Creative Business Guide - Crossing borders Doing business

Accounting

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Invoices are the basis for your sales and calculating VAT. The Tax Office uses your invoices to determine how much VAT you are required to pay. For that reason, there are legal requirements for what must appear on your invoices.

What do I include on my invoices?

The invoice date;
A unique invoice number (number your invoices sequentially and in successive order);
The VAT number;
The CoC number;
Name and address of your company;
Name and address of the customer;
Description/quantity and the nature of the goods or services provided;
The date on which the deliveries or services took place or were completed, or the date on which a pre-payment was made that otherwise differs from the invoice date;
The price excluding VAT;
The VAT amount to pay;
The amount including VAT.

For each invoice that you send, you should maintain a copy in your records.

If you supply to a customer in a different EU country, you include the VAT number of the customer on your invoice. Sometimes, there is an arrangement where your client pays the VAT. Also mention this on the invoice.

By law, you are required to maintain records. Below is a list of requirements to which you are subject in terms of record-keeping.

How long do you have to keep your records on file?

Every person who runs a business is legally required to maintain records for a period of 7 years. These records should contain basis information such as:

The accounting ledger;
Debtor and creditor records;
Inventory records;
Procurement and sales records;
Payroll records.

Sales tax records (VAT)

Your administration is the basis for your VAT declaration. For this, keep records of the following:

Invoices that you issue;
Invoices that you pay;
Payables and receivables;
Personal use of goods and services;

If you do business in a foreign country, you also keep a record of imports and exports.

What data comprises your administrative records?

All data that can be compiled on paper or electronically makes up the administrative records for your enterprise = cash records, cash receipts, invoices, and bank statements, for example.

Corporate taxes for BV/NV/SAs in the Netherlands

If you have a BV or NV/SA, you will pay corporate tax on the profits earned and income tax on wages earned from the BV. If the remaining profit is privately disbursed, you will pay dividend taxes on that. Taking out salaries from the BV is relatively expensive. A dividend payment is technically cheaper in terms of taxation. The tax office does not permit BVs to exist without paying out any (or very little) salaries, however.

Corporate tax rates for 2011

For the portion of profits subject to tax that are greater than	But not more than	Rate
€ 0	€ 200,000	20.0%
€ 200,000	-	25.0%

Corporate tax returns

When declaring corporate taxes, there is a deadline as to when you must file a return with the tax office. For corporate taxes, this deadline is 1 June.

Deductions in the Netherlands

As a business owner, and certainly as a start-up, you can often take advantage of beneficial deductions. You deduct the amount from your profits upon filing, in which case you pay fewer taxes.

This regulation has conditions. Take the time commitment criterion, for example: on an annual basis, you must have worked a minimum of 1,225 hours (at least 24 hours per week) for your job. For all deductions that apply, you can only use them for income tax if you are a business owner.

Self-employment deduction

The self-employment deduction is taken from the profits earned. The amount depends on the profits: the more profit, the less the self-employment deduction. The precise amount can be requested at the tax office.

Conditions: you are freelance and meet the time commitment criteria.

Start-up deduction

For start-up businesses, there is a standard start-up deduction. At that point, you can deduct a sum of €2,123 from your profit in addition to the self-employment deduction.

In order to be able to use the start-up deduction, you have:

A right to a self-employment deduction
In the previous 5 years, you did not take a start-up deduction more than twice
You did not have a company for at least 1 year within the previous 5 years.

As a starter, you can take advantage of this deduction for 3 years.

Start-up deduction when occupationally disabled

Starters who are occupationally incapacitated due to injury or illness are entitled to a special start-up deduction.

Conditions: you receive an occupational disability benefit and spend at least 800 hours per year on your business

Work tax credit

Does your partner undertake unpaid work for the business? If so, you can deduct an amount from your profits for this reason. The amount depends on the profits earned and the number of hours that your partner volunteered his/her time and services.

Conditions: you meet the time commitment criteria.

Fiscal Old-age Reserve (FOR)

With the fiscal old-age reserve, you can save funds towards your pension.

Under this scheme, you do not pay tax on any amounts that you set aside. Instead, you pay the tax, for example, when you retire or when you quit or dissolve your company. Annually, you may set aside a maximum of 12% of your profit, with the absolute amount capped at € 11,882. The amount may not exceed the amount of your company assets.

Conditions: you meet the time commitment criterion and have not yet reached the age of 65 (by the beginning of the calendar year).

Arbitrary write-offs

Need materials for your business? As a start-up, you may "arbitrarily" deduct the cost of materials from the tax levied. That means that you yourself determine how much you write off.

By writing off a lot, you have less profit, in which case you pay fewer taxes or even might get taxes back.

Conditions: you have a sole proprietorship, VOF, CV, or corporation, and may claim a right to a start-up deduction. Supplementary conditions can be found on the site of the tax office.

Small business exemption

An additional deduction for entrepreneurs is the small business exemption. In this case, you do not pay any tax for up to 12% of your profits. This is the net profit after subtracting other deductions for business owners, such as the self-employment deduction. The small business exemption also applies if you do not meet the time commitment criterion.

Income tax in the Netherlands

Income tax
Business owners pay income tax. Upon starting, you provide the tax office with projected earnings for your business. After that, it is something you do each year. At the beginning of the calendar year, you will receive a provisional tax levy, based on your estimation. You pay the tax in monthly instalments.

