Employing in Netherlands: What You Need to Know
Employment law in the Netherlands is not contained under a single law. Instead it is governed by statutory regulations codified in (among other laws) the Dutch Civil Code, then furthermore governed by (among other things) in a Collective Labour Agreement (if applicable), internal regulations (if applicable) and the individual employment contract itself.
Employment law provides strong labor conditions and protections for employees, so employing people will generally be an important investment and commitment. However, options such as using Collective Labour Agreements and temp agencies are popular options for more flexible workforce arrangements. For these and many other reasons, the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Netherlands.
The official website for employment information is at the Ministry of Social Affairs and Employment.
Key Factors to Consider When Employing in Netherlands
There are several key areas to be aware of within Netherlands’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the Netherland laws and rules for both Netherland employees as well as foreign nationals.
Employee Entitlements
| Information | Explanation |
|---|---|
| Time Off Work ? | Employees in the Netherlands are however also entitled to several kinds of special leaves, including:
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| Annual Leave Accrual Entitlement ? | The number of days of paid statutory annual leave is equivalent to the number of working days a week multiplied by four, i.e. in most cases 20 days of leave (five work days a week). Workers on leave receive pay from their employer, plus a ‘bonus’ equivalent to 8% of annual earnings. Accumulation of leave entitlement is possible; employees can “save up” their days of paid leave. |
| Maternity Leave in Netherlands ? | Maternity leave is sixteen weeks. Leave must start four weeks before birth and up to six weeks can be taken the birth, with ten weeks after the birth. Paternity leave is available for two working days within four weeks after the birth of the child. Parental leave (ouderschapsverlof) Parental leave is twenty-six times the number of working hours per week per parent per child. For example, a full-time job of 38 hours a week gives a leave entitlement of 988 hours (i.e. 26 weeks). Leave is unpaid and has to be taken part time; full-time is only possible if the employer agrees. |
Probation
| Information | Explanation |
|---|---|
| Probation Period ? | Any probationary period must be laid down in writing. In the case of an open-ended employment contract or a contract fixed for two or more years, the maximum period is two months. Otherwise, the maximum period is one month. |
Pension
| Information | Explanation |
|---|---|
| Pension Requirements ? | The pension scheme in the Netherlands is a “collective pension scheme” where contributions are financed from employee-contributions paid on income at a rate of 17.9%, and from tax revenue. The employer may voluntarily make a contribution. |
GEO Solutions or DIY Employment in Netherlands?
Companies entering Netherlands must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Netherlands Employer of Record solution makes it faster, easier and cheaper to deploy staff if they are not ready to register as an employer with the Dutch authorities.
A DIY approach will typically take weeks until there is a properly registered entity ready to run payroll and handle all of the statutory requirements. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
Shield GEO provides a fully outsourced employment service in Netherlands. Companies expanding into the Netherlands can contract with Shield GEO to employ and payroll their staff on their behalf in the Netherlands. Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.
Outsourcing Employment Through a GEO Employer of Record Service
Using Shield GEO Employer of Record Services in Netherlands
Companies entering the Netherlands can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities. A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in Netherlands makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.
The company that is expanding into Netherlands contracts with the GEO to employ and payroll their staff on their behalf. The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll. This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.
