For many internationals starting a business in the Netherlands, the Dutch eenmanszaak (sole proprietorship, that is, being self-employed) is the logical first step. It is simple, flexible and cost-efficient. But as your business grows, the question inevitably arises:
When does it make sense to switch to a Dutch BV (private limited company)?
At Tax is Exciting, we advise international entrepreneurs daily on this exact question. The answer depends on much more than just profit levels.
The Dutch BV: more than just tax savings
A Dutch BV often becomes financially attractive once annual profits exceed approximately €120,000. However, there are many situations in which a BV structure can be beneficial sooner than that:
- when starting a company together with partners;
- when attracting investors;
- when creating a scalable business;
- when limiting certain business risks.
That said, a BV is not automatically ‘better’. A BV comes with additional legal, administrative and tax obligations. Annual accounts must be prepared and filed, payroll administration is required, and shareholder decisions need to be formally documented.
The right structure should support your business goals – not create unnecessary complexity or costs.
Is a holding structure always necessary?
One of the most common misconceptions we see is that every BV should immediately include a holding company structure. In reality, this depends entirely on your plans. A holding structure can be very useful if you intend to:
- sell the company in the future;
- attract investors;
- separate valuable assets;
- build multiple business activities.
However, if you are primarily operating as an independent consultant or service provider where the business depends mainly on your own personal work, a holding structure may offer limited practical advantages while increasing annual compliance costs. We always advise clients to look critically at the balance between legal structure and practical efficiency.
Converting your existing business into a BV
Already operating as a sole proprietor? Then converting into a BV can often be done smoothly and tax efficiently. There are several methods available:
- a direct (‘hard’) conversion;
- a tax-neutral (‘silent’) conversion, where assets, contracts and fiscal reserves can transfer into the BV without immediate taxation.
The optimal route depends on your business activities, timing and future plans. Proper guidance during this process can prevent unnecessary taxation and administrative complications later on.
The director’s salary: more than just the minimum
Once you own a BV, you usually also become its managing director (DGA – directeur-grootaandeelhouder). Dutch tax law requires directors to pay themselves a salary. Many entrepreneurs assign themselves the statutory minimum salary threshold, currently around €60,000. In practice, however, the appropriate salary depends on multiple factors, including:
- the profitability of the company;
- comparable market salaries;
- business cash flow;
- personal financial circumstances.
A well-designed salary strategy is therefore an important part of effective tax planning.
International entrepreneurs need international tax advisors
At Tax is Exciting, we specialise exclusively in advising internationals operating in the Netherlands. We understand the challenges that come with cross-border entrepreneurship, Dutch tax rules and international mobility. Whether you are:
- setting up your first Dutch BV;
- restructuring your business;
- handling Dutch payroll and tax compliance;
- or planning future growth,
our team is happy to assist.
We combine technical expertise with practical, entrepreneurial advice – always with a focus on clarity and efficiency.
Considering a Dutch BV structure?
Feel free to contact Tax is Exciting for an initial consultation. We are happy to explore the best structure for your business ambitions in the Netherlands.
for more information: orangetax.com