How much income tax?
Amounts to be paid at various profit levels:

Company Profits in euro	10,000	30,000	50,000	100,000
Self-employment deduction	9,427	7,222	7,222	4,574
Small business profit exemption	69	2,733	5,133	11,451
Taxable profit	504	20,045	37,645	83,975
Income tax and premium on national insurance for tax credits	169	6,860	14,246	36,665
General tax credits	1,987	1,987	1,987	1,987
Labour credits	271	1,489	1,433	1,433
Payable income tax	-	3,384	10,826	33,245
Net profit after tax	10,000	26,616	39,174	66,755

Personal taxes in the Netherlands

Taxes are related to income earned by Dutch residents and certain non-resident natural persons subject to tax in the Netherlands.

Dutch income is taxed in three different "boxes" (figures for 2010):

Box 1: Income from work and home - taxed progressively, 4 brackets: 33.45%, 41.95%, 42.00% and 52.00%; for the first and second brackets, this includes premiums for national insurance (Anw, AOW and AWBZ). For persons aged 65 or older, this amount is lowered to a rate of 15.55% for the first bracket and 24.05% for the second bracket, given the exemption from contributions towards the AOW benefit (general seniority act).
Box 2: Earnings from considerable interest - rate is 25%
Box 3: Income from savings and investments - a profit yield of 4% is assumed for all intents and purposes; the rate is 30%, which is 1.2% of the asset - this is the levy on income-yielding assets.

The threshold income is the total income from all three boxes, before applying personal deductions. The latter is applied to the income in box 1, and if that is insufficient, it is applied to the income in box 3 and then box 2. The collective income is the total income from all three boxes, after applying personal deductions. Tax credits are deducted from the total amount of tax assessed in the three boxes.

Advance levies / withholdings

On income tax due, two other taxes in the Netherlands can be reduced under certain circumstances: the wage tax and taxes on dividends. If these taxes can be calculated based on income tax, this is called a voorheffing, i.e., withholdings or advanced levy. If this is not the case, the two taxes are called eindheffingen, i.e. final levies.

If the amount of all income tax combined is higher than the amount withheld, the tax payer is obliged to pay the difference. If the amount of the withholdings exceeds the amount of income tax owed, the difference is refunded to the tax payer.

Tax return

The data for the tax assessed for a calendar year are determined, in part, by the tax return that the tax payer must file before 1 April of the next year. To that end, the tax office sends a tax return form requesting that you download the tax filing programme and use that to file your tax return electronically. You need DigiD for this. It is also an option to submit a paper tax return.

Sales tax (VAT) in the Netherlands

As a business owner, you pay sales tax (VAT = value added tax) for most products and services that you sell. VAT that you pay yourself on purchases may be deducted from this amount. You pay a sales tax if the tax office considers you subject to VAT, or what is called an ondernemer voor de BTW. For this, other conditions apply than the ones for the business owner for income tax, or what is called an ondernemer voor de inkomstenbelasting.

After you register with a chamber of commerce, your data is automatically reported to the tax office.

Are you starting a sole proprietorship? If so, you will immediately receive a VAT number upon registration with a chamber of commerce. If you register a VOF, CV, or corporation with a chamber of commerce, you will receive your VAT number from the tax office within 5 business days. Legal entities and other partnerships that register with a chamber of commerce also receive their VAT numbers from the tax office within 5 business days. The VAT-identification number of a Dutch entrepreneur or business owner consists of 14 characters. It starts with the country code NL, followed by 9 digits.

VAT is assessed at different rates. For most goods and services, the standard rate is 19%. For some goods or services, there is a rate of 6% or 0%.

VAT in your accounting records
It must be apparent from your accounting records how much VAT you are required to pay. There must be, for example, a summary listing of accounts receivables and accounts payables. You must record goods and services with different VAT-rates separately in the accounting ledger. If you deducted the amount of VAT paid from the amount received, you determine the remainder, if any, and pay that to the tax office. Depending on the type of business and the turnover, you will do this either on a monthly, quarterly or annual basis.

Small business scheme
For business owners with a sole proprietorship or VOF that pays very little VAT, there is what is called a kleine ondernemersregeling or small business scheme. Business owners who pay less than € 1,883 in sales tax qualify for a VAT reduction and (in some cases) exemption from administrative requirements. If you have just started, you may qualify for this scheme.

On the tax office's website, you will be able to find more information about the small business scheme and the "Kleine ondernemingsregeling" brochure.

Taxes for sole proprietors in the Netherlands

With a sole proprietorship, you pay income tax and a national insurance premium. You do not pay employee insurance and can claim the self-employment deduction and small business exemption, provided you qualify under the conditions.

The amount of the self-employment deduction depends on the amount of profit. Starters entitled to a self-employment credit can also benefit from a start-up deduction.

Not all Belgian enterprises are subject to the same accounting system. These requirements differ based on the following: the legal form of the business, the sector, sales, the total balance, and the number of persons employed.

Keeping good accounting records is more than just a statutory requirement. It gives you a clear picture of the company's financial situation. Even if you hire an outside CPA, you would be better off keeping good accounting records of your own.

Based on the nature of the business and the size, you can apply one of the following types of accounting:

For sole proprietorships, VOFs, and CVs as described above, simplified accounting applies if the sales volume is less than € 500,000.

If you use simplified accounting, you must keep daily financial records (cash and bank ledger) and maintain a record of sales and purchases on a regular basis. The stock-taking ledger is only generated once a year.

For corporations (BVBA, EBVBA, CV, NV) and for all other enterprises with sales volume greater than € 500,000, complete (double) accounting records are required to be maintained.

