ZZP vs BV: When Should a Freelancer Incorporate?
Starting a business in the Netherlands often means choosing between operating as a ZZP (eenmanszaak) ā a sole proprietorship ā or incorporating a BV (besloten vennootschap) ā a private limited company. Both structures have distinct implications for taxes, liability, costs, and administration. This research-based overview with up-to-date 2025/2026 data compares both options and helps you determine when switching makes sense.
In This Article
1. Overview: ZZP (Eenmanszaak) vs BV
ZZP (Eenmanszaak)
- +Simple to start - just KvK registration
- +No notary required, minimal formalities
- +Tax deductions: zelfstandigenaftrek, startersaftrek, MKB-vrijstelling
- +Low administrative burden and costs
- āFull personal liability for debts
- āProgressive tax up to 49.5% on high income
BV (Private Limited)
- +Limited liability - personal assets protected
- +Lower corporate tax (19%/25.8%) on high profits
- +Professional image, easier to attract investors
- +Flexibility for growth and succession
- āNotary required, higher setup costs
- āNo entrepreneurial tax deductions
- āMandatory DGA salary (min. ā¬56k in 2025)
2. Liability Protection: Unlimited vs Limited
One of the most significant differences between ZZP and BV is liability protection. This is often a major factor in the decision to incorporate. Make sure you also have proper contracts in place regardless of your legal structure.
ZZP: Unlimited Personal Liability
- ā¢ No legal separation between personal and business assets
- ā¢ Creditors can claim your personal savings, car, house
- ā¢ Risk extends to spouse if married in community of property
- ā¢ A business mishap directly impacts personal finances
BV: Limited Liability
- ā¢ Company is a separate legal entity
- ā¢ You only risk the capital invested in the BV
- ā¢ Personal savings and property protected from business creditors
- ā¢ Exception: personal liability for negligence or personal guarantees
When liability matters most
3. Taxation: ZZP Income Tax vs BV Corporate Tax
Taxation differs greatly between a sole proprietorship and a BV, affecting when each structure is financially advantageous. For a detailed overview of all 2026 tax changes for freelancers, see our dedicated guide.
ZZP: Income Tax with Special Deductions
As a sole proprietor, your profit is taxed in Box 1 as personal income. The rates are progressive: 36.97% up to ~ā¬75k, and 49.5% on higher income. However, ZZP'ers get special deductions that can dramatically lower the effective tax rate on small to medium profits (read more about the zelfstandigenaftrek and startersaftrek):
| Deduction | 2025 | 2026 | Benefit (at 37% rate) |
|---|---|---|---|
| Self-employed deduction (Zelfstandigenaftrek) | ā¬ 2.470 | ā¬ 1.200 | ~ā¬450-900 tax savings |
| Starter deduction (Startersaftrek) | ā¬ 2.123 | ā¬ 2.123 | ~ā¬785 extra (first 3 years) |
| SME profit exemption (MKB-winstvrijstelling) | 12,7% | 12,7% | 12.7% of remaining profit tax-free |
These deductions can significantly lower the effective tax rate for freelancers with small to medium profits.
BV: Corporate Tax + Dividend Tax
A BV pays corporate tax (vennootschapsbelasting) on its profits, which is much lower than the top income tax rates. However, getting money out of the BV triggers additional taxation.
| Tax Type | Rate 2025 | When it applies |
|---|---|---|
| Corporate tax (bracket 1) | 19% | On first ā¬200,000 profit |
| Corporate tax (bracket 2) | 25,8% | On profit above ā¬200,000 |
| Dividend withholding tax | 15% | When distributing profits |
| Box 2 income tax | 24,5% / 31% | 24.5% up to ~ā¬67k, 31% above |
Keep profits in the BV?
4. Administrative Burden and Costs
Running a BV comes with significantly more complexity and costs than a sole proprietorship. This is an important factor to consider.
| Aspect | ZZP (Eenmanszaak) | BV |
|---|---|---|
| Setup costs | ā¬0 - ā¬50 (KvK only) | ā¬300 - ā¬600 (notary + KvK) |
| Annual accounting | ā¬500 - ā¬1,500 | ā¬1,500 - ā¬3,500+ |
| Payroll administration | Not required | Required (DGA salary) |
| Financial statements | Not required | Required (file at KvK) |
| Notary involvement | Never needed | For incorporation, changes, dissolution |
Keep in mind that a BV brings not only complexity but also recurring costs that eat into your savings.
Hidden costs of a BV
5. DGA Salary Requirement (Gebruikelijk Loon)
When you have a BV and work in it as a director-major shareholder (DGA), tax law requires you to pay yourself a "gebruikelijk loon" (standard salary). This rule prevents people from avoiding tax by taking only low salary and high dividends.