Payroll
| Payroll | Netherlands |
|---|---|
| Management Fee for Employer of Record Services / Monthly Payroll Costs | Please contact us for a quote |
| Notes | Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities. |
| Currency ? | Euro |
| Tax | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Tax Rates | Expats working in Holland may be able to qualify for the ‘30% ruling’. It enables an employer to pay an employee a tax free-allowance of up to 30% of their employment income and they can receive a tax-free reimbursement of the school fees for children attending international schools. Note that the employee must qualify for this ruling and an application must be made by the employer and employee and the Dutch tax authorities must issue a grant before the ruling is applied. The ruling is only applicable for the first 96 months of their employment in Holland. |
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| Tax Returns Supplied | Yes |
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| Employers Social Security and statutory contributions |
Disability (WAO) – 4.95% Unemployment (WW) – 2.15% Health Insurance (Zvw) – 7.50% up to a max of €195.58 per day Pension – 2.79% Sickness Benefit – 1.59% Childcare – 0.50% |
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| Employees Social Security and statutory contributions |
31.15% capped at earnings up to €33,363 p/a |
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| Can supply private health care | Yes |
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| Can assist opening bank accounts | Yes |
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Work Permits
| Work Permits | |
|---|---|
| Can Sponsor Work Permit |
Yes, Shield GEO is able to sponsor non-EU workers on Highly Skill Migrant/Knowledge Migrant (‘Kennismigrant’) Work and Residence Permits that allow them to work in The Netherlands. As the Employer of Record, Shield GEO handles all of the formalities and employment requirements in Holland. The client maintains responsibility for day to day employee management. |
| Work Permit cost | Please contact Shield GEO for a quote. |
| Work Permit processing time | 2-4 weeks |
| Work Permit process |
The employee must be earning over €4,189 a month for over 30’s and €3,071 for those under 30. They also must have a Bachelor’s Degree, a specialization and several years of relevant work experience. Process: The Dutch Employer (as a certified Employer) submits the TEV application to the IND in The Netherlands along with the application for a Knowledge Migrant (‘Kennismigrant’) Resident Permit. A decision will be made usually within 2-4 weeks. Note that nationals of the US can travel to Holland whilst the visa is being applied for. Once approved, the applicant can commence their role in Holland. For the physical Residence Permit card to be issued the employees biometrics must be taken in Holland; fingerprints, photo, signature. These will be stored digitally on their Residents Permit card. This will be issued a few weeks after biometrics have been taken at an office of immigration authority. Officially the employee can only start working once they physically receive the Residence Card (timestamp Y), however it is possible to get a temporary sticker in their passport to allow them to commence their role once the Residence Permit is approved. On arrival in Holland they need to register at the local Town Hall, Permits are valid for up to 5 years but this is dependent on the length of the assignment. Documentation required: employment contract, cv, degree/diploma certificates, professional references, local employers registration as an Authorized Sponsor (Erkend Referent), Dutch Health Insurance. |
| Can Work Permit be processed in country | Yes but country dependent |
| Switch Business Visa to Work Permit? | No |
| Can Spouse work on dependent visa? | Yes |
Business Visas
| Business Visas | |
|---|---|
| Can do Business Visa | Yes |
| Business Visa Cost | Please contact Shield GEO for a quote. |
| Business Visa processing time | 5-10 days Consulate Dependent |
Payroll and Tax in Netherlands
There are specific rules for payroll and taxation in Netherlands, depending upon the type of business structure being used. Any business with employees must register with the Dutch Tax Authorities, and receive a payroll tax number. The primary concerns for a foreign company that needs to comply with tax laws in Netherlands are: income tax withholding, national insurance withholding, (included in payroll tax), business tax and permanent establishment concerns.
| Information | Explanation |
|---|---|
| Remote Payroll ? | A remote payroll in Netherlands is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Netherlands. One option for a non-resident company to payroll its employees (local and foreign) in Netherlands is to use a fully outsourced service like a GEO which will employ and payroll the staff on their behalf. |
| Local Payroll Administration ? | In some cases, a company will register their business in Netherlands under one of the forms available, but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider. |
| Internal Payroll ? | Larger companies with a commitment to Netherlands may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Netherlands payroll, and can fulfill all tax, withholding, and payroll requirements. |
| Fully Outsourced Payroll & Employment ? | Companies can outsource the employment and payroll of their staff in Hong Kong to a GEO, like Shield GEO. This is possible for both foreign workers and Hong Kong nationals. This is the easiest, fastest and safest way to payroll staff in Hong Kong. Shield GEO manages all aspects of payroll for workers in Hong Kong, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client. Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips. Read more about outsourced payroll and employment through Shield GEO. |
Immigration and Work Permits in Netherlands
Foreign workers are required to have the proper visas and sometimes work permits in Netherlands, as established by immigration laws. If you come from outside of the European Union, and are going to run the business in the Netherlands or move foreign staff there, this means that you will need a residence permit, as well as a work permit. This often requires company registration prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly. If you have yet to complete the incorporation process you can use an outsourced management company or GEO Employer of Record to sponsor the employee for the necessary permits.
Using your own company ?
Initial Requirements
Any employer with a branch in the Netherlands or who is represented in the Netherlands by an authorised commercial agent may apply for a residence permit for regular labour. Your organisation must be listed in the Commercial Register of the Chamber of Commerce, insofar as this is required under the Commercial Registers Act 2007. Your organisation does not have to be recognised as a sponsor.
An employer must submit an application for a single permit. This is a permit that entitles the foreign national to stay and work in the Netherlands.
