I INTRODUCTION TO THE IMMIGRATION FRAMEWORK

Dutch immigration policies have tended to be restrictive in recent decades. Since 2004, favourable schemes have been introduced designated to business immigration with the aim of being competitive in attracting foreign talent and providing a favourable investment climate for foreign businesses. A major step towards these ends was the introduction of the Modern Migration Act in 2013. This law was initially devised as a complete overhaul of the immigration policies and application processes, with fast-track processing and simplified, generic permit categories. However, to accommodate the demands of the business community for specific permit categories, the government has, over the past couple of years, introduced various new visa schemes and adapted existing ones, making the business immigration landscape perhaps more complex, but also more welcoming.

In its structure, the system is, therefore, one of specific permit categories rather than a points-based system. The two dominating systemic distinctions are (1) short-term stay (up to 90 days) versus long-term stay, and (2) work authorisation versus legal stay, meaning that legal stay (whether for a short or long term) does not automatically imply work authorisation, nor vice versa. The dominating permit types are the knowledge migrant permit and the new EU intra-corporate transfer (ICT) permit. Employers with recognised sponsor status benefit from accelerated application procedures.

i Legislation and policy

The main source of Dutch immigration law is the Aliens Act and its several annex regulations and guidelines: the Aliens Decree, the Aliens Regulation and the Aliens Circular (a set of guidelines for the implementation of the law).

Working activities by foreign nationals are covered by the Employment of Foreigners Act (EFA), the EFA Implementation Decree and the EFA Implementation Guidelines. The EFA Implementation Guidelines are an important source for everyday practice. The Policy Rules for the Imposition of Employer Sanctions set the financial penalties for illegal employment.

As a matter of principle, all regular immigration is sponsor-based, with a few exceptions, such as entrepreneurs and investors, and search year applicants. Since the introduction of the Modern Migration Act in 2013, sponsors now have more rights in the immigration process, as well as more obligations and liabilities. Sanctions for non-compliance have been increased.

Residence permits for salaried employment are always sponsored. The residence permit (applied for by the employee) goes hand in hand with a work permit (being an employer’s permit); there can be no residence permit without a work permit, and vice versa. The work permit is subject to a labour market test. Important alternatives are intra-corporate transfer work permits and knowledge migrant residence permits.

Admission of independent entrepreneurs (business owners, investors, contractors, etc.) is based on the concept of added value for the Dutch economy. The decision is essentially made not by the Immigration and Naturalisation Service but by the Netherlands Enterprise Agency, applying a detailed points-based system. Specific entrepreneur schemes exist that are exempt from the points-based system, such as the start-up visa scheme and the Dutch American Friendship Treaty scheme.

The rules for Dutch nationality are found in the Dutch Nationality Act, the Manual for the Implementation of the Dutch Nationality Act and the Decree on the naturalisation test.

Dutch immigration law cannot be viewed without taking into account European Union legislation. While still mainly focusing on the rights of EU nationals, EU regulations increasingly also introduce rights directly applicable to third-country nationals. Relevant directives are:

  1. the EU Long-Term Residents Directive;
  2. the EU Blue Card Directive;
  3. the Directive Providing for Minimum Standards on Sanctions and Measures Against Employers of illegally staying third-country nationals;
  4. the Single Permit Directive; and
  5. the Intra-Corporate Transfer Directive.

