US Citizen Financial Planning on DAFT: The Cross-Border Questions You Must Answer in Year 1 (Before It Gets Expensive)

Last reviewed: January 2026

DAFT is DIY-friendly on the immigration side. The treaty is not the hard part. The hard part is building a real money system while you are also building a business in a new country.

Year 1 is where Americans accidentally create expensive messes: money scattered across accounts, random USD to EUR conversions, unclear “business versus personal” boundaries, and tax planning that only starts when someone panics in March. Your residence permit can still be fine. Your finances are what get painful.

This article is the map. It is not product advice and it is not a list of hacks. It is the set of cross-border questions you must answer early so your cash flow, bookkeeping, taxes, and investing decisions stay boring.

The Year 1 decision map

Most DAFT founders show up with a to-do list: IND appointment, KvK registration, bank account, bookkeeping, VAT, taxes. The tasks matter, but the stress comes from missing decisions. When the decisions are unclear, you redo the same work over and over.

If you can answer the five questions below, everything else gets easier. You will still have tasks, but you will stop guessing.

What “boring” looks like in 90 days

This is the target state that eliminates most Year 1 stress. It is not glamorous. It is effective.

By day 90, you can…	Because you did this
Explain your system in 10 minutes (accounts, currencies, what goes where).	You wrote a one-page Money Map and stopped mixing business and personal spending.
Predict your next 60 days of cash flow without stress.	You set a transfer rule and a pay-yourself rule (even if the numbers change).
Hand a professional a clean file without panic.	You run a weekly 15-minute admin rhythm and you keep receipts and statements organized.
Keep DAFT capital boring instead of treating it like spare cash.	You built buffers and set-asides into your routine, and you never “borrow” from capital.
Avoid accidental US reporting problems from new foreign accounts or investments.	You track accounts from day one, and you do not buy non-US funds casually.

Decision 1: Build an account architecture that survives the move

Your first job in the Netherlands is not “pick the perfect bank.” Your job is separation, clarity, and continuity. You want a setup that can handle two currencies, two tax systems, and a self-employed business without mixing everything together.

If you are an eenmanszaak (sole proprietor), it is easy to fall into “it is all me anyway.” In practice, you still need clean separation. You are building a file the IND can approve at renewal, a bookkeeping trail a Dutch bookkeeper can understand, and a story your US CPA can follow. Separation is how you get there.

Minimum viable stack

This is the simplest stack that works for most DAFT founders. You can add complexity later if you truly need it.

Account	Purpose	Keep it boring by doing this
NL business account (EUR)	Invoicing, business expenses, VAT flows, DAFT capital.	Run the business through this account. Do not pay personal groceries from it.
NL personal spending account (EUR)	Rent, utilities, insurance, daily life.	Pay yourself on a schedule (monthly is simplest). Spend from here.
US checking (USD)	Any US obligations that continue: loans, subscriptions, credit cards, US taxes if needed.	Keep it active until you know your steady state. Avoid “oops, I closed the wrong thing.”
Transfer / FX rail (USD and EUR)	Moving money between currencies with clear labels and records.	Use one primary rail so you can reconcile easily and produce clean statements.

Two practical notes for Americans: First, bank onboarding can take longer than you want, and some banks have extra friction with US citizens because of FATCA reporting requirements. Second, your goal is not to optimize interest rates in Year 1. Your goal is to keep the system explainable and workable.

If you want to keep it even cleaner, choose one primary spending card system and stick to it. If you keep using US credit cards (common), treat them as a US obligation and pay them from your US checking on a predictable cadence. Do not make your monthly close depend on five cards across three currencies.

This is also why we push a Money Map early. A Money Map is not a spreadsheet of balances. It is a one-page diagram of accounts, currencies, income sources, and what each account is for. When you have it, you can ask better questions and get faster answers from professionals.

If you want the practical admin stack that supports this, read: DAFT Bookkeeping That Actually Works. If you want the “getting paid” setup (invoicing, VAT, and what to keep), read: Getting Paid, Invoicing, and VAT on DAFT.

