[paulmatthijs]

Don't know anything about other EU countries than the Netherlands, but it's pretty easy over here. Just a matter of some paperwork by a notary, which will cost <1K.

There's a big caveat though: 5%+ shareholders are considered managing directors (a "DGA": Director/Majority Shareholder), and as such should receive a minimum salary of 48K EUR per year. There's a special startup exempt on the way that lowers this to minimum wages for some years.

Bottom line: if you want to incorporate in NL, as a founder you're ought to receive a salary and pay taxes accordingly.

[ojm]

Really? This seems insane.

So if two people want to start a business, they will need to fund their company with at least 2x €48k?

Seems that it'd be hard to start a business.

[paulmatthijs]

It's an inheritence of the famously low profit taxes. To make sure owners don't circumvent (the higher) income taxes by maximizing profit they have a compulsory salary or a management fee. This ensures they pay their part of the welfare system. They cannot pay themselves less than other personnel, and not below 48K.

It's a nuisance for incorporated startups for sure, but there's a catch: if you can show you can't afford it, you don't have to pay up. Problem is that you need a ruling for it, which you can request after incorporating. A classic Catch 22.

Otoh, to put 48K in perspective: if you work 32 hours a week the 48K comes down as well to the level of about 2K/m net income. If you're in Amsterdam you can count on 1+K just for housing so you'll need that kind of income anyway. Of course you don't really work just 32 hours, but your contract can state it without issues. 32-36 hours is considered fulltime in the Netherlands.

The system is designed on liability: when incorporated, you cannot not be held liable as a person, only the incorporation can. This has a cost, so to say. The Dutch systems assumes that if you need that kind of "protection", you have a proven business and revenue to pay for the "luxury".

If you choose the non-incorporated business types (a EMZ or VOF), you are personally liable and you get a LOT of tax rewards for it. I've been a successful freelancer for 15+ years before becoming a founder, and haven't paid more than 20K in taxes in all those years combined. You get so much tax benefits that it doesn't make sense to incorporate before you take home a profit of about 120K/y. With a median income <30K, that is a lot of tax to pay up for accountability.

But, if you want to go with investors incorporating is the way to go. You can't just incorporate in Estonia and have your company in Amsterdam. You'll be taxed like a Dutch company.

Long story short: NL is awesome for startups, just don't incorporate before you have investors or serious profits.