A Cost Overview Guide

Setting up a Company

Tuesday March 22, 2022

Introduction

As a starting entrepreneur, you’re going to wear many different hats. One of these hats will be budget control, an activity you should keep an eye out for from the get-go. 

So what’s the first thing on the agenda? Understanding all costs you can expect when setting up your company in the Netherlands. The following guide will walk you through all important cost components you should consider so that you avoid any unpleasant surprises. 

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Coworking

1 The Fundamentals

The rise of startups in the Netherlands has been quite spectacular in the past decade, with its consistent ranking of being at the top 10 of most competitive economies worldwide.

Moreover, the Netherlands is primarily known for having a very friendly fiscal setup. A BV (limited liability company) setup cost is around €1,000 on average. The setup costs of a BV are relatively much cheaper compared to many other countries around the world.

The overall costs for setting up a company in the Netherlands largely depend on how you manage your money and the choices to keep these costs low.

2 Common Company Costs

Costs always vary based on the services that your company provides. However, fixed costs (apart from setup costs) apply to most companies.

Company Registration 

There are three main entities with which a company can register: sole proprietorship, BV, and Holding. 

Sole proprietorship (eenmanszaak) 

An eenmanszaak is a single-person company in the Netherlands. As a single trader, you are solely and completely responsible for the company, its finances, and its debts. In the Netherlands, you may establish just one sole proprietorship, but you can use various trade names and take on different commercial activities.

You are required by law to keep accounting records for your firm. There are a number of criteria for your records. The finances (the books) are an important aspect of your company’s documents. They provide insight into your company’s financial health by determining if all bills have been paid.

BV (esloten vennootschap)

A BV is a limited liability company. The shareholders of a BV are not liable for the debts of the company. This type of company is suitable for companies with more than one shareholder. A minimum of two shareholders is required to establish a BV.

The shareholders are liable for the debts of the company up to the amount they have invested in the company. The company’s assets can be used to repay its debts. A BV must have a board of directors that is responsible for the management of the company.

Holding 

A Holding can be used to divide your company structures into several BV’s, allowing you to never be personally responsible in the case of bankruptcy. The Netherlands has a strong global reputation and is, therefore, an excellent location to establish a business. The BV is internationally renowned as part of the Holding, giving it the ideal position for conducting local and international trade.

When you establish a company in the Netherlands, you will need to register it with the Chamber of Commerce. The Chamber of Commerce is responsible for issuing business licenses and registering companies. After your company has been registered, you will receive a Certificate of Incorporation. This document is proof that your company has been legally established and can now start operating.

Office Rental

In the Netherlands, office rental prices are high. Expect to pay around €2,000 – €2,500 per month on average for a decent setup in Amsterdam or Rotterdam and up to €1,000 per month outside big cities.

Equipment

You will need to purchase equipment such as a telephone, computer and other essentials that your business requires. This can vary depending on the type of company you’re setting up, but for an average startup, it’s around €2,000.

Accounting Services

To make sure you do not mess up your taxes, getting an accountant is a necessary investment. Accountants can get quite expensive in the Netherlands. Expect to pay between €150 – €300 per month for accounting services.

Legal Services

Getting legal advice is extremely important when setting up a company in any country, let alone the EU. Legal services in the Netherlands are expensive compared to many other European countries, but they can be much more costly in other non-EU countries. Expect to pay around €200 – €500 p/m for legal services.

Tax Rates

The Netherlands is considered to be one of the biggest tax havens in the world. There are different types of taxes: 

  1. Company Tax: This is a tax on the profits of a company.
  2. Corporate Income Tax: This is a tax on your income. The Dutch income tax rates are progressive, so the more you earn, the higher the rate you will pay. The standard rate is 25.8% as of January 2022. However, the first income range has a lower tax rate of 15%.
  3. Value-added tax (VAT): This is a value-added tax that is charged on goods and services. The standard VAT rate in the Netherlands is 21%.

Tax rates vary depending on which setup you choose and how your business is structured.

Costs Overview

The cost overview is divided into two parts: 

  1. One-time setup costs (starting from €100):
    • Equipment and supplies
  2. Monthly recurring costs (starting from €100):
    • Office space rent
    • Equipment and supplies
    • Phone bills
    • Utilities
    • Insurance
    • Lawyer & accountant
    • Inventory
    • Employee salaries
    • Marketing
    • Market research
    • Printed marketing materials
    • Making a website

3 Lowering Company Costs

This chapter focuses on managing your company's costs through smart tips for lowering them.

