Establishing a freelance business in Holland - advice needed
Thread poster: Veronica Lupascu

Veronica Lupascu  Identity Verified
Netherlands
Local time: 05:40
Dutch to Romanian
+ ...
Aug 23, 2010

Dear colleagues, especially those living and working in Holland,

I am about to move to Holland in 2-3 months and I am a little bit worried of me being, adapting and working there. I was initially thinking to establish an offshore business in Cyprus, while living in Holland, for tax purposes, but since I am willing to permanently establish myself in Holland, I understand that it would be much easier and 'healthier' to have my business established there too.

Considering Holland's severe policy concerning migrants and some external advices I took from Dutch people, I think it is very important for me to pay taxes and social contributions in Holland (and not Cyprus), if I want to permanently live there and to move my business to Cyprus at a later stage, eventually.

Now my question to you working as freelancers in Holland is if the below Tax scheme applies to freelancers too:

33.45% on income up to EUR 18’218
41.95% from EUR 18’218 up to EUR 32’738
42.00% from EUR 32’738 up to EUR 54’367
52.00% on income over EUR 54’367

http://www.capitaltaxconsulting.com/international-tax/netherlands/dutch-income-tax/



This is huge, when comparing to Cyprus Tax schemeicon_smile.gif but anyway

Further, I would appreciate it very much if you could give me some tips of the whole procedure when establishing a freelance business in Holland. I am an EU citizen, but I saw I am required to have an innovative business, which would also serve the economic Dutch interest, if I want to establish it in Holland. I don't translate from Dutch or into Dutch, therefore my business has apparently no chances in Holland. Also, it seems that I still need the so called MVV Visa if I want to live and work in Holland, even if I am an EU citizen. I really hope this is wrong informationicon_smile.gif

So I don't know what exactly to ask you, because I am very confused and worried about everything. Could you please give me some links to informative webpages, since I am not so good in researching using my basic Dutch and all my EN researches did not help me too much. I will definitely consult some Tax specialists or lawyers when I am there, but I need to have an idea before I get in Holland.

Thank you very much for reading all aboveicon_smile.gif

en dank jullie wel voor jullie hulp! (ik spreek en schrif Nederlands een beetje, maar ik heb nog veeeeel te lerenicon_smile.gif )


 

Williamson  Identity Verified
United Kingdom
Local time: 04:40
Flemish to English
+ ...
IND Aug 23, 2010

Contact : www.ind.nl and belastingsdienst.nl (both in English too).

Citizens from Romania and Bulgaria need a work-permit, even though these countries are E.U.-Members.

On the tax-misery index, Holland belongs to the top ten.
Housing in Holland is more expensive than in Cyprus. A decent house : about 250.000-300.000 if you live in the Randstad.



[Edited at 2010-08-23 09:34 GMT]


 

Joy Phillips
Netherlands
Local time: 05:40
Member (2006)
Dutch to English
Freelancing & taxation in the Netherlands Aug 23, 2010

I'm not sure which rules and regulations would apply in your exact case, but here are a few English links that you may find relevant.

The Tax Administration offers an English summary of how freelance income is taxed in the Netherlands:
http://belastingdienst.nl/variabel/buitenland/en/private_taxpayers/private_taxpayers-04.html#P107_6897

(and yes, I believe those are the current tax brackets!)

The Aliens Police has an extensive English website that will help you figure out the residence requirements:

http://www.ind.nl/EN/verblijfwijzer/

One paragraph that specifically applies to you states:

All EU subjects, with the exception of Bulgarians and Rumanians are entitled to work without restriction in all sectors and industries. Bulgarians and Rumanians must have a work permit for the first 12 months they are working in the Netherlands. Their employer must apply for this work permit with the CWI.

(The spelling & grammar errors are not mine.)

As far as I know, EU citizens are not required to have an MVV visa.

Good luck!


 

Susanne Bittner  Identity Verified
Local time: 05:40
English to German
+ ...
Get in Touch with translators' association Aug 23, 2010

Besides, do get in touch with the Dutch Translators Association (www.ngtv.nl), they have a starters' helpdesk and can probably manage to find someone for you who can help you with all these questions in English. Good luck Susanne

 

Veronica Lupascu  Identity Verified
Netherlands
Local time: 05:40
Dutch to Romanian
+ ...
TOPIC STARTER
Thank you for the links Aug 23, 2010

Thank you both, Joy and Susanne, for the links and for your prompt responses.