With complete accounting, an account system and detailed annual account with a balance sheet, an account of sales profits, and an explanation must also be maintained.

In both systems, you are required to do your accounting according to the nature and size of your business. Accounting must include information about all of your business transactions. This information can be obtained from the documentation referring to the different activities (invoicing, account statements, transaction tables, etc.)

Advance levies / withholdings

Levy on real property
Property tax in Belgium is a tax levied on real property owned. It is based on estimated income, meaning a fixed projection of the rental value, such as values determined through the services of Patrimonial Documentation, mainly that of the Cadastre.

The base rate for property taxes is determined by local city regions. The districts and provinces add on their levies with it, i.e. the so-called "opcentiemen" (a standard additional charge). So, taxes differ from district to district. Each of the named administrations receive their portion of the taxes.

Levy on movable property
In Belgium, taxation on movable property is an advance (levy) on the income tax assessed on income from roerende goederen. In Belgium, the word "goederen" (goods) is also used for abstract, intangible values. The roerende inkomsten (movable income), thus, is primarily comprised of interests and dividends. The tax on that is either 15% or 25%, and is withheld by the bank that pays out the interest or the corporation that pays out the dividend. These withholdings on movables are for employed individuals, meaning that there is no further taxation.

Business tax
In Belgium, business taxes are an advance levy paid on income tax, which is assessed on professional income and was previously called bedrijfsinkomsten. These consist exclusively of withholdings from wages that were paid by employers to the Belgian tax office. This is comparable to wage taxes in the Netherlands.

For more information on taxation in Belgium, go to the following websites:

Corporation tax in Belgium

Corporate tax applies only for domestic corporations. For establishments in Belgium with foreign legal entities, there is a comparable tax to that for non-residents. Corporations are subject to tax on their profits, such as those from reserved earnings, disbursed dividends, or certain non-deductible expenditures, the so-called subjected expenditures. Certain deductions may still be taken from these profits, such as the deduction for investments or compensatory losses from previous years. In order to avoid double taxation, there are also exemptions for receiving dividends and incentives on shares from other corporations.

The current rate for corporate tax in Belgium is 33% (with a crisis contribution of 33.99%). Certain corporations pay a lower rate of 24.25% on the first €25,000.

From To	rate (includes 3% crisis contribution)	cumulative income
€0 - €25,000	24.98%	€6,244.38
€25,000 - €90,000	31.93%	€26,998.88
€90,000 - €322,500	35.54%	€109,617.75
€322,500 - infinity	33.99%

The profits after tax are either reserved or paid out as a dividend. There is still a dividend tax assessed on disbursed profits, which is called "roerende voorheffing" (an advance levy on income derived from securities, dividends and other movable assets). This levy, which amounts to 15% or 25%, qualifies as an advance payment or the final regulation of income tax of the recipient of the dividend.

For corporations whose accounting year ends on 31December, the latest filing date for corporate tax is the middle of September. Corporations are granted a grace period of one month if they file electronically using the Vensoc system.

Personal taxes in Belgium

Personal taxes
According to the Income Tax Code, residents are subject to personal taxes. Residents are natural persons who reside in Belgium or have their principal estate in Belgium. Earnings that are taxed are: income from real property, income from personal property, securities, other movable assets, income earned from work, and miscellaneous income. Tax is not assessed on the gross income, but rather the net income. This means gross income, reduced by either actual or optional expenses.

Tax brackets
The tax rates on personal income range from 25% to 50%. The rates stated are valid for income from 2009, tax year 2010.

From/to	rate	cumulative tax
€0 - €7,900	25%	€1,975
€7,900 - €11,240	30%	€2,977
€11,240 - €18,730	40%	€5,973
€18,730 - €34,330	45%	€12,993
€34,330 - infinity	50%

Tax on non-profit entities in Belgium

Tax on non-profit entities is a levy instituted in Belgium on income tax for not-for-profit organisations. It affects approximately 100,000 not-for-profit organisations called VZWs (verenigingen zonder winstoogmerk), foundations, etc. Even public authorities such and city/local governments fall into this category. Corporations, however, do not. For-profit legal entities are subject to corporation taxes. Business income is not taxed under levies for non-profit entities. The tax on income from real and movable property is limited to the taxes withheld for real and movable property respectively.

Types of taxes in Belgium

There are four different types of taxes in Belgium:

A tax on the total income of residents in Belgium, i.e. personal income tax.
A tax on the total income of domestic-based corporations, i.e. corporation tax.
A tax on the income of non-residents, i.e. non-resident tax.
A tax on the income of Belgian legal entities other than corporations, i.e. legal entity tax.

In addition, there are three other types of taxation:

Property tax
Tax on securities and movable assets
Business tax

You can also prepay taxes. Sometimes there is an additional for those who do not pay in advance, and sometimes there is an reduction incentive for those who do pay in advance.

VAT in Belgium

The goods and services that a business provides are, in principle, subject to VAT. VAT is a consumption tax that is paid by the end consumer. VAT is collected on a step-by-step basis, namely with each transaction in the production and distribution process. The standard rate is 21%. For certain categories of goods and services, there is a more favourable rate of 6% and 12%.

When it comes to accounting, certain requirements must be fulfilled for:

all "commercial" enterprises entered in the business registry;
all enterprises with total sales greater than €260,000 or profits greater than €25,000

What must be retained?

Invoices you issue;
Invoices you pay;
Payables and receivables;
Personal use of goods and services;
Accounting ledger;
Records of debits and credits;
Stock records;
Procurement and sales records;
Payroll records.

