Employer of Record Services in Netherlands
Expanding business overseas brings along a few challenges. You wish to hire new employees and manage them quickly. But how to do all this from far away. That is why hiring Employer of Record Netherland is important. It is the best possible solution to consider the appropriate local regulations. PEO solution helps you streamline international expansion and that too, without establishing an entity.
Hiring in Netherlands: All That You Need to Know
The Netherland has a largely English-speaking crowd and it shares amazing connections to other European markets. Due to its robust digital infrastructure, it becomes a prime location for businesses looking for international expansion. Dutch workers are known for leading other nations when it comes to business skills and tech knowledge. While this is a land of opportunity for investors and businessmen, it has legal complexities to be taken care of and the best way to deal with it is to hire a Netherland Employer of Record.
Key Areas to Consider
While doing business in an unknown location, it is important to be well aware of the laws and regulations applicable to your business. Of course, you want to compliantly hire and onboard your Dutch employees while expanding business in the Netherlands. The associated challenges include retaining employees, oversee payroll, laws compliance, and risk mitigation. You need a proper solution to take care of all these considerations on your behalf and that is what exactly Netherland Employer of Record does for you.
Let’s take a dig to understand what the requirements to do business in the Netherlands are.
Table of Contents
• Immigration and Work Permits in Netherland
• Have your Own Company
• Setting up Payroll in Netherland
• Payroll and Tax in Netherland
• Work Permits
• Employee Entitlements
• Setting up a Company in Netherland
• Netherland Employment Compliance
• How to Onboard Employees
• Benefits of Netherland Hiring Outsourcing
• Why Infotree Global Solutions?
Immigration and Work Permits in Netherland
International workers must obtain proper visas and sometimes even work permits to work in the Netherlands, as recommended by immigration laws. If you are coming from outside of the European Union, and are willing to operate the business in the Netherlands, it means that you will require a residence permit and a work permit as well.
It often needs company registration and that too, prior to sponsoring work permits for staff, which can cause an issue if your organization is striving to enter the country quickly. If you have not completed the incorporation process, then it is better to use the services of an outsourced management company or Netherland Employer of Record to sponsor the works for the mandatory permits.
Have your Own Company
If you are an employer with a branch in the country or you are someone who is represented in the Netherlands by an authorized entity, you should apply for a residence permit for regular labor. Your company should be listed under the Commercial Registers Act 2007. The work permit and the residence permit can be combined in the single permit and you need to apply for one permit at any one authority. If you have hired an Employer of Record in Netherland, it can help you find out more details about it.
The single permit includes a residence permit and an extra document stating for which employer the foreign national is allowed to work and under which scenario.
Before submitting the application, the employer should decide whether the employer needs a provisional residence permit. After your application, you need to pay the fees and submit all the needed documents with the application form. This includes copies of the employee’s passport/ID and educations diploma. Any foreign documents will need to be legalized and be in English, French, Dutch, or German. Once the application is permitted, you will be notified to collect the single permit and you will also get a copy of the additional document.
Setting Up Payroll in Netherland
Working hours in the Netherlands cap at 55 hours per four-week period. The currency is Euro and in a 16-week period, the average workweek should not exceed a 48-hour workweek average. However, mutual agreements may draw different working hours. By considering the Netherland Employer of Record service, you can learn about the different aspects of payroll in the Netherland. However, despite collective agreements, employees may never have to work for more than 60 hours per week because the country has specific workweek laws in place to restrict working overtime. Talking about overtime considerations, the overtime pay may vary depending on the industry and as suggested in the collective agreements.
Payroll and Tax in Netherland
If you want to employ staff in the Netherlands then you are obliged to deduct payroll tax from your workers’ wages. Your Netherland Employer of Record takes care of the payroll tax which includes:
• Wage tax
• Social security contributions
• Premiums for employer insurance
• Employer’s health care insurance contribution
Before you hire staff, you need to be registered yourself as an employer with the Dutch Tax and Customs Administration. You may also require to register if your organization has its registered branch in another country. After registration, you will get a payroll tax number and the forms you need.
There are a few types of visas in the Netherlands for different purposes:
• MVV, Residence Permit, and Work Permit (TWV)
If you wish to set up or operate a business in the Netherlands, you need to have a residence permit. In a few cases, you may also need an additional work permit (TWV) and a recognized qualification in the specific industry. Before a residence permit, you should apply for a provisional residence permit (MVV) that enables you to enter the country, unlike a tourist. However, you can apply for both the MVV and a residence permit simultaneously, called the Entry and Residence Procedure (TEV).
If you are a national of New Zealand, South Korea, Japan, Candid, Australia, or the United States of America then you don’t need a MVV. Instead, you are eligible to apply for a residence permit at the IND desk within 3 days to enter the country. The costs of acquiring a residence permit will totally depend on the legal type of your business. Netherland Employer of Record can help you renew your Residence permits annually.
• Single Permit (Combined residence and employment permit) – GVVA
Foreign nationals from outside the EEA and Switzerland are required to apply for a combined residence and employment permit (GVVA) if they are willing to work there for more than 3 months. The process to apply for an employer-sponsor work permit is issued for up to 3 years. In case, your employee has to work for less than 3 months, an individual work permit can be applied to the UWV. This type of work permit is valid for 1 year with a renewal option.
