For many founders in the Netherlands, the first real decision is whether to start as an eenmanszaak (sole proprietorship) or a BV (private limited company). The differences come down to liability, tax, admin and what investors expect. Below are the facts side by side, based on the 2026 figures. Which form is right for you is ultimately a question for a tax adviser.
What are the main differences?
| Sole proprietorship | BV | |
|---|---|---|
| Setting up | Register with the KVK (Chamber of Commerce) | Deed from a civil-law notary, then registration with the KVK |
| Owners | One person | One or more shareholders |
| Liability | You are personally liable | In principle the BV is liable, not you |
| Tax on profit | Income tax, with entrepreneur’s allowances | Corporate income tax: 19% up to €200,000, 25.8% above that |
| Your own income | The profit is your income | Salary (customary salary of at least €58,000), plus any dividend |
| Tax on dividends | n/a | Box 2: 24.5% up to €68,843, 31% above that |
| Admin | Simpler | Filing annual accounts, payroll, UBO registration |
| Investors | Not possible | Can take shares |
Are you personally liable?
With a sole proprietorship, yes: your personal assets are at stake if your business can’t pay its debts. A BV is a separate legal entity, so in principle the BV is liable, not you. That difference matters more as you take on bigger commitments, such as staff, a lease or a loan.
The protection isn’t absolute, though. Banks often ask for a personal guarantee before lending to a young BV, and a director can still be held personally liable in cases of mismanagement.
How is each one taxed?
Sole proprietorship. Your profit is taxed through your personal income tax. If you spend at least 1,225 hours a year on your business (the hours criterion), you qualify for the self-employed allowance (zelfstandigenaftrek): €1,200 in 2026. The SME profit exemption of 12.7% then applies to what’s left. New entrepreneurs may also qualify for the starter’s allowance (startersaftrek).
BV. The BV pays corporate income tax on its profit: 19% on the first €200,000 and 25.8% on anything above that. As a DGA (director-major shareholder), you are an employee of your own BV and pay wage tax on your salary. That salary must be at least the customary salary (gebruikelijk loon): €58,000 in 2026, or more if that’s the norm for comparable work. If you later pay out profit as a dividend, you pay Box 2 tax on it.
At lower profits, a sole proprietorship is often cheaper, thanks to the entrepreneur’s allowances and lower running costs. As profits rise, the balance tips the other way, especially if you don’t need the money personally straight away.
How much admin does a BV involve?
You set up a BV through a civil-law notary. Since 2012 the minimum share capital has been one cent, so you don’t need to put in a large sum to get started. After that, there’s work you wouldn’t have with a sole proprietorship:
- preparing annual accounts every year and filing them with the KVK;
- running payroll for your own salary, with a monthly payroll tax return (see payroll tax for your first employee);
- registering the ultimate beneficial owners (UBOs) in the UBO register;
- keeping personal and business finances strictly separate, with a current account for anything you settle between yourself and the company.
In return, a BV gives you structure: shares, a clear line between your personal and business affairs, and the option of putting a holding company above your operating company. With a holding company you can, for example, pass profit up from the operating company tax-free and invest it later, without paying personal tax on it straight away.
Can a sole proprietorship raise money from investors?
In practice, no. Investors take shares, and a sole proprietorship doesn’t have any. An employee option scheme also requires a BV. That’s why many startups begin as a BV from day one, or convert their sole proprietorship as soon as an investment round is on the horizon. Once investors are on board, they’ll expect a regular monthly report.
Can you switch later?
Yes. You can convert a sole proprietorship into a BV at any time, and tax relief is available, so you don’t have to pay tax straight away on hidden reserves and goodwill when you convert. The timing and conditions are strict, so get advice before you start.
So which one is right for you?
A sole proprietorship is often a good fit if you’re starting on your own, expect modest profits in the first few years and aren’t looking for investors. A BV is the better fit if you’re starting with co-founders, want to bring in investors, are taking on bigger risks or want to keep profit in the business to grow.
Whichever form you choose, we take over your bookkeeping as soon as the structure is in place. For a holding company with few transactions, there’s a separate Holding package from €125 a month.
Sources
— Boele
