The following article provides a detailed overview of the sole proprietorship status (eenmanszaak) in the Netherlands (NL), including its legal structure, tax treatment, and practical considerations for 2025.
Sole Proprietorship Availability and Legal Structure in the Netherlands
The eenmanszaak is the Dutch equivalent of a sole proprietorship. As of 2025, this structure remains widely accessible for Dutch citizens and residents seeking to operate individually run businesses. Setting up an eenmanszaak does not require forming a separate legal entity, streamlining the process for those looking for a simple and flexible business solution.
However, the simplicity of this status is balanced by the fact that the owner is personally liable for all debts and obligations of the business. There is no distinction between personal and business assets in the eyes of Dutch law, a factor worth careful consideration.
Key Features of the Eenmanszaak Structure
| Feature | Description |
|---|---|
| Status Name | Eenmanszaak (Sole Proprietorship) |
| Legal Entity? | No separate legal entity; individual is the business |
| Who Can Register? | Dutch citizens and residents |
| Liability | Unlimited personal liability |
| VAT Registration | Required unless exempt under the small businesses scheme (KOR) |
Taxation for Sole Proprietors in the Netherlands (2025)
As expected in a high-tax jurisdiction like the Netherlands, sole proprietors are subject to personal income tax on business profits. The following table summarizes the 2025 income tax rates applied to profits generated through an eenmanszaak:
| 2025 Income Bracket (EUR) | Rate (%) | Rate (USD)* |
|---|---|---|
| Up to €75,518 | 36.97% | ~$81,100 (1 EUR = 1.075 USD) |
| Above €75,518 | 49.5% | Above ~$81,100 |
*USD conversion at 1 EUR = 1.075 USD (approximate rate for 2025 – subject to market fluctuations).
Net profits from an eenmanszaak are declared as personal income and taxed progressively according to this framework.
Tax Deductions for Entrepreneurs
The Dutch tax system provides targeted deductions for sole proprietors, including:
- Zelfstandigenaftrek: A self-employed deduction designed to reduce taxable income for qualifying entrepreneurs.
- Startersaftrek: An additional deduction available to first-time business owners meeting certain conditions.
The actual amounts for these deductions should be verified each year, as they are determined by Dutch tax authorities and are subject to periodic revision.
VAT Registration Requirements
Registration for VAT (BTW in Dutch) is generally required for an eenmanszaak. However, small businesses with limited turnover may be eligible for an exemption through the small businesses scheme (KOR). Eligibility thresholds and conditions for the KOR can be found on official government sources, and it is important to review these yearly.
Practical Implications for 2025
Choosing the eenmanszaak structure allows for quick setup, operating flexibility, and lower upfront costs. However, the unlimited liability and the progressive income tax system—together with substantial social security contributions—should be factored into any decision to operate under this status in the Netherlands.
Summary Table: Eenmanszaak Status at a Glance
| Aspect | Details |
|---|---|
| Availability | Yes (2025) |
| Status Name | Eenmanszaak |
| Owner Liability | Unlimited personal |
| Tax Basis | Personal income tax (progressive rates) |
| Tax Deductions | Zelfstandigenaftrek, Startersaftrek (if eligible) |
| VAT Registration | Generally required (KOR exemption possible) |
Pro Tips for Setting Up an Eenmanszaak in the Netherlands
- Confirm your eligibility for the zelfstandigenaftrek and startersaftrek in the year you register your business, as these can significantly lower your effective tax rate.
- Carefully assess whether your expected turnover qualifies you for the KOR VAT exemption, which can ease administrative burdens for small operators.
- Maintain clear and thorough accounting records from day one, as personal and business finances are legally indistinguishable in this structure.
- Evaluate whether sole proprietorship liability is appropriate for your business risk profile; consider alternative legal structures for higher-risk activities.
- Regularly consult the Dutch government portals for updates to tax rates, deductions, and compliance requirements.
Official Resources and Further Reading
The eenmanszaak remains the most streamlined business form for individuals in the Netherlands. The setup is efficient, and the tax infrastructure includes meaningful deductions for qualifying entrepreneurs in 2025. Unlimited personal liability and progressive income tax rates are notable considerations. For those who prioritize administrative simplicity, the eenmanszaak offers an accessible path—provided that the accompanying legal and fiscal responsibilities are thoroughly understood and planned for.