The residence permit and the work permit are combined in the single permit. You only have to apply for one permit, at one authority (the IND).
The single permit consists of a residence permit and an additional document stating for which employer the foreign national is permitted to work and under which conditions.
Prior to submitting an application, the employer should determine whether the employer requires a provisional residence permit (MVV). Your employee does not require an MVV if he originates from one of the following countries:
- An EU Member State
- Australia
- Canada
- Japan
- Monaco
- New Zealand
- Vatican City
- United States of America
- South Korea
Procedure if MVV not required
1. Submit an application for a single permit at the IND
The application form can be downloaded from the website at ind.nl. There are two types of application forms: One that iscustomised to your situation (only available in Dutch) via the Klantdienstwijzer; another by submitting a standard application form (only available in Dutch).
2. Pay the fees and submit all required documents together with the application form.
These include copies of your employee’s passport/travel ID, and educational diplomas. The employer will also need to submit information on the company itself, about the recruitment process and the employment contract.
Any foreign documents will have to be legalised and be in Dutch, English, French or German.
3. Notify employee of approval
Once the application is granted, you will be notified by the IND as to when the employee can collect his single permit. The single permit consists of a residence document and an additional document. The single permit is issued to the employee in person. From that moment, the employee is permitted to work in the Netherlands as specified in the additional document.
4. Receipt of additional document
You will receive a copy of the additional document after the single permit has been issued to the employee. You must keep this copy pursuant to the duty to keep records.
N.B. In order to be able to employ a Japanese national, you must not submit an application for a single permit, but an application for a residence permit for ‘regular labour’. A work permit is not needed for Japanese nationals.
Procedure if MVV is required
1. Submit a combined application for an mvv and a single permit.
This is the procedure for ‘Entry and Residence’ (TEV).
2. Inform employee if the IND grants an MVV.
The employee must collect the MVV at the Dutch embassy or the Dutch consulate within 3 months. After that, he will have 3 months to enter the Netherlands.
3. Notify employee to collect single permit when application is granted
Once the application is granted, you will be notified by the IND as to when the employee can collect his single permit. The single permit consists of a residence document and an additional document. The single permit is issued to the employee in person. From that moment , the employee is permitted to work in the Netherlands as specified in the additional document.
4. Receipt of additional document
You will receive a copy of the additional document after the single permit has been issued to the employee. You must keep this copy pursuant to the duty to keep records.
Documents Required
The documents required depends on the purpose of residence. The application form for a residence permit indicates which documents and evidence are required.
This may include:
- the employer’s testimonial, employment contract, the appointment decision or the hosting agreement;
- the work permit or an application for this;
- a copy of employee’s passport;
- in the case of work experience: a work placement or work
- experience agreement
- in the event of mandatory civic integration abroad: evidence that the civic integration exam has been passed;
- antecedents certificate which indicates whether or not the employee has been committed of a criminal offence.
Duration
- If your organisation is recognised as a sponsor, given the application is complete, the IND will usually decide within 2 weeks. If a Single Permit is required, the IND will take about 7 weeks to complete the process.
- If your organisation is not recognised as a sponsor, and the application is complete, the IND will decide within 90 days. 90 days is also the legal time limit.
Cost
The fee (currently EUR 870) is a non-refundable fee for processing your application. You cannot get a refund if your application is refused. Click here for the latest information on fees.
Use the Shield GEO Employer of Record Solution?
Application for combined work permit/residence permit and visa approval of ‘Kennismigrant’ (highly skilled migrants) is submitted on behalf of the applicant to the immigration authority in Netherlands. The approval should take around 10 working days, after which D-type visa approval is communicated by letter to us and electronically to consulate in home country.
The employee must be earning over €4,189 a month for over 30’s and €3,071 for those under 30. They also must have a Bachelor’s Degree, a specialization and several years of relevant work experience.
Process: The Dutch Employer (as a certified Employer) submits the TEV application to the IND in The Netherlands along with the application for a Knowledge Migrant (‘Kennismigrant’) Resident Permit. A decision will be made usually within 2-4 weeks.
Note that nationals of the US can travel to Holland whilst the visa is being applied for.
Once approved, the applicant can commence their role in Holland.
For the physical Residence Permit card to be issued the employees biometrics must be taken in Holland; fingerprints, photo, signature. These will be stored digitally on their Residents Permit card. This will be issued a few weeks after biometrics have been taken at an office of immigration authority.
