Incorporating a BV
At some point, almost every entrepreneur asks the same question: should I set up a BV (private limited company)? The short answer is: it depends. On your profit, your risks and what you want to do with your business. In this article we cover everything you need to know.
With a sole proprietorship, you are the business. If something goes wrong, such as debts or a lawsuit, creditors can come after your personal assets. Your savings, your car, your home. Everything is at stake.
A BV is different. A BV is a separate legal entity. You are the owner, but the company is legally separate from you as a person. If the BV goes bankrupt, your personal assets are in principle protected.
That sounds attractive, but a BV also comes with more costs and rules. Read on to find out when it is worth it.
The tipping point is the moment when a BV becomes more tax-efficient than a sole proprietorship. In 2026, that is roughly at an annual profit of €100,000 to €120,000.
Why so high? As a sole proprietorship, you are entitled to deductions such as the self-employed deduction. These reduce your tax bill significantly. At lower profit levels, that advantage often outweighs the costs of a BV.
Earning more? Then a BV becomes more interesting. A BV pays less tax on its profits:
As a sole proprietor, higher profits are quickly taxed at 49.5% income tax. The difference is significant.
Note: when you take money out of the BV to your personal account, you pay additional tax on that. Always calculate this carefully for your own situation.
Less than you might think, but it is not free.
One-off costs at incorporation
Recurring annual costs
A BV costs more than a sole proprietorship. That is exactly why it only pays off when your profits are high enough.
At Sarabel, you always know where you stand. We work with a fixed all-in price per financial year. View our prices.
A holding company is a second BV above your regular BV. You then have two companies: a holding company that owns the shares, and an operating BV where you do your daily work.
When is it smart?
When do you not need one yet?
If you are just starting out with a BV and your profits are just above the tipping point, a holding company is often not yet necessary. The extra costs and complexity do not outweigh the benefits. Start with one BV and reassess later whether a holding company makes sense.
Not living in the Netherlands or not a Dutch national? You can still set up a Dutch BV. There are a few things to keep in mind.
What do you need?
Tax as an expat
Living in the Netherlands? Then you pay tax on your salary from the BV here, just like everyone else. The 30% ruling (reduced to 27% from 1 January 2027) may apply if you meet the conditions. This can significantly reduce your tax bill.
Living outside the Netherlands but with a Dutch BV? The BV pays corporate tax in the Netherlands. What happens to your salary or dividend after that depends on the tax treaty between the Netherlands and the country where you live.
Every situation is different. Always seek advice if you want to set up a BV as an expat.
If you have a BV and also work in it, you must pay yourself a salary. The Dutch Tax Authority calls this the customary salary (gebruikelijk loon). This is a mandatory minimum. They want to prevent you from paying yourself €1 in salary and taking the rest as cheaper dividend.
The minimum customary salary in 2026 is €58,000 gross per year. Your salary must be at least the highest of:
Sometimes yes. For example if your BV is making a loss and there is no other option, or if you are an innovative startup with a special declaration. But you must be able to prove this clearly. Do not do this on your own.
Salary or dividend?
Many BV owners keep their salary at the minimum and take the rest as dividend. Dividend is taxed less heavily than salary. In 2026:
Whether this is smart for you depends on your overall situation. This is something to calculate together with your accountant.
A BV is not a goal in itself. It is a choice you make when it genuinely pays off. Not sure? Run the numbers first.
Have questions about your specific situation? Send an email to info@sarabeladministratie.nl.