Selling services or products online requires more than just creating a website. First of all, you have to register a company at the Trade Registry of the Dutch Commercial Chamber (KvK) and choose a name for your domain, then keep financial records and make payments for income and value-added tax (BTW). Starting an online shop in the Netherlands involves compliance with different regulations and rules, including particular requirements for selling online. The present guide will help you figure out what your obligations are. For more information and legal assistance, contact our incorporation agents.
Is your online shop considered a real business?
Up to a certain point, an online shop may be just a hobby, but when does it become a real business? The Commercial Chamber at the Customs and Tax Administration has set the following seven criteria:
- company size (in money and time);
- entrepreneurial risk;
Registration at the Dutch Trade Registry and Tax Administration
All new businesses have to be registered at the Dutch Trade Registry. If your entity is a cooperative or a sole proprietorship, you will be issued a value-added tax number and your details will be passed to the National Customs and Tax Administration, so you do not have to go through a separate registration procedure with them. Associations and companies with limited liability need to be registered separately. For more information, please, refer to the articles on legal business forms.
Register the name of your domain (address on the Internet)
To purchase and register a domain, you need to reserve its name at a registrar. The name should be unique, chosen with respect for other companies’ trade names, trademarks and copyrights. The registrar shall forward your request to the institution administering domain names.
In case you have hired a designer to create your online shop, you will be allowed to modify it yourself only if you own the copyright. It is best if the designer agrees to waive his/her rights. Another option is to obtain a licence regarding the online shop use.
Third party E-commerce stores
Perhaps you will want to use third party E-Commerce portals such as Amazon Netherlands, Bol.com (biggest online retailer in the Netherlands), Ebay (Marktplaats in The Netherlands) or Shopify. For Bol.com and Amazon we have a more thorough guide on how to get started.
If your online shop is generating income, the authorities will probably consider you an entrepreneur liable for income tax. In this case, your profit from the business will be taxed. You have to pay value-added tax (BTW) for most services and products. In Holland, there are three different value-added tax rates. Some services and goods can be exempted from VAT. The VAT is charged to the customers and transferred to the office of the tax authorities. If your turnover exceeds a certain amount in another member state (MS) of the EU, you need to charge value-added tax using the rate of the respective state. You are liable for VAT in that MS too, so you must also register your business there. Thresholds for remote sales differ depending on the country.
Entrepreneurs must keep records of their business transactions. The same rules apply to online shops. The records must meet certain requirements. For example, you need to keep the records in your archive for a minimum of 7 years. You also have to record the hours that you spend working for the online shop, if you want to receive an entrepreneur allowance.
Provide straightforward information online
Your website needs to state clearly the identity of your company. You have to include your address, number in the commercial registry and VAT number. Also, you need to inform the customers of the features and prices of the products you offer, the preferred payment method, the ordering process, the warranty, the period for product return and the terms of delivery.
Make sure that the personal details of your customers are safe
Ask permission before placing cookies on your customers’ computers
Handle your customers’ details with proper care. Personal data need to be protected from theft, loss and such. Ask your hosting provider about the available options for security. Provide secure payment methods to your customers. Secure payments require a secure connection to the internet, starting with “https” in the URL field of your browser.
Written order confirmations
You have to send order confirmations in a written form, including your general conditions, warranty conditions and contact details. Customers need to receive this info at the time of product delivery or service provision, at the latest.
Rules for advertising by email
You cannot make cell phone calls or send emails to companies or people for the purposes of advertisement if they have not given you their permission.
Rules for selling alcohol and tobacco
High-alcohol drinks can be sold online only with a permit or license, as stipulated in the Catering and Licensing Act. Low-alcohol drinks can be sold without a licence.
Holland permits online sales of tobacco. You can provide overviews of the tobacco products you offer (including logos) and list prices on the website. You cannot, however, recommend specific products.
Prepare your General Terms & Conditions (GTC)
It is advisable to have GTC in order to minimise risks and ensure transparency of your business operations. GTC include details about payment, periods for delivery, warranty and settlement of disputes.
Requirements for product safety, labelling and packaging
Final goods have to be safe for the customers. Therefore the products offered in your online shop need to meet certain requirements. See which rules are applicable to your business. Product labelling and packaging is also regulated. For example, in case of export, your label needs to include the official language at the destination.
If you plan to start an online shop in Holland, do not hesitate to contact our specialists. They can assist you in registering your Dutch business. They will give you more details on company registration and consult you on the relevant legal matters.