Officially the employee can only start working once they physically receive the Residence Card (timestamp Y), however it is possible to get a temporary sticker in their passport to allow them to commence their role once the Residence Permit is approved.
On arrival in Holland they need to register at the local Town Hall,
Permits are valid for up to 5 years but this is dependent on the length of the assignment.
Documentation required: employment contract, cv, degree/diploma certificates, professional references, local employers registration as an Authorized Sponsor (Erkend Referent), Dutch Health Insurance.
Types of visas in Netherlands
| Category | Description of Visa |
|---|---|
| Setting up business - MVV, Residence Permit and Work Permit (TWV) | In order to set up and to carry on a business, a residence permit is required (if you’re not an European Union national). In some cases, you may also need to apply for an additional work permit (TWV). Another requirement for setting up business is a recognised qualification in the sector. Before applying for a residence permit, you will need to apply for a provisional residence permit (MVV) that allows you to enter the country as a potential resident rather than as a tourist. You can apply for both the MVV and a residence permit at the same time, called the Entry and Residence Procedure (TEV). If you are a national of Australia, Canada, Japan, Monaco, New Zealand, South Korea, the United States of America or Vatican City, or you have an EC permanent residence permit, issued by another EU member state, you do not need to apply for a MVV but instead you are eligible to apply for a residence permit at the Department of Immigration and Naturalisation (IND) desk within three days of entering the country. The costs of obtaining residence permit would depend on the legal form of your business – whether you are self-employed as a sole trader, enter into a partnership agreement or venture into a start-up. Residence permits are renewed annually. You will receive a letter from the IND three months before your permit expires, advising you to extend your residence permit, along with the extension application form. |
| Single Permit (Combined residence and employment permit) – GVVA | As of 1 April 2014 foreign nationals from outside the EEA and Switzerland must apply for a combined residence and employment permit (GVVA) if they intend to work here for longer than three months. The procedures for applying for an employer-sponsored work permit is detailed in the above section of ‘Using your own company’. Usually it is the employer who applies for it and the permits are issued for up to three years. If the intention is for the employee to work for less than 3 months, a separate work permit can be applied for to the Netherlands Employee Insurance Agency (UWV). This work permit is valid for a maximum of 1 year with the availability of a renewal. The cost of a Single Permit is €870. |
| Intra-Company Transfer - Separate work permit and residence permit | The organisation must be registered in the Chamber of Commerce’s trading register as required by the Company Trade Register act 2007. The employer does not have to be a recognised sponsor. For intra-company transferees, namely trainees, specialists and key personnel, it is no longer possible to start the single permit procedure. Employers will need to apply for 2 separate applications: a work permit with the Netherlands Employees Insurance Agency (UWV) and a residence permit with the Immigration and Naturalisation Service (IND). Depending on the employees nationality, the employer may need to apply for a provisional Residence Permit (MVV) for the employee. An MVV is a visa that is issued for a stay longer than 90 days. The sponsor submits an application both for an MVV and a residence permit at the same time. This is called the Entry and Residence Procedure (TEV). It may be that your employer is a recognised sponsor, who may qualify for the fast-track procedure in which the IND aims to decide within 7 weeks of receiving an application. Duration: Employee is entitled to reside in Netherlands for the duration of the employment contract or the appointment with the opportunity to extend (as long as applied for within good time) Cost: €870 |
| Entrepreneur Permit | In the Netherlands, freelancers, entrepreneurs and one-man start-ups are recognised as ZZP’ers (zelfstandige zonder personeel) or self-employed without employees. As such, the procedure is very similar to that of anyone starting a business or registering a company. To become a ZZP’er you will need to have certain documentation (residence permit, address, etc.) among other essentials. The IND (Immigration and Naturalisation Service) and the Chamber of Commerce can advise you on your individual situation. A new scheme makes it possible for ambitious entrepreneurs to apply for a temporary residence permit for in the Netherlands. The scheme’s associated residence permit entitles the applicant to be a resident of the Netherlands for one year. Within that year, the start-up entrepreneur can create a business based on an innovative product or service under the guidance of an experienced mentor. After one year, the start-up entrepreneur may have the duration of their residence permit extended on the basis of the Dutch government’s self-employment scheme. In this regard, the start-up entrepreneur must meet the standard requirements applicable to the self-employment scheme. There are general and specific conditions that need to be met for an application under this scheme. They can be found on the government’s website at https://ind.nl/EN/business/investor-self-employment-start-up/Start-up/Pages/default.aspx The cost of the ‘start-up’ permit is currently €307 and if extended through the self-employment scheme, the cost is €384. |
Setting up a company in Netherlands
When setting up a company you may want to consider these factors:
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Business Factors
- The industry and type of business
- Nationality of the headquarters/individual(s) and
- Presence of existing trade agreements or relationships
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Location
Netherlands is made up of 12 provinces. While Netherlands regulations seem relatively unified, each province may have differences in their requirements and processes. Information researched aimed for general Netherlands-wide information, but in some cases may be based on Holland.