I will analyse the information and get in contact with someone from NGTV. I will post here my "findings", just in case somebody else is interested.

By the way, I am a Romanian citizen, so I will still need that 12 months work permit, which is only received based on MVV Visa.

I find the information on The Tax Administration very useful and somehow exhaustive. Thank you, Joy!


 

Veronica Lupascu  Identity Verified
Netherlands
Local time: 05:40
Dutch to Romanian
+ ...
TOPIC STARTER
:) Aug 23, 2010

Williamson wrote:

Contact : www.ind.nl and belastingsdienst.nl (both in English too).

Citizens from Romania and Bulgaria need a work-permit, even though these countries are E.U.-Members.

On the tax-misery index, Holland belongs to the top ten.
Housing in Holland is more expensive than in Cyprus. A decent house : about 250.000-300.000 if you live in the Randstad.



[Edited at 2010-08-23 09:34 GMT]


I was actually expecting a reply from youicon_smile.gif

Well, I've found the solution with housing and I don't need to worry about that.

As about taxes, yes, they may scare. Anyway, I find the Social Contributions system of Holland much better that the one of Cyprus. Cyprus Social Insurance contributions (17.3%) do not cover all the needs, or, if they cover them, it is in a small percent, obviously. I find this matter extremely important.

I will move my business back in Cyprus when I am well established in Holland, with full rights. I am well informed of Dutch policy concerning immigration and I simply don't want to risk at all.

But just like you, Williamson, I am a tax freak, sort oficon_smile.gif


 

Ronald van der Linden  Identity Verified
Mexico
Local time: 22:40
German to Dutch
+ ...
seek professional advice Aug 23, 2010

http://www.newtoholland.nl/immigration/app/en/home?init=true

In addition to mentioned websites, perhaps this is an interesting site.

Regarding the MVV, please note that if you have a EU/Switzerland nationality, you are a EU-citizen, and specific rules apply (i.o.w. immigration rules are less strict)

http://www.ind.nl/EN/verblijfwijzer/verblijfwijzer_mijnsituatie.asp?proc=komen&procedure=Working%20on%20a%20self-employed%20basis&procedurestapnaam=Frequently%20asked%20questions&land=Cyprus&duur=1〈=en

Quote:
"Is it true that the MVV obligation does not apply to family members or relatives of residents of the European Union?

If you are married to or if you are the (registered) partner of a citizens of the European Union you do not need to apply for an MVV. You can travel to the Netherlands together with your partner. This also applies to a number of other family members. For more information, please go to ‘Family member of a citizen of the European Union’."

http://www.ind.nl/EN/verblijfwijzer/verblijfwijzer_mijnsituatie.asp?proc=komen&procedure=Working%20on%20a%20self-employed%20basis&procedurestapnaam=Work%20as%20a%20Paid%20Employee&land=Cyprus&duur=1〈=en

Regarding your citizenship, being from Romania, according to the IND-website, I think the difference only lies regarding whether to have to apply for a working visa (for one year max.) If I have understood correctly, this ONLY applies when you are going to work as a paid employee, and not when your are a "self-employed entrepreneur". As a self-employed entrepreneur you can apply for a residence permit and do not need a working visa.

Something that is important, is that you have health insurance!

Regarding Dutch taxes, and many other contributions/insurances to be paid by entrepreneurs, and yes, tax percentages are high, but you will have also the benefit of deducting costs and entrepreneur tax benefits. Also note that these taxes are income taxes. You could therefore also consider to establish a different legal entity where corporate taxes will be charged. This legal entity (BV, besloten vennootschap, a limited company (Ltd)) could then also function as the legal mother company of both your businesses in Cyprus and the Netherlands.

Or, another idea, why not simply maintain your business in Cyprus. I find it hardly logical, that when we have the EU that you "have to" move your business to Holland and work out the administration, paperwork, etc. The whole point of the EU is free movement for people and businesses.

