Dutch Business Structures: BV and VOF for DAFT Owners

Most US citizens who arrive in the Netherlands through the Dutch-American Friendship Treaty (DAFT) start with an eenmanszaak — a sole proprietorship. It is the simplest structure, the cheapest to set up, and it is what the DAFT application process naturally leads to.

But as your business grows, you may start wondering whether a different structure makes more sense. We had the same question about a year in, and the answer depends on your revenue, your risk tolerance, and your long-term plans.

Here is a practical guide to Dutch business structures beyond the eenmanszaak.

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Quick Overview of Dutch Business Structures

The Netherlands offers several business entity types. Here are the ones most relevant to DAFT entrepreneurs:

Structure	Dutch Name	Liability	Minimum Capital	Best For
Sole proprietorship	Eenmanszaak	Unlimited personal	None	Solo freelancers
Partnership	VOF	Unlimited personal (shared)	None	Two or more partners
Private limited company	BV	Limited to company assets	0.01 euro (symbolic)	Growing businesses
Foundation	Stichting	Limited	None	Non-profit activities

Most DAFT entrepreneurs will only ever need to think about three of these: eenmanszaak, VOF, and BV.

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The Eenmanszaak (Sole Proprietorship)

Since you probably already have one, let us briefly review why it works — and where it falls short.

Advantages:

• Simplest to set up and maintain
• Lowest administrative burden
• Access to self-employment tax deductions (zelfstandigenaftrek, startersaftrek)
• Full control over your business
• Straightforward KVK registration

Limitations:

• Unlimited personal liability — your personal assets are at risk if the business incurs debt
• All profit is taxed as personal income (up to 49.5% in the highest bracket)
• Cannot easily bring on partners or investors
• Perceived as less "serious" by some larger Dutch companies

For many DAFT entrepreneurs, the eenmanszaak remains the right structure indefinitely. But there are clear situations where something else makes more sense.

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The BV (Besloten Vennootschap) — Private Limited Company

The BV is the Dutch equivalent of a US LLC or corporation. It is a separate legal entity, which is the key difference from an eenmanszaak.

Why Consider a BV?

Limited liability. This is the biggest reason. In a BV, the company is responsible for its debts, not you personally. If something goes wrong — a lawsuit, a bad debt, a failed project — your personal savings, home, and other assets are protected (with some exceptions for fraud or mismanagement).

Tax efficiency at higher income. Once your business profit consistently exceeds roughly 80,000-100,000 euros per year, a BV can be more tax-efficient. Corporate tax rates (19% on the first 200,000 euros of profit, 25.8% above that) combined with dividend tax (26.9%) can result in a lower total tax burden than personal income tax at higher brackets.

Credibility. Some larger Dutch companies prefer working with a BV. It signals stability and commitment. If you are bidding on corporate contracts, having a BV can help.

Growth potential. A BV makes it easier to bring on investors, hire employees, and create more complex ownership structures.

The Costs and Downsides

Setup costs. You need a notary to incorporate a BV. Notary fees range from 400-800 euros. You will also want legal and accounting advice, which adds 500-1,500 euros.

Annual costs. A BV must file a separate corporate tax return. Accounting is more complex. Expect to pay your accountant 1,500-3,000+ euros per year for BV administration, compared to 500-1,000 for an eenmanszaak.

Mandatory annual accounts. A BV must prepare annual financial statements and file them with KVK (called "deponeren"). There are simplified rules for small BVs, but it is still more work.

You lose self-employment deductions. If you become a director-employee (DGA) of your own BV, you no longer qualify for the zelfstandigenaftrek and startersaftrek. These deductions are worth thousands of euros per year, so the tax math needs to clearly favor the BV before switching.

Minimum salary requirement. As a DGA, you must pay yourself a "customary salary" (gebruikelijk loon), currently a minimum of roughly 56,000 euros per year (2026). This salary is taxed as personal income. You can request a lower amount from the Belastingdienst if your business cannot support this level, but it adds complexity.

Reality Check: Many accountants and online resources push the BV as the obvious next step. But for DAFT entrepreneurs earning under 80,000 euros in profit, the eenmanszaak is almost always more tax-efficient once you factor in the self-employment deductions and the additional costs of running a BV. Do the math with your accountant before making the switch.

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The VOF (Vennootschap Onder Firma) — General Partnership

A VOF is a partnership between two or more people who run a business together. Each partner contributes labor, capital, or both.

