In a January 2015 client alert, we disclosed that Japanese nationals are no longer subject to work authorization (a work permit) in order to perform work activities in the Netherlands. This was thanks to an applicable treaty between the countries that dates back to the early 1900s and a related judgment of the Dutch Council of State in December 2014.

On June 21, 2016, the Dutch immigration authorities advised that work authorization requirements for Japanese nationals will be reintroduced from October 1, 2016.

1. Most Favored Nation Doctrine

The 1912 Treaty of Commerce and Navigation between the Netherlands and Japan stipulates that nationals of both countries have full liberty to enter all parts of each other's territories, together with their families, and to dwell therein provided that they conform to the laws of the respective country. In all matters concerning travel and residence, study and investigations, the exercise of trade and profession and the carrying on of their industrial and manufacturing enterprises, these nationals are to be placed upon the same footing as the nationals or citizens of the most favored nation ("MFN").

The MFN doctrine implies that Japanese nationals have the right to live and work in the Netherlands under the same conditions as nationals of the nation that has entered into the most favorable arrangements with the Netherlands.

The 1875 Treaty of Friendship, Establishment and Commerce between the Netherlands and Switzerland stipulates that nationals of both countries should be considered equal concerning - among other things - stay and residence and the exercise of trade, industry and profession in the respective countries. This arrangement seemed to provide confirmation of a work authorization exemption for Swiss nationals in the Netherlands and vice versa.

2. Interpretation Statement

On June 16, 2016, the Dutch and Swiss governments issued a statement to confirm their interpretation of the 1875 Treaty of Friendship. The parties acknowledge that the treaty is without prejudice to the relevant national legislation relating to foreigners with respect to admission to stay on the territory, the right to work in any form of (self)employment including the requirement of work permits, and the establishment of businesses.

3. Consequences and Transitional Arrangement

In consideration of the Interpretation Statement above, the 1875 Treaty of Friendship does not include a work authorization exemption for Swiss nationals to perform work activities in the Netherlands. Consequently, Japanese nationals can no longer rely on the MFN doctrine either to argue that they are exempt from work authorization requirements.

Japanese nationals who currently have a Dutch residence permit with indication that they can perform work activities in the Netherlands without a work permit are allowed to continue such status for the remainder of their permit duration (even after October 1, 2016). However, this transitional arrangement will not apply to renewal applications received by the immigration authorities as from October 1, 2016.