Do you need a business bank account?
- Marty Zanen
- 5 Jun 2023
- Edited 6 Jan 2023
- 4 min
- Managing and growing
A business account is not mandatory for an entrepreneur but can be useful. It can help to give your business a professional image. Or you can choose a cheaper private account. Learn more about the banking options and choose the right bank account for your business.
Good records and transparancy are important
The Dutch Tax and Customs Administration (Belastingdienst) needs to see your financial records. It does not matter whether you use a business account or a private account. As long as it is clear how money flows in and out of your business. Where does the money come from? Where does the money go? And which transfers are for business and private use? An option is to open a second private current account for your business finances. This makes it easier to separate business and private income and expenses.
Using a private account for business purposes?
Most banks state in their general terms and conditions that a private bank account is only intended for private use. Banks may check private accounts at random and contact you if there are many business transfers. But private accounts have no maximum limit for the amounts that you can send or receive. Opening a private account is usually cheaper than a business account.
The customer can transfer the amount to you without any problems. When your customer transfers money, he will only see your name, not your company name. This is also the case with the IBAN check. This looks less professional than with a business account.
Business bank account
With a business account you keep your private money and expenses and the money of your company separate. Opening a business account is often a bit more expensive, but you have more options and a choice of packages than with a private account. The benefits include:
- a clear financial overview
- clear bookkeeping for you, your accountant and the tax administration
- everything is clear and separate; ready for your tax return
- you can choose from different business packages, so you can choose what you need
- the costs for a business account are deductible and you can reclaim the VAT on business expenses
- a professional image for your company: the customer sees the company name when making the transfer and on the statement
How to open a business account:
Before you open a business account, the bank will ask you to provide details. These differs per bank and per legal structure. So, always check with the bank which information is required. Sometimes you can open an account online. Then you do not have to visit your bank. Most banks ask for these documents as standard:
- Valid proof of identity. The bank also wants this if you open an account online. Never just hand over your proof of identity, make a safe copy.
- An extract from the KVK Business Register.
Save time with bookkeeping
Do you use accounting software? You can usually connect your business bank account to this application. With a business account, you do not have to manually add all transfers into your software. This saves you time.
If you use your main private bank account for business, the business and private transactions are mixed. It takes you or your accountant more time to separate them. Of course, using a second private account for your business also keeps business transfers separate. The administration is much faster and more transparent.
Do you work together with 1 or more business partners in a general partnership (vof)? Then it makes sense to use a business account in the name of the general partnership. You can also agree that for transfers larger than a certain amount, more than one person must approve the transfer. This is called joint authority. You can arrange this through your bank.
Joint authority can include the business partners, but also employees or your accountant.
Prevent money laundering
Banks and other institutions must prevent criminals from laundering money they have earned from crime through their accounts. Banks are required to investigate their customers. This is called a money laundering investigation (witwasonderzoek). The bank wants to know where the money comes from. And what the customer uses the money for. A bank must have sufficient insight into the cash flows within the company. Banks usually pass on costs for the money laundering investigation to their customers. Does the bank discover unacceptable (integrity) risks when investigating the new customer? Then the bank can refuse to open a business bank account.
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 (online). Your bank may ask additional questions. This is how your 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, ask your bank what is possible. When working with minors, some banks need a parent or guardian to sign their approval. The parent or guardian is therefore also liable. Or a bank can ask for a limited legal capacity (handlichting) that gives you the powers of an adult.
Some banks do not let minors open a business bank account. A solution can be to open a second private account. If you do business together with one of your parents/guardians, for example in a general partnership, then opening a business account is usually no problem.
As a foreign entrepreneur with a company in the Netherlands, you need a bank account. This can be a Dutch bank account, although it is not mandatory. You can open a business bank account in the Netherlands with valid proof of identity and an extract from the KVK’s Business Register. 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.
Insights into your financial matters
Do you want to get your business finances in good order? In the Book of Finance for entrepreneurs, you can learn more about money matters, including finding financing, administration and taxes. For example, a liquidity budget gives you financial insight into your company’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.