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Netherlands Individual - Other issues

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Immigration rules and formalities

The Dutch immigration policy has been aiming to protect the Dutch labour market for decades. Over the past few years, it has introduced a less restrictive admittance policy for highly skilled employees of multinational companies who meet specific criteria.

Immigration procedure(s) apply to foreign nationals who want to work and stay in the Netherlands.

According to the Dutch Foreign Employment Act, an employer needs to be in possession of a work permit for a non-European Economic Area (EEA) national (including Croatian nationals) that will perform employment activities in the Netherlands. An exception applies to Japanese nationals, who are also allowed to work without a work permit in the Netherlands. However, for Japanese nationals, a residence permit is required in case the intended stay will exceed 90 days (within a period of 180 days). Furthermore, from 1 January 2017 onwards, Japanese nationals who come to the Netherlands to work (again) need a work permit based on revised regulations.

Additionally, most nationalities require a Schengen visa in case the intended stay will be less than three months within six months. Please note that a Schengen visa issued for business does not allow the business visitor to work in the Netherlands. A separate work permit will have to be applied for.

In case the intended stay will exceed three months (within six months), a residence permit is required to legally stay in the Netherlands. Next to that, a long-term entry visa (MVV) is required before entering the Netherlands (excluding nationals from Australia, Canada, Japan, Monaco, New Zealand, South Korea, Vatican City, and the United States).

EEA nationals

No immigration requirements are applicable for EEA and Swiss nationals other than registration with the local municipality in the city of residence in cases where the stay exceeds four months (see Registration municipality below).

Non-EEA nationals

For non-EEA and non-Swiss nationals (including Croatian nationals), it depends on the exact facts and circumstances to determine which immigration procedure will apply. There are various types of Dutch work permits (e.g. for intra-company transfers, students, (short-term) highly skilled migrants). Which type of work permit can be applied for will depend on the exact facts and circumstances of the case.

The following work permit procedures are the most common:

Intra-company transfer (ICT) procedure

The procedure for ICTs applies when a non-EEA national who is a manager, specialist, or trainee, who has one's main residence outside the European Union and an employment contract with a company based outside the European Union, is transferred to an entity based in the Netherlands. The Dutch ICT residence permit grants a legal work and residence status when the foreign national’s stay exceeds three months within six months. The conditions for the ICT procedure include the following:

  • The foreign employee has to have been employed by the company group for at least three consecutive months immediately prior to the transfer.
  • The salary of the foreign employee must be in accordance with Dutch market standards (the highly skilled migrant salary threshold: EUR 4,756 or EUR 3,487 [including holiday pay] if one is under the age of 30 [2018]).
  • Managers and specialists must have sufficient experience for their position in the Netherlands. Trainees must have a master degree (university or ‘HBO’/college level) or at least five years’ experience.

Depending on the nationality, an MVV visa may be required. The decision period for this residence permit for recognised sponsors is two to four weeks (excluding MVV visa), and is eight weeks for not-recognised sponsors.

The ICT residence permit cannot be extended after one year (for trainees) or after three years (for managers or specialists). A cooling off period of six months will apply once the maximum validity has been reached. The foreign employee will have to reside outside the Netherlands before a new ICT residence permit can be applied for in the Netherlands.

Intra-EU mobility

The above information is applicable in case the foreign national has the intention to reside in the Netherlands for the majority of the transfer (the Netherlands is the first member state). The foreign employee who is in possession of a valid ICT residence permit issued by another participating EU member state, may be transferred to the entity in the Netherlands too, in which case the Netherlands is the second member state.

  • When the work activities will last for less than 90 days in 180 days, the foreign employee may start working as soon as the short-term mobility has been notified to the Dutch labour authorities (UWV).
  • When the work activities will last longer, a Dutch ‘mobile ICT’ residence permit will need to be applied for at the Dutch Immigration and Naturalisation Service (IND). After the application has been submitted, the individual will be allowed to start working in the Netherlands.

Highly skilled migrant procedure

A residence permit as a highly skilled migrant will allow a non-EEA national to work and reside legally in the Netherlands (without a separate work permit). The highly skilled migrant procedure applies to foreign employees who are currently in possession of a residence permit as a highly skilled migrant or who have an employment contract with a company in the European Union.

The following requirements have to be met:

  • The company must be registered as a recognised sponsor with the IND.
  • The monthly wage (including holiday pay) of the employee exceeds EUR 4,860 or EUR 3,563 if one is under the age of 30 (2019). For recently graduated students who studied or were promoted in the Netherlands, and for students who graduated or were promoted in a top university abroad, possibilities exist to obtain a residence permit to look for a job as a highly skilled migrant for a period of one year (starting within three years after their graduation/promotion). As soon as they have found a job in the Netherlands, their employer can apply for a residence permit as a highly skilled migrant if the wage (including holiday pay) of the employee is at least EUR 2,553 gross per month (2019).
  • The guaranteed wage is to be paid monthly via bank transfer on a bank account in the employee's name.
  • The wage conforms to market.
  • The stay of the employee is longer than three months within six months.

