What Is a General Partnership in the Netherlands

If you're looking to team up with one or more partners to start a business in the Netherlands, you've likely come across the Vennootschap onder Firma (VOF), or general partnership. This is a common business structure where you and your partners join forces, operating under a shared company name.

Each partner brings something to the table—this could be money, equipment, or even just your time and expertise. In return, everyone shares in the venture's profits, but also its risks.

Getting to Grips With the VOF

The easiest way to think about a general partnership is to imagine two friends starting a coffee shop. One might put up the cash for the lease and equipment (a financial contribution), while the other, a skilled barista, contributes their craft and manages the day-to-day operations (a labour contribution). They run the shop together, under one name, and split the profits based on whatever agreement they've hashed out.

This collaborative setup is one of the most straightforward ways to go into business in the Netherlands. A massive plus is that there's no legal requirement for a minimum start-up capital. This really lowers the barrier to entry, letting you and your partners pool what you already have without needing a huge pile of cash to get started.

But here’s the critical part you need to understand right from the get-go: a VOF is not a separate legal entity. In the eyes of the law, the business and its partners are one and the same. This has huge implications for personal liability, which we'll dive into a bit later.

Key Features at a Glance

So, what are the defining traits of a Dutch general partnership? Here are the fundamentals:

• Multiple Partners: You need at least two people or legal entities to form a VOF.

• Shared Contributions: Partners chip in with capital, physical goods, know-how, or their own labour.

• No Separate Legal Personality: The partnership’s debts are the partners’ personal debts. There's no legal shield between your business and personal assets.

• Profit Sharing: Profits are carved up between the partners, usually based on the terms laid out in a partnership agreement.

It's easy to see why this structure is a popular pick for joint ventures. When at least two people decide to collaborate under a single business name, the VOF is often the most direct path. You must register your partnership in the KvK trade register within eight days of starting up. This makes key details about the business and who is involved public.

Understanding the legal side of things is crucial. Depending on your situation, you may need various legal services to make sure you're fully compliant with Dutch regulations.

To give you a clearer picture, here’s a quick summary of the VOF's essential features.

Dutch General Partnership (VOF) at a Glance

Feature	Description
Legal Form	General Partnership (Vennootschap onder Firma)
Minimum Partners	At least two
Legal Personality	No, the VOF is not a separate legal entity.
Liability	Partners are jointly and severally liable for all business debts.
Start-up Capital	No minimum capital is required by law.
Registration	Mandatory registration with the Dutch Chamber of Commerce (KvK).
Taxation	Partners are taxed individually on their share of the profits via income tax.
Agreement	A partnership agreement is not legally mandatory but highly recommended.

As you can see, the VOF offers a straightforward way to start a business with others, but the liability aspect is a serious consideration.

The simplicity of setting up a VOF, combined with the hands-on involvement of its partners, makes it a really attractive option for small and medium-sized businesses built on close collaboration.

It's also worth keeping in mind that Dutch partnership law is on the move. For anyone interested in how these structures might change in the future, it's a good idea to learn about the modernization of partnerships bill explained here: https://lawandmore.eu/blog/modernization-of-partnerships-bill-explained/. This proposed legislation could bring some important updates, especially around liability and legal status for VOFs.

How to Set Up Your General Partnership

Starting a general partnership (VOF) in the Netherlands is a fairly direct process, but getting the foundation right from day one is absolutely critical. Interestingly, the journey doesn't start with official forms, but with a candid conversation between you and your partners.

The single most important step you'll take is drafting a partnership agreement (vennootschapsovereenkomst). While it's not strictly mandatory under Dutch law, trying to run a VOF without one is like setting sail in a storm without a map. Think of this document as your business's constitution.

Your agreement needs to lay everything bare: what each partner is contributing (cash, assets, or just good old-fashioned sweat equity), how profits and losses will be split, who has the final say on decisions, and—this is a big one—what happens if someone wants out or the partnership needs to be dissolved. A solid agreement now is your best insurance against bitter disputes later.

Official Registration Steps

Once you've sorted out the internal rules, it's time to make it official with the Dutch authorities. This is a non-negotiable step for any business operating in the Netherlands.