• Intra-Company Transfer – Separate work permit and residence permit
The company must be registered under the Chamber of Commerce’s trading register as suggested by the Company Trade Register act 2007. The employer may not be a recognized sponsor. For intra-company transferees, like trainees, experts, and key personnel, it is not possible to start the single permit procedure. Employers will require to apply for 2 separate applications: a work permit with UWV and a residence permit with IND.
Based on the employees’ nationality, the business owner may need to apply for a provisional Residence Permit (MVV) for the employee. An MVV is a visa that is granted for a stay longer than 90 days. The sponsor can submit an application for both permits at the same time, known as the Entry and Residence Procedure (TEV).
• Entrepreneur Permit
Ambitious entrepreneurs can apply for a temporary residence permit to work in the Netherlands. It has a residence permit entitling the applicant to be a resident of the Netherlands for one year. Within that year, the entrepreneur can create his business based on innovative products or services as guided by the experts. After one year, the entrepreneur may ask for extending the residence permit based on the Dutch government’s self-employment scheme. For it, he should meet the standard requirements that are applicable to the self-employment scheme.
The Netherlands’ has a certain policy for labor where the minimum wage is approx. €1,653.60 per month, or €381.60 per week for all workers who are above 21 years. The national minimum wage changes take place twice annually first in January and again in July to reflect mutually consented upon wage averages. Agreements extending beyond six months may also encompass probation periods of up to two months, but no longer than that. People working in the Netherlands are eligible for both contractual and discretionary bonuses.
By hiring an Employer of Record Netherland, you can be assured of following all the labor laws and payroll concerns. Employers must provide all contractual employees the termination notice if required. Notice periods are not mandatory during a worker’s probation or trial period. Dutch law recommends a statuary notice period of 1 month for workers, though individual agreements may reflect shorter or longer notice periods. In the case of employer dismissal without notice, it may lead him to extra compensation equivalent to the amount of potential employee income during the perceived notice period.
Setting up a Company in Netherland
While establishing a company you need to consider factors like business, industry type, the nationality of the headquarters, or presence of existing trade agreements, and of course, location. Netherlands is formed up of 12 provinces. While Netherlands rules seem relatively unified, every province may have varied requirements and processes. It includes language, where English prevails but the official national language is Dutch and then there are regional languages like Frisian.
Being an EU member state, the Netherlands encourages free movement of supplies and labor from and to member states. However, if you are a non-EU or EEA citizen then the need for staying and working in the Netherlands will be a little complex. Then you need to have a proper work permit and visa. You need to have proper qualification documents to recognize qualifications. It is applicable for sole entrepreneurs, representatives, and managing personals.
Netherland Employment Compliance
Dutch employment law is rather complex, especially the dismissal laws. The legislative changes introduced by the act recommended a change to pre-determined procedures for termination based on the grounds for dismissal. Here the employer is free to select between various types of procedures like increased income protection for employees, the reduction of disparity between fixed-term and permanent employees, the simplification of dismissal laws, and growing incentives for unemployed people to find re-employment. Thus, the act has added complexities to the dismissal system, resulting in employers concentrating even more on flexible employment relationships. To promote compliance, employers are obligated to specify on payslips all factors, making up the wage encompassing expense allowances. Relying on the expertise of an Employer of Record Netherland can actually help.
How to Onboard Employees?
Foreign jurisdictions recommend compliance with all local rules and laws. However, by using the EOR, you can easily employ and payroll your staff in the Netherlands without hassles. What this actually means is that the organization does not need to have a formal entity in the host country, saving time and efforts. Instead, your legal Netherland Employer of Record can assist you with employment agreements, payroll, tax and withholdings, and immigration formalities.
By using their services, you can save time and resources to be used for establishing your local entity with office space. Besides, you do not have to hire employment lawyers, accountants, immigration personals, local partners, and human resources. Your EOR is there to manage all employment requirements, enabling you to quickly deploy the staff.
Benefits of Netherland Hiring Outsourcing
By taking the help of the Netherland Employer of Record, you can shed away countless worries associated with global hiring. Being aware of the laws of the specific country, your EOR takes care of all the legal formalities associated with international hirings. Their expertise in managing professional employment associated immigration cases helps you to relieve when it comes to understanding the local labor laws and regulations.
An EOR is helpful in pre and in-employment screening, taxation that also includes Netherlands’ 30% tax benefit ruling, legal and payroll affairs, work permits, insurance and taxes and so. Imagine seeing your work getting done by someone who knows how to do it the way you wanted. This not only helps you stay relaxed and focus on your business operations but also ensures they are in compliance with local laws and regulations.
Why Infotree Global Solutions?
Taking your business to an international market is indeed an exciting experience. But it brings along a number of concerns. That is why partnering with Infotree Global Solutions allows your company to expand in the Netherlands without worries. Using our International PEO solution, our team of experts backs up all your needs and helps you onboard your international workers quickly. By using our services, you can easily manage risk mitigation, payroll, and tax formalities because that is all done by us.
As your Employer of Record in Netherland, we help you keep your business move forward no matter when you have short term or long-term projects in mind for the Netherlands. We assist you to direct the complexities of expansion by ensuring an expansion experience where you hire one or many employees using our brand name without setting up an office. It is wonderful to know that with international EOR, your company can save a significant amount of resources that otherwise should be spent on the restrictive entity setup process.
If you are all set to mark your presence in the Netherlands, get in touch with us today and learn more about it.