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Regulatory framework and trends

Trends and developments

Have there been any notable recent trends or developments regarding business-related immigration in your jurisdiction, including any government policy initiatives?

On July 1 2017 the International Commercial Trade Regulation took effect. Designed as a work permit waiver, the regulation allows foreign companies that trade with a party in the Netherlands to submit an application with the Employment Insurance Institute for approval of a cross-border ‘project’ that requires the temporary employment in the Netherlands of foreign nationals. Migrant workers involved in an approved project require neither work permit nor work authorisation. Instead, their company must notify the Dutch authorities of their arrival two working days in advance. A project can be approved for three years. The waiver is open for projects of any size. Workers who will need to reside in the Netherlands for over 90 days can be eligible for a residence permit.

When deciding on project applications, the Employment Insurance Institute will assess:

  • whether some resident workers should have priority;
  • the nature of the work that the employees will be carrying out;
  • the duration of the project;
  • the value of the product or service that is being delivered;
  • the number of workers that will be deployed;
  • the value of the project; and
  • whether the parties involved have received any sanctions related to immigration.

The Employment Insurance Institute enjoys large discretion in approving project applications.

Other recent developments are the transposition of the Intra-company Transfer (ICT) Directive (2014/66/EU) and the Posted Workers Enforcement Directive (2014/67/EU).

Domestic law

What legislation and regulations govern immigration in your jurisdiction?

Primary legislation includes the Immigration Act 2000, the Work by Foreigners Act 1995 and the Netherlands Nationality Act 2003.

Secondary legislation includes the Immigration Decree, the Decree on the Execution of the Work by Foreigners Act and the Decree on Acquisition and Loss of Dutch Nationality.

In addition, the following provide the framework for the government agencies (the Immigration and Naturalisation Service and the Employment Insurance Institute) to exercise their discretionary powers and interpret the legislation:

  • the Aliens Circular;
  • the Executive Rules Work by Foreigners Act;
  • the Penalty Scheme for the Work by Foreigners Act; and
  • the Guidance on executing the Netherlands Nationality Act.

International agreements

Has your jurisdiction concluded any international agreements affecting immigration (eg, free trade agreements or free movement accords)?

The Netherlands is a member state of the European Union. As such, EU regulations are applicable in Dutch law automatically (eg, the Schengen Borders Code), while directives must be transposed into national law. Notable examples relevant for non-asylum-based immigration are:

  • the Citizens’ Rights Directive (2004/38) (also known as the Freedom of Movement Directive);
  • Directive 2003/86 on family reunification by third-country nationals;
  • Directive 2003/109 on long-term residence by third-country nationals;
  • Directive 2009/50 on highly skilled workers (European Blue Card); and
  • the ICT Directive.  

The most relevant bilateral treaties for the practice of business immigration are the following:

  • The Treaty of Friendship, Commerce and Navigation between the Netherlands and the United States;
  • the Treaty of Commerce and Navigation between the Netherlands and Japan;
  • the EU-Turkey Association Agreement; and
  • the Comprehensive Economic and Trade Agreement Treaty between Canada and the European Union.

Regulatory authorities

Which government authorities regulate immigration and what is the extent of their enforcement powers?

The minister of justice and security has decision powers regarding immigration under the Immigration Act and regarding naturalisation under the Nationality Act, while the minister of social affairs and employment has decision powers regarding work permits under the Work by Foreigners Act. The ministers use these powers through government agencies: the Immigration and Naturalisation Service, the Employment Insurance Institute and the Labour Inspectorate. The consulates and embassies have an executive role in issuing visitor and entry visas.

Can the decisions of these authorities be appealed?

Yes – a decision in a non-asylum case can be submitted for review with the authority concerned or a higher authority. Decisions on such a review can be appealed before the relevant district court. Most rulings from a district court can be appealed before the Administrative Jurisdiction Division of the Council of State. If the case has elements of interpretation of EU law, the court and the Administrative Jurisdiction Division can, and the latter may even be required to, ask the European Court of Justice for a preliminary ruling. Further, applicants that have exhausted domestic remedies can file a complaint with the European Court of Human Rights if they think that the case involves a violation of human rights, protected in the European Convention on Human Rights.

Recent case law

Has there been any notable recent case law regarding immigration?

Yes – case law is a highly relevant and dominant factor, notably case law from the Administrative Jurisdiction Division of the Council of State, the European Court of Justice and the European Court of Human Rights.

