Sole trader (eenmanszaak)

You register your sole proprietorship with the Chamber of Commerce (KVK). The registration fee is €80.10. You do not need to separately notify the Tax Authorities; this is done automatically. The Tax Authorities then determine if you are also an entrepreneur for value-added tax (VAT). In that case, you will receive a VAT identification number.

Prepare your registration online and log in with your DigiD. Then, make an appointment to complete your registration.

With "My Sole Proprietorship," you, as the owner, can view your Chamber of Commerce extract by logging in with your DigiD. This allows you to verify if your registration is accurate and make any necessary changes directly.

You are legally obliged to maintain records for your sole proprietorship. An important part of this is bookkeeping, which leads to an annual financial statement giving an overview of your sole proprietorship's financial position. This includes checking if all bills are paid and what expenses you have incurred for your business. The financial statement forms the basis of your tax returns. You do not need to deposit the financial statement with the Chamber of Commerce. You can outsource your administration to an accountant or bookkeeper.

You pay income tax on the profits from your sole proprietorship. If the Tax Authorities recognize you as an entrepreneur for income tax, you are entitled to the SME profit exemption (mkb-vrijstelling). If you also meet the hours criterion, you are entitled to more tax benefits, such as self-employment deduction and fiscal retirement reserve. Starters can also benefit from start-up deductions for the first 3 years. Read more about tax benefits and deductions. If you are an entrepreneur for VAT, you pay VAT on your turnover. Whether you are an entrepreneur for VAT depends on your situation. If you have a turnover of up to €20,000 per year, you can use the small businesses scheme (KOR) and do not charge VAT.

The sole proprietorship is not a legal entity. This means that you are responsible for all actions of your sole proprietorship and personally liable for its finances and any debts. Creditors of your business can make claims on your personal property. If your business goes bankrupt, you also go bankrupt. If you are married in community of property, your partner is also financially liable for the debts. You can prevent this with prenuptial or partnership agreements.

The owner always has full signing authority. This means you can sign contracts or perform legal actions on behalf of the company, such as updating the Chamber of Commerce registration. You can also grant someone else power of attorney, allowing them to act on behalf of the company. Register this person, the authorized representative, with the Chamber of Commerce. While not mandatory, it's helpful for clarity with business partners.

You can hire employees with a sole proprietorship. The term sole proprietorship refers to the legal form, not the number of people working in your business. There is no maximum number of employees you can hire. You pay payroll taxes and social security contributions for your employees. When you hire an employee for the first time, you must register as an employer with the Tax Authorities and inform the Chamber of Commerce. Learn what you need to do when hiring your first employee.

As the owner of a sole proprietorship, you pay contributions for national insurance. You will receive state pension (AOW) from the day you reach your state pension age. AOW is a minimum income; you can arrange additional retirement provisions yourself.

You are not entitled to sickness benefits, unemployment benefits, or occupational disability benefits. Therefore, it's advisable to take out disability insurance. If you are pregnant, you are entitled to a minimum of 16 weeks of maternity leave. Apply for this through UWV. Depending on your business, it may be wise to take out additional insurance.