Self-employment in the Netherlands: The entrepreneur’s permit, startup visa and DAFT
Are you looking to be self-employed in the Netherlands? Find out whether the Entrepreneur's Residence Permit, Startup Visa or DAFT is right for you. [Contributed by Fragomen]
Performing work in the Netherlands must be authorised by the Dutch authorities, even when that work is for your own company. If you are interested in being self-employed, you will need to apply for an entrepreneur’s or zelfstandige residence permit.
In general, any immigrant business owner may qualify for the Entrepreneur’s Residence Permit if the proposed self-employment serves an important Dutch interest. To qualify, the entrepreneur must be the owner or co-owner (at least 25 percent ownership) of a company registered in the Netherlands. Successful applicants will receive a renewable residence permit that is valid for two years and can sponsor partners and minor children to join them in the Netherlands. It is important to note that only self-employment is authorised by the Entrepreneur’s Permit, regular employment requires a work permit.
In principal, under this scheme there is no limitation on the type of business that the entrepreneur can engage in. However, the intense application procedure might lead to qualification difficulties for ambitious entrepreneurs who are not engaged in certain types of business. Among other requirements, the entrepreneur must demonstrate that his or her self-employment serves essential interests in the Netherlands. An agency of the Ministry of Economic Affairs (RVO) will determine this according to a points system.
The points system looks at three areas: personal experience, the quality of the business plan and the added value for the Dutch economy. Added value to the Dutch economy can be in the form of job creation, investment or innovation. Out of a maximum of 300 points, a minimum of 90 points is required to obtain a positive recommendation and for each component, the applicant must score at least 30 points. In some cases, scoring exceptionally high in one area can compensate for a low score in another area. However, this is an exceptional circumstance and if you want to work under self-employment in the Netherlands you should be prepared to satisfy all three components.
The points system used by the RVO provides the appearance of certainty, in practice however, many applicants find that there is broad discretion in satisfying the criteria. To maximize your chances of being successful, we advise that you provide a very well-documented application package with a robust business plan that includes detailed financial projections.
The Dutch government is actively seeking to attract talented entrepreneurs and investors to the Netherlands as part of the ambitious entrepreneurship program. The Dutch authorities noticed that many startup entrepreneurs were not yet at the point where their companies could pass the robust scrutiny of the RVO points system and did not qualify for an Entrepreneur’s Permit. In January 2015, the Startup Visa came into effect, creating a one-year permit that provides room for startup entrepreneurs to grow their company.
Among other requirements, you must be working with a reliable facilitator (incubator or business angel), the proposed product or service must be innovative and you must have sufficient funds to live in the Netherlands for the duration of the year-long permit. You must also present a plan demonstrating how your idea will successfully grow into a business.
The Startup Visa is non-renewable and the startup entrepreneur must apply for the standard Entrepreneur’s Permit at the end of the first year. After the first year of the Startup Visa scheme, it became clear that many startups are still in a growth stage when the Startup Visa expires, thus creating a risk that they may not qualify under the points-based system.
In January 2016, it was announced that the business facilitator can submit a recommendation to the RVO to support the Entrepreneur’s Permit application for the startup. With such a recommendation, approval by the Dutch immigration authorities should presumably be easier to obtain. At the time of publication of this article, it is still not clear how this change works in practice, as the first issued Startup Visas are only now due for renewal. This is certainly something we will revisit in the future.
Dutch-American Friendship Treaty (DAFT)
If you are a citizen of the United States, the good news is that an international trade agreement exists between the US and the Netherlands (DAFT) whereby American entrepreneurs are not checked against the RVO points system.
The so-called ‘DAFT permit’ is actually a standard Entrepreneur’s Permit that is issued via a unique application process. American entrepreneurs are required to make a minimum capital investment in a registered Dutch company that they own or co-own (currently EUR 4500 for most business) and the investment must be maintained for the duration of the residence permit. This will be reviewed when it comes time to renew the permit after two years.
Along with the capital investment, there are several other administrative steps that must be completed, most of which require that you are physically present in the Netherlands. This can be done while visiting the Netherlands during your 90-day visa term for US nationals.
The process of putting together a successful DAFT application can be a logistical challenge, as many agencies that must be visited to complete the process are not familiar with the DAFT permit and the corresponding requirements. However, when properly executed, a DAFT application can provide you with a clear and, for the most part, certain route toward being self-employed in the Netherlands.
If you would like to be self-employed in the Netherlands, if you are a startup entrepreneur with an innovative idea to bring to the Dutch economy or if you are an American who wants to learn about residing in the Netherlands via the Dutch-American Friendship Treaty, please contact Christine Sullivan at Fragomen Worldwi
Christine has lived in Amsterdam as a DAFT entrepreneur and has helped many others to successfully qualify to be self-employed in the Netherlands. For any questions about being self-employed or for any questions about immigration in the Benelux countries, please contact Christine directly at email@example.com.
Contributed by Fragomen
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