Business visitors

Visa requirements

In what circumstances is a visa required for business visitors?

This is governed by EU Regulation 539/2001, which lists the countries whose nationals must be in possession of visas when crossing the external borders of the Schengen Area and those whose nationals are exempt from that requirement.

Restrictions

What restrictions are imposed on business visitors in terms of the work that they may undertake and their period of stay in your jurisdiction?

Business visitors are allowed to work if the host employer obtained a work permit, unless the activity is listed as work permit-exempt. The most notable example of an exempt activity is attending business meetings.

Application and entry

How are business visitor visas obtained and what is the typical turnaround time?

Business visitor visas can be obtained at the competent Dutch consulate or embassy or the private visa handler (VFS) for that consulate or embassy. Processing time is typically 15 days.

Are any visa waiver or fast-track entry programmes available?

Yes. Exempt are:

  • nationals from the European Union, the European Economic Area and Switzerland;
  • nationals from countries that are listed as such under Regulation 539/2001; and
  • individuals holding a valid residence permit or valid long-stay visa for any of the Schengen countries.

Companies whose employees need to travel frequently to the Netherlands can be admitted to the fast-track Orange Carpet Programme.

Short-term training

What rules and procedures apply for visitors seeking to undertake short-term training in your jurisdiction?

Business visitors are allowed to receive training or operational instructions regarding goods that were manufactured in the Netherlands or services that will be performed in the Netherlands. Training and instructions must be limited to observing, getting accustomed to company culture and receiving instructions in a classroom or a similar setting that is clearly for instruction purposes only (ie, not for productive work), and under the guidance of an instructor/teacher. In other words, the setting itself must make it obvious that the activity involved is training and not carrying out productive work. This means that the training should not take place on the work floor, for instance. Attending meetings to enhance company culture is included in this waiver.

The waiver covers only recipients of training; those giving the training require a work permit. Attending a training under the waiver is not limited to intra-company trainings.

Lastly, the waiver is applicable for a maximum of 12 weeks out of 36 weeks for a single entry.

Transit

In what circumstances is a transit visa required to pass through your jurisdiction? How is it obtained?

Nationals of countries listed in Annex I to Regulation 539/2001 must have an airport transit visa when passing through the international transit area of airports situated on the territory of Schengen countries, including the Netherlands.

Sponsored immigration

New hires

What sponsored visas or work permits are available to employers seeking to hire foreign nationals in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?

The most common categories are the Highly Skilled Migrant Programme and European Blue Card Programme. The Highly Skilled Migrant Programme allows employers with recognised sponsor status to sponsor migrant workers whose salary meets a threshold, provided that their salary is also in line with Dutch market level. For scientific researchers, guest lecturers or physicians training to be specialists, different salary thresholds apply.

The European Blue Card allows employers with or without recognised sponsor status to sponsor migrant workers who have completed a post-secondary education programme of at least three years and been awarded a diploma, and whose salary meets a higher threshold without a market level test. The employer must not have received any penalties relating to immigration in the five years preceding the application. A check will take place to verify that the employee’s diploma is the equivalent to a Dutch higher education degree of at least three years.

The application is processed within 90 days, or two weeks if the employer has recognised sponsor status.   

Intra-company transfers

What sponsored visas or work permits are available to multinational employers seeking to transfer foreign employees to your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?

Multinational employers seeking to transfer foreign employees to the Netherlands need to apply for a residence permit under the Intra-Company Transfer (ICT) Directive. To be granted an ICT permit, the following general conditions must be met:

  • The foreign national is a manager, specialist or trainee;
  • The foreign national is qualified at university or undergraduate level;
  • Professions listed as ‘regulated professions’ in the Netherlands, such as pharmacists, architects or physicians, must have accredited foreign qualifications;
  • The foreign national has been employed by the company for at least three months;
  • The foreign national possesses a valid employment or trainee contract with an employer outside of the European Union or an assignment letter from an employer;
  • The foreign national has his or her principal residence outside the Netherlands at the time of application;
  • The foreign national has not resided in the Netherlands on the basis of the ICT Directive in the previous six months;
  • The foreign national will return to a corporate group outside the European Union after the transfer period has expired;
  • The salary meets statutory minimum wage and vacation pay requirements;
  • The salary meets the industry benchmark considering position, age, expertise and experience;
  • The host entity and sending entity belong to the same corporate group;
  • The host entity is not established for the purpose of facilitating entry into the European Union;
  • The transferee spends the longest time in the Netherlands;
  • The host entity has not been previously sanctioned for undeclared work or illegal employment;
  • The host entity conducts economic activities;
  • Secondments of company employees in the Netherlands are allowed as core economic activities of the entity; and
  • The application meets the general admission requirements of the Aliens Act.

