Banks & Finances Netherlands

There are several banks in the Netherlands that are particularly loyal to foreigners and offer convenient services for expats. 

 

Bunq is a fully digital bank that offers convenient mobile solutions and support in several languages, including English. This bank is known for its innovation and flexibility, which is especially useful for expats. One key feature is the ability to open an account without a social security number for up to 90 days, which is especially convenient for those new to the country. However, the bank doesn't have physical branches and charges higher fees for some services compared to traditional banks.

 

ABN AMRO is one of the largest traditional banks in the Netherlands and is active with foreigners. The bank provides all of its services in English, including its mobile app and customer support; it offers special packages for expats, making it a popular choice among new residents of the country

 

ING is another major bank in the Netherlands, known for its history and extensive branch network; offers a mobile app and website in English, making it easy for foreigners to use its services. The bank also has special offers for students and young people, making it popular with young expats. 

 

Rabobank offers a wide range of services for foreigners, including English-language support and special financial products. This bank is known for its strong regional network and active involvement in local communities. However, some of the information on the website may only be available in Dutch.

 

N26 is a digital bank that is also well suited for expats. It allows you to open an account quickly and easily via a mobile app, and provides free accounts with a virtual Mastercard. N26 is suitable for those who prefer to manage their finances exclusively online, although the bank does not have physical branches in the Netherlands.

To open a bank account in the Netherlands, you will need to follow a few steps, whether you want to do it in person at a bank branch or online.

1. Selecting a bank.

2. Gathering the required documents:
  - ID: A valid passport or ID card will do. Note that a driver's license may not be accepted as the only document.
  - Proof of Address: This can be a rental agreement, utility bill or other official document that proves your address in the Netherlands.
  - BSN: This is your social security number, which is mandatory for most banks. You get this number when you register at the municipality when you arrive.
  - Residence permit: If you are from a non-EU country, you will need to provide a residence permit or proof of registration with the immigration authorities.

3. Visit the bank or apply online: 
  - In person: You can come to the nearest bank branch with your documents. Some banks may require an appointment in advance.
  - Online: Many banks offer the option of opening an account online, which can be faster and more convenient. You'll need to upload digital copies of documents and possibly confirm your identity via video call or other online methods.

4- Waiting for your bank card: Once your application is approved, you will receive your account details and debit card within a few days. The card and other required information such as PIN will be sent to you separately for security reasons.

Additional information:
- Fees: Most Dutch banks charge a small annual account maintenance fee. The exact amount may vary depending on the services included, such as internet banking, mobile app access and credit card services.
- Online banking: Dutch banks are known for their advanced online and mobile banking platforms, making it convenient and digitally accessible to manage finances.

To withdraw cash with a foreign bank card in the Netherlands, you can use the numerous ATMs located throughout the country.

 

Where to withdraw cash?

- ATMs: In the Netherlands, there are many ATMs that support Visa, Mastercard, Maestro, and Cirrus cards. The most common ATM network is Geldmaat, which works with cards from most international payment systems.

- ATM locations: You can find ATMs almost everywhere—in city centers, at train stations, in shopping malls, and even in some villages. For the convenience of locating the nearest ATM, use online locators such as the one on the Geldmaat website.

 

Fees and currency conversion

- Withdrawal fees: When using a foreign card at ATMs in the Netherlands, fees may be charged. If your card is issued in a country outside the European Economic Area, an additional fee of around 4 euros per transaction may be charged.

- Currency conversion: Some ATMs may offer a dynamic currency conversion option, allowing you to choose to withdraw money in your card’s currency. However, in most cases, it is more advantageous to choose to withdraw in euros, as the conversion may be less favorable due to extra markups.

 

Helpful tips

- Avoid independent ATMs: In tourist-heavy areas such as airports and hotels, ATMs operated by independent providers may be installed, which charge higher fees. Try to use ATMs located near bank branches.

- Inform your bank: Before traveling to the Netherlands, inform your bank about the planned use of your card abroad to avoid the card being blocked due to suspicious activity.

