Advantages of a BV

  • Limited liability: your personal assets (house, savings) are protected from business debts and claims.
  • Lower tax on high profits: corporate tax of 19% vs. income tax up to 49.5%.
  • Flexible income: combine a minimum salary with tax-efficient dividend payouts.
  • Holding structure: accumulate wealth in a holding BV, tax-free between entities.
  • Tax-free exit: sell your operating company through a holding with zero tax on the gain.
  • Credibility: larger clients and investors often prefer working with a BV.
  • Pension building: invest through the BV for a tax-efficient long-term pension strategy.

Disadvantages of a BV

  • Higher setup costs: €485–€3,085 for incorporation, against €85.15 for a sole trader.
  • Higher annual costs: accountant, payroll administration and annual accounts add real yearly costs; the size follows the administration.
  • Minimum salary obligation: as DGA you must pay yourself at least €58,000 (2026), even if the BV has limited profit.
  • More administration: payroll, annual accounts at KVK, corporate tax return — more complex than a sole trader.
  • Zero self-employed deductions: the self-employed deduction (€1,200) and SME profit exemption (12.7%) disappear.
  • Double taxation: profit is taxed at both BV level (19%) and personal level (box 2) when distributed.

The verdict: when is a BV the right choice?

Choose a BV when: annual profit exceeds €80,000, you have significant liability risk, you plan to grow and hire, or you want to build long-term wealth efficiently. Stick with a sole trader when: you are just starting, profit is below €60,000, or you want maximum simplicity.

Read next

Further along the same line: Setting Up a BV in the Netherlands in 2026, Incorporating a BV and BV Incorporation Costs 2026.