The application is processed within 90 days, or two weeks if the employer has recognised sponsor status. 

Do any special rules govern secondments?

Yes – the immigration rules are based on the ICT Directive, and the rules on employment conditions are based on the Posted Workers Directive (96/71/EC) and the Posted Workers Enforcement Directive.

Sponsor requirements and considerations

What are the eligibility and procedural requirements for employers to sponsor foreign employees?

To sponsor a worker in an employment-related category, the employer must normally be registered in the Dutch Trade Register (unless that is not required), and be allowed to employ the employee in the given industry (eg, under the Placement of Personnel by Intermediaries Act). To sponsor a worker under the Highly Skilled Migrant Programme, employers must have recognised sponsor status, can be applied for with the Immigration and Naturalisation Service. The key requirements to obtain recognised sponsor status are that:

  • the continuity and solvency of the company be sufficiently guaranteed; and
  • the company be registered with the Chamber of Commerce in the Netherlands.

The company and its directors and stakeholders should also have an undisputed trustworthy reputation.

Turkish nationals and their family members do not need a recognised sponsor when they want to work as highly skilled migrants. They may submit their application independently. However, an application filed by a recognised sponsor is generally processed faster. 

What ongoing reporting and record-keeping requirements apply to sponsors?

According to the Immigration Act, sponsors must comply with a duty to report certain facts and circumstances within either four or two weeks, and keep records and retain certain documents and information. In addition, recognised sponsors must observe a duty of care towards the sponsored migrant worker. In situations regulated by the Posted Workers Enforcement Directive, the host employer must also provide certain information and keep records and retain certain documents.

In what circumstances (if any) must the employer submit to resident labour market testing before hiring or transferring foreign employees? Do any exemptions apply?

A resident and EU/EEA labour market test is required unless an exemption applies. Exemptions include certain categories of athlete and musician, religious workers, intra-company transferees, applicants under the Highly Skilled Migrant Programme and European Blue Card Programme.

Are there any annual quota limits or restrictions on certain positions that can be filled by foreign nationals?

Yes, on Asian cuisine chefs and certain working holiday programmes.

Are there any immigration exemptions or other special schemes for shortage occupations in your jurisdiction?

No.

How long does it typically take to obtain a sponsored visa? Is expedited visa processing available?

A residence permit application takes up to 90 days. Recognised sponsors enjoy expedited processing and can obtain approvals within two weeks.

What rules govern the hiring of foreign third-party contractors?

This very much depends on how the assignment is structured and its duration.

What are the penalties for sponsor non-compliance with the relevant immigration laws and regulations?

Employing a migrant worker illegally                                                                                        € 8,000

Failure to provide copy of ID to enforcement agents within 48 hours                       € 8,000

Failure to notify work that must be notified                                                                         € 1,500

Failure to provide secondary employer with copy of ID                                                  € 1,500

Failure by secondary employer to verify ID                                                                          € 1,500

Failure by secondary employer to keep copy of ID on record                                       € 1,500

Employers that are an individual or a foundation (stichting) or association (vereniging) and have had work carried out as non-profit outside a business scope will normally receive a penalty of 50% of the amounts stated above.

The civil penalty scheme allows the Labour Inspector:

  • to lower the penalty by 25%, 50% or 75% if there are mitigating factors;
  • to raise the penalty by100% in case of recidivism within five years or within 10 years if the violation is serious; and
  • to raise the penalty by 200% in case of multiple recidivism within five years or within 10 years if the violation is serious;

Non-compliance with sponsor duties, set in the Immigration Act, may result in a warning or a penalty of €3,000 per violation. This amount is increased to €4,500 for subsequent offences committed within two years. This applies to ordinary and recognised sponsors, equally. Former sponsors of an illegal migrant worker can be held liable for certain removal costs if the migrant worker is removed within one year of the sponsorship ending.

For recognised sponsors, subsequent offences may lead to suspension or revocation of the recognised sponsorship status, or revocation or non-renewal of the highly skilled migrant’s residence permit.

 The Labour Directorate can refuse work permit applications if the person or legal body applying for a work permit has been issued with a civil penalty in the five years preceding the application.

