Things that are different with a BV than an LLC

In the US, I ran a software consultancy through an LLC for several years, so when preparing for the DAFT visa, the plan to start a business was already taken care of – I would simply do the same thing under a BV. Having experience with an LLC gave me confidence and familiarity, but also a lot of incorrect assumptions. Here are some mistakes and surprises I’ve run into.

• When preparing to apply for the DAFT visa, there’s a lot of waiting for documents, apostilles, and approvals. I did not realize that the BV is an entirely separate track. I did not need to wait until my DAFT application was approved before beginning BV preparations. On the contrary, the BV needed to exist before I arrived in order to apply for the 30% ruling. I should’ve talked to accountants early. I thought this would be the last step, and ended up having to scramble to establish an accountant relationship and set up my BV. I did not need to be a resident to form a BV, I only needed an address. Speaking of which…
• Apartment rental contracts may not allow you to register your BV at your home. “No commercial activities” is a standard clause. My listing’s agent clarified that this meant I couldn’t open a shop to the public, but consulting at home was fine. However, other DAFTers I’ve talked to weren’t so lucky, and are paying for rental addresses. It seems to vary by listing and landlord, and would be good to ask about as a cost factor. An LLC parallel might be a registered agent, though this service is a convenience rather than a requirement in the US.
• In the US, my LLC paid me a nominal salary, and the surplus was available to withdraw at-will in distributions. (This was the primary benefit of the LLC, as distributions are taxed at a lower rate.) I used that surplus like a personal savings account, taking distributions as needed. With a BV however, before distributions can be granted, an uitkeringstoets (business analysis) must be performed demonstrating that the business is healthy enough to allow distributions. Furthermore, distributions may be taxed at a comparable or higher rate than salary, especially after a 30% ruling. So not only are distributions not available at-will, but they’re also more expensive. I’ve had to adjust to living on salary alone. (This is fine if you expect it, but I deliberately took a low salary to build up business savings.)
• Reimbursements have been one way I’ve been able to take cash as needed in these early stages. I was able to reimburse myself the fee I paid the notary to incorporate. (Side-note: a notary here refers to a lawyer. In the US I’ve only heard it used to refer to a notary public.) I’ve been warned about special taxes if my company is ever in debt more than 17,500 EUR to me. I don’t expect to be in this situation, but ask for advice if you might, such as by puting in lots of savings to cover salary.
• Health insurance is always private. My B.V. cannot pay for my basic health insurance.
• With my LLC, I never shared my invoices to my accountant. They only cared about balance sheets. Here, I must, and they’re required to follow certain standards, such as addresses, a unique ID, and a clear description of the charges. Additionally, all my income has to be tied to an invoice, so if you’re lucky enough to receive something like a bonus, you have to invoice for it.
• I couldn’t name my BV whatever I wanted, as there are standards to ensure a business name isn’t misleading.
• My BV has to pay my wages within the month it’s for, i.e. my November salary has to be paid by the end of November. My LLC didn’t have this requirement, and typically I’d be paid in the middle of the following month, giving me time to collect on invoices. Without a buffer, things were uncomfortable for me in the early months, having to pay myself before a client paid my invoice.

It’s very difficult to reset your whole understanding of running a company, so it helps to realize early that a BV is not a Dutch version of an LLC, but a totally different structure with different goals – one passes capital, the other preserves it. Thankfully I have very patient accountants.