1. Register with the Dutch Chamber of Commerce (KvK): You and your partners will need to book an appointment to get your VOF into the Trade Register (Handelsregister). Be sure to bring your personal identification and have all the business details ready, like its name and planned activities. This is the moment your partnership officially exists in the eyes of the law.

2. Tax and Customs Administration (Belastingdienst): The good news is the KvK handles this part for you. They automatically pass your details along to the Dutch Tax and Customs Administration, so there's no need to register separately. The Belastingdienst will then send you a VAT identification number (btw-ID) and other tax details you'll need to stay compliant.

The government actually provides some clear guidance for new entrepreneurs, as you can see in the checklist from business.gov.nl below.

This checklist really drives home the structured path you need to follow, from choosing your legal form right through to managing taxes. If you want to get into the weeds on this, our guide on Dutch company registration offers a much more detailed breakdown.

Finalising Your Setup

With your partnership agreement signed and your KvK registration complete, you're legally good to go. But there are a couple of final touches that will set you up for a smoother start.

A partnership agreement is more than just a legal formality; it is a roadmap for your business relationship. It forces partners to discuss difficult topics upfront, preventing misunderstandings when the pressure is on.

We always advise opening a dedicated business bank account. Keeping the partnership's finances completely separate from your personal accounts makes bookkeeping infinitely easier and reinforces the professional structure of your venture. By taking these steps, you're not just starting a business—you're building a robust framework that can support your ambitions and protect everyone involved.

Navigating Personal Liability in a VOF

When you decide to form a general partnership (VOF), the law essentially sees you, your partners, and the business as a single entity. This brings us to the most critical concept you need to grasp: unlimited and joint liability. This isn't just a piece of legal jargon; it's a principle that has a direct and significant impact on your personal financial security.

Think of it like this: you and your partners are all co-signing a loan for the full amount of your business's debt. If the business can't pay its bills, a creditor doesn't have to go after the business first. They can come directly to any one of the partners for the entire sum. This means your personal assets—your savings, your car, even your home—could be on the line.

This is the reality of what's known as joint and several liability. It means that each partner is individually responsible for 100% of the business's debts, no matter who incurred the debt or made the mistake.

The Reality of Joint and Several Liability

Let's play out a scenario. Imagine your partner, acting alone, makes a poor business decision that plunges the VOF into significant debt it can't repay. Under Dutch law, a creditor has every right to pursue you—and only you—for the full amount owed.

It would then fall on your shoulders to try and recover the appropriate share of that debt from your other partners. This process can quickly devolve into stressful, expensive, and often relationship-ending legal battles. The risk isn't just about the business failing; it's also about the actions and decisions of the people you're in business with.

The core principle of a VOF is that personal and business assets are not legally separate. A creditor can pursue the partner with the deepest pockets for the full debt, making the choice of who you partner with incredibly important.

Understanding this risk is the first step. The second, and far more important step, is to build a protective shield around your personal assets right from the start.

Creating Your Financial Safety Net

The good news is, you're not powerless against this risk. There are practical and legally sound ways to manage the exposure that comes with unlimited liability. Taking these proactive steps is essential for protecting what's yours while still enjoying the advantages of a partnership.

• A Detailed Partnership Agreement: This document is your first and best line of defence. A properly drafted agreement should clearly define each partner's authority, set spending limits, and outline specific responsibilities. You can even include clauses requiring unanimous consent for major financial commitments, which stops one partner from unilaterally taking on large debts.

• Business Liability Insurance: Getting the right insurance coverage is non-negotiable. General liability insurance can cover claims related to property damage or injury. Meanwhile, professional liability insurance (also known as indemnity insurance) protects you against claims of negligence or errors connected to your professional services.

It's also worth noting that Dutch partnership law is on the move. There are upcoming legal reforms designed to modernise the existing framework, which could potentially allow partnerships to gain their own separate legal personality. Such a change could significantly limit personal liability in the future, making the VOF a more appealing structure. You can discover more insights about these changes to Dutch business law and how they might impact partnerships. This shift would offer better protection for partners' private assets and enhance the long-term stability of the business.

