Checklist for starting a business with unemployment benefit

Can you start a business with an unemployment benefit?

In the Netherlands, it is possible to start a business with an unemployment benefit. Certain conditions apply, and you need permission from the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV). Follow the steps in this checklist to learn more.

1. Prepare by doing research

If you want to start a business and continue to receive unemployment benefit, it is important to do some research in advance. The UWV requires that you take the online training ‘Zelfstandig ondernemen met een WW-uitkering’(Starting a business with unemployment benefit, only available in Dutch). It informs you about the conditions UWV sets and about other important matters to take into account. You receive a certificate when you complete this training.

Permission

To start a business with unemployment benefit, you need permission from UWV. In the training, you will learn which rules you need to meet to get permission. For example, you must be able to earn enough money with your business.

2. Take advantage of the research period

Do you want to develop your idea further? You may be able to take advantage of a 6-week research period. During this period, you do not have to apply for jobs and you keep your benefits. Your employment adviser must give permission for this.

During the research period, you can further investigate and prepare your idea. For example:

• calculating your turnover
• location
• insurances
• permits
• business plan
• tax matters

Do you not want to start your own business after the research period? Then nothing changes. You will receive your benefit and have the same rights and obligations as before the investigation period.

Do you want to start your own business after the research period? Then you may qualify for a start-up period. The start-up period is a maximum of 6 months. See step 3.

3. See which way you can start a business

There are 3 ways to start a business from unemployment:

You cannot work temporarily for the old employer

During the start-up period, you may not do any assignments for the employer who made you redundant. Do you accept an assignment from your former employer? If so, the UWV will no longer pay benefits until the end of the start-up period. You may also be fined. After the start-up period, you may still work for your former employer.

4. Register with KVK and the Netherlands Tax Administration

Will you start working as an entrepreneur or self-employed professional? Then you must first register with the Dutch Business Register (Handelsregister) at the Netherlands Chamber of Commerce, KVK. In most cases, KVK will forward your registration to the Netherlands Tax Administration (Belastingdienst), so you do not have to register with them yourself. If the Tax Administration considers you an entrepreneur for VAT, you will be given your VAT number and your VAT identification number.

5. Report your income to the Tax Administration

You must report your income to the Tax Administration each year. You pay taxes on this income. If you receive an entrepreneur allowance (ondernemersaftrek), you must also report the number of hours spent on your business to the Tax Administration. Please note: UWV adds entrepreneur allowance to your income.

The statements of your income to UWV and the Tax Administration are compared. Are there any differences? If so, there are consequences. You may have to repay excess benefit payments. Or you may have to pay underpaid tax to the Tax Administration.

6. Take out loss-of-income insurance

Do you continue as a zzp’er without or after the start-up period? Then you are not automatically insured for those hours against loss of income due to illness or incapacity for work.

Do you still want to be insured? Then you must take out a disability insurance. If you start with a starting period, you will be fully insured for employee insurance during that period. You can often also insure against incapacity for work through UWV.

See what other insurances are important for your business.