With the rise of remote working, many people are thinking about heading to another country to work from their laptops. In some countries it’s perfectly legal to just arrive on a tourist visa, open your laptop and work remotely for your foreign-based company, but in the Netherlands, it’s not.
In the Netherlands, you need to have the proper visa, including the “right to work,” even if you are working remotely for a foreign company. You also need to follow the labor laws and employment laws of the Netherlands.
But I’m Not Taking a Job Away from a Dutch Person
If you live in the Netherlands, even if you work remotely for a foreign company, you’re using the roads, the healthcare system, the fire department, and other social services, so you must follow the local employment laws.
Your employer also has a responsibility to follow Dutch employment laws, especially if you are a manager of the company. You have a high burden of compliance as a manager.
These laws include requirements like social insurance, disability insurance, and unemployment insurance, for example. If you get injured, your foreign company might not pay your medical claim or disability claim, and if your position is terminated, you might not be able to collect unemployment benefits from your home country if you are living abroad.
How to Legally Work as an Employee of a Foreign Company While Living in the Netherlands
All that being said, there are 3 ways you can legally work for your U.S. or foreign employer while living in the Netherlands. These 3 ways cover employees of companies, not self-employed people. If you’re self-employed, scroll down to the next section.
1. Your Employer Uses an International Payroll Company to Pay You
Your employer can keep you on as an employee and hire an international payroll company (such as Broadstreet) to pay you.
This is a great option for your employer because they don’t need to create a branch of the company in the Netherlands. They just need to pay the payroll company, and the payroll company pays you. You become a legal Dutch employee working for a U.S. company, and the payroll company takes care of everything. This is the easiest option.
One caveat of using this option is that you must already have a visa with the “right to work” in the Netherlands. Your employer can’t sponsor you, because they are not a Dutch company, so you need to get the right to work on your own.
Some ways to do that are to get a partner visa, or if your partner is living in the Netherlands under a highly skilled migrant worker visa or a Dutch American Friendship Treaty (DAFT) visa, you can inherit their right to work.
If you’re a citizen of another European country, you might already have the right to work in the Netherlands.
Something else to be aware of is that you can’t get the 30% Ruling with this option. The 30% Ruling is only available to foreign nationals who are recruited by Dutch employers.
Another thing to know is that this option won’t work if you are a manager or a director of the company. According to European Union laws, when a manager or director moves to the E.U., the company thereby establishes a corporate entity in the country where the person lives. The corporate entity follows the manager. This means if a manager of a U.S. company manager or director lives in the Netherlands, the U.S. company needs to follow Dutch and European Union laws in regards to the employee living in the Netherlands. The company would be subject to corporate income tax by way of a managing employee residing in The Netherlands.
2. Your Employer Uses a “Payrolling” Company as an Intermediary
In this case, you become an employee of the payrolling company instead of an employee of the U.S. or foreign company that you were working for. Your former employer has a contract with the payrolling company and pays them for the work you do.
The payrolling company is a Dutch company that is already approved to provide sponsorship for your visa. You become an employee of the payrolling company on paper, working on secondment to the actual employer. You can get a highly skilled migrant visa and the 30% Ruling with this option.
3. Your Employer Opens a Branch in the Netherlands
Your employer can open a branch of the company in the Netherlands and get approval from the Dutch immigration office (IND) to start hiring workers from abroad as highly skilled migrants. This process is rather lengthy. It can take up to two years for the company to get approved to hire non-Dutch citizens and provide sponsorships for visas.
This is a great option for your company to consider if they want to expand into the Netherlands.
These three options are all options to consider, and you can choose the best one for you based on your visa status. If you need a visa, and you need an employer to sponsor you, then you need to use option 2 or option 3. If you are able to get a visa with the right to work in the Netherlands on your own without employer sponsorship, then you can use option 1.
How to Legally Work In the Netherlands as a Self-Employed Person
Another option to legally work in the Netherlands is to become self-employed by starting a business in the Netherlands. If you start your own business in the Netherlands, you can take Dutch clients or foreign/remote clients. For example, your former employer can become your first client.
To start a business in the Netherlands, you’ll need to go to the KVK and register your business.
If you set up your own business and your former employer hires you as a contractor, you need to make sure that you are following the rules of self-employment. For example, as a self-employed person, you are able to make your own decisions, set your own working hours, place of work, and take other clients. This is in contrast to being an employee of a company where the company sets your working hours, place of work, etc.
Something to be aware of with this option is if 70% of your income or more comes from one client, you’re not eligible for self-employment deductions on your Dutch taxes.
BNC Tax Offers Business Consulting
Here at BNC Tax, we get a lot of questions about how U.S. citizens can work in the Netherlands, and we offer business consulting sessions to help you make the best decisions when it comes to business, working, and paying taxes as an American living in the Netherlands.
To make an appointment for a consulting session, visit our Appointment Calendar.