- Choose the right card: If you have multiple cards, check the conditions for using each one abroad. Some cards may offer more favorable terms for withdrawing cash in foreign currency.

International bank transfers

A bank transfer through your Dutch bank is one of the most reliable ways to send money abroad. You will need the recipient’s details, including the IBAN and BIC/SWIFT code of the recipient’s bank. Transfers to SEPA countries (Single Euro Payments Area) often incur minimal fees, while transfers to countries outside SEPA may be subject to significant charges. The process can be completed through your bank’s online banking or mobile app.

 

Online money transfer platforms

Online services like Wise, PayPal, Revolut, and XE offer convenient and often cheaper alternatives to traditional bank transfers. These platforms allow you to send money worldwide using real exchange rates and transparent fees. The process usually involves creating an account, entering the recipient's details and transfer amount, and then authorizing the transaction. Such services are often more cost-effective and faster than traditional bank transfers, especially for large amounts.

 

Money transfer services

If you need to send money in cash form, or the recipient does not have a bank account, traditional services like Western Union or MoneyGram may be a good option. These services allow you to send money that can be collected in cash at a pickup location. However, the fees for such transfers can be higher than when using online platforms.

Basic requirements for obtaining a mortgage as a foreigner:

Citizenship and residence permit: To obtain a mortgage, foreigners need to have a residence permit in the Netherlands. EU/EEA citizens generally have the same rights to obtain a mortgage as Dutch citizens. Citizens of non-EU countries can also obtain a mortgage, but additional documents confirming their resident status may be required.

 

Type of employment: A permanent employment contract significantly eases the mortgage acquisition process. If you have a temporary contract, the employer must provide a letter of intent to extend your employment. It is also possible to obtain a mortgage as a freelancer, but in this case, you need to provide an income and tax report for the last 12 months.

 

Financial Requirements: Foreigners are usually offered mortgages up to 100% of the property value, but the buyer will need to cover additional expenses (such as taxes, appraisal, and notary services) from their own funds. These costs amount to about 4-6% of the property value.

 

National Mortgage Guarantee: In 2024, the limit for a mortgage with the National Mortgage Guarantee was increased to 435,000 euros. This program provides lower interest rates and additional guarantees for borrowers.

 

Important Aspects:

- Interest Rates: Mortgage rates depend on the term of the fixed rate and the loan-to-value ratio. The lower the LTV, the lower the interest rate.

- Consultation: It is recommended to consult mortgage advisors who specialize in working with foreigners. This can significantly simplify the process of choosing the right mortgage and understanding all the nuances.

Bank Transfer

- Real Estate: The primary method of paying for real estate in the Netherlands is a bank transfer. After signing the purchase and sale agreement and obtaining a mortgage, the buyer transfers funds to a special notary account. The notary then transfers the money to the seller after completing all formalities. This process ensures transaction security and correct distribution of funds.

- Automobile: When purchasing a car, especially a new or expensive one, a bank transfer is also the preferred method. Payment can be made directly to the dealer or a private seller. If purchasing through a dealer, various payment plans may be offered, including installments or leasing.

 

Mortgage or Loan

- Real Estate: For purchasing real estate, most people in the Netherlands take out a mortgage. After the mortgage is approved, the bank transfers the funds to the notary's account, who completes the transaction.

- Automobile: An auto loan or lease is available for cars. Leasing is popular among companies and individuals wishing to update their vehicles every few years. A loan can be arranged at a bank or through a car dealer and is paid back on an agreed schedule.

 

Leasing

- Automobile: Leasing is a common way to finance the purchase of a car in the Netherlands. It can be financial leasing (with a subsequent purchase) or operational leasing (without the option to purchase). In the case of operational leasing, you simply rent the car for a certain period and then return it to the dealer.

 

Cash Payment

- Automobile: Cash payment may be possible when buying a used car, especially from private sellers. However, for large amounts, it is important to consider restrictions on the use of cash and risks related to security.