On issues of short-term stay, national law has been largely replaced by the Schengen Borders Code and the Schengen Visa Code, which set a directly applicable common policy for an area covering the EU (except the United Kingdom, Ireland, Bulgaria, Romania, Cyprus and Croatia) plus Norway, Iceland, Switzerland and Liechtenstein.

ii The immigration authorities

The main immigration authorities in the Netherlands are as follows:

  1.  the Immigration and Naturalisation Service (IND), an agency of the Ministry of Security and Justice, processes and decides all long-term stay applications (regular and asylum) and nationality requests;
  2.  the Central Labour Office (CLO), an agency of the Ministry of Social Affairs and Employment, plays a decisive role for certain categories of employment-related immigration, as it applies labour market tests or grants waivers therefrom;
  3.  local municipalities are responsible for the registration of immigrants in the Municipal Database (BRP) and the providing of a tax number, as well as checking the authenticity of source documents such as birth certificates and marriage certificates;
  4.  expat centres are joint offices of the IND and the local municipality and are present in most of the larger cities, operating a streamlined application process for knowledge migrants combining both the residence permit application process and the registration in the BRP and offering enhanced service to knowledge migrants;
  5.  the Netherlands Enterprise Agency (RVO), under the Ministry of Economic Affairs, plays a decisive role in the admission of investors and entrepreneurs. The RVO also assesses applications for recognised sponsorship for recently established companies; and
  6.  Dutch embassies and consulates decide on visa applications for short-term stay. Actual visa collating is done only by a limited number of consulates, called regional support offices.
iii Exemptions and favoured industries

For salaried employment, the exemptions divide into exemptions from the work permit requirement as such, and exemptions from the labour market test requirement. Some are function-based and others are industry-based, such as the arts sector.

Exemptions from the work permit requirement

Several exemptions are listed in Article 1, Paragraph 1(a) of the EFA Implementation Decree. Most are for short-term stay; for example:

  1.  installation of equipment or software;
  2.  business meetings;
  3.  artistical work (e.g., work as a peforming artist);
  4.  quality assessment or work related to providing import certificates; and
  5.  receiving training or instruction in the use of goods or services.

Others are for long-term stay, for example:

  1.  reporters for a news agency with its main headquarters outside the Netherlands;
  2.  researchers sponsored by the EU or by Dutch national research funds;
  3.  guest lecturers; and
  4.  diplomats, Nato officials and related categories.

Holders of a residence permit for independent entrepreneurs do not require a work permit for any activity connected to their independent business (e.g., providing a contracted service for a client).

Work permits not requiring a labour market test

This applies to most highly skilled worker schemes (e.g., the intra-corporate transfer schemes, the knowlede migrant scheme and the EU Blue Card scheme). Further details are given in Section IV.

II INTERNATIONAL TREATY OBLIGATIONS

i European nationals

Pursuant to the Treaty Establishing the European Union (the EU Treaty), nationals of EU Member States are at liberty to settle in other Member States and take up work, whether as a salaried employee or as a contractor or independent entrepreneur. The same applies to nationals from EEA countries (Iceland, Norway and Liechtenstein) and Switzerland. EU, EEA or Swiss nationals do not require a residence permit to reside in the Netherlands, and have full access to the labour market. As long as they have work or sufficient means of subsistence and do not constitute a threat to public order, public security or public health, they can legally reside in the Netherlands for a long-term stay. An employer that wishes to employ an EU, EEA or Swiss national is not required to obtain a work permit. The only exception is nationals of Croatia (an EU Member State since 2013), who are barred from the free movement of workers until the end of the transition period, which lasts until 1 July 2020 (ultimately).

In addition to rights for EU nationals, the EU has made several Directives that set (semi-)harmonising standards for third-country nationals in the field of immigration, which have been implemented in the Dutch legislation. Two directives in particular stand out.

EU Blue Card Directive

The EU Blue Card Directive (Directive 2009/50/EC) sets a common standard for the entry and residence of highly skilled workers from third countries. An EU Blue Card is a work and residence permit that can be obtained by an employee who has either three years of tertiary education or equivalent professional experience, and a job offer for at least 12 months with a salary of 1.5 times the average national salary. In the Netherlands, this translates into a bachelor’s degree and a salary of €5,160 gross per month exclusive of 8 per cent statutory holiday allowance.

Intra-Corporate Transfer Directive

The Intra-Corporate Transfer Directive (Directive 2014/66/EU) (the ICT Directive) partly harmonises the conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer. The rights of the