Understanding How Your Partnership Is Taxed

When it comes to taxes, a general partnership (VOF) in the Netherlands works on a principle of fiscal transparency. This is a crucial concept to grasp. It simply means the VOF itself doesn't pay any corporate tax. Instead, the profits "flow through" directly to the individual partners.

Think of the VOF as a clear pipeline for money. Revenue comes in from your business activities, and after you've paid your expenses, the profits flow straight out to the partners. There's no tax stop at the company level. Each partner is then personally responsible for declaring their share of that profit on their income tax return.

This structure is a defining feature of the VOF. It's what really sets it apart from a private limited company (BV), where the company's profits are taxed separately before any income reaches the owners. This straightforward approach is a big reason why the VOF remains a popular choice for entrepreneurs teaming up.

How Income Tax Works for Partners

Once your share of the profit lands in your personal bank account, it's taxed as income from your business. The exact amount you'll pay depends on your total taxable income, which is calculated using progressive tax brackets. How much profit you receive is determined by the split you and your partners laid out in your partnership agreement.

It's a testament to the VOF's appeal that its numbers have grown steadily, from around 90,000 in 2010 to an estimated over 120,000 by 2025. This rise highlights how attractive this straightforward tax treatment is, though it does demand meticulous bookkeeping from each partner. You can explore a broader overview of Dutch business structures on business.gov.nl.

The key takeaway is that in a VOF, you are taxed as an individual entrepreneur, not as a corporation. This unlocks several valuable tax deductions designed specifically to support business owners.

Taking advantage of these deductions can significantly lower your taxable income, leaving you with more money to either reinvest in the business or draw as personal income. Smart international and national tax planning is essential to make sure you're getting the most out of these benefits.

Key Tax Deductions and VAT Obligations

Several important tax breaks are available to partners in a VOF, as long as they meet certain criteria, like the hours criterion (urencriterium).

• Entrepreneur's Allowance (ondernemersaftrek): This isn't a single deduction but a collection of them. The most common is the self-employed deduction (zelfstandigenaftrek), which lets you subtract a fixed amount directly from your profits.

• SME Profit Exemption (mkb-winstvrijstelling): After you've applied the entrepreneur's allowance, you can then deduct a further percentage from whatever profit is left. This exemption is a fantastic benefit available to all entrepreneurs, no matter how many hours they work.

Beyond your income tax, your VOF will also have to deal with Value Added Tax (VAT), known locally as BTW. Nearly all VOFs must register for VAT, which means you'll need to charge it on your goods or services and then file regular VAT returns with the Dutch Tax and Customs Administration.

Choosing the Right Dutch Business Structure

Picking the right legal structure for your new venture in the Netherlands is one of those foundational decisions that will shape everything that comes after. It's not just about paperwork; it's a choice that directly impacts how much personal risk you’re taking on, what your tax bill looks like, and how much admin you'll be dealing with.

While a general partnership (VOF) is a fantastic, straightforward way for two or more people to get a business off the ground, it’s crucial to see how it stacks up against the other popular options. Getting this wrong can lead to serious headaches down the road, so let's weigh your choices carefully.

VOF vs Eenmanszaak vs BV

To figure out what’s best for you, we need to compare the VOF with its two main alternatives: the sole proprietorship (eenmanszaak) and the private limited company (besloten vennootschap, or BV). Each one is built for a different kind of business journey.

An eenmanszaak is the classic choice for solo flyers—freelancers, consultants, and one-person shops. It's the simplest and cheapest to set up, but there's a big catch. Just like with a VOF, there is no legal wall between you and your business. You are personally on the hook for every last cent of business debt.

Then you have the BV, which is a whole different animal. A BV is its own separate legal entity, and that's its superpower. It creates a protective shield between your business liabilities and your personal assets (like your house and savings). This makes it the go-to structure for businesses that want to scale, bring in investors, or operate in higher-risk industries. Of course, this protection comes at a cost—namely, higher setup fees and more complex tax and administrative duties.

When you're thinking through these options, it's often useful to look at the basics of setting up any company. While the Dutch rules are specific, the core principles of business formation are universal, as you can see in guides like this one explaining how to start a business in Australia.

Now, let's put these three structures side-by-side to make the differences crystal clear.

