If you’re starting a business or partnering with someone in the Netherlands, one of the first major decisions you’ll face is whether to choose a BV or a VOF. Your legal structure determines your liability, tax obligations, professional image, and how ownership and responsibilities are defined.
This article clearly explains the difference between a besloten vennootschap (BV) and a vennootschap onder firma (VOF), fully in line with Dutch laws and regulations.
Legal and organizational differences between a BV and a VOF
A BV (private limited company) is a legal entity, meaning it is legally separate from you as the founder. This offers protection: you have limited liability, and your personal assets are generally not at risk for business debts, unless there is mismanagement or personal guarantees.
In a VOF (general partnership), it’s different — both you and your partner are personally liable for all business obligations. Creditors can claim your personal assets, even if you weren’t the one responsible for the debt.
Setting up a BV also requires more formality. You must incorporate it through a notarial deed and register it with the Chamber of Commerce (KvK). It has shareholders and established articles of association.
A VOF, on the other hand, only requires KvK registration — no notary is needed. However, it’s strongly recommended to draft a partnership agreement defining profit distribution, responsibilities, contributions, and exit terms.
A BV is often seen as more professional, especially by banks, investors, and larger clients. It conveys stability and growth potential. A VOF feels more approachable and flexible, making it attractive for smaller partnerships or family businesses.
Fiscal and practical differences between a BV and a VOF
Taxation works very differently for the two structures.
A BV pays corporate tax on its profits. As a director–major shareholder (DGA), you must pay yourself a “customary salary” — in 2025, this minimum is €56,000 per year unless you can justify a lower amount. You pay wage tax on this salary, and any dividend payments are taxed separately.
In a VOF, profits are not taxed at the company level. Instead, partners pay income tax on their share of the profits. This makes the VOF attractive for startups, since you can qualify for deductions like the zelfstandigenaftrek (entrepreneur’s deduction), startersaftrek (starter’s deduction), and MKB-winstvrijstelling (SME profit exemption), as long as you meet the 1,225-hour rule per year.
Startup costs also differ. Forming a BV costs between €400 and €1,000, depending on the notary and advisory fees.
Starting a VOF costs about €75 — just KvK registration, no notary required.
When to choose a VOF
A VOF is ideal for entrepreneurs who want to start quickly, inexpensively, and with minimal complexity. It’s great for collaborations with a trusted partner — for example, in a consultancy, creative agency, or small retail business.
Because it’s easy to set up and comes with tax benefits, it’s suitable when financial or legal risks are low. You share profits and manage the business based on mutual agreements, preferably written down in a partnership contract to prevent conflicts.
However, remember that in a VOF, you are personally liable. You can be held responsible for debts caused by your partner. A VOF is also less attractive to external investors, since it doesn’t issue shares.
When to choose a BV
A BV is better suited for entrepreneurs planning to grow, hire employees, attract investors, or operate in a riskier sector. While more formal and costly to set up, a BV protects your personal assets. You’re better shielded against lawsuits and bankruptcy.
A BV becomes especially advantageous when your annual profit exceeds €100,000. Thanks to the lower corporate tax rate (19% up to €200,000 and 25.8% above that in 2025), it’s often more tax-efficient than a VOF.
It also boosts credibility with clients, banks, and investors — and if you plan to sell your business or raise funding later, a BV is almost essential.
Disadvantages include the required salary payment, annual filing of accounts with the KvK, and higher startup costs. Still, for growing or complex businesses, the benefits often outweigh these drawbacks.
Starting a business together
When starting a business with someone else, a VOF often seems easier. But beware: in a VOF, you’re liable for your partner’s mistakes too. A BV offers more protection, clarity, and legal structure.
With a BV, you can establish a shareholders’ agreement that defines voting rights, profit distribution, and procedures for joining or leaving the company. You stay personally protected, and in case of conflict, there’s a clear legal framework.
Tip: Always have a legal document in place — a partnership agreement for a VOF or a shareholders’ agreement for a BV.
Can you switch from a VOF to a BV?
Yes. Many entrepreneurs start with a VOF and later convert it to a BV as they grow or take on more risk. The transition must be handled carefully to avoid tax consequences.
There are two ways:
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Geruisloze inbreng (tax-neutral transfer): you transfer the business without immediate tax settlement (if conditions are met).
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Ruisende inbreng (taxable transfer): you do settle taxes on hidden reserves or goodwill.
Always consult a bookkeeper or tax advisor before switching to ensure a smooth transition.
Summary: When to choose a BV or VOF
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Choose a VOF if you’re starting with a trusted partner, have limited risks, want to use tax deductions like the zelfstandigenaftrek, and prefer a simple, low-cost setup.
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Choose a BV if you want to protect personal assets, expect rapid growth, hire staff, attract investors, or want a more professional image.
Need help choosing the right structure?
The choice between a BV and a VOF isn’t just administrative — it’s a strategic decision that affects your liability, tax position, and growth potential.
At Balancify, we help entrepreneurs make informed, tailored decisions that fit their goals. Whether you’re starting out or scaling up, we’ll ensure your legal form, tax setup, and bookkeeping are perfectly in order.
Contact Balancify today and take the next step with confidence.