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Language
Language may be an influence. While a large number of people speak English (reportedly 87%), and Amsterdam recognizes English as one official language, the official national language is Dutch. Furthermore there are various regional languages such as Frisian.
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Visas
Being an EU member state, the Netherlands allows free movement of goods and labor from and to other member states. However for non-EU or EEA citizens or residents, requirements for working and living in the Netherlands will be more complex. If you come from outside of the European Union, this means that you will need a residence permit (MVV). In some cases you may also need to apply for a work permit (TWV). If you are not a resident of the EU, the best thing to do is to first go to the IND. On the website you will find everything you need to know to be able to apply for your stay in the Netherlands.
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'The Netherlands' vs 'Holland'
Historically the Netherlands in its entirety has often been referred to as ‘Holland’. However this is an older practice, that was due to the county of Holland being the economically and politically most important county in the region. In the current day and age referring to the Netherlands as Holland is incorrect, and now ‘Holland’ strictly refers only to North and South Holland, two of the nation’s twelve provinces.
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Requirement for Recognized Qualification
There are some professions in the Netherlands which are regulated and require a recognized qualification. This should be considered for people such as sole entrepreneurs, representatives, managing directors and the like. The Netherlands Organization for International Cooperation in Higher Education (NUFFIC) provides a foreign qualification accreditation service, which will confirm whether or not your qualifications meet the standards required for conducting business in the Netherlands.
The Netherlands is known for its history of international trade reaching back to the colonization era. The Dutch are considered internationally oriented and the labor market is characterized by a low level of unemployment, a high level of education and good language skills (reportedly the highest percentage of good command of the English language outside an English speaking country – although the same is often said of countries like Sweden and Norway). Furthermore, the Netherlands offers a high level of political and legal stability and well-developed financial and economic infrastructure.
There are no particular restrictions on foreign owned companies in the Netherlands, and a high number of tax treaties prevent double taxation and often provide additional tax benefits.
The Netherlands is also considered an ideal location by many foreign businesses to position themselves to enter markets throughout Europe, the Middle East, the Far East, Africa and beyond.
If you come from outside of the European Union, and are going to run the business in the Netherlands or move foreign staff there, this means that you will need a residence permit (MVV). In some cases you may also need to apply for a work permit (TWV).
Note: Information on specific requirements can also be obtained in more detail from the Dutch Chamber of Commerce, which is also a good source of information and advice on other aspects of running a business in the Netherlands.
Note: Generally no special permissions are required. However, there are some professions in the Netherlands which are regulated, and you would require a recognized qualification in order to set up a business within that sector. The Netherlands Organization for International Cooperation in Higher Education (NUFFIC) provides a foreign qualification accreditation service, which will confirm whether or not your qualifications meet the standards required for conducting business in the Netherlands.
Representative Office (RO)
A representative office may be established as a location or office in the Netherlands, but generally speaking no business activities are conducted there. A typical activity of a representative office is a location for doing market research, providing product information, etc.
A representative office does generally not have to be registered with the Chamber of Commerce (in fact registration is not possible and will be denied) and furthermore a representative office does under certain conditions not constitute a taxable presence in the Netherlands. The representative(s), however, must register for personal income tax. A work permit and residence permit are also required.
A representative office can have employees. If so, the foreign entity needs to register itself as a “withholding agent” with the Dutch tax authorities (obligation to withhold wage tax).
Any Dutch VAT incurred by a representative office is under certain conditions eligible for refund. In order to get a refund, the foreign company should file a periodical request with the Dutch tax authorities.
While this kind of entry is informally accepted by Dutch authorities, there does not appear to be a clear ‘official’ representative office status due to lack of any registration required.
Representative Branch Registration Process
Appoint a Representative
The existence of the representative office basically depends on the appointment and establishment of one or more representatives. The representative(s) must register for personal income tax. A work permit and residence permit are, of course, also required.