Decision 2: Build a USD and EUR cash flow routine that keeps DAFT boring

DAFT founders tend to live in extremes. Either everything is DIY chaos, or they hand money decisions to someone else and hope it works out. The calm option is a simple routine you can run every month, even when income is variable.

The goal is not to be clever. The goal is to be consistent. Consistency is what keeps you compliant, keeps your buffers intact, and keeps the DAFT capital requirement from becoming a surprise problem.

Start with one rule: the business pays you on purpose

You are not “paid” automatically when you are self-employed. You choose a pay-yourself policy. That policy should protect four things: VAT money, income tax set-asides, business runway, and the DAFT capital buffer.

If you want a full walkthrough, read: Paying Yourself on DAFT.

Keep the DAFT capital requirement boring

This part should be simple. People make it hard when they treat capital like spending money. Treat it like business capital that stays in the business. Build your monthly routine so you do not accidentally draw it down.

Related: The EUR 4,500 DAFT Capital Requirement.

Your USD to EUR transfer policy (rule-based, not rate-chasing)

You do not need to predict exchange rates. You need a policy. A policy is a sentence you can follow when you are busy and stressed. “We convert every month for the next month’s EUR spending and keep a buffer” beats “we convert when we get nervous.”

One detail that matters for US tax prep: currency. Your US return is in USD. Your Dutch life is in EUR. That means your records need to be reconcilable in both currencies. You do not have to solve this alone, but you do need a consistent record trail.

Primary sources for currency conversion references (use as a starting point and confirm with your US tax professional): IRS: Foreign currency and exchange rates and IRS: Yearly average exchange rates.

Decision 3: US and NL tax coordination is a calendar, not a panic attack

The single biggest mindset shift for Americans abroad is simple: you do not get to choose one tax system. As a US citizen, you keep US filing obligations even while living in the Netherlands. In the Netherlands, your residence status and facts determine what is taxed and where.

Your job is not to memorize tax law. Your job is to keep documentation clean, build a calendar, and show up to professionals with organized inputs. That is how you avoid the expensive “cleanup” bill.

Do not guess on FEIE versus FTC

If you are a US citizen abroad, you will hear two acronyms quickly: FEIE (Foreign Earned Income Exclusion) and FTC (Foreign Tax Credit). Which approach is right depends on facts and often changes with income type, business structure, and the move year. Also, FEIE does not automatically remove self-employment tax issues.

Primary sources: IRS: Foreign Earned Income Exclusion and IRS: Foreign Tax Credit.

Self-employment tax and the US-NL totalization question

One common surprise for Americans who become self-employed abroad is US self-employment tax. There is also a totalization agreement between the US and the Netherlands designed to prevent double social security taxation in certain situations.

Do not wing this. Raise it early with your US tax professional and your Dutch advisor. If your situation qualifies, you may need a certificate of coverage or other documentation. If it does not qualify, you plan for it and set aside money accordingly.

Primary sources: IRS: Self-employment tax for businesses abroad, IRS: Totalization agreements overview, and SSA: Totalization Agreement with the Netherlands (also available as a PDF: Netherlands agreement pamphlet).

Use provisional assessments strategically (Dutch side)

The Netherlands has the concept of a provisional assessment (voorlopige aanslag). In plain English: it can help you pay throughout the year instead of getting hit with one large bill later. Whether it is useful depends on facts, but it is one of the levers that can make cash flow calmer for entrepreneurs.

Primary source: Belastingdienst: voorlopige aanslag.

Track VAT and income tax obligations like a business owner

VAT (btw) and income tax are not “later problems.” They shape your cash flow now. The boring approach is to treat VAT and income tax as pass-through money you set aside and pay on time, not as money you get to spend.

Primary sources: Belastingdienst: BTW overview and Belastingdienst: income tax return for entrepreneurs.

State tax risk: treat it as a real third system

This is where a lot of Americans get surprised. If you keep strong ties to a US state (address, driver’s license, voter registration, property, dependents, or a pattern of returning), the state may still consider you a resident for tax purposes. Do not assume “I moved” is enough. Coordinate with your US CPA.

If you are planning to stay long term, do not treat DAFT as a temporary hack. Your endgame affects what you should keep stable in Year 1. Read: DAFT endgame planning: permanent residence and Dutch citizenship.

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