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Starting your own business while receiving unemployment benefits is possible, sometimes even while (partially) retaining your benefits — but there are conditions attached and you need permission from the UWV. There are roughly three routes: with a start-up period, while retaining unemployment benefits without a start-up period, or without retaining unemployment benefits. Below, you can read how each route works, how to obtain start-up capital, and what legal arrangements you need to make.
3 ways to start a business while receiving unemployment benefits
1. With a start-up period
During a start-up period, you may dedicate all your hours to your own business. It does not matter how much you earn or how much time you spend on it. During this period, you retain your unemployment benefit, with a reduction. TODO_VERIFY: the duration of the start-up period (around 26 weeks) and the reduction percentage (around 29%) are UWV conditions that are subject to change — check the current regulations with the UWV. If you are entitled to unemployment benefits for a shorter period, the start-up period will be shorter.
Conditions for the start-up period:
- You need prior permission from the UWV;
- The UWV will not grant permission if your business is expected to generate insufficient income to live on;
- you must take an (online) training;
- You may not carry out assignments for your previous employer during the start-up period.
2. With retention of unemployment benefits, without a start-up period
The hours you spend on your self-employed activity each month are offset against your unemployment benefit. The UWV calculates a notional monthly income for this purpose. You report the hours worked via the income statement. You remain required to apply for jobs for the hours for which you are still receiving unemployment benefits.
3. Without retention of unemployment benefits
You start working full-time as an entrepreneur and your unemployment benefit stops.
How do you get start-up capital?
There are various ways to obtain start-up capital:
- Bbz start-up credit: pursuant to the Decree on Assistance for Self-Employed Persons (Bbz), you can apply to the municipality for an interest-bearing loan for necessary investments;
- Bank financing: with a good business plan, you can approach a bank for, for example, a financial lease or a business loan;
- Alternatives: crowdfunding, investments from business angels, family or friends, and government subsidies.
What legal arrangements do you need to make as a start-up?
As a starting entrepreneur, you will face many challenges, especially if you are starting from benefits. In any case, ensure you have the basic documents, such as:
- general terms and conditions;
- a privacy statement and cookie declaration;
- where necessary, a data processing agreement and a processing register;
- a good order confirmation.
Frequently Asked Questions
Am I allowed to start a business while retaining my unemployment benefits?
This is possible via a start-up period (with a reduction in the benefit) or by offsetting hours without a start-up period. You need permission from the UWV and must meet the conditions.
Do I need permission from the UWV?
For the start-up period, yes. The UWV assesses, among other things, whether your business is expected to generate enough income to live on.
Am I allowed to work for my previous employer during the start-up period?
No. During the start-up period, you may not carry out assignments for your previous employer.
Can I get a loan to start a business?
Yes, for example through the Bbz start-up loan from the municipality or via bank financing. A good business plan is important in this regard.
Getting off to a good start as an entrepreneur while receiving benefits?
A flying start begins with the right legal documents. We advise you on your legal questions and offer an affordable Starter Package with all the documents you need, at a competitive fixed price — including an intake meeting, concept round, revision round, and final design.
View our corporate law or schedule a no-obligation intake consultation.
