What is a self-employed person
ZZP stands for zelfstandige zonder personeel: a self-employed person without employees. You work for your own account and risk, supply services or products and invoice clients yourself. Calling yourself a ZZP professional does not determine your tax status or how a particular working relationship must be assessed.
The term self-employed is not an official legal form. It is a description of how you work. Most self-employed people choose the legal form when registering in the Trade Register sole proprietorship. Chamber of Commerce registration, entrepreneurship for VAT purposes and entrepreneurship for income tax purposes are separate assessments. Even so, you can also be a freelancer with a different legal form, for example a private limited company.
What is a sole proprietorship
A sole proprietorship is an official legal form. You register it with the Chamber of Commerce and you are fully responsible for your business. There is no separation between your business and private assets. If things go wrong financially, you can also be held liable privately.
Despite the name, a sole proprietorship allows you to hire staff as normal. The term just means that there is one owner, not that you are obliged to work alone. You can use multiple trade names and carry out different activities within the same company.
What is a freelancer
Freelancer, like zzp'er, is not a legal term. The meaning is pretty much the same: someone who works independently, without employment. The difference is mainly in the use of language. In creative or journalistic sectors, you more often hear ‘freelancer’, in construction or business services more often ‘zzp'er’.
Both terms are used for carrying out assignments independently. The number of clients or the chosen designation is not in itself proof of entrepreneurship. You must assess your administration and tax position based on the actual situation.
Difference between sole proprietorship and zzp
A sole proprietorship is a legal form; a ZZP professional is someone who works independently without employees. A ZZP professional can run a sole proprietorship, but not every sole proprietorship is run without staff. Once you hire employees, you are no longer a ZZP professional, while the sole proprietorship continues to exist.
The Tax and Customs Administration looks primarily at the factual situation: do you work independently, do you make a profit and do you run entrepreneurial risk? Those circumstances count towards the assessment; a single characteristic alone is not decisive. Read more about false self-employment.
Difference between self-employed and freelance
There is no substantive difference between zzp and freelance. Both words describe the same thing: working independently, without permanent employment. Only the sector and word usage differ. Legally and fiscally, it is exactly the same.
Sole proprietorship or self-employed, which is convenient?
You choose a legal form, not between the concepts of sole trader and freelancer. A sole trader structure may be suitable, but also assess liability, costs and your tax position.
For tax advantages specific conditions apply. The SME profit exemption does not have an hours criterion; the self-employed deduction and regular startup deduction do, alongside other conditions. A Chamber of Commerce (KVK) registration does not automatically grant entitlement to these schemes. See the conditions for the SME profit exemption.
Overview of similarities and differences
| Term | Meaning |
|---|---|
| Self-employed | Self-employment without employees; not a legal form. |
| Freelance | A common term for carrying out assignments independently; not a legal form. |
| Sole proprietorship | Sole trader with a single owner; hiring staff is possible. |
The designation does not automatically determine your tax status or the assessment of an assignment.
Pros and cons of self-employment or sole proprietorship
A major advantage of working as a self-employed professional with a sole proprietorship is freedom. You choose your own assignments, rates and working hours. Subject to certain conditions, you can make use of tax benefits and generally have limited set-up costs. Furthermore, the administration is straightforward and you can get started quickly.
On the other hand, there are risks. You are personally liable for any debts. If you fall ill or have no assignments, you are not automatically covered like an employee. You also have to arrange your own pension, insurance and a financial buffer. Yet many entrepreneurs find the freedom and independence more important than that security.
When to switch to a BV as a self-employed person
There is no profit figure at which a private limited company is automatically more advantageous for everyone. Your salary, how much profit you distribute or leave in the company, setup and administration costs, and liability all influence the balance. A private limited company comes with its own obligations, including the customary salary regulation where applicable and the filing of annual accounts. Have the comparison made using your own figures and risks.
Frequently Asked Questions
What is the difference between self-employment and sole proprietorship?
A ZZP professional works independently without employees. A sole proprietorship is the legal form commonly used to do this.
Is sole proprietorship the same as zzp?
No, but they overlap. You register as a sole trader and are automatically self-employed as long as you don't employ anyone.
Which is better, a self-employed person or a sole trader?
This is not a choice. Most self-employed people have a sole proprietorship. The term self-employed says how you work, the sole proprietorship says how you are legally set up.
