Business bank account: useful, not mandatory

A business bank account is not mandatory for a sole proprietorship, general partnership, partnership, or limited partnership. But it is clear and useful to separate private and business expenses. And a business account has more advantages, such as saving time with bookkeeping and giving your business a more professional image. You can also use a private account for business purposes. Read here what to consider before you decide on a business bank account or private bank account for your company.

A clear financial overview

The Tax and Customs Administration (Belastingdienst) needs to see your financial records. It does not matter if 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? A business account gives a clear overview. Another 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 (in Dutch).

Using a private account for business purposes

Would you like to use your private account for business purposes? Then make sure that 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.

Opening a private account is usually cheaper than a business account. Private accounts do not have a maximum limit for the amounts that you can send or receive. The customer can transfer the amount to you without any problems. When your customer transfers money, they will only see your personal name, not your company name. This is also the case with the IBAN check. This looks less professional than with a business account.

Benefits of a business bank account

With a business account you keep your private money and expenses and that of your company separate. 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 you have more options and choices for different banking packages than with a private account
  • the costs for a business account are tax 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 differ per bank and per legal structure (in Dutch). Always check with the bank which information is  needed. Usually, you can open an account online. Then you do not have to visit your bank. Most banks ask for these documents as a 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.

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.

Visiting address

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 an expert  for help. Compare the available options with different banks. .  Some banks need a parent or guardian to sign their approval. In this case, the parent or guardian is also liable.

Or you can apply for a limited legal capacity (handlichting),  which gives you the powers of an adult entrepreneur when it comes to your business. Some banks do not allow minors to open a business bank account. A solution can be to open a second private account. Are  you  conducting business together with one of your parents or guardians? For example, in a general partnership. Then opening a business account is usually not a problem.

Foreign entrepreneurs in the Netherlands

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.

Insight into your financial matters

In the Book of Finance for entrepreneurs, you can learn more about money matters. 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.