The Labour Directorate can advise the Immigration and Nationalisation Service to refuse employment-based residence permits (Combined Permit for Stay and Work) if the person or legal body that is the sponsor of the application has been issued with a civil penalty in the five years preceding the application.

In addition, the Labour Directorate can refuse work permit applications or advise the Immigration and Nationalisation Service to refuse employment-based residence permits (Combined Permit for Stay and Work) if the person or legal body that is the sponsor of the application:

  • has been refused recognised sponsor status, or if its status has been suspended or revoked and this decision is legally final; or
  • has been issued with a civil penalty by the Immigration and Nationalisation Service for violating sponsor duties.

Company officials who can be considered to have personally committed or otherwise been responsible for a violation risk a civil penalty of 50% of the penalty amount if the Labour Inspector can demonstrate that they:

  • had knowledge of the violation;
  • had influence over it/played a significant role in it; and/or
  • neglected to take measures to prevent the violation or the continuation of the violation.

Persons and legal bodies risk criminal prosecution if a violation can (also) be considered an act penalised in the Dutch Penal Code – for instance, if a company official has submitted a fraudulent company statement, the official could in principle be prosecuted for fraud.

In addition, the Dutch Penal Code contains special articles about working with illegal migrant workers. A person or legal body that knowingly employs an illegal migrant worker can receive a jail sentence of up to 12 months or a criminal penalty in the fifth category. The jail sentence can be four years if the person or legal body makes a habit or a profession out of employing illegal migrant workers.

Are there any other special considerations for sponsors in your jurisdiction?

Companies that often work with non-EU employees can obtain a sponsor licence (recognised sponsorship) that gives them the right to a facilitated and expedited procedure for their employees’ work and residence permits, as well as their dependants’ permits.

General employee requirements

Must sponsored employees meet any language requirements?

No, this is not a requirement for their first admission to the Netherlands. They do need to pass the Civic Integration Test (which is mostly a language test) if they want to apply for permanent residence or Dutch citizenship.

Are sponsored employees subject to any medical checks?

There is no specific requirement to submit medical statements, but nationals of some countries are required to take the tuberculosis (TB) test within three months of entering the Netherlands.

Must sponsored employees meet any medical or other insurance requirements?

As mentioned above, some need to take the TB test, and sponsored employees need to obtain Dutch health insurance, unless they are exempted from this obligation.

Are sponsored employees subject to any security or background checks?

They do not need to submit police certificates, but will sign an antecedents statement in which they have to declare that they have never been convicted of a crime, accepted a fine or out-of-court settlement, or even been subjected to criminal prosecution for committing a crime. If they cannot sign the statement, they will have to explain what they did. Whether or not the employee is still allowed to come to the Netherlands very much depends on the gravity of the crime and when it was committed.

Are sponsored employees subject to any restrictions on studying or working second or volunteer jobs?

In principle, sponsored employees will be falling under the category of highly skilled migrants or ICTs, and as such they will receive a residence permit that does not restrict them from working (even as self-employed) or volunteering on the side.

Are there any rules or standards governing the equivalence of sponsored employees’ foreign qualifications?

In general, there is no requirement to show the equivalence of sponsored employees’ academic qualifications.

However, anyone applying for an EU Blue Card (less common in the Netherlands) is required to secure a diploma evaluation of the academic degree in order to show that the employee has followed a higher education programme that is the equivalent to a Dutch higher education of at least three years.

What are the penalties for employee non-compliance with the relevant immigration laws and regulations?

An employee would not receive a monetary penalty for non-compliance, but he or she would most likely either lose the residence permit or see his or her legal stay interrupted (making it harder to secure permanent residence or citizenship later). Also, providing false information can not only lead to the revocation of the employee’s current permit, but also become a ground for refusal of future residence permit applications in the Netherlands.

Unsponsored immigration

Highly skilled individuals

What unsponsored immigration routes are available for highly skilled foreign nationals to seek employment in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?

Employment-related migration in the Netherlands is sponsor-based. Sponsoring under the Highly Skilled Migrant Programme requires recognised sponsor status.

The most notable exception is the orientation year for graduates, who can apply for a self-sponsored residence permit allowing any type of work. Highly skilled workers may be eligible under another category that is either self-sponsored or sponsored by a non-employer (eg, a family member).

Entrepreneurs

What unsponsored immigration routes are available for entrepreneurs seeking to establish a business in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?