 

Cryptocurrency

- In some cases, especially regarding newer types of assets such as premium cars, it is possible to use cryptocurrencies for payment. However, this is still rare, and most transactions continue to be conducted through traditional banking channels.

Bank Deposits

- Savings Accounts: Various types of savings accounts are available in the Netherlands, offered by large banks. These accounts can have a fixed or variable interest rate. Deposits offer reliability, but the interest rates are usually low.

- Fixed Deposits: These are accounts with a fixed term where the money is locked for a specific period (usually from 1 to 5 years) with a fixed interest rate. In return, depositors receive a higher interest compared to regular savings accounts, but early withdrawal of funds may lead to penalties.

 

Investments in Stocks and Bonds

- Stocks: The Netherlands offers a wide range of stocks through the Amsterdam Stock Exchange. Investors can buy shares of both local and international companies. This is one of the riskier but potentially more profitable investment methods.

- Bonds: Investments in government and corporate bonds are a more conservative option. Bonds provide a fixed income in the form of interest payments and are considered less risky compared to stocks. However, the yield from bonds is usually lower.

 

Investment Funds and ETFs

- Investment Funds: These funds pool money from multiple investors and are managed by professional managers. Funds can include various assets: stocks, bonds, real estate, etc. They are suitable for those who want to invest but do not have the time or knowledge to manage a portfolio on their own.

- ETFs (Exchange Traded Funds): traded on the exchange like stocks, but represent a basket of various assets, such as stocks or bonds: they offer diversification and are an affordable way to participate in a broad market with relatively low fees.

 

Real Estate

- Real estate investment remains a popular way to build capital. This may include buying housing to rent out, which provides a steady income. In the Netherlands, real estate, especially in large cities, tends to increase in value, making such investments attractive in the long term.

 

Pension Savings

- Pension Funds: Employers in the Netherlands often offer pension plans that include regular contributions from both the employee and the employer. These funds are invested in various assets, providing returns until retirement.

- Individual Pension Plans: The self-employed and freelancers can open an individual pension account, to which they contribute funds and which are also invested to generate income by the time of retirement.

 

Alternative Investments

- Cryptocurrencies and Fintech Tools: Investments in cryptocurrencies and fintech services are becoming increasingly popular among those who are willing to take high risks in exchange for potentially high returns. However, it's important to remember the volatility of such assets and the regulation in different countries.

 

It's important to consult with financial advisors and carefully evaluate your investment decisions.

As in most countries, in the Netherlands, it is necessary to file an annual tax return, especially if you have an income. This can be done online through a personal account on the tax service website.

 

In the Netherlands, foreigners living and working in the country are subject to tax obligations, which depend on their tax status and type of income.

 

Residency Status and Taxation

- Residents: If a foreigner resides in the Netherlands for more than 183 days a year or has a center of life interests in the country (e.g., family or work), they are considered a tax resident. Tax residents are taxed on global income, i.e., all income received both in the Netherlands and abroad.

- Non-residents: Non-residents are taxed only on income received in the Netherlands, such as income from work, real estate, or business located in the country.

 

Income Taxes

- Income tax is divided into three categories:

1: Income from work and home ownership, such as salary, freelance income, as well as mortgage payments. Rates are progressive, with a maximum rate of about 49.5%.

2: Income from substantial investments (if you own more than 5% of shares in a company).

3: Income from savings and investments. This box includes income from real estate (except your primary residence), dividends, and other investments.

 

Social Contributions

- Foreigners working in the Netherlands are also required to pay social contributions. These contributions include mandatory deductions for the state pension system, disability insurance, and healthcare. Employers usually withhold these amounts from wages.

 

Tax Benefits and Deductions

- 30% rule: Some highly qualified foreign specialists may be eligible for a 30% tax benefit, which allows up to 30% of their salary to be tax-free. This benefit is aimed at compensating additional costs associated with moving and living in the Netherlands.

- Child benefits: Residents with children may receive tax benefits or child allowances.

