Moving from Israel to the Netherlands as a business owner or freelancer
Sep 5, 2024
Many Israelis are coming to the Netherlands to reside and work there. The business climate is friendly, internationally orientated and the capital of Amsterdam has a vibrant jewish culture. As an Israeli business owner or freelancer moving to the Netherlands, there are 2 main things to look at : the visa situation for yourself and your family, and the company type to set up in the Netherlands for your business. In this article we will zoom into both.
Your visa
Many Israelis are blessed with a secondary EU passport, inherited from their parents or grandparents. If this is the case, you can register in the Netherlands as a Citizen of the Union. If you come as a couple and only one of you has an EU passport, the partner or spouse doesn’t have to stay out in the cold. In these cases, the partner can also register in the Netherlands as a partner of an EU citizen. This is called a “verification against EU law procedure”. You don’t have to be married to make use of this possibility. If you are not married, you just need to prove you have lived together for 6 months prior to moving to the Netherlands, for example by showing a collective apartment lease contract. If you are married, you can just show your marriage certificate. If your partner or spouse has a Dutch passport, you can register in the Netherlands with a Netherlands partner visa. Israelis having a secondary US passport can make use of the Dutch-American Friendship Treaty (DAFT) and obtain a residence and self employed work permit in the Netherlands like that. Lastly, there’s the situation where the parent has an Israeli passport, and the children a Dutch passport. If that is the case, the parent can join the children to the Netherlands under the so-called Chavez-Vilchez procedure. All options for obtaining a self employed residence permit are laid out in the below flowchart.
Documents required for your visa
Every foreign person registering in the Netherlands needs to bring official documents. As an immigrant to the Netherlands you will be dealing with two governmental organizations: the Dutch immigration service (the “IND”) and the municipality where you are going to register yourself (the “Gemeente”). The IND and gemeente all have basic document requirements.
The IND requires the following documents basic documents in all cases:
- For all family members: Passport copy for the initial application. Bring the original passport to the IND meeting.
- From all family members of the main applicant: a PDF copy of their apostilled original birth certificate. NB: This is not required for the main applicant. Please keep the original for the Gemeente (see below). You don’t need it at the IND.
- If you bring a spouse: a PDF copy of the apostilled original marriage certificate. NB: Please keep the original for the Gemeente (see below). You don’t need it at the IND.
- If you bring an unmarried partner: a PDF copy of the apostilled original declaration of single/unmarried status from the municipality of origin.
The IND has additional document requests depending on the visa you are applying for. For example the Netherlands partner visa requires you to provide proof of income.
The Gemeente requires the following documents:
- For all family members: an original copy of their apostilled birth certificate.
- If you bring a spouse: an original copy of the apostilled marriage certificate.
- If you bring an unmarried partner: an original copy of the apostilled declaration of single/unmarried status from the municipality of origin.
NB: Please make sure the apostilles are at most 6 months old at the moment you use them in the Netherlands
NB2: Please make sure all documents provided are translated into Dutch, English, French or German. The translation must be apostilled too.
Choosing a company form: BV+30% vs. ZZP
Setting up as a business owner in the Netherlands, you basically have a choice between two company forms: the ZZP and the BV. The company form ZZP/eenmanszaak has certain requirements in order to obtain the tax breaks. You will want these tax breaks, otherwise the ZZP/eenmanszaak is as tax efficient as a regular BV.
These are the ZZP requirements in short:
- spend at least 1224 hours per year in your EZ
- have 3 or more clients
- don’t have more than 70% revenues from one single client
- promote your business, for example using a website
- If you work intensively for one client, use correct freelance agreements
- Make sure your work does not resemble the work of regular employees in your client’s company
The BV allows for the attractive tax break called the 30% ruling. If you expect to make at least € 66,000 per year or more, you should go for the 30% ruling. It has an enormous amount of benefits. Another article explains the difference between the ZZP/eenmanszaak income in comparison to the BV+30% in more detail. If you are moving as a couple and you are both freelancing, it is worth checking out the option of working from a Dutch BV company together, and applying a 30% ruling there.
Income from your ZZP/eenmanszaak
The ZZP/eenmanszaak is a see-through entity. This means it does not have a capital separate from the owner, so all profits are immediately subjected to income tax. Here the aforementioned income tax breaks apply, which can make for an attractive option if you earn under € 60,000 per year. In another article we explain more about the difference between the ZZP and the BV+30% company form, along with some calculations.
The BV + 30% ruling
If you manage to secure earnings per year in excess of € 66,000 the 30% ruling becomes an attractive option. The 30% ruling allows you to pay yourself 30% of your salary as tax free expat reimbursement, and only pay taxes over the remaining 70%. This is a very good deal, as long as your income exceeds the threshold amount. If you drop below €66,000 the 30% ruling becomes less effective. If you drop below € 46,107 per year (2024) the 30% ruling will be rescinded. While the 30% ruling is very attractive, it has more upfront setup costs. This is because you need to setup a Dutch limited company (BV) for this first. Then you enter into a director’s labor contract with it while you are still abroad, and then you can apply for the 30% ruling. It is highly recommended to hire counsel for this process.
BV setup
The setup of a Dutch BV requires a Dutch notary. The notary identifies the founder(s) of the BV, executes the deed of incorporation and registers the BV at the Chamber of Commerce (KVK). If you are incorporating a BV as a foreigner, there are additional KYC requirements to be met. You must provide a copy of your Israeli ID Card showing your ID Card number. Additionally, you must provide a utility bill not older than 1 month of yourself. This utility bill should confirm your current living address (presumably in Israel). A lot of things can be used here: phone, electricity, bank, credit card, water, or any other recurring bill that states the name, address and a date not older than one month at the moment of setup (so preferably very recent). If your bill is in Hebrew, please add a regular translation of the bill (not official or notarized). Also bear in mind that your BV company needs to be registered at an address. You can use a home address for this, or alternatively a co-working or office space provider.
Profit taxes and dividends for Dutch BVs
Profit taxes only apply if you have profits. If you pay out everything as salary (as is normal if you have a 30% ruling) there are no profits to be taxed. If you don’t have a 30% ruling (or it has expired) you start paying profit taxes once the company has profits left after you’ve paid out salary. The rates for profit taxes are as follows: 19% over profits up to € 200,000 and 25,8 % over all profits above that (2024). This means that profit taxes apply before dividends and dividend taxes.
Dividends are not recommended as long as you have a 30% ruling. Dividends are taxed more heavily than salary under 30% ruling. You will therefore not use dividends unless your 30% ruling expires, or you didn’t have one to begin with.
Holding Company structure for Dutch BVs
The holding company has a number of benefits. The main benefits from a tax perspective are: the ability to receive dividends and the sale price on shares tax free in your holding company, on account of the participation exemption. And if you have post salary profits exceeding € 250,000 per year, you can use the additional holding company for an additional € 250,000 of lower bracket corporate income tax rate.