When It Makes Sense

You are starting a business with your spouse. Many DAFT couples start a VOF together. Both partners can qualify for self-employment deductions if they both meet the 1,225-hour requirement.

You are partnering with another entrepreneur. If you and another DAFT entrepreneur (or a Dutch partner) want to run a business together, a VOF is the simplest structure.

How It Works

• Each partner is personally liable for all partnership debts (not just their share)
• Profits are split according to the partnership agreement
• Each partner files their share of the profit on their personal tax return
• Both partners can claim self-employment deductions if they meet the hour requirement
• Registration at KVK is straightforward and inexpensive

The Risk

Unlimited joint liability means each partner is responsible for the entire partnership's debts. If your partner makes a bad decision, creditors can come after your personal assets. Choose your partners carefully and put a solid partnership agreement in place.

Pro Tip: If you form a VOF, invest in a proper partnership agreement drafted by a lawyer. It should cover profit-sharing, decision-making authority, what happens if one partner wants to leave, and how disputes are resolved. The cost (500-1,500 euros) is insurance against far more expensive problems later.

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When to Convert: Eenmanszaak to BV

The "should I switch to a BV?" question comes up constantly among DAFT entrepreneurs. Here is a practical framework.

Consider Converting When:

• Profit consistently exceeds 80,000-100,000 euros per year after expenses, and you have confirmed with your accountant that BV taxation saves you money net of additional costs
• Liability risk is significant — you work in a field where client lawsuits or large claims are realistic possibilities
• You want to bring on investors or partners who want equity rather than a simple partnership
• Large clients require it — some Dutch corporates have policies against contracting with eenmanszaak businesses above certain project values
• You plan to hire multiple employees — the BV structure handles this more cleanly

Stay With Eenmanszaak When:

• Profit is under 80,000 euros — the self-employment deductions make the eenmanszaak more tax-efficient
• Your liability risk is low — service-based businesses with small project values and good insurance coverage
• You value simplicity — less administration, lower accounting costs, fewer compliance obligations
• You are in your first few years — the startersaftrek (starter's deduction) is only available for eenmanszaak owners in their first three years of business

The Conversion Process

Converting from eenmanszaak to BV involves:

1. Engage a notary and accountant. Both are required.
2. Prepare an opening balance sheet for the BV.
3. Notarial deed of incorporation. The notary creates the BV, registers it with KVK, and files the articles of association.
4. Transfer assets and contracts. Your existing business assets, contracts, and obligations transfer from you personally to the BV.
5. Close the eenmanszaak. Deregister it at KVK.
6. Set up BV administration. New bank account, payroll for your DGA salary, corporate tax registration.

The entire process typically takes four to eight weeks and costs 2,000-5,000 euros when you include notary, accountant, and legal fees.

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The Stichting (Foundation)

Less common for DAFT entrepreneurs, but worth mentioning. A stichting is a Dutch foundation — a legal entity without shareholders or members that exists to serve a specific purpose.

When it is relevant: If your DAFT business involves non-profit activities, cultural projects, or social enterprises, a stichting might be appropriate. Some DAFT entrepreneurs run a stichting alongside their eenmanszaak or BV.

Key characteristics:

• No profit distribution to founders or board members
• Board of directors governs the foundation
• Can employ people and conduct commercial activities (within limits)
• Relatively simple to set up (notary required)
• Limited liability for board members (similar to a BV)

A stichting is not suitable for a standard freelance or consulting business, but it has its place for specific use cases.

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DAFT and Business Structure Changes

One important consideration: your DAFT residence permit is tied to your business. If you change structures, make sure the transition is clean and documented.

The IND wants to see that you are still running an active, registered business. Inform your immigration lawyer or adviser before making structural changes. The transition from eenmanszaak to BV is well-understood, but the timing and documentation matter — especially if your permit renewal is coming up.

You should also consider the tax implications of any structural change. The transition itself can trigger taxable events (like deemed disposal of business assets), so plan the timing with your accountant.

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The Bottom Line

Most DAFT entrepreneurs should start with an eenmanszaak and stay with it until they have a concrete reason to change. The simplicity, lower costs, and tax deductions make it the right choice for the majority of solo businesses.

When your profit grows, your liability exposure increases, or your business needs become more complex, revisit the question. Run the numbers with your accountant, not with general rules of thumb from the internet. Your specific situation — income level, industry, risk profile, and long-term plans — determines the right answer.

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We're not immigration lawyers—just Americans who did this. Requirements change, so verify with official sources.