Church taxes in Germany

All natural persons subject to taxation in Germany and who are members of an official religious group (Catholic, Protestant, Jewish, etc.) are subject to church taxes.

Corporation tax in Germany

Capital corporations considered to be established in Germany are liable for tax on their entire worldwide income. This tax is called the "Körperschaftsteuer" (corporation tax).

A capital corporation is considered established in Germany if it started up in Germany and Germany is where its registered offices are located, or if the primary management is located in Germany. In all other cases, a capital corporation is considered to be established elsewhere, in a country other than Germany. The latter only concerns income from German sources subject to taxation.

Corporations subject to corporate taxes are required to file tax returns. Based on that, tax office auditing will then determine the tax owed and will demand payment of those amounts. Filing must be submitted for each tax year before 1June of the following year. The rate for corporate taxes is 15%.

Income tax in Germany

German income tax is assessed from the following sources:

Business activities
Engagement in self-employment activity
Employment
Assets

Natural persons with an official residential address in Germany are subject to federal and local taxes on their entire, worldwide income for German income tax purposes.

A natural person not officially residing in Germany is only required to pay foreign taxes ("beschränkt steuerpflichtig"), and is only subject to German income tax for the amount of income from German sources. As such, one must pay taxes on profits generated from a business established in Germany or on income from a job performed in Germany. This must be paid to the Germany treasury.

Local business taxes in Germany

The "Gewerbesteuer" is a local business tax on profits. The applicable rate is determined for each tax district and varies from 7 to 17.5%.

Personal taxes in Germany

Wage tax is a type of income tax and is withheld from the paycheck if the employer is based in Germany, or if the business is established or represented by an entity located in Germany.

Tax solidarity in Germany

German taxpayers pay a solidarity surcharge as a contribution to German unification. This surcharge amounts to 5.5% above the income subject to tax and corporate taxes.

VAT in Germany

VAT in Germany is 7% or 19%. For certain countries and forestry businesses, there is another rate which varies from 5.5% to 10.7%. VAT numbers can be directly requested from the "Bundeszentralamt für Steuern". VAT must be remitted every quarter. This is done electronically. Monthly tax filings are permitted under special circumstances. In both cases, VAT must be paid within 10 days of the end of the month or the quarter.

More information can be found on the websites below concerning VAT in Germany:

Withholding tax in Germany

Royalties, dividends, and interest earnings are subject to a withholding tax of 25%, provided this is paid to foreign tax payers. Under the Dutch-German tax treaty, Dutch persons can avoid taxation by requesting an exemption or can receive a refund by filing for one within 4 years of receipt of payment. This request is submitted to the Bundesamt für Finanzen.

Withholding tax for performing artists, athletes and visual artists
Earnings from performing artists, athletes, visual artists and comparable occupations obtained through activity carried out or "processed" in Germany are subject to a withholding tax of 20%. Depending on the amount of income earned, this withholding tax may drop to 0%.

Company Name

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In the Netherlands, Belgium, and Germany, the founders are, in principle, free to choose the name of their sole proprietorship or enterprise. It is also the case that "each enterprise must do business under a name that differs from the name of other companies." The name of the sole proprietor or the person running the business may always be used as the name of the firm. Both the name of the firm and the legal form of business must have already been determined prior to registering with a chamber of commerce (Holland), the Central Enterprise Databank (Belgium), or the Business Registry (Germany).

This is also a requirement in Germany for subsidiaries. Subsidiaries always have the name of the registrant with the term "Zweigniederlassung" (German for "subsidiary"), and the city name after it. For other legal forms, you may create a name, but the legal form must be clarified (adding on the abbreviation GmbH for example). The trading name must be registered with the local district court (Amtsgericht) before entry in the business registry. If it appears from the Amtsgericht's investigation that the name can be used, it is entered in the registry.

In order to be considered for registration, the company must be entered in the business registry. The name of the firm must be mentioned on all correspondence. With a GmbH, it is required to also mention the full names of the directors. At the Patent Office, you can register a business name for all of Germany - see www.dpma.de.

You can protect your company name throughout Europe as well. More information on European name registration can be found at http://oami.europa.eu door on the website for the Benelux Trademark Office: www.boip.int.

You can protect your company name throughout Europe as well. More information on European name registration can be found at http://oami.europa.eu or on the website for the Benelux Trademark Office: www.boip.int.

Legal Form

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For the Netherlands, Belgium, and Germany, the same split between an enterprise without incorporation (where you as founder or partner are made liable for your personal income and where profit/loss from the enterprise is generally counted along with your income tax) and an enterprise with incorporation (where your assets remain protected, where a minimum amount of capital is needed, and where profit/loss both fall under corporate tax regulations) is applicable.

