Private Limited Company)
A BV is a separate legal entity. It protects your personal assets and allows for shareholders, making it the preferred form when raising capital or scaling. Profits are taxed at the corporate rate, and you’ll need to pay yourself a salary as a DGA. Admin is heavier: a notarial deed, financial statements, and payroll are required.
Key Differences
Liability
With an eenmanszaak or VOF, you are personally responsible for business debts. A BV offers limited liability: the company is liable, not you personally (except in cases of mismanagement or personal guarantees).
Tax
Freelancers are taxed under personal income tax, with deductions available in early years. A BV pays corporate tax (19% up to €200,000, 25.8% above that) and you pay tax again on any salary or dividends. At low profit, an eenmanszaak is more tax-efficient. At higher profit, a BV may offer advantages.
Administration
Sole proprietors file personal income tax and keep basic books. BVs require notary setup, financial statements, corporate tax filings, and payroll processing. It’s more complex, but manageable with the right support.
Final Thoughts
Startups often begin with an eenmanszaak or VOF due to ease and low cost. But as you grow, face more risk, or seek funding, a BV offers the structure you need. The timing of the transition depends on your profits, goals, and risk exposure.
If you're unsure when to switch or need help with the process, Startup Accounting can support you at every stage.
When to Switch to a BV
You want to limit personal liability: A BV protects your personal assets in most cases.
You’re bringing in a co-founder or investor: Only a BV can issue shares.
You want to reinvest profits: Retained earnings in a BV are taxed less than personal income.
You’re planning an exit: Selling a BV (via shares) is simpler and often more tax-efficient.
You’ve outgrown freelancer tax perks: If your profit is growing or tax deductions are expiring, a BV may be smarter.
July 10, 2025
Which Legal Form Fits My Startup?
(Freelancer to BV: When and How to Transition)
Which Legal Form Fits My Startup?
(Freelancer to BV: When and How to Transition)
1. Open a separate business account early
Choose a reputable bank and set it up as soon as you have a KVK registration. Use this account exclusively for business income and expenses.
Even freelancers benefit: it reduces confusion when preparing your VAT aangifte and ensures compliance with the Belastingdienst.
2. Use clear payment references
Use useful and specific descriptions for transfers:
"Salary – April 2025" instead of "Transfer"
"Invoice 302 – ABC Client" instead of "Payment"
"Reimbursement – June Marketing Lunch" for staff expenses
This assists your accountant, streamlines audits, and ensures transparent record-keeping.
3. Record every expense with proof
Every business-related payment should be meticulously matched to:
An invoice
A receipt
A reimbursement claim
Tip: The Belastingdienst requires supporting documentation for each input VAT claim. Store receipts digitally in organised folders or utilise tools like Basecone.
4. Keep your owner transactions clean
If you're paying yourself:
For BVs: Pay via salary (through payroll) or dividend.
For eenmanszaak: Transfer money as an "owner's draw" with a clear label.
Avoid vague, one-off transfers like "€1,000 – Savings." Such transactions muddy your records and complicate tax season.
5. Monitor regularly
Log in weekly to:
Reconcile new transactions
Flag any unclear transactions
Ensure invoices and receipts are properly linked
This habit saves significant time when preparing your VAT return or compiling financial statements.
Common Mistakes to Avoid
Starting a business in the Netherlands means choosing a legal form that best suits your startup’s needs. Many founders begin as freelancers (eenmanszaak), but as the business grows, a BV (Besloten Vennootschap) , a private limited company, can offer advantages. This guide from Startup Accounting will walk you through the main Dutch business structures, compare their tax and liability implications, and explain when and how to transition from a sole proprietorship to a BV.
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