There are many good reasons to consider freelancing as an option in Amsterdam. In this guide we will explore the key aspects of freelancing in the Netherlands, the nuances that come with being self-employed and some important considerations that must be taken into account.
Why you should freelance in the Amsterdam Area:
- Freelancing gives you the freedom to decide what work you do and when. As your own boss, you determine where and how you work which increases your opportunities.
- You can improve your financial situation. Self-employment removes the ceiling for financial growth as you are not constrained by one job's salary scale and can increase your earnings as long as you can bring in new business.
- You are eligible for tax benefits and pay less tax if you work more than 1,225 hours a year.
- Enjoy flexibility in the type of work you do. You can take on different clients and have more variety.
- You can combine freelancing with an employment contract which is a good option considering how many part-time jobs are on offer in the Amsterdam Area.
How to become a freelancer
In the Netherlands, freelancers, entrepreneurs and one-person start-ups are recognised as ZZP’ers (zelfstandige zonder personeel) or self-employed without employees. The procedure for starting out as a freelancer is very similar to that for anyone starting a business or registering a company.
To become a ZZP'er you will need to have certain documentation (residence permit, address etc.) among other essentials. The IND (Immigration and Naturalisation Service) and the Netherlands Chamber of Commerce KvK can advise you on your individual situation.
Once you have been given the green light, you'll need to follow a few steps:
Choose a business name.
- Arrange a workspace, or check whether your residence is a viable (and legal) workspace for the work you intend to carry out.
Register your business with the Chamber of Commerce. Registration is compulsory for every business.
Get a model agreement to clarify your income tax status. When a ZZP’er works for a company or client, it is often difficult to determine whether this is a case of employment in the traditional sense. To clarify where you stand, you may need to use a pre-approved or individual ‘model agreement’. This statement clarifies the status of a ZZPer’s income and whether a company should or shouldn’t withhold levies and premiums. The model agreement system replaces the previous VAR statements and came into effect on 1 May 2016. Read more about model agreements.
Sort out your tax administration (filing for your VAT/BTW). Most freelancers are required to charge VAT (BTW) of either 21% or 6%, depending on the service. You can either do this yourself or hire a bookkeeper and/or accountant. VAT declarations are typically filed quarterly. Read our guide on taxes and insurance for companies and information on tax for internationals, including self-employment. Do consider getting professional assistance to get the best tax benefits and set yourself up for success.
Research insurance cover for freelancers. There are many different insurance types including business liability, health, unemployment and pension. Insurance can be expensive but it is recommended for new starters with no previous experience in freelancing. One option is to become a member of ZZP Nederland. This is a specialised body that provides advice and information on all freelance matters, as well as member discounts on ZZP-related insurance policies.
Arrange various other administrative issues: tax, invoices (facturen), terms & conditions, and expenses.
Important things to consider
Being your own boss allows a great deal of personal and creative freedom but freelancing can be very different from typical employment. Before filling in the paperwork and launching your company consider the following issues:
- A financial plan can be helpful to make sure you are on the right track and have a clear picture of how to find new clients and market your company. Read our resources on setting up a business for more guidance.
- Consider obtaining special permits or licences depending on your trade.
- As a freelancer, you will have to take care of your own pension contributions and find the plan that suits you best.
- Unlike employment, freelancers have have to budget for sick days in advance to avoid loss of income. You may want to get insurance to cover this.
- Bookkeeping is an important consideration and hiring a bookkeeper will help you pay tax efficiently and take advantage of deductions where applicable. Our IN Amsterdam partners offer a variety of tax services that include bookkeeping for small businesses.
- You must pay VAT tax quarterly as well as pay yearly tax on your income.
- As a freelancer you are personally liable for any damage or failure to execute and comply with established agreements. To provide for this, you can take out professional indemnity insurance.
It's important to bear in mind that registered freelancers are expected to have a minimum of three employers (clients) per year. It is also inadvisable to receive more than 70% of your freelance income from one client – exceeding this may result in the tax authorities viewing it as traditional form of employment and thus subject to employer-paid tax and social security.
If you are interested in starting a business and not necessarily working as a self-employed professional but as an entrepreneur, you may be eligible for a temporary residence permit called the 'scheme for startups', which affords ambitious entrepreneurs one year in the Netherlands to launch an innovative business under the guidance of a Netherlands-based mentor.