A popular expression referring to entrepreneurs in the Netherlands is the ZZP expression. What is the difference between a ZZP vs one man company (eenmanszaak)?
In the initial fase there is not difference. Both the ZZP and the one man company is a business, a company registered with the Dutch Chambers of Commerce having in most cases a value added tax number. At the end of the year an identical income tax return for entrepreneurs is being completed.
The liability for both the ZZP and one man company is identical, the person in who’s name the company is registered is fully liable with is private assets for the liabilities of the company.
ZZP entrepreneur without employees
The difference is in the exact translation of ZZP. ZZP stands for Independent entrepreneur without employees. The alternative translation and very true translation is the independent entrepreneur without a pension.
That implies that if you are an entrepreneur without employees, you could be referred to as being a ZZP entrepreneur. But personally I disagree with this comparison. A ZZP entrepreneur in my view is the former employee who now provides his or her services to that former employer via a company. This is much cheaper for the former employer as no social premiums are due and the former employee receives a higher net income, as the entrepreneur discounts make the difference.
ZZP not socially insured
However, this former employee is not insured for unemployment, disability and liability. Moreover, the former employee is not insured for the fact that the Dutch tax office agrees him or her being an entrepreneur in the first place. If you only work for one organization, you are depend on that organization, which implies you are a deemed employee. The consequence for this deemed employment ship is with the former employer, being the social premiums and a substantial penalty.
Other situations where it does not concern a former employee, but a independent person that was only able to find one client, consuming all his time on this one client, results more or less in the same situation of being a deemed employee.
Research has shown that we have 300.000 ZZP entrepreneurs in the Netherlands and the average turnover of this group is EUR 15.000 per year. Being a ZZP entrepreneur is not enviable.