If an MVV visa is required on the basis of the nationality, the visa and residence permit can be applied for simultaneously under the so-called TEV procedure. The decision period for this residence permit (in or excluding MVV visa) is two to four weeks.

If the employee will have to work in the Netherlands for less than three months, a work permit as a highly skilled migrant can be applied for (without a residence permit). The processing time of the application is approximately two weeks. In order to be able to make use of this possibility, the employer also has to be an acknowledged sponsor and the employee must fulfil a key position. The monthly wage (including holiday pay) for this work permit must be at least EUR 4,860 for employees 30 years of age and older and EUR 3,563 if the employee is younger than 30 years of age (2019).

GVVA

In case the highly skilled migrant and ICT residence permit procedures are not applicable, a single permit (GVVA) will need to be applied for when the work and stay in the Netherlands is at least three months.

Registration municipality

In case the stay in the Netherlands is less than four months, registration with one of the 19 designated municipalities as a non-resident is voluntary, but required in order to obtain a Dutch citizen service number (so-called BSN). For a stay of at least four months within six months, registration in the Municipal Population Database (Basisregistratie personen or BRP) is required.

Update and trends

Under the Modern Migration policy, the responsibility and obligations for Dutch employers have increased, while on the other hand, procedures have been simplified. In this respect, we have noticed an increase in retroactive inspections by the Dutch immigration authorities on the obligations for employers. If employers fail to meet their obligations, penalties can be imposed.

On 15 May 2014, the European Parliament adopted Directive 2014/66/EU (the ICT Directive). This Directive lays down autonomous rules regarding entry and stay for the purpose of work as an intra-company transferee in EU member states (excluding Denmark, Ireland, and the United Kingdom). The ICT Directive must be implemented in all participating European member states on 29 November 2016. After 29 November 2016, it will not be permitted for member states to apply national measures in cases where the ICT Directive applies. As a result, certain national measures, such as the highly skilled migrant residence permit category in the Netherlands, will no longer apply in certain cases.

Economic employer concept

On 1 December 2006, the Dutch Supreme Court rendered a judgement regarding the interpretation of the term 'employer' in article 15, paragraph 2, sub b of the Organisation for Economic Co-operation and Development (OECD) Model Convention. The Supreme Court ruled that the employer concept should be interpreted economically. For inter-company assignments, the economic employer concept implies that a foreign group company that bears the risks and responsibilities of the employee's activities and that will have the authority to instruct the employee will be considered the employer if the salary costs relating to the employment activities in that country are charged individually (i.e. the actual salary costs per time unit) to the foreign group company.

In addition to the new case law of the Dutch Supreme Court, the Dutch Ministry of Finance published new policy guidelines in a decree on 20 January 2010 in reaction to questions raised about the practical application of the aforementioned judgement. The Decree addresses the definition of employership (state of being an employer) in the employment article of tax treaties and is particularly relevant for short-term assignments. It deals only with assignments to a separate legal entity in the country of employment. In other words, the Decree does not address assignments to a permanent establishment (PE) in the country of employment. The relevance, in particular for group entities, is that the Decree mentions a number of examples of commonly occurring case positions and their related tax treatment. With this, a few guidelines and tools are provided for the practical application of the Dutch Supreme Court's economic employer concept. More importantly, the Decree introduced two specific facilities, i.e., a 60-day facility and a general facility for reversing wage tax withholding from the home country employer to the Dutch company that is hiring employees. The second facility provided then has been included in the wage tax legislation per 1 January 2013 as well.

60-day facility

Under the aforementioned judgement of 1 December 2006, cross-border intercompany employment is subject to a test as to whether the group company in the country of employment qualifies as an economic employer. The Decree offers a relaxation for assignments to the country of employment for less than 60 days over a 12-month period in the context of an exchange programme or career development, or in situations where the employee in question has a specific expertise. In these instances it is easier assumed that no employer under a tax convention exists in the country of employment regardless of who is bearing the employment costs. This will alleviate the administrative burden for many group entities. The facility is intended in principle for group entities as referred to in the Dutch Wage Tax Act (one-third equity stake required). Groups that do not satisfy this requirement, but present themselves as a group can submit an application to the Dutch tax authorities to request treatment along the lines of the Decree.

General facility for reversing payroll obligations to a Dutch group entity

When an employee is subject to Dutch wage tax, the foreign, formal employer will in principle be liable to remit wage tax. In other words, the foreign employer will have to register in the Netherlands and operate a Dutch (shadow) payroll. However, from 1 January 2013, there is a general facility included in the legislation for reversing wage tax withholdings from the home country employer to the Dutch (host country) employer in assignment situations. As such, the Dutch employer can take over the withholding obligation from the home country employer. However, a request should be filed with the Dutch tax authorities in this respect; otherwise, the foreign formal employer should still register with the Dutch authorities for the purpose of remittance of Dutch wage tax and employee insurance premiums via a Dutch (shadow) payroll.

The scope of this legislation is expanded as of 1 January 2017. Please note, however, this facility (still) does not apply in all situations, e.g. formal salary splits are not automatically covered. In those situations, the formal foreign employer(s) may still need to register and operate a separate shadow payroll in addition to the Dutch employer.


Last Reviewed - 11 July 2019

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