Coworking Spaces

Coworking spaces and startup offices offer an excellent, low-cost alternative to office rental in the Netherlands. Coworking spaces can vary in price from around €100 – €400 per month for a basic, shared office space. In addition to this, although you are renting a place that you share with others, you can still personalise it in a way that you can have your own office or desk.

Choosing Specific Services

When renting an office, you can choose specific services for your business. This can be very useful in reducing monthly expenses.

For example, if you are just starting your company and want to rent a space at 42workspace, you can opt for a Premium Desk that offers meeting rooms, phone booths, coffee, kitchen, and printing. Meanwhile, as your company grows, you move to a Shared Office that offers all the previous services and a dedicated desk, furnished space, and cleaning services. And finally, Private Office will provide you with your very own space for your team. 

Hiring Interns & Part-timers

Hiring interns and part-timers at the early stages of your startup can help you save money. Although these employee members will likely work for less, you can help incentivise them by giving them responsibilities equal to their work and increasing their hourly rate as your company grows.

Using Automation Platforms

Automation platforms can help you save a lot of time, money, and other resources to conduct administrative work. This is especially true for companies with a minimal workforce. Take advantage of automation tools such as:

  • Zapier: Zapier is an automation tool that connects different web services like Gmail, Evernote, Dropbox and more. This means you can create automated tasks for your business with little to no effort on your part.
  • HubSpot: HubSpot is a popular marketing automation platform that helps you save a lot of time on customer acquisition.
  • Redwood: Redwood orchestrates IT, finance, and business workflows end-to-end with automation.

If you are looking for more ideas, check out these top 10 IT automation tools

Using SaaS Solutions

SaaS solutions are a great way for startups to get up and running quickly and efficiently. By leveraging the power of the cloud, you can focus on your product and customer base rather than on managing servers and other back-end infrastructure.

In addition, SaaS solutions can help you lower costs since you don’t have to pay setup fees. Instead, you typically spread the payments into monthly instalments.

Seeking Grants & Subsidies

There are some grants and subsidies available from government organisations that you should look into when setting up a business in the Netherlands. They even assist startups, which can help relieve the financial stress that entrepreneurs encounter in their early days. The Netherlands Enterprise Agency (RVO) provides most grants & subsidies. These grants and subsidies can be on a local, regional, national or international level.

4 Covering Company Costs

On top of finding ways to lower your costs, it is essential to seek out the best ways to cover them.

Generate Income from Day 1

Always seek to generate income from day one, and make sure you have a sustainable business model. If it doesn’t work, re-evaluate your startup business model, revisit your lean canvas, and try again.

Loans & Grants

The Dutch government has implemented several schemes to help cover your costs. However, use these loans or grants responsibly to reap the benefits. Do not use them to “test” your business idea; instead, use them to get your company off the ground.

Savings, Investments, & Inheritance

You should also look into your savings and investments.

Startups are often founded on very little capital, so seed funding can play a crucial role in helping new businesses get started with minimal financial stress.

You should also consider getting more involved in your local startup scene. This could be through joining networking events that expose you to investors and people interested in making meaningful connections with like-minded people.

Family Members

If all else fails, consider asking for help from your family members. Although it is often taboo to ask for financial assistance from them, it can be a massive help during the early stages of your startup. However, always be mindful that they may not have much money or other resources to offer.

Raising Capital through Investors

Moreover, you should consider pitching your business idea to various investors. This is another excellent way to raise money. For example, you can pitch to angel investors or venture capitalists (VCs) who might be interested in your product or service.

Be Patient & Stay Focused

As any entrepreneur knows, the first few years are crucial for your business. Therefore, it is essential to stay patient and focused during this time, so you can take advantage of opportunities as they come along. This way, your startup can grow steadily and have a better chance of achieving long-term success.

5 Conclusion

There are many ways to set up a company in the Netherlands with limited financial resources. Although it is relatively expensive, you should not let this discourage you. Consider researching grants and subsidies available to startups, and rent co-working spaces with shared facilities. Be patient and stay focused on building the company you always dreamed of.

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