Should You Register as a ZZP or BV as an American Entrepreneur in the Netherlands?

When Americans move to the Netherlands under the Dutch-American Friendship Treaty (DAFT) visa, they have the opportunity to start their own business. As a DAFT visa holder, you can choose to set up your business as a ZZP (self-employed) or BV (private company). Each structure has its unique benefits and requirements. The right choice for you will depend on your business model, income expectations, and long-term goals. We’re here to give you a brief breakdown of the two structures.

ZZP (Self-Employed)

ZZP stands for zelfstandige zonder personeel, which translates to “independent without staff” or “self-employed person.” This business structure is akin to a sole proprietorship or freelance business in the United States, except you can hire staff, but this does come with additional personal risk.

Why Choose ZZP?

Setting up a ZZP is a popular choice for freelancers and independent contractors, as it is straightforward, inexpensive, and offers various tax benefits. To start a ZZP, you’ll need to:

Open a Dutch business bank account and deposit €4,500. This is the minimum capital requirement set by the Dutch government. You must maintain this amount in your account for the entire duration of your stay in the Netherlands under the DAFT visa, and Dutch immigration may audit you to ensure compliance. If you don’t meet this requirement, your visa can be revoked.

ZZP Tax Benefits

ZZP businesses benefit from several tax deductions and subsidies, including:

• Regional Subsidies
• Sectoral Subsidies
• Subsidies for Specific Activities
• Private Business Ownership Allowance
• Tax Relief for New Companies
• SME Profit Exemption
• Small Businesses Scheme (KOR)
• Co-Working Partner Tax Relief
• Tax-Deferred Retirement Reserve
• Discontinuation Relief
• R&D Tax Credit (WBSO)

Overall, a ZZP structure is ideal for smaller businesses and freelancers looking to minimize their startup costs and enjoy a range of tax advantages.

BV (Private Company)

BV stands for besloten vennootschap, which translates to “private company.” This structure is similar to a corporation in the U.S. and offers more formal organization and protection. While a BV requires more upfront work and capital investment, it may be a better option if you plan to scale your business or expect higher profits.

Why Choose BV?

• A separate entity for liability purposes
• You may be eligible for the 30% ruling
• May have tax advantages (discuss with a Dutch tax advisor)

Tax Benefits of a BV

30% Ruling: The Netherlands offers a tax advantage called the 30% Ruling for highly skilled migrants, which applies to those recruited from abroad to work for a Dutch company. Under this ruling, 30% of your salary is tax-free for the first five years. The company only pays employer payroll taxes on the remaining 70% of your taxable salary. This benefit is exclusive to BV companies and can result in significant tax savings.

Important Note: As of January 2024, the 30% tax-free portion has decreased to 27% and will continue to be reduced in future years. If you plan to benefit from the 30% Ruling, it’s crucial to establish your BV before moving to the Netherlands, as the ruling is only available within the first three months of your stay.

Corporate Tax Savings: You can retain part of the profits within your BV and pay a lower corporate tax rate. In 2025, this rate is set at 19% for profits under €200,000.

Other Benefits of BV

• Tax-free reimbursement for international school fees – If you have children, your BV can cover the cost of international schooling, which can be a significant expense.
• Driver’s License Swap – If you’re moving from the U.S., you can avoid the long and costly process of driving school (which can cost over €1,500) by exchanging your U.S. driver’s license for a Dutch one.

Costs to Set Up a BV

While the BV offers valuable tax benefits, there are substantial setup and ongoing costs:

• Incorporation fees: €2,500
• Payroll (minimum salary): €56,000 (2025), plus employer taxes of around €6,000
• Administration (bookkeeping, VAT, payroll): Around €200/month
• U.S. Tax: As the owner of a foreign corporation (a BV), will result in US tax forms for either a Controlled Foreign Corporation or if an entity elections status is made, a Foreign Disregarded Entity.
• Dutch Tax: You’ll need to file both a corporate and personal tax return in the Netherlands, with estimated costs of €2,500 annually for tax preparation.

In general, if you are able to pay yourself the minimum required salary with the additional cost of about $10,000 (start-up year) and $4,500 (subsequent years) for administration and accounting fees, it may be in your interest to opt for the BV instead of the ZZP.

Often our clients’ tipping point when to opt for a BV rather than a ZZP is typically €80,000 in annual profits. If your business is expected to reach that level, the tax savings from the 30% Ruling and the ability to leave profits in the BV will likely outweigh the higher costs associated with the BV structure.

Which Option is Best for Me?

Choosing between a ZZP or BV under the DAFT visa is an important decision that depends on the size and nature of your business.

Navigating these options and understanding the U.S. tax implications can be complex. For personalized advice tailored to your unique situation, consider scheduling a consultation with BNC Tax and Accounting. Our experts can guide you through the process, help you choose the best structure for your business, and ensure you remain compliant with both Dutch and U.S. tax laws. Contact us today to set up your consultation and take the next step toward establishing your business in the Netherlands!