Minimum DGA Salary
What this means
6. The Profit Threshold: When Does a BV Become Beneficial?
This is the critical question for many freelancers. The answer depends on your circumstances and evolving tax laws, but here are the general guidelines from expert sources. Use our tax calculator to compare your specific situation, or check the gross-to-net calculations for 2026.
ZZP is almost always better. Tax deductions and simplicity outweigh BV benefits.
Gray zone. A BV may start to pay off. Calculate your specific situation.
A BV likely saves you tax. The lower corporate rate pays off.
Concrete Example: ā¬80,000 Profit Comparison
Tax comparison for ā¬80,000 annual profit
ZZP (Eenmanszaak)
Profit: ā¬ 80.000
After deductions & Box 1 tax
Net: ~ā¬ 59.700
BV Structure
DGA salary: ā¬51k (taxed Box 1)
Remaining profit: ā¬29k at 19% VPB
Net: ~ā¬ 63.800
ā BV yields approximately ā¬4,100 MORE after-tax income on ā¬80k profit!
The tax savings alone don't tell the whole story. A fair comparison must include the additional running costs of a BV.
Don't forget the costs!
Why the Threshold is Dropping
The tipping point has dropped significantly in recent years. The self-employed deduction is being reduced from ā¬7,280 (a few years ago) to just ā¬900 by 2027. Meanwhile, corporate tax on the first ā¬200k remains at 19%. This makes a BV more attractive at lower profit levels than before.
7. Other Advantages of a BV
Beyond taxes and liability, there are qualitative factors that might prompt a freelancer to incorporate:
Professional Image
A BV can appear more established to larger clients and international partners. Some companies prefer contracting with a BV entity.
Growth & Investors
A BV allows you to sell or issue shares, bring in partners or investors, and create a holding structure for risk segmentation.
Continuity & Succession
A BV exists independently of you. It can be sold, transferred, or continue if you leave. Perfect for building something beyond yourself.
No Mandatory AOV
The planned mandatory disability insurance (AOV) for ZZP'ers by 2027 (~ā¬200+/month) doesn't apply to DGAs. This could save you ā¬2,400+ yearly.
8. Conclusion & Recommendations
ZZP vs BV is a trade-off between simplicity & tax perks (ZZP) and protection & long-term strategy (BV).
- Profits are relatively low or unpredictable (under ā¬80k)
- You value simplicity and low administrative burden
- Your activities are low-risk (and insured where needed)
- You're a starting entrepreneur benefiting from starter deduction
- Consistent profits above ā¬100k annually
- Significant liability concerns (large contracts, lawsuits risk)
- Plans to grow beyond a one-person operation
- Want to bring in investors or partners
- Building something to potentially sell
Ultimately, the best choice depends on your personal situation and future plans.
Frequently Asked Questions
Can I switch from ZZP to BV later?
Yes, this is called "inbreng" (contribution of sole proprietorship into BV). It can be done tax-efficiently with proper planning. Many freelancers start as ZZP and incorporate later when profits justify it.
What about a Holding-BV structure?
A holding structure (with a Holding BV owning an Operating BV) offers additional benefits: dividend from operating to holding BV is tax-free, better risk separation, and easier to sell parts of your business. Usually worth it at higher income levels.
Can I pay myself less than the minimum DGA salary?
Only in specific circumstances: if you can prove the market rate for your work is lower, if you work part-time, or as a starting entrepreneur (with Tax Authority agreement). Without approval, paying less can lead to tax corrections.
Is false self-employment (schijnzelfstandigheid) relevant here?
Having a BV doesn't eliminate false self-employment concerns. The relationship with your client is what matters. However, some clients feel more comfortable contracting a BV, and enforcement is stricter for ZZP arrangements. Read our full guide on false self-employment enforcement in 2026 for the complete picture.
Key Takeaways
- ZZP is best for simplicity, low profits (<ā¬80k), and enjoying tax deductions
- BV becomes tax-advantageous around ā¬90k-ā¬100k profit
- Liability protection may justify a BV even at lower profits
- Factor in BV costs (ā¬2,000-4,000/year) when calculating benefit
- Consult a tax advisor for a personalized analysis
Sources and More Information
- MKB Servicedesk - How to choose the right legal form
- MKB Servicedesk - What is a BV
- Ligo.nl - ZZP or BV? Which legal form in 2026?
- Matchd - When to incorporate as a ZZP
- OAMKB - Sole proprietorship or BV: fiscally advantageous?
- Brandboekhouders - Tipping point sole proprietorship to BV
- Jongbloed - DGA salary requirements
- Zelfstandigen Bouw - Mandatory AOV for self-employed
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