 

Property Tax

- Owning real estate in the Netherlands, foreigners must pay property tax, which depends on the value of the property determined by the municipality. Taxes are also levied on real estate ownership as part of income taxes.

 

Inheritance and Gift Tax

- In the Netherlands, there is an inheritance and gift tax levied on both residents and non-residents. Rates depend on the degree of kinship to the donor or deceased, as well as the size of the inheritance or gift.

 

It is recommended to consult with tax specialists or financial advisors to optimize your tax burden and utilize available benefits.

Tax filing for foreigners in the Netherlands has its own specifics and requires compliance with certain rules and deadlines.

 

Who is required to file a tax return?

- Residents: Must file for global income (including foreign income).

- Non-residents: Must declare only income earned in the Netherlands, for example, income from work, real estate rental, or other sources of income in the country.

 

The tax filing process

- Electronic filing: The tax return in the Netherlands is submitted online through the tax service portal using the Mijn Belastingdienst system. For this, you will need a DigiD — a digital identifier used for accessing various government services.

- Deadlines: Returns usually need to be filed by May 1st of the year following the reporting year. In some cases, if you have complex tax circumstances, you can request an extension for filing.

 

Documents and information needed for filing a return

- Income: You need to provide information on all income, including salaries, freelance earnings, investments, and more.

- Expenses and deductions: You can state expenses that are deductible, such as mortgage interest, education expenses, and medical expenses. For those entitled to the 30% tax ruling, it is necessary to confirm compliance with this benefit's conditions.

- Other assets and liabilities: You also need to provide information about your assets, including real estate and savings, if they are subject to taxation.

 

Features for foreigners

- 30% ruling: This benefit allows highly skilled foreign specialists to exempt up to 30% of their income from taxation. If you are eligible for this benefit, it is important to correctly reflect this in your tax return.

- Double taxation: If you receive income both in the Netherlands and abroad, you should consider double taxation agreements that the Netherlands has signed with other countries. This will help avoid double taxation of the same income.

 

Consultation and assistance

- If you are unsure about the correct completion of your tax return, it is recommended to consult a tax advisor or use the services offered by the tax service for foreign residents. This will help avoid errors and possible fines.

In the Netherlands, self-employed individuals and freelancers have specific tax features and access to benefits.

 

Business registration

- KvK: All self-employed individuals and freelancers are required to register their activities at the Dutch Chamber of Commerce. After registration, you will be assigned a unique number needed for interactions with the tax service.

- Choice of legal form: Freelancers usually register as sole proprietors, but other forms are also available, such as a private limited liability company.

 

Tax obligations

- Income tax: Freelancers are taxed on the basis of their net income. It is important to consider that business-related expenses, such as office rent, transportation expenses, and equipment purchases, can be deducted from taxable income.

- VAT: If your annual income exceeds €20,000, you are required to register as a VAT payer and charge this tax to your clients. The VAT is usually 21%, but for some goods and services, the rate may be reduced to 9% or 0%.

 

Tax credits and deductions

- Startup credit: If you have recently started your business and meet certain criteria, you may receive an additional tax credit for the first three years of operation.

- Entrepreneurial Benefit: Self-employed individuals can take advantage of a fixed tax benefit, which allows reducing the taxable income by a certain amount (in 2024 this is approximately €6,310).

- Limited Self-Employment Income: The benefit is applied if the freelancer or self-employed person works at least 1,225 hours per year in their enterprise. It is important to document these hours for potential verification.

 

Pension and Social Contributions

- Pension: Unlike employees, self-employed individuals must independently secure their pension. This can be done through private pension funds or special pension schemes for freelancers.

- Insurance: It is recommended to arrange for voluntary health insurance, disability insurance, and other types of coverage, as state protection programs are often limited for the self-employed.

 

Administrative Duties

- Self-employed individuals are required to keep records of their activities, including income, expenses, and tax payments. This data may be requested by the tax service to verify the accuracy of tax payments.

 

It is recommended to consult tax advisors to optimize the tax burden and make use of all available benefits.