Make it or break it - some dos en don'ts when setting up a business in The NetherlandsYou have arrived at your new posting, you’ve found a house, the boxes are unpacked and the kids are in school. You might want to take some creative time-out, study or just sit still and reinvent yourself. Or - you’re actually eager to pick up things from where you left them; that is, get your career back on track. No need to reinvent the wheel – here’s some advice on how to start right for setting up your own business in The Netherlands.
Are you in or are you out?
Statistics show that an increasing number of expat spouses and partners create new business ventures, expand small businesses or open a business either as a branch of or relating to a foreign organisation.
Statistics also show that the entrepreneurial enthusiasm often gets dampened once the unfamiliar rules and regulations start to kick in. ‘I did not know’ is not an excuse in the eyes of the Dutch authorities.
Being well informed will boost your confidence, your creativity and your efficiency and GMW Advocaten is happy to provide you with advice on how to create the perfect circumstances under which to start and develop your business.
Diplomas and certificates
Before starting a business in The Netherlands it is best to check whether your diplomas, certificates and licenses from abroad are valid. You might need additional certifications and licences. The Chamber of Commerce and the Ministry of Economic Affairs can help with information.
You have the choice between several legal structures for your business: sole-trader (eenmanszaak), a partnership (V.O.F.) or a public limited liability company (B.V.). Each has different consequences upon liability, tax and social security to which the business is subject. The choice of the legal structure depends mainly on what kind of business you want to start, its scale, and the legal risks involved.
Starting entrepreneurs often don’t realize that they are personally liable for the fulfilment of obligations when their business is set up as sole trader. In the event of non-compliance this could very well result in personal bankruptcy. Some sound advice ahead of disaster is therefore essential.
Once you’ve chosen the legal structure of your future business, you have to register it in the trade registry of the Chamber of Commerce. A general search will be done to check if there is already a business registered under that name. We strongly suggest requesting a nationwide business name search. This also includes a search of business names, which sound similar but are spelled differently. The registration fee depends on the legal structure.
Please note that the Chamber of Commerce does not investigate whether your trade name conflicts with existing trademarks. The Benelux Organisation for Intellectual Property in The Hague is responsible for the registration and protection of trade marks. If applicable, please ensure that a search is performed to establish whether your trade name infringes on already existing trademarks. Your trade name is protected from the day your company is operative and becomes known to third parties.
No need to elaborate on this one. ‘Verba volant, scripta manent’ that is ‘spoken words fly away, written words remain.’ It is of utmost importance to put down all agreements in writing, no matter how reliable your business partner. Clear written agreements will actually strengthen any partnership.
Do not enter long-term agreements
As a lessor of business premises it is of great importance that you use a lease agreement that protects your interests. It might be stating the obvious, but most probably you’ll be faced with a standard contract usually covering a period of 5 years. Standard, however not compulsory! These terms, as many others, can be negotiated. As you don’t know whether your business is going to be a success, our advice is to start with short-term lease (1 or 2 years).
As standard contracts are predominantly in the (sole) interest of the lessor/tenant, we strongly advise you to have your draft lease/tenancy contracts checked by a lawyer. Better safe than sorry.
The above also applies to other standard contracts.
Too many unpaid invoices may very well jeopardize your own financial balance.
In order to limit your number of outstanding invoices we advise you to draw up sound general terms and conditions. This is not compulsory when setting up a business; however, it is very wise to do so. A lawyer can assist you with this and can also screen the ones you already made.
An effective sound debtor policy and the accuracy of written warnings are very important, too. Experience shows the above-mentioned measures to be quite effective in most cases.
As an employer it is essential to have accurate employment contracts that include, among others: an accurate job description, the type of employment agreement (permanent, temporary, on-call, zero hours), the length of the employment (definite or indefinite period), the length of the trial period, the working hours notice period, detailed rules on sickness leave , work conditions, identification requirements; any pension schemes, any competition clauses and clearly stipulated holiday allowance and salary agreements.
To make sure the employment contract you use is not in breech of mandatory legal provisions or an applicable collective bargaining agreement, it is wise to have your contracts checked. Costly claims from employees can thus be prevented.
From experience we know it pays to establish a sound personnel file on each employee. As discussed, accurate employment contracts are essential. Secondly, make sure you conduct regular job assessments and have them signed by the employee! Thirdly, keep a record of all incidents that might occur on the work floor and acknowledge them to the employee in writing.
Notwithstanding legal advise and accurate contracts, you might want to terminate the employment of a staff member ahead of time. Experience shows that it is not sensible to deal with these issues on one’s own initiative: at crucial moments, wrong decisions could easily be made, resulting in damages going beyond the bill of several claims.
Looks like you’re in!
You’ve read the above and are still determined to set up your own business? Congratulations!
GMW Advocaten is looking forward to assist you with what we do best; our team consists of 20 lawyers bringing in their expertise and professional experience in Company law, Employment law, Civil service law, Tenancy law, Real estate law, Family law, Insolvency law, Liability law, ICT-law, Intellectual property law, Competition law, Criminal law and Administrative law.
We’re happy to advise you and negotiate on your behalf. If need be, we’ll stand in court for you and with you. Whilst strictly following the rules of procedure our legal experts will give you tailor made advice for the unique situation you’re facing. Being in court on a daily basis, they are aware of all changes occurring in the Dutch legal system and will implement these in efficient solutions, supporting your business.
Please feel free to consult us on any legal aspect. Upon appointment, we offer a free 30 minute intake session, enabling you to get a professional and objective evaluation of the situation you are faced with before taking any decision. Furthermore, we can offer you a 10% discount on the attorney consultation fee.