VOF vs Eenmanszaak vs BV A Side-by-Side Comparison

Thinking about which structure to choose? This table breaks down the essential differences between the three most common business types in the Netherlands. It's a quick way to see how they compare on key points like liability, tax, and who they're best suited for.

Feature	General Partnership (VOF)	Sole Proprietorship (Eenmanszaak)	Private Limited Company (BV)
Number of Owners	Two or more partners	One owner	One or more shareholders
Legal Personality	No, partners are the business	No, the owner is the business	Yes, a separate legal entity
Personal Liability	Unlimited, joint, and several	Unlimited, personal liability	Limited to company assets
Formation Costs	Low (only KvK registration fee)	Low (only KvK registration fee)	Higher (notary deed required)
Taxation	Partners pay personal income tax	Owner pays personal income tax	Company pays corporate tax; director pays income tax on salary
Best For	Collaborative small businesses	Solo freelancers and consultants	Scaling companies seeking investment and liability protection

This table lays it all out, but the decision often comes down to one simple trade-off.

Choosing between a VOF and a BV often boils down to a single question: How much personal risk are you willing to accept in exchange for simplicity and lower costs?

Ultimately, there's no single "best" answer—only what's right for your specific situation. A VOF is perfect for a small team of trusted partners. An eenmanszaak is the ideal launchpad for a solo entrepreneur. And a BV is the smart, protective shell for an ambitious company ready to grow, hire, and secure its founders' personal wealth.

Got Questions About Dutch Partnerships? Let's Clear Things Up

Even after you've got the basics down, a few practical questions always seem to pop up when you're seriously considering a general partnership (VOF). It's completely normal. Let's tackle some of the most common queries we hear from entrepreneurs just like you.

Think of this as the final check-in, designed to iron out any lingering doubts so you can make your decision with total confidence.

Can a VOF Hire Employees?

Absolutely. A general partnership is perfectly capable of hiring staff. When you do, the VOF itself becomes the legal employer, not you or your partners individually. This is an important distinction because it means the partnership as a whole takes on all the responsibilities that come with having a team in the Netherlands.

This isn't a small step. It means you're on the hook for:

• Withholding payroll taxes from your employees' wages.

• Paying the required social security contributions.

• Making sure you follow all Dutch labour laws to the letter.

Just remember, hiring people adds a significant layer of financial duty. Because all partners are personally liable for the VOF's debts, that liability now covers everything payroll-related, too.

What Happens When a Partner Leaves?

This is a big one, and it can genuinely put the entire business at risk. Under Dutch law, if your partnership agreement doesn't say otherwise, the VOF is legally forced to dissolve the moment a partner leaves, passes away, or retires. That’s the default rule, and it can throw a massive spanner in the works.

This is precisely why a rock-solid partnership agreement is non-negotiable. You need specific clauses—often called 'continuation' or 'succession' clauses—that map out exactly what to do in these scenarios. A good agreement will detail how the remaining partners can buy out the departing partner's share and keep the business running smoothly, without having to liquidate everything and start from scratch.

Is a Partnership Agreement Really Necessary?

While you can technically register a VOF without one, running your business this way is like navigating a minefield blindfolded. The partnership agreement is, hands down, the single most important document you and your partners will create. It's the instruction manual for your professional relationship.

Think of your partnership agreement as your best defence against future conflict. It forces you to have those tough but crucial conversations upfront—about money, decisions, and exit plans—before they escalate into real-world problems.

If you skip this step, any disputes will be settled based on general Dutch law, which might be a world away from what you and your partners actually intended. A clear agreement protects everyone.

Can I Form a VOF With My Spouse?

Yes, you certainly can. Setting up a VOF with a spouse or registered partner is a popular choice for family-run businesses. But you need to go into it with your eyes open, especially when it comes to liability and taxes.

If you are married in community of property, your shared assets are already accessible to creditors. Creating a VOF together does not alter this situation but does establish a formal business relationship. From a tax perspective, the Dutch Tax and Customs Administration (Belastingdienst) requires proof that both spouses are independently operating as entrepreneurs to qualify for tax benefits like the entrepreneur's allowance. For personalized legal guidance on this matter, contact the lawyers at Law & More.