Knowledge base
Advantages and disadvantages of a BV
The advantages of a BV at a glance
If you are considering setting up a BV (the Dutch private limited company), it makes sense to first understand its advantages and disadvantages properly. The page on setting up a BV in the Netherlands explains how the incorporation process works through the civil-law notary. This page is about the substantive trade-off: what are the advantages of a BV, which disadvantages matter, and at what point does the balance tip in favour of the BV as the smartest choice?
Limited liability. The most frequently mentioned advantage of a BV is limited liability. As an entrepreneur you are in principle not personally liable for the debts of the BV. Your private assets, your house and your savings account stay out of reach if the business runs into trouble. With a sole proprietorship (eenmanszaak) or a general partnership (vof) this is different: creditors can then recover their claims directly from your private possessions.
A tax advantage above a certain profit level. A BV pays corporate income tax (vennootschapsbelasting, VPB) on its profit. In 2026 a low rate applies to the first bracket and a higher rate above that (check the current rates with the tax authority (Belastingdienst), as they can change each year). With a sole proprietorship you pay income tax, which rises to 49.5 percent in the top bracket. Above a certain profit level, for most entrepreneurs somewhere between 100,000 and 150,000 euros per year, a BV is more advantageous for tax purposes. Always have this tested against your own situation in an advisory meeting, because the tipping point depends on your private income, deductions and structure.
Building up capital and separating assets. Through the BV you can keep funds inside the business and pay a lower tax rate on them as long as you do not distribute them. That creates room for reinvestment or for building a buffer. You can also use the BV structure, a holding company with an operating company, to shift profits to the holding company in a tax-efficient way before they are taxed. You can read more about the structure of a holding company and an operating company on the page about BV structure: holding company, shares and management.
A professional image and room to grow. A BV is a legal entity. That means you sign contracts in the name of the BV, that you can more easily work together with several shareholders, and that you can sell or transfer the business more easily. Investors and larger clients generally prefer working with a BV rather than with a sole proprietorship.
The disadvantages of a BV: what weighs against it?
An honest picture of the advantages and disadvantages of a BV also includes the other side. The disadvantages of a BV are concrete and measurable, and for some entrepreneurs they are decisive.
Higher fixed costs. A BV comes with structural costs that a sole proprietorship does not have. You are required to prepare annual accounts (jaarrekening) and file them with the Chamber of Commerce (KVK). You have to file a corporate income tax return. As the director-major shareholder (DGA) you are required to pay yourself a customary salary (in 2026 at least the standard amount used by the tax authority, check the current amount). On top of that comes the payroll administration. All these obligations cost time or money, or both. On the page about the costs of a BV you can read what you can concretely expect.
Incorporation costs and starting capital. Setting up a BV requires the involvement of a civil-law notary. That brings one-off costs. In the past a minimum capital requirement of 18,000 euros applied; that was abolished in 2012. Even so, it is wise to know what starting capital you need. Read more on the page about starting capital for a BV.
More administrative obligations. The BV is a legal entity with its own obligations: keeping minutes of shareholders' meetings, recording decisions, and filing the annual accounts on time (no later than 12 months after the end of the financial year, but in practice earlier). If you do not have this in order, you risk directors' liability, and that immediately erodes the benefit of limited liability.
A DGA salary is mandatory. As the sole or main substantial-interest holder you are required to award yourself a customary salary. The tax authority sets a minimum. On that salary you simply pay income tax and social security contributions. For starting entrepreneurs with a low turnover this is sometimes a reason to hold off on choosing the BV early on.
The conclusion of the trade-off. The advantages of a BV are greatest for entrepreneurs with a substantial profit, for those for whom limited liability weighs heavily, and for those who want to build up capital or transfer a business. The disadvantages weigh heaviest for those still in an early growth phase with a modest profit and little liability risk. Want to know whether a BV makes sense in your situation? Schedule a free 30-minute introductory meeting. You get an answer about your own situation, not a sales pitch. Already convinced and want to know what the bookkeeping for your BV costs? Then request a no-obligation quote straight away and within one working day you will know what your fixed monthly fee will be.
FAQ
Frequently asked questions
What are the main advantages of a BV compared with a sole proprietorship?
The three most frequently mentioned advantages of a BV are: limited liability (your private assets stay out of reach), a lower tax rate on profit through corporate income tax once your profit exceeds a certain tipping point, and the option to let capital grow inside the business at a lower rate. In addition, a BV is easier to transfer and offers more possibilities for working together with several shareholders. Whether these advantages outweigh the costs in your situation depends on your profit level, your private situation and your risk profile.
What are the disadvantages of a BV?
A BV comes with higher fixed costs than a sole proprietorship: you are required to prepare and file annual accounts, file a corporate income tax return, and award yourself a customary salary as a DGA on which you pay income tax and social security contributions. On top of that come the incorporation costs through the civil-law notary. For entrepreneurs with a modest profit and little liability risk, these disadvantages of the BV weigh more heavily than the advantages.
From what profit level is a BV more advantageous for tax purposes?
That differs per situation, but most tax specialists use a rule of thumb of somewhere between 100,000 and 150,000 euros net profit per year as the tipping point. Above that level you generally pay less tax as a DGA through the BV than as a sole proprietor in the highest income tax bracket (49.5 percent in 2026). This is a rough guideline, though. Your personal situation, deductions and structure determine the exact tipping point. Schedule a free introductory meeting for an answer tailored to your situation.
As a DGA, am I really not liable with a BV?
In principle, as a director of a BV you are not personally liable for the debts of the BV. But that protection has its limits. If you fail to meet the administrative obligations, such as filing the annual accounts on time, or if there is improper management, the court can still hold you personally liable. That is precisely why keeping track of deadlines and maintaining your records correctly is not optional.
What does the bookkeeping for a BV cost at Nummerix?
We work with one fixed monthly fee (excl. VAT) agreed in advance that covers everything: financial administration, VAT (btw) returns, corporate income tax, annual accounts and the payroll administration for the DGA. The exact amount depends on the size and complexity of your BV. Request a no-obligation quote and you will receive a concrete proposal within one working day.
Can I convert my existing sole proprietorship into a BV and then have Nummerix handle the bookkeeping?
Yes. We guide the conversion process, in which your sole proprietorship is converted into a BV. Setting up the BV itself is done through a civil-law notary; we take care of everything that is needed afterwards: the bookkeeping, the tax returns and the annual accounts. You do not have to arrange anything yourself for the transfer of your current records; we contact your current firm.
Questions about your own situation?
An intake call is free and without obligation. Prefer to know the price straight away? Request a quote.