If at a later date the activities of the representative office change into a branch, the appropriate registration/amendment of registration in the trade register will have to be made. At the same time, the new entity must register for corporate tax, VAT etc.
Agency: N/A (arranged by your company)
Time: N/A
Cost: N/A
Register with Tax Office
Our research did not find an explicit requirement to register with the tax office for a representative office. Nonetheless, if employing people, the office is presumably required to then register with the Dutch Tax Authorities to obtain a VAT number and for taxation purposes.
Agency: Tax and Customs Administration (Belastingdienst)
Time: 5 days
Cost: No charge
Register for Employee Insurance
Regardless of its less formal status, when hiring staff the representative office must observe the normal rules of labor law. If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.
The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can also opt to be a self-insurer.
Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.
Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
Time: 1 day
Cost: no charge
Risk Inventory and Evaluation
If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.
It is not clear whether this requirement also applies to representative offices that employ staff, but assumed that it is and thus listed here for consistency.
The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:
- Which risks you and your employees encounter;
- What measures you have taken in order to prevent harm to your own health and that of your employees;
- What measures you are planning to take (Plan van Aanpak).
Agency: N/A (arranged by your company)
Time: N/A (actually making the plan will take some time, but there is no registration or approval process)
Cost: N/A
Branch Office
The branch office is considered an extension of its foreign parent, and thus the parent company will be responsible for its legal obligations and debts.
A branch is generally useful in the early stages of having a presence in the Netherlands, and the speedy formation of the branch can be advantageous. On the other hand, a disadvantage is the full liability of its parent.
The foreign head office only needs to file certain documents and information with the trade register of the Chamber of Commerce in the district where the branch will be located. Documents generally include:
| ● Name and address of the foreign legal entity or partnership, its legal form, details about the registration in its home country (such as name register and registering body, city and country of registration, registration number). |
| ● A proof of registration, not older than one month, issued by the foreign registering body. |
| ● In the case of a foreign legal entity, a copy of the articles of incorporation and articles of association (if these last are a separate act). These documents must be original or certified copies. All these documents should be in Dutch, English, French or German or have been translated into any of these languages. |
| ● The identities and addresses of its directors and the identity of the branch manager, empowered to legally bind the company. |
| ● The office address of the branch in the Netherlands, which is to be considered its legal domicile. |
| ● The trade name and a description of the business. |
Generally speaking, all the information that the foreign company needs for registration in its own country should be sufficient.
Altogether the steps will take about 1 week, though it is advised to allocate between 2 and 4 weeks for the whole procedure.
Branch Office Registration Process
Check Trade Name
Before forming the company, a business name which is unique within the Netherlands must be selected. A method for searching this can be via with the Benelux Office for Intellectual Property to make sure the business name has not already been taken as a trademark.
Agency: Benelux Office for Intellectual Property
Time: Instant
Cost: None
Register the Business and Name at Dutch Chamber of Commerce
The documents detailed below are required by the Dutch Chamber of Commerce trade register in order for branch registration.:
- A copy of the parent company’s Certificate of Incorporation
- A copy of Memorandum & Articles of Association of the parent company
- A copy of the parent company’s Certificate of Good Standing
- All registered directors and proxy holders of the parent company in its domicile country must also be registered in the Netherlands
- Directors and proxy holders of the parent company must provide a passport copy and proof of their private address – i.e. a current and original statement or invoice from the bank or a utility company
There is no requirement for any share capital for Dutch branches.
All required documentation must be officially apostilled and translated into Dutch or English by a certified translator.
Agency: Dutch Chamber of Commerce (KvK)
Time: 1 day
Cost: 50 EUR
Register with Tax Office
The branch company must register with the Dutch Tax Authorities to obtain a VAT number and for taxation purposes.
You do not usually need to register separately with the Tax and Customs Administration. The Chamber of Commerce will pass on your details automatically. This step is thus just listed separately for reference.
Note: You can apply for registration at the Trade Register also via a service called Message Box. For this purpose you need identification with e-Identity (EID) token (eHerkenningsmiddel) level 4 or signing with the PKI certificate (Public Key Infrastructure). Message Box is a secure e-mail system that enables you as an entrepreneur to exchange digital messages with Dutch government agencies.
