Business bank account: useful, not mandatory

Is a business bank account mandatory?

A business bank account is only mandatory for entrepreneurs with a private limited company (BV) or a public limited company (NV). Do you operate as a sole proprietorship, a general partnership (VOF), a professional partnership (maatschap), or a limited partnership (CV)? In that case, you are not required to open a business account. You may also use a personal account. However, in practice, a business account in the business’s name is more convenient. This is certainly the case for VOFs, professional partnerships, and CVs, as you work with several people and share funds.

The Netherlands Tax Administration expects you to keep clear records. You must be able to show which income and expenditure is business-related. That is why it is important that your personal and business cash flows are clearly separated. A business account makes this easier to track.

Why is a business bank account useful?

A business account gives you a clear overview and a clear separation between personal and business cash flows. The benefits include:

• a clear financial overview for you, your accountant, and the Tax Administration
• saving time with your bookkeeping if you link the business account to your accounting software
• the costs for a business account are tax deductible
• a professional image for your company: the customer sees the company name when making the transfer and on the statement 

Can you also use a private account for business purposes?

You may only use your private account for business purposes if your bank allows this. In their general terms and conditions, most banks state that a private  account is only intended for private use. Banks may check private accounts at random and contact you if there are many business transfers.
 

What do you need to open a business account

Before you open a business account, the bank will ask you to provide certain documents. These differ per bank and per legal structure. Banks will always ask for a copy of a valid identity document and an extract from the Business Register. Always check with the bank which information is  needed. Usually, you can open an account online.

Why do banks carry out an investigation?

Banks are covered by strict regulations aimed at preventing money laundering and fraud. This means they will do due diligence on any customer applying for a business bank account. This is called a money laundering investigation (witwasonderzoek). The bank wants to know where your money comes from and what you use it for. Banks will also want to know who the owner of a business is. If the bank discovers risks it can refuse to open a business bank account.

Is your visiting address shielded?

Have you protected your company's visiting address in the KVK Business Register? Then it can be more difficult to open a business bank account. The bank may ask additional questions. This is how the bank estimates the risks. If the outcome is positive, the bank will still open a business account for you.

Minors and business bank accounts

Are you under 18 and running a business? If you want to open a business bank account, you have 3 options:

• you can apply for limited legal capacity (handlichting),  which gives you the business rights of an adult entrepreneur
• choose a bank that allows minors to open a business bank account
• open a second private account to use for your business, if your bank allows this

Do you have a business together with one of your parents or guardians? For example, a VOF. Then opening a business account is usually not a problem.

Business account in the Netherlands for foreign entrepreneurs

Foreign entrepreneurs with a company in the Netherlands may open a bank account, but it is not mandatory. Each bank has its own approval policy. Banks check the applicants and can ask questions about the purpose and use of your business account. They can also ask where your invested capital comes from and who are the main stakeholders in your business.

Managing your finances effectively

Would you like a better understanding of your business’s finances? A liquidity budget gives you financial insight into your business’s cash flows. View your income and expenses per month or per quarter. This also provides an overview on an annual basis. A well-organised bank account is essential for this purpose.. You can find more information about your business’s finances in the KVK Book of Finance.