Without incorporation:

Eenmanszaak (EZ)
Maatschap (MTS)
Vennootschap onder Firma (VOF) - with the male/female firm as a special form
Coöperatieve vennootschap (CV)

With incorporation:

Besloten vennootschap (BV)
Naamloze vennootschap (NV)
Vereniging
Stichting
Coöperatie - with limited liability (BA) - with excluded liability (UA) - with legal liability (WA)
Onderlinge waarborgmaatschappij

More information on Dutch legal forms of business can be found at:

Besloten Vennootschap (BV)

Legal entity whose corporate capital has been divided into shares that are not freely transferable; the shares are designated by name
Takes on the form of private limited liability because shares are not freely transferable; this contrasts to the NV partnership where the shares are in principle freely transferable.
A record showing the persons participating in the capital of the private limited liability company for a particular number of shares
Limited liability of the shareholders for debts of the BV.
Establishment: articles of incorporation, Declaration of No Objection, bank declaration, accountant's declaration, minimum capital of € 18,000 (contribution of a sole proprietorship or monetary contribution), registration in the business registry
Annual general meeting (AVA/AGM) at least once per year
Daily management by the board (RvB), the directors being appointed and terminated via the AVA/AGM
Up until the time that all incorporation requirements are satisfied, the founders of the BV are mainly liable. When the requirements are fulfilled, the shareholders are only liable for the amount of their participation in the BV. The directors of the company are not responsible for the debts of the BV.
Paying partnership tax on profits. The AVA/GM decides how the profits will be divided up after the partnership tax. The amount of profits disbursed to the shareholders are called dividends.

Eenmanszaak (EZ) (Sole proprietorship)

one person is responsible for the enterprise
not a legal entity
no difference between business assets and personal assets (fiscally, there is a difference, however)
owner = entrepreneur in the sense of income tax? Depending on;
- the number of customers
- there must be a such thing as business risk (potentially unrecoverable debts, defaulting payers)
- the company must make itself known to the public (advertisements, website)
- investments

These factors are evaluated and considered by the tax authorities. Someone who runs a business for income tax purposes can take advantage of a number of tax breaks, such as the tax-deferred income credit for the self-employed and the self-employment deduction. Moreover, a starting entrepreneur can take advantage of this starter's deduction for three years. The profit or loss from the enterprise counts as personal income. The entrepreneur pays his/her own income tax out of this.

no staff hired = "ZZP'er" or freelancer. All debts this person incurs as an entrepreneur are considered personal debts. If the entrepreneur is married in a community of property, the assets of the partner are also considered debt liabilities.

Pros

Start-up costs are low.
The formalities upon start-up are limited.
All decision power rests with the enterprise as the only owner.
The sole proprietorship can be adapted easily to changing circumstances.
The profit goes to the owner.

Cons

The capacity of the sole proprietor is limited.
Illness of the owner or death would become complicated.
Higher taxes on the profits than with partnerships.
Unlimited liability.

Naamloze Vennootschap (NV)

Legal entity where the corporate capital is divided into shares which in principle are freely transferable
No obligation exists to keep a record of shareholders, so shares do not have to be designated by name, but can be to the bearer
Most suitable partnership for large-scale shareholdership of partners who have no need to know each other
Limited liability
The only legal entity that can request a stock listing
Established by notarial deed, Declaration of No Objection, minimum capital of 42,500 euros, registration with a chamber of commerce
Annual general meeting (AVA/AGM) at least once per year
Daily management by the board (RvB), the directors being appointed and terminated via the AGM
Up until the time that all incorporation requirements are satisfied, the founders of the NV are mainly liable. When the requirements are met, the shareholders are only liable for the amount of their participation in the NV. The directors of the NV are not normally liable for debts to the NV.

Vennootschap Onder Fima (VOF)

Simple way for two or more people to start up a business together
No incorporation
Established by natural persons or a legal entity
Registration with a chamber of commerce. No solicitor is needed to start a VOF.
Partners are primarily liable for the debts incurred
Not subject to tax for the partnership tax or income tax. The profits of the VOF are assigned to the partners.
Partner is responsible for paying taxes on his/her share of the profits
Profit is fiscally transparent

Without incorporation

Eenmanszaak (Sole proprietorship)

With incorporation

(Single person) Besloten vennootschap met beperkte aansprakelijkheid ((E)BVBA)
Naamloze vennootschap (NV)
Vennootschap onder firma (VOF)
Gewone commanditaire vennootschap (GCV)
Commanditaire vennootschap op aandelen (CVA)
Coöperatieve vennootschap (CV)
(European) Economische samenwerkingsverbanden (ESV/EESV)

More info about all the legal forms in Belgium can be found at:

(E) BVBA

Number of partners: normally a minimum of 2, but the BVBA can also exist with 1 partner, which then makes it an (E)BVBA
Capital: the minimum capital is € 18,550, fully secured, € 6,200 secured (for an (E)BVBA, capital amounting to € 12. 400 should be secured), 20% per share in cash, 100% per share in kind. For the contribution in kind, a report from a business reviewer is required. Effective 1 June 2010, it is possible to start a BVBA with a minimum capital of 1 euro (the so-called S-BVBA or "Starter's BVBA"). The real amount of starting capital required, however, will be higher because this has to be justified in the entrepreneur's financial plan.
Shares: by name
Administration: by one or more directors; these are on the board of directors
Profit; the intention of making a profit is what distinguishes the partnership from other forms of cooperation.
Contribution; every partner must buy into the partnership in the form of money, a contribution in kind or industry. In exchange for this, the partner receives shares.
Profit sharing and loss; each partner shares the profits and shares the burden of a loss. In theory, the share in the profit is equal to the partners initial contribution.
Affectio societatis; there must be a desire present among the partners to cooperate on an equal level.
The partnership is founded by notarial deed

CV/CVBA

Plurality requirement; a partnership must consist of at least two partners. An exception here is the (E)BVBA.
Profit; the intention of making a profit is what distinguishes the partnership from other forms of cooperation.
Contribution; every partner must buy into the partnership in the form of money, a contribution in kind or industry. In exchange for this, the partner receives shares.
Profit sharing and loss; each partner shares the profits and shares the burden of a loss. In theory, the share in the profit is equal to the partners initial contribution.
Affectio societatis; there must be a desire present among the partners to cooperate on an equal level.
The partnership is founded by notarial deed

Eenmanszaak (Sole proprietorship BE)

No clear line of demarcation between personal assets of the owner and that of the business; thus, the proprietor holds all assets, and his/her personal assets are also at stake when running the business.
The case is the same for a sole proprietorship in the Netherlands.