Agency: Tax and Customs Administration (Belastingdienst)
Time: 5 days (ie. after registration at the Chamber of Commerce in previous step)
Cost: No charge
Open Corporate Bank Account
It is possible to use a foreign bank account while doing business in the Netherlands, a feature which has been facilitated by the new SEPA rules. Nonetheless, a Dutch account may be preferred, since it will probably make transactions smoother being based in the Netherlands.
Generally it is possible to make an appointment to open a commercial bank account as soon as the company has been registered with Chamber of Commerce, and it is possible for the appointment to take place at the same day.
The bank will need to identify the limited company plus the board member(s) and/or owners. The following documents are generally required:
- An original, recent (not older than 3 months) certified extract from the Chamber of Commerce that the company is registered.
- The articles of association (deed of incorporation).
- Separate responsibility of the board members, showing in the extract from the Chamber of Commerce, boards can decide to let only one board member identify himself in order to open the bank account.
- Joint responsibility of the board members, showing in the extract from the Chamber of Commerce, the boards that choose this structure need all of the members to show up and identify themselves to open the account.
- An original valid identity paper of each director to an employee of the bank who can then identify the person directly or
- A copy of a valid identity paper of each director that is legalized by a notary located in the Netherlands.
- The name, address and date of birth + residence data of each director;
- A completed and signed ultimate beneficial owner (UBO) statement for each director
Agency: Commercial Banks
Time: 1 day
Cost: None
Register for Employee Insurance
If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.
The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can opt to be a self-insurer.
Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.
Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV)
Time: 1 day (can be combined with previous step)
Cost: no charge
Risk Inventory and Evaluation
If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.
The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:
- Which risks you and your employees encounter;
- What measures you have taken in order to prevent harm to your own health and that of your employees;
- What measures you are planning to take (Plan van Aanpak).
Agency: N/A (arranged by your company)
Time: N/A (actually making the plan will take some time, but there is no registration or approval process)
Cost: N/A
Subsidiary Company
A more full level of operation is setting up a full subsidiary via a Dutch incorporated company. Dutch law distinguishes between two types of limited liability companies:
- The public limited liability company (Naamloze Vennootschap or NV)
- The private limited liability company (Besloten Vennootschap or BV).
Difference between NV and BV
The NV is more common for companies that are listed on a stock exchange, or engage in banking or insurance, but is not restricted to these businesses. The BV is mainly privately owned, and used for smaller businesses or group holdings.
BVs cannot issue share certificates and can’t issue bearer shares. However BVs can be formed with a minimum share capital of EUR 1 (ie. at least one share with voting rights and one share with profit rights or a single share with a combination of both), while NVs must have a minimum share capital of € 45,000.
Subsidiary Company Registration Process
Altogether the steps will take about 1 week, though it is advised to allocate between 2 and 4 weeks for the whole procedure.
Check Trade Name
Before forming the company, a business name that is unique within the Netherlands must be selected. A method for searching this can be via with the Benelux Office for Intellectual Property to make sure the business name has not already been taken as a trademark.
Agency: Benelux Office for Intellectual Property
Time: Instant
Cost: None
Notarize Articles of Association
The incorporation of a BV or NV requires the services of a civil-law-notary, a Dutch lawyer specializing in drafting and executing deeds of incorporation and articles of association.
Agency: Dutch civil-law-notary
Time: 1 day
Cost: EUR 1,750-2,500 for NV or BV (with relatively “standardised” articles of association)
Register the Business and Name at Dutch Chamber of Commerce
When you have decided on the type of business you would like to start, then you need to have it registered with the Dutch Chamber of Commerce (Kamer van Koophandel or KvK).
You also have to submit the trade name when registering with the KvK. This name must meet the conditions of the Trade Name Act (Handelsnaamwet).
Note: If you wish for your trade name to also be protected as a trademark you must register your trade name at the Benelux Office for Intellectual Property (BOIP).
The Chamber of Commerce will automatically pass on your details to the Tax and Customs Administration (Belastingdienst).
Once you have been registered you will be given a unique number for your business. This number, known as the KvK nummer, will need to be used on all invoices and outgoing post which your new business deals with.
Agency: Dutch Chamber of Commerce (KvK) – http://www.kvk.nl/english/
Time: 1 day
Cost: 50 EUR
Register with the Trade Register and the Tax Office
New businesses must be registered with the Trade Register kept by the Chamber of Commerce.
You do not need to register separately with the Tax and Customs Administration. The Chamber of Commerce will pass on your details automatically. This step is thus just listed separately for reference.
