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Hiring Foreign Tech Employees in the Netherlands without a Dutch entity

HIRING FOREIGN TECH EMPLOYEES IN THE NETHERLANDS WITHOUT A DUTCH ENTITY

Payroll and Tax in the Netherlands Guide 

Over the years, the Netherlands has become one of Europe's biggest hotspot for leading communications and information technology businesses. In fact, over 60% of Forbes 2000 IT companies are already established in the Netherlands.

This of course leaves the question – what about the other 40%? How can they get a foot hold in the Dutch technology market, particularly without having an entity established in country at a time when there is global uncertainty surrounding Corona Virus?

The Dutch IT market is referred to by many as ‘The Digital Gateway to Europe’ It’s a central location for travel across mainland Europe (granted this is more difficult at present) access to an excellent talent pool at a good price and accessible to Non-EU migration, making it an ideal base for businesses looking to establish a European operation.

However, employing people without full compliance with local fiscal and employment legislation can have serious consequences, with high fines or even prison. It could also stop you conducting business in the future. So, it is important to make sure you follow the right steps before you start.

Option 1: Engage a PEO or Workforce Management Partner

Engaging with a PEO or workforce management partner is an increasingly popular option for tech businesses looking to ‘land and expand’ and employ people in the Netherlands. This would allow you to avoid the need to register a business in country as your employees are engaged via a separate entity.

This means that you can focus solely on implementing your business strategy whilst the employer liability and HR advisory services for employing people in the Netherlands remain with a company that specialises in the subject. Should the employees not live up to expectation or the project become unviable it is much simpler to serve the employees their notice and move on.

Hopefully however, you can prove the business works and after a successful period of say 12 months, look to establish your own entity and transition the employees across. The Netherlands has a standardised labour code which makes transitioning employees much easier from one employer to another, with fairly uniform conditions. To find out more about this process, click here.

Option 2: Establish a Business and Hire a Human Resources Manager in the Netherlands

Before you can look at engaging a HR manager you must first establish a business, open bank accounts and identify office space etc. You will need a locally appointed director for the business, which would either mean relocating somebody internally or making a new appointment locally which can prove prohibitive for businesses looking to ‘dip their toe’ in the market.

Hiring a human resources manager in the Netherlands could be a long-term option, particular if you envisage a fast-growing workforce. However, you should also consider what their role would entail in the start-up phase. Would they be responsible for recruitment also? Is this part of their skillset? What part of the human resources function can they be directly responsible for and what part would still need to be outsourced?

Option 3: Engage a Human Resources Consultancy in the Netherlands

Typically, a business would also have to engage with a human resources consultancy who can offer a range of flexible packages for start-up businesses in the Netherlands. Choosing the right consultancy that is reflective of your business values whilst ensuring you can employ a local human resources manager or a human resources consultancy to manage this for you. Of course, you will also need to have completed the process of setting up a business in the Netherlands before proceeding with this option.

Hopefully these 3 options have given you an insight into the different ways you can get your foot through the door in the Netherlands with or without having a local entity. If you would like to find out more about operating in the Netherlands, check out our free business guide:

Payroll and Tax in the Netherlands Guide 

Posted by Simon Duff