Freelance jobs vs. Fully Self-Employed

Upon starting your own business, you will either be fully self-employed or be considered working at a freelance job. Start-up formalities are the same in both cases. The greatest difference is in the social-security contributions that should be paid each quarter.

In general, you are fully self-employed if your independent contract work is your primary or only source of income. If you undertake work in a different profession apart from your independent contract work, and work at least part time as an employee or public servant, you will start being considered as holding a freelance job. For an appointed instructor in education, it equates to 60% of a full-time schedule.

The only criterion is that the number of hours you work are salary based.

There are a few exceptions. For instance, if you are a student below the age of 25, your self-employment or independent contract work is regarded as a freelance job.

NV (BE)

Numerous partners: minimum two
Capital: statutory minimum capital of € 61,500 This amount must also be fully secured. Moreover, there is a deposit requirement of 1/4^thon each share, for amounts above the sum of € 62,500. For the contribution in kind, a report from a business reviewer is always required. The input from the business reviewer is also required if share holders, partners, or administrators want to contribute an asset within two years of establishment, which belongs to them and represents at least 10% of the capital.
Shares: by name or to the bearer or dematerialised
Financial plan: necessary
Transfer of shares: rather free
Administration: through a board of directors (RvB, or "Raad van Bestuur") with at least three administrators who do not need to be shareholders. If there are only two shareholders, an RvB is sufficiently complete with the two administrators up until the time that there is a third shareholder in the mix.
Plurality requirement; a partnership must consist of at least two partners. An exception here is the (E)BVBA.
Profit; the intention of making a profit is what distinguishes the partnership from other forms of cooperation.
Contribution; every partner must buy into the partnership in the form of money, a contribution in kind or industry. In exchange for this, the partner receives shares.
Profit sharing and loss; each partner shares the profits and shares the burden of a loss. In theory, the share in the profit is equal to the partners initial contribution.
Affectio societatis; there must be a desire present among the partners to cooperate on an equal level.
The partnership is founded by notarial deed

Without incorporation

Einzelfirma (Sole Proprietorship)
Gesellschaft bürgerlichen Rechts (GbR)
Offene Handelsgesellschaft (oHG)
Kommanditgesellschaft (KG)
GmbH & Co. KG

With incorporation

Gesellschaft mit beschränkter Haftung (GmbH)
Aktiengesellschaft (AG)
Eingetragene Genossenschaft
Limited (Ltd)

Einzelfirma (Sole Proprietorship)

Individual person who starts his/her own business or opens a store.
Owner is unrestricted and is liable for all his/her assets - including personal assets.
Profit, yield or loss from the firm is charged directly to the business person, in which case the annual revenues for the company are subject to income tax.

GbR

At least two people
Written contract for establishment
Not a legal entity
Personal liability for partners
Income tax on profit/loss

GmbH

Comparable to the Dutch BV or the Belgian BVBA
Limited liability
Divided into shares
Founded by one person
Corporate share capital must be at least 25,000 euros
Minimum capital participation amounts to 100 euros
Notarial deed for establishment
Registration in the business registry.

KG, GmbH & Co KGDe

KG: partners are liable for their contribution and no more than that; otherwise, the same regulations apply as for the OHG.
GmbH & Co KGDe: KG where it is not a natural person but rather a legal entity (GmbH) that acts as managing partner. This is a GmbH & Co KG. Because of this, the personal liability of the managing partner is limited by GmbH law to the amount of corporate share capital.

OHG

Not a legal entity
Personal liability for partners
Establishment by partnership agreement
Registration in the business registry

National insurance

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National insurance is a public system intended to guarantee income and/or care for natural persons or families (or other societal structures) considered temporarily or permanently unable (or no longer able) to generate (sufficient) income and/or care for themselves. This applies, for example, to pensions, health care, incapacitation, statutory sick pay (SSP), death of a family member or unemployment. A person can only be insured in one country.

Child care

Independent parents receive an income dependent portion of the child care credit provided by the government.

Cost of health care

Every Dutch person is required to be insured against illness and related expenses. Insurers have a variety of premiums and conditions. Employees also pay a contribution on a sliding scale based on income, which the employer compensates for. However, taxes are assessed on these amounts as well.

Self-employed persons must pay the contribution themselves based on income. They pay this contribution later when filing their tax.

Health insurance

An employee is required to be insured against loss of earnings due to illness for a period of two years. After that, there is the WIA (Work and Income according to Labour Capacity Act). An employee who wishes to become self-employed can apply to the public employment service UWV Werkbedrijf for voluntary health insurance. That must occur, at the latest, 13 weeks after becoming established as an independent contractor or self-employed person. Many first-time entrepreneurs are unaware of this option. The condition, however, is that you must have been insured for a longer period with a previous employer. More information concerning voluntary health insurance under the National Insurance Act can be found at www .szw .nl.