Note:| You can apply for registration at the Trade register also via Message Box. For this purpose you need identification with e-Identity (EID) token (eHerkenningsmiddel) level 4 or signing with the PKI certificate (Public Key Infrastructure). Message Box is a secure e-mail system that enables you as an entrepreneur to exchange digital messages with Dutch government agencies.
Agency: Tax and Customs Administration (Belastingdienst)
Time: 5 days (ie. after registration at the Chamber of Commerce in previous step)
Cost: No charge
Open Corporate Bank Account
It is possible to use a foreign bank account while doing business in the Netherlands, a feature which has been facilitated by the new SEPA rules. Nonetheless, a Dutch account may be preferred, since it will probably make transactions smoother being based in the Netherlands.
Generally it is possible to make an appointment to open a commercial bank account as soon as the company has been registered with Chamber of Commerce, and it is possible for the appointment to take place at the same day.
The bank will need to identify the limited company plus the board member(s) and/or owners. The following documents are generally required:
- an original, recent (not older than 3 months) certified extract from the Chamber of Commerce that the company is registered.
- the articles of association (deed of incorporation).
- Separate responsibility of the board members, showing in the extract from the Chamber of Commerce, boards can decide to let only one board member identify himself in order to open the bank account.
- Joint responsibility of the board members, showing in the extract from the Chamber of Commerce, the boards that choose this structure need all of the members to show up and identify themselves to open the account.
- an original valid identity paper of each director to an employee of the bank who can then identify the person directly or
- a copy of a valid identity paper of each director which is legalized by a notary located in the Netherlands.
- the name, address and date of birth + residence data of each director;
- a completed and signed ultimate beneficial owner (UBO) statement for each director
Agency: Commercial Banks
Time: 1 day
Cost: None
Employee Insurance
If you hire employees in your business you are obliged to pay insurance on behalf of your workers for a number of schemes, including national insurance. Employers pay contributions on behalf of employees to the Dutch Tax and Customs Administration (Belastingdienst). These contributions are part of the payroll tax.
The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) arranges payment of employee benefits. With regard to the Work and Income (Capacity for Work) Act you can opt to be a self-insurer.
Therefore before you employ staff, you must register as an employer with the Dutch Tax and Customs Administration. You will then receive a payroll tax number and the required forms. You use the payroll tax number when submitting returns and with regard to other types of contact with the Dutch Tax and Customs Administration.
Agency: Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) – http://www.uwv.nl/OverUWV/english/
Time: 1 day (can be combined with previous step)
Cost: no charge
Risk Inventory and Evaluation
If you own a business in the Netherlands and you employ staff, you are obliged to conduct a risk inventory and evaluation (RI&E). You must make the RI&E available for perusal at a location accessible by employees.
The RI&E must be performed before the official start of your business. When carrying out an RI&E, you must check:
- Which risks you and your employees encounter;
- What measures you have taken in order to prevent harm to your own health and that of your employees;
- What measures you are planning to take (Plan van Aanpak).
Agency: N/A (arranged by your company)
Time: N/A (actually making the plan will take some time, but there is no registration or approval process)
Cost: N/A
Outsourcing Employment Through a GEO Employer of Record Service
Whether to incorporate in Netherlands, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.
If the company intends to have staff in Netherlands they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where
- the company is looking to setup an office quickly
- the company wants to work within a defined budget
- the company wants to limit its initial commitment in Netherlands
- the company needs help with tax, employment, immigration and payroll compliance in Netherlands
The complexity of employment regulations in Netherlands makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.
Shield GEO provides a comprehensive service in Netherlands allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Netherlands.
Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Netherlands. Read more about outsourced employment through Shield GEO.
With a historical foundation of international trade, the Netherlands has a strong and developed business investment environment, economy and infrastructure. It is considered a popular choice for foreign business as a ‘gateway’ into Europe, and has an open framework for foreign business establishment and ownership.
Dutch employment law provides strong labor conditions and protections for employees, thus, employing people will generally be an important investment and commitment. However, options such as using Collective Labor Agreements and temp agencies are popular options for more flexible workforce arrangements.
The business structures available to establish a foreign presence are typical to most western countries: the representative office which has no legal entity status and thus can only be used for preliminary activities such as market research, the branch office which is a legal entity, but as an extension of the foreign parent, and thus the foreign parent is liable for its debts and obligations. Finally, the full subsidiary company, which is a separate legal entity and independently managed from the parent company.
- Netherlands Employer of Record Overview
Netherlands
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