Entrepreneurs

Entrepreneurs can apply under the self-employed category, and will then be assessed through a point system. Applicants can score points for their business plan, personal experience and contribution to the Dutch economy. RVO (the Netherlands Enterprise Agency) carries out an assessment of whether a business has a good chance of success and serves the Dutch economy’s vital interests. The points are hard to obtain, making this one of the more difficult immigration routes. That said, more favourable rules exist for US, Japanese and Turkish entrepreneurs under bilateral treaties.

Where the application is approved, a residence permit will be granted with a validity of two years. If, by the time an extension is due, the entrepreneur still meets the eligibility criteria, the permit will be extended for another five years (and be renewable afterwards).

Start-up

Under the start-up programme, a permit is granted for one year to develop a business with the support of a (recognised) facilitator. Once that year has expired, the start-up entrepreneur must apply for a regular permit for entrepreneurs. Apart from being supported by a facilitator in the Netherlands, the business should be innovative. The applicant must have sufficient and sustainable resources, and be registered with the trade register of the Chamber of Commerce.

Investors

What unsponsored immigration routes are available for foreign investors seeking to invest in your jurisdiction? What are the eligibility criteria, application procedures and maximum period of stay for each?

     Foreign investors can apply for a Dutch residence permit if they are willing to make a substantial investment in the local economy. The main requirement is to invest at least €1.25 million in the country.

In addition, any two of the following requirements must be met:

  • The investment adds to innovation in a particular industry;
  • The investment creates jobs; and/or
  • The investor brings a high-value personal network or specific knowledge.

The residence permit is valid for three years and is renewable. After five years the investor may apply for a permanent residence permit or Dutch citizenship.

Ancestry

Are any immigration routes open to foreign nationals based on ancestry or descent?

Regular immigration based on descent or ancestry is not possible, but it is always an option to assess whether ancestry can be a basis for Dutch citizenship.

Other routes

Are there any other unsponsored immigration routes?

Most routes require a sponsor. The most notable exceptions are the self-employment and investor programmes, the Working Holiday Scheme and the Working Holiday Programme, the orientation year for graduates, the research year for academics, and the programme of former Dutch citizens (ie, individuals who have lost their Dutch nationality). These are self-sponsored.

Extensions, permanent residence and citizenship

Extensions and status changes

Can short-term visa or work permit holders switch to long-term visas? If so, what conditions and procedures apply?

In general, employees on short-term work permits may not switch their status to long-term visas while they are in the Netherlands. However, employees from Australia, Canada, Japan, Monaco, New Zealand, South Korea, Switzerland, the United States or the Vatican need no further entry clearance visa and, therefore, need not return to their home country before being able to switch to a long-term visa.

Under what conditions can long-term visas be extended?

Long-term visas (residence permits) may be extended as long as employees still fulfil the criteria of their permit and their employment is continued, unless the visa is by nature temporary (eg, for seasonal work or as an au pair).

Permanent residence

Can long-term visa holders apply for permanent residence? If so, what conditions and procedures apply?

In principle, employees and their dependants become eligible for permanent residence after five years of legal and actual residence. They cannot have committed crimes or accumulated (too many) large fines in the meanwhile and, most notably, should have passed the Civic Integration Exams.

Citizenship

Can long-term visa holders or permanent residents apply for citizenship? If so, what conditions and procedures apply?

Long-term visa holders become eligible for citizenship after five years of uninterrupted legal residence in the Netherlands. In addition, they need to have passed the Civic Integration Exams. In the four years prior to their application, they may have received neither a prison sentence nor a training or community service order, and they may not have had to pay a large fine either in the Netherlands or abroad. There must also be no ongoing criminal proceedings against them.

The applicants must be willing to take the oath of allegiance in a naturalisation ceremony and, in most cases, be willing to renounce their former citizenship (if possible), as at the moment the Netherlands is not very open to dual citizenship.

Dependants

Eligibility

Who qualifies as a dependant for immigration purposes?

Both married and unmarried partners (including same-sex couples) qualify as dependants for immigration purposes, as well as children under 18 years of age.

Conditions and restrictions

What conditions and restrictions apply to bringing dependants to your jurisdiction (including with respect to access to labour markets, education and public benefits)?

Dependants of employees coming to the Netherlands as highly skilled migrants or intra-company transferees are granted free access to the labour market. They may not claim public benefits, as this is a ground for the immigration authorities to revoke their residence permit.