Maternity benefits

In June 2008, the regulation for Self-employed and Pregnancy (ZEZ) was put into effect. Under this regulation, self-employed persons are entitled to pregnancy and maternity benefit. The benefit is never higher than the minimum income unless the entrepreneur has also cancelled their voluntary insurance. Self-employed persons who work at least 1,225 hours get a benefit at this level. For the self-employed who work less than 1,225 hours, the benefit depends on the amount of profit/income. The benefit lasts a minimum of 16 weeks.

Occupational disability

An employee is required to be insured against occupational disability. Self-employed persons must also handle this on their own. Entrepreneurs are not required to insure themselves against occupational disability. Reserve funds and public assistance are available for those with long-term occupational disability who are not covered by insurance.

Old age

Anyone who has lived or worked in the Netherlands, including the self-employed, is entitled to an AOW benefit (General Seniority Act) upon reaching the age of 65. It is not exactly a fortune - 70% payment of the net minimum wage for a single person, 100 percent for a couple. Additional insurance is the motto. For the self-employed, there are a number of options to generate extra income in old age:

continue a pension plan
form an old age reserve (FOR)
close an annuity insurance.

Unemployment

Unemployment benefits for entrepreneurs can be summed up quickly: they do not exist. Insuring against insufficient work or no work at all is not possible. However, the entrepreneur is also not subject to paying premiums under the Unemployment Insurance Act (unemployment premium).

As a self-employed person, you have to pay for your own national insurance contributions. National insurance contributions are paid by the quarter and are collected through the social insurance fund. Those amounts cover 3 facets: pension, child care, and health and invalidity insurance.

The national insurance contributions are based on earnings (gross earned income, minus operational costs and perhaps including any business losses, before deducting compensation and remunerations) that you as a self-employed person received in the tax year preceding the year in which contributions are owed. National insurance contributions are tax deductible.

How much national insurance contributions do I pay as a starting independent contractor?

If you were not self-employed three years ago, you also do not have any income upon which any national insurance contribution can be estimated.

There are two options:

You pay the minimum:
During the first three complete years of your self-employment activity, you pay a provisional contribution every quarter, in advance.

For a primary business activity (main profession), you pay € 631.15 per quarter from the start of the activity to the last quarter of the first complete calendar year. In the second complete year of your self-employment activity, you pay € 646.54 per quarter, and during the third year, € 661.94 per quarter.

For other work (informal side job), you pay € 69.83 per quarter for the first year. During the second year, you pay 71.53 euros, and during the third, € 73.24.
Or you pay an amount based on projected income:
You can pay higher national insurance contributions on a voluntary basis. The amounts are based on your estimated income. The advantages of this are that regularisation after three years is significantly less, there are tax breaks (because national insurance contributions are deductible), and there is a better tax schedule. If it later appears that you have paid too much, you will receive a refund of the excess. You will also get a starter's bonus as well for the contributions paid on top of the minimum contribution. This starter's bonus amounts to 0.75% of the amounts and is paid above the statutory minimum for a quarter, with effect from the advance payment up until regularisation.

For the specific amounts that apply for the year 2011, click here.

The national insurance system in Germany has five branches: publicly funded health care, health care insurance, pension insurance, accident insurance and unemployment insurance.

The following occupational groups of self-employed persons are automatically covered;

independent craftsman
independent instructor
carer
midwife
maritime pilot
domestic industry
coastal skipper or coastal fisherman
artist
writer
general contractor
independent worker

Otherwise, self-employed persons who work in Germany must register with (the Deutsche Rentenversicherung ) the German National Insurance Fund: http://www.deutsche-rentenversicherung.de.

Step by step

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Administrative and legal requirements

STEP 1: Choose a business name
Your business name should be "catchy" and not closely resemble that of an existing company. The chamber of commerce can run a business name search for you.
STEP 2: The correct qualifications
For some occupations, you will need some formal qualification such as a professional degree. You will need this, for instance, if you wish to run a restaurant, hotel, or catering business.
STEP 3: The Legal Form
It is critical for your business to choose the right legal form. This is also how you single-handedly determine the extent to which you are liable for your own business and how you can best tailor this to your financial advantage.
STEP 4: Required licenses and permits
For certain occupations, you also need a permit. Establishment permits are no longer required, however permits by sector (retail business, hotels, restaurants, catering, financial services, transportation, market, street trade and door-to-door sales) and All-in-one Permit for Physical Aspects are required in certain cases.
STEP 5: Register with a chamber of commerce
Upon registering with a chamber of commerce, you become registered automatically with the tax authorities. For a sole proprietorship, VOF (general partnership), CV (limited partnership) or corporation, you will need to go to a chamber of commerce. If you start up a legal entity (BV or Foundation), the solicitor will arrange to register you with a chamber of commerce. In order to register yourself, you need a registration form and a valid form of identification. You can register starting 1 week before the start of business activity up to 1 week after business commences. You can calculate your estimated annual registration fee here . Depending on the sector, you may also have to register for a professional or product association (this is, for example, a membership with a union or trade association of retail merchants). For some occupations, such as a pharmacist or veterinarian, you must join a mutual pension fund. Other entrepreneurs have sole responsibility for their pension.
STEP 6: Administration
Clear administration gives insight into the expenses incurred and debtor management, and also gives you important marketing information such as which products or services are performing well and which are not. General administration must be kept on file for 7 years. In this case, it is a question of: the accounting ledger, debtor and creditor administration, supply management, sales and procurement administration and payroll administration. For VAT, you maintain all payables and receivables, a record of expenditures and income, and documents on the personal use of goods and services. So, think about the cash administration, cash vouchers, invoices, and bank statements. These documents serve as the basis for your VAT declaration; do not throw them away.
STEP 7: Required compensation
For music, video, and copying. A few regulations are in place regarding mandatory compensation and royalties for the use of another person's work. They include Reprorecht and Buma/Stemra.
STEP 8: Dealing with personnel
When you recruit personnel, you must adhere to certain rules: working hours, occupational health, corporate emergency services, child care, works council, etc. and suitable working conditions. A complete listing can be found here.

Administrative and legal requirements

STEP 1
As a foreigner in Belgium, if you plan to work, do business or carry out entrepreneurial jobs, the business activity must be reported to the appropriate authorities before the work commences. For more information click here.
STEP 2: Deposit account
As a self-employed business or sole proprietor, you must have a bank account established in Belgium. It is better for you to open a separate account for your business rather than using your personal account number.
STEP 3: Permits
Depending on the profession and the type of work you will be doing, you may need a permit: a professional card for foreigners, authorisation for door-to-door sales, authorisation for fair attractions, butchering license, etc. In addition, you need to be of a competent age to do business (18 +) and a national of the European Economic Area (EEA). Otherwise, you must have a work permit.
STEP 4: Central Enterprise Databank (BCE/KBO)
Merchants, trading companies, and those working in a liberal profession register with the BCE/KBO to request an EIN or employer identification number (also referred to as the company registration number). This registration number also becomes your TIN or tax ID number (also referred to as VAT). You can also register with the BCE/KBO through private enterprise service offices such as Zenito. Before you are entered in the business registry, you must have decided on a business name (or DBA name) and your legal form.
STEP 5: Professional Skill
As a starter, you must show proof that you have sufficient business management knowledge. In addition, for certain professions, such as the construction industry or body care, you must show evidence of sufficient professional expertise in the field. An listing of professions can be found here.
STEP 6: Social Insurance Fund
As a starter, you can register yourself on the day itself (within 90 days of the start of business activity upon starting up the company) with a social insurance fund or with the National Assistance Fund. This fund collects social security contributions that you should be paying and ensures that they are correctly disbursed.
STEP 7: National Health Service Administration
In order to be properly set up with health insurance, you are also required to join a health fund. If you have already joined a health fund, you report them as your provider upon starting business activity with your proprietorship.
STEP 8
When your start a company (BVBA, NV, CBVA, etc.), you should first (before step 2) create your partnership. For this, a few formalities have to be taken care of, such as drawing up the statutes, presenting them to the chamber of commerce, presenting a financial plan and generating start-up capital, etc. In most cases, you will need to hire a solicitor to do this.

Administrative and legal requirements

STEP 1: Deposit account
Open a bank account with a German bank.
STEP 2: Business registry
You can register online in the business registry. Before you are entered in the business registry, you must have a business name and have determined your legal form.
STEP 3: Permits
For certain traditional occupations, you also need what is called a "Meisterbrief", or credentials qualifying you as a master craftsman. The Chamber of Skilled Trades and Crafts can provide you a list of trades that must adhere to this regulation. Liberal professions for the most part are not subject to requirements. Legal entities, persons and corporate bodies in general may not take on the guise of a liberal profession, unless said entity, person or body is an office for tax advice or accounting. For market sales, you should first put in a request to obtain an appropriate licence.
STEP 4: Trade Licensing Office
Register with the Trade Licensing Office. This should be done within one month. Take an official copy of the entry from the trade registry and any licenses or permits needed.
STEP 5: Health and Safety Executive
Register with the HSE. You can find the location nearest you at www.entry.de.
STEP 6: Chamber of Commerce
Register with the German Chamber of Industry and Commerce. More information can be found at www.ihk.de
STEP 7: National Health Service
If you have taken on employees or plan to, you should be registered with the 'Krankenkasse'. A listing of German health insurance companies can be found at www.krankenkassentarife.de.
STEP 8: Social Insurance Fund
Within a week from starting your business, you should register with the "Berufsgenossenschaft", the Employers' Liability Insurance Association. They are responsible for the statutory minimum accident insurance. Sources of information

Subsidies and support measures

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LIOF
LIOF provides venture capital at the start of or growth of innovative start-up (MKB) companies. In addition, LIOF serves as a partner of the entrepreneur, with the goal of porting the business to the next level.

Province of Limburg
Subsidies in the creative industry.

Institutions in Limburg that produce creative and innovative products and services can request a subsidy from the Province of Limburg. There are 3 categories.

The exact subsidy regulations can be found here.

Government
In order to check which type of support you qualify for, you can use the checklist for support measures. This can be found here.

LRM
LRM is a profit-driven investor. They provide entrepreneurs in Limburg with a unique combination of venture capital and real property.

CultuurnInvest
The fund works on the growth and economic independence of companies that provide products and services tied to culture. There must be clear market potential. CultuurInvest does not issue any subsidies. The fund invests by way of deferred loans and participation in capital shares. More information: click here.

Stroom
Stroom is the cultural subsidy of the Province of Limburg.

Design Flanders
Design Flanders supports a wide range of projects that stimulate contemporary design in Flanders through subsidies. Designers recognised by Design Flanders, as well as organisations that plan projects together with those designers, can apply for a subsidy.

Germany has a number of subsidy regulations and promotional programmes. There is a lot of funding and support for innovation, for example, where much attention is placed on bringing together and supporting entrepreneurs and companies that are involved in the same sector of activities.

Websites where relevant information on subsidies can be obtained are:

Related location(s)

Visit the start-up map