Anyway, more details about establishing your business in the Netherlands, perhaps you will find more information here at the Chamber of Commerce, where every business will need to be registered: www.kvk.nl and where automatically you will be registered for tax purposes.

I think you should ask professional advice from tax accountants and lawyers, and, of course, these costs are tax deductible.

Finally, in Dutch, the "self-employed entrepreneur" is referred to as "zzp-er".

Good luck.


 

Veronica Lupascu  Identity Verified
Netherlands
Local time: 05:40
Dutch to Romanian
+ ...
TOPIC STARTER
professional advice Aug 23, 2010

Yes, I said in my initial post that I am gonna contact professionals when I am there, but I need an general idea of the situation, so that I am not too stressed. And I was much more stressed before you providing me with all these useful links and informations.

Thank you so much!

Ronald van der Linden wrote:

Regarding your citizenship, being from Romania, according to the IND-website, I think the difference only lies regarding whether to have to apply for a working visa (for one year max.) If I have understood correctly, this ONLY applies when you are going to work as a paid employee, and not when your are a "self-employed entrepreneur". As a self-employed entrepreneur you can apply for a residence permit and do not need a working visa.



I think you are right here and this is so good to hear. Theoretically I need only the residence permit to be able to establish my business in Holland. I have read about establishing the business and the procedure is quite the same as in other countries.

Regarding Dutch taxes, and many other contributions/insurances to be paid by entrepreneurs, and yes, tax percentages are high, but you will have also the benefit of deducting costs and entrepreneur tax benefits. Also note that these taxes are income taxes. You could therefore also consider to establish a different legal entity where corporate taxes will be charged. This legal entity (BV, besloten vennootschap, a limited company (Ltd)) could then also function as the legal mother company of both your businesses in Cyprus and the Netherlands.

Or, another idea, why not simply maintain your business in Cyprus. I find it hardly logical, that when we have the EU that you "have to" move your business to Holland and work out the administration, paperwork, etc. The whole point of the EU is free movement for people and businesses.


I've been thinking of maintaining my business in Cyprus, but my general idea is to obtain a permanent residence permit in Holland or a long time residence permit. I will also have my family there and I suppose the whole process is even simpler. I want to avoid any kind of problems or issues related to Tax Authorities or IND-offices and only when I feel 100% secure in Holland, I may bring back my business to Cyprus or not. Maybe I will get used in time to your taxesicon_smile.gif Actually, now that I analyse it, it is not so scary anymore. The tax scheme I found and posted in my initial post, does not differentiate the Social Insurance Contributions and the Income Tax, so I had the idea that those 33,45%, 41,95% etc. represent only the Income Tax, with other amounts to be applied for Social Insurance. Now it is much clearer to me, thanks to you allicon_smile.gif

I will look on the website of Dutch Chamber of Commerce too, now that I practically clarified it with the residence permit and establishing.

Dank jullie allemaal!


 

Samuel Murray  Identity Verified
Netherlands
Local time: 05:40
Member (2006)
English to Afrikaans
+ ...
@Veronica Aug 24, 2010

Veronica Lupascu wrote:
33.45% on income up to EUR 18’218
41.95% from EUR 18’218 up to EUR 32’738
42.00% from EUR 32’738 up to EUR 54’367
52.00% on income over EUR 54’367


See Rudhar's very old post:
http://rudhar.com/politics/vlksvrlk.htm

I am an EU citizen, but I saw I am required to have an innovative business, which would also serve the economic Dutch interest, if I want to establish it in Holland.


Really? Where did you hear that?

Also, see here:
http://www.zzp-nederland.nl/


 

Veronica Lupascu  Identity Verified
Netherlands
Local time: 05:40
Dutch to Romanian
+ ...
TOPIC STARTER
Thank you for the links Aug 25, 2010

Samuel Murray wrote:


See Rudhar's very old post:
http://rudhar.com/politics/vlksvrlk.htm


Also, see here:
http://www.zzp-nederland.nl/


Even though I still have to use a dictionary for almost every Dutch wordicon_smile.gif


As about the "innovative business" it is wrong information. It is written in the application for MVV Visa (45 pages of applicationicon_smile.gif ), but thanks to all you suggesting good websites, I found out I don't need it anymore.


 


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