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Business structures 101 — sole prop, BV, holding and when to use which

Q: When is a BV better than a sole prop?

Rule of thumb: from €80,000+ profit/year, BV becomes attractive. Above that threshold a lot of profit lands in Box 1 bracket 3 (49.5%). BV pays only 19% Vpb up to €200k. You lower tax immediately but still pay Box 2 (24.5% in 2026, first €67k) on what you take to private. Net effect: at €100k profit you save ~€4-6k/yr. At €200k+ profit: €15-25k/yr savings. But: a BV brings accounting costs (€1,500-3,000/yr) plus complexity. Only switch when profit is stable above €80k for multiple years.

Q: How do I set up a BV?

2026 steps: (1) Name check via KvK name lookup. (2) Choose a notary (compare rates, €500-1,500). (3) Sign the deed of incorporation at the notary — contains articles of association, capital contribution (since 2012 min €1), shareholders. (4) Registration in KvK register (happens automatically via notary). (5) Open a bank account in the BV's name (Bunq Business or ABN Amro Business). (6) Start Vpb registration at Belastingdienst + apply for DGA payroll tax number. (7) Choose an accountant (essential for BV annual statement). Total: 2-4 weeks lead time, ~€800-2,000 startup costs.

Q: What does a BV cost per year in admin?

Expected annual costs: (1) Accountant: €1,500-3,500 for SME BV (annual statement + Vpb + DGA payroll tax). (2) KvK annual filing: €75 (mandatory deposit). (3) Possibly annual statement audit for larger BVs: €2-5k auditor. (4) Business bank account: €15-30/mo. Total: €2,000-4,500/yr extra vs sole prop. You need to earn that back via tax savings — at €80k profit it's ~break-even, at €120k profit clearly advantageous.

Q: Set up a holding BV immediately or later?

Immediately is better if you know you're aiming for growth. Setting up a holding structure later requires a "ruisende fusie" or "aandelenruil" (share swap) — often fiscally possible but complex with advisory costs €5-10k. Setting up direct: 2 BVs at once (holding + working BV), one-time €1,500-2,500 extra notary. But: for the first 2-3 years as a BV, a single BV is often sufficient — only add a holding when you: want to separate multiple clients/activities, build wealth in the holding, or plan to sell a working BV down the road.

Q: Can I just pay myself €1 in dividends?

No. The DGA must pay themselves a customary salary (~€56k in 2026), unless Belastingdienst agrees to lower. Grounds for lower: (1) Comparable role elsewhere would earn less (rare). (2) BV is a startup with insufficient profit (first 2-3 years possible). (3) Part-time engagement (half DGA salary for half work time). On excess: Belastingdienst recalculates after the fact and you pay back payroll tax + fines on the difference.

The seven Dutch business structures explained plainly: sole prop, VOF, professional partnership, BV, holding BV, NV, foundation. Per form: tax, liability, setup cost, when it makes sense. Plus: how a holding structure cuts your tax by €10,000+/year.

In short

In the Netherlands there are seven main structures for a business, each with its own tax, liability, and complexity. (1) Sole prop / ZZP: simplest, you "are" the business. Profit in Box 1 (max 49.5%). Liable with private wealth. No setup cost. (2) VOF (general partnership): 2+ people running a business under one name. Each partner liable for all debts. Profit per person in Box 1. (3) Maatschap (professional partnership): for "regulated profession holders" (lawyers, doctors, accountants). Each partner liable for own actions. (4) BV (private limited): legal entity — company separate from private. Profit taxed at 19% Vpb up to €200k, 24.5% above. Payout via salary (Box 1) or dividend (26.9% Box 2). DGA salary requirement ~€56k/yr. Setup via notary ~€500-1,500. (5) Holding BV: a BV that owns other BVs. Smart structure for risk separation + tax saving via deelnemingsvrijstelling. (6) NV (public limited): for stock listing or large enterprises. Min capital €45k. Almost never for SME. (7) Stichting (foundation): no profit motive, often for charity or wealth management. Practical rule of thumb: up to €80k profit/yr: stay sole prop — simplicity beats marginal benefit. Above €80k: consider BV. Above €150k: holding structure becomes seriously advantageous (see complex cases below).

How to read the result

Sole prop and ZZP are the same thing
"ZZP" isn't a separate legal form, just a shorthand for "Zelfstandige Zonder Personeel" (self-employed without staff). Legally you're a sole proprietor (registered as such with KvK). Belastingdienst calls it "IB-ondernemer". Marketing term ZZP ≈ legal term sole proprietor.
A BV is a separate legal entity
Unlike sole prop / VOF, a BV has its own legal personality. Effect: creditors can only reach BV assets, not your private savings or house. Except in cases of director liability (mismanagement, unpaid payroll tax, fraud). Plus: a BV continues if you stop — sellable, transferable.
The holding trick — dividends between BVs are tax-free
Central concept: participation exemption. A BV (the holding) that owns 5%+ of another BV (working company) receives profit distributions (dividends) from that other BV tax-free. No Vpb, no Box 2 on that transfer. Only when you pull from the holding to private do you pay Box 2 (24.5%/33%). Effect: profit can stay in the holding, be invested, or fund new BVs — without the Box 2 meter starting immediately.
DGA salary requirement: pay yourself a "normal" salary
A managing director-shareholder (DGA) of a BV must pay themselves a "customary" salary via employment — 2026 minimum ~€56,000/yr (was €52k in 2025). That salary lands in Box 1 as regular wage. Profit above the salary can stay in the BV or come out as dividend (Box 2 24.5%/33%). The DGA salary requirement prevents entrepreneurs from paying themselves €1,000 salary and distributing the rest as Box 2.

Key terms

Sole proprietorship: Business form where person and business are legally one. No setup costs. Liable with private wealth. Profit in Box 1.
VOF (general partnership): Vennootschap Onder Firma. 2+ entrepreneurs together under one name. Each partner jointly liable for all debts. Profit split set in a partnership deed.
Maatschap (professional partnership): Specific partnership form for regulated professions (doctors, lawyers, accountants). Each partner liable for their own actions, not for others'.
BV (private limited): Besloten Vennootschap. Legal entity — business legally separate from owner. Since 2012, €1 minimum capital (was €18,000). Setup via notary.
Holding BV: A BV that owns other BVs. Working companies sit below the holding. Risk separation + tax optimization via the participation exemption.
Working company: The BV where the actual operational activities happen (invoicing, contracts, staff). Sits below the holding BV.
Participation exemption: Vpb exemption on dividends between BVs that own 5%+ of each other. Makes holding structures tax-advantageous: money can move between BVs without Vpb or Box 2 tax.
Vpb (corporate tax): Vennootschapsbelasting. Tax on profit of legal entities (BV, NV, stichting). 2026: 19% up to €200k profit, 24.5% above.
Box 2: Box for income from substantial interest (5%+ shares in a BV). Rate 2026: 24.5% up to €67k, 33% above (changed from 26.9% in 2025).
DGA: Directeur-Grootaandeelhouder (Managing Director-Shareholder). Someone who owns 5%+ shares in a BV. Must pay themselves a customary salary (~€56k/yr 2026).
NV (public limited): Naamloze Vennootschap. For stock listing or large companies. Minimum capital €45,000. Almost never used for SMEs.
Stichting (foundation): Legal entity with no profit motive. Manages assets for a purpose (charity, family wealth, ANBI). No shareholders.

Frequently asked

When is a BV better than a sole prop?

Rule of thumb: from €80,000+ profit/year, BV becomes attractive. Above that threshold a lot of profit lands in Box 1 bracket 3 (49.5%). BV pays only 19% Vpb up to €200k. You lower tax immediately but still pay Box 2 (24.5% in 2026, first €67k) on what you take to private. Net effect: at €100k profit you save ~€4-6k/yr. At €200k+ profit: €15-25k/yr savings. But: a BV brings accounting costs (€1,500-3,000/yr) plus complexity. Only switch when profit is stable above €80k for multiple years.

How do I set up a BV?

2026 steps: (1) Name check via KvK name lookup. (2) Choose a notary (compare rates, €500-1,500). (3) Sign the deed of incorporation at the notary — contains articles of association, capital contribution (since 2012 min €1), shareholders. (4) Registration in KvK register (happens automatically via notary). (5) Open a bank account in the BV's name (Bunq Business or ABN Amro Business). (6) Start Vpb registration at Belastingdienst + apply for DGA payroll tax number. (7) Choose an accountant (essential for BV annual statement). Total: 2-4 weeks lead time, ~€800-2,000 startup costs.

What does a BV cost per year in admin?

Expected annual costs: (1) Accountant: €1,500-3,500 for SME BV (annual statement + Vpb + DGA payroll tax). (2) KvK annual filing: €75 (mandatory deposit). (3) Possibly annual statement audit for larger BVs: €2-5k auditor. (4) Business bank account: €15-30/mo. Total: €2,000-4,500/yr extra vs sole prop. You need to earn that back via tax savings — at €80k profit it's ~break-even, at €120k profit clearly advantageous.

Set up a holding BV immediately or later?

Immediately is better if you know you're aiming for growth. Setting up a holding structure later requires a "ruisende fusie" or "aandelenruil" (share swap) — often fiscally possible but complex with advisory costs €5-10k. Setting up direct: 2 BVs at once (holding + working BV), one-time €1,500-2,500 extra notary. But: for the first 2-3 years as a BV, a single BV is often sufficient — only add a holding when you: want to separate multiple clients/activities, build wealth in the holding, or plan to sell a working BV down the road.

Can I just pay myself €1 in dividends?

No. The DGA must pay themselves a customary salary (~€56k in 2026), unless Belastingdienst agrees to lower. Grounds for lower: (1) Comparable role elsewhere would earn less (rare). (2) BV is a startup with insufficient profit (first 2-3 years possible). (3) Part-time engagement (half DGA salary for half work time). On excess: Belastingdienst recalculates after the fact and you pay back payroll tax + fines on the difference.

Complex situations

Edge cases that typical net-pay tools skip but actually matter for a real Dutch tax situation. Each one assumes the basic case above and tells you what changes.

Holding structure in action — tax saving example

Setup: you > Holding BV > Working BV. You work from the Working BV, invoice clients, pay yourself a DGA salary of €56,000/yr. Working BV profit per year: €150,000.

Without a holding (Working BV only): Vpb 19% on €150k profit = €28,500. Net in BV: €121,500. If distributed as dividend to private: Box 2 24.5% on first €67k + 33% above = €16,415 + €17,985 = €34,400 Box 2 tax. Net in private: €87,100.

WITH a holding: Working BV makes €150k profit, pays €28,500 Vpb. €121,500 transferred as dividend to Holding BV. Via the participation exemption 0% Vpb on that transfer. Money sits in the holding. You can leave it to invest, start a new working BV, buy a house from the holding (next case). Only when you pull it private: Box 2 24.5%/33%. Advantage: tax deferral + flexibility. Plus: when selling the working BV, profit goes tax-free to the holding. 10-year effect: being able to invest in the holding + start new BVs without Box 2 on distribution = wealth grows much faster than with direct private payouts.

Buying real estate via a holding BV

Smart structure: Holding BV buys real estate, not you privately. Advantages: (1) No Box 3 tax on that property (it sits in the BV, not in private wealth). (2) Mortgage interest deductible in the BV (fully, no 36.97% max cap like Box 1). (3) Maintenance + depreciation deductible from BV profit. (4) On sale: profit taxed in BV (19-24.5%) but loss years can be offset. (5) Heirs inherit shares in the holding (simpler transfer than real estate). Disadvantages: (1) Private-ownership sale with profit has Box 3 exemption up to tax-free wealth. In the BV: no exemption. (2) For investment property: income seen as revenue, VAT consideration. (3) Mortgage bank applies stricter requirements to BV purchases. (4) No owner-occupier deduction (applies only to private owner-occupants). For whom it makes sense: rental property or working space for your BV.

When does a Stichting make sense?

A Stichting (foundation) is mainly used for (A) Charities (ANBI status needed for donor deductions): nature conservation, education, healthcare. (B) Family-wealth management (Stichting Administratiekantoor or STAK): holds shares, issues certificates to family members — prevents fragmentation and gives one vote in meetings. (C) Managing monuments or religious institutions. Tax: a stichting with profit is taxed with Vpb. A stichting with public benefit (ANBI) is largely exempt. No profit motive doesn't mean "no profit allowed" — only that profit isn't distributed to owners but stays in the stichting or is spent on the goal. Setup: notarial deed required, KvK registration, no founding capital needed. ANBI status applied for separately at Belastingdienst.

Converting sole prop to BV (silent contribution)

On growth: convert your sole prop to a BV. Silent contribution (geruisloze inbreng): tax-friendly route where you transfer assets + liabilities of the sole prop to the BV without immediate tax over hidden reserves (appreciation of e.g. inventory, stock, goodwill). Conditions: BV takes over sole-prop balances at the same book value, not higher. You receive 100% shares in exchange. Lock-up: shares can't be sold for 3 years (otherwise still tax over reserves). Practical: (1) Notary arranges deed (costs ~€1,500-2,500). (2) Accountant makes valuation report of the sole prop. (3) Belastingdienst approval needed for silent treatment (form submission). (4) Lead time: 2-4 months. Alternative: noisy contribution (ruisende inbreng) — faster, no 3-yr lock-up, but you pay tax immediately on hidden reserves. With limited reserves often fine.

Foreign establishment — beware

LinkedIn tip: "Move your BV to Cyprus / Estonia / Malta for 0% tax". Reality: for Dutch residents that's almost always smoke and mirrors. Main pitfalls: (1) Effective management: if you live in the Netherlands and manage the BV, effective management is in NL — BV stays NL tax-liable regardless of where registered. (2) Substance requirements: for genuine foreign recognition you need office, staff, local decisions. (3) Anti-abuse legislation: NL has strict rules against mailbox companies since 2019. (4) If caught: back-payment + fines + sometimes criminal charges. Conclusion: not for "Dutch entrepreneur wants less tax". DOES make sense for: genuine international activity with substance in that country, or when emigrating to that country (migration tax return).

Privacy of BV shareholders

Since 2020: UBO register (Ultimate Beneficial Owner). Every BV must register beneficial owners (5%+ shares) in the public KvK register. What's in it: name, birth month+year, country of residence, nationality, nature of interest. What's NOT: home address, birth day, BSN. Who can see: until 2022 publicly accessible, since 2022 only on request with justification (after EU ruling). Objection possible: on fraud risk, kidnap risk, professional risk (politician, journalist). Practical: privacy via Stichting Administratiekantoor (STAK) — STAK is UBO of the working BV, you're UBO of STAK. Not invisible but one layer further from the working BV.

What this tool doesn't do

This guide covers the seven main structures + holding tax savings. Out of scope: specific advisory costs (consult a tax advisor for your situation), international structures (DGA emigration), EOR/employer-of-record setups, ANBI application procedure, and specific sector regulations (healthcare, real estate, financial institutions). For structural advice: tax advisor via Register Belastingadviseurs (RB) or NOB (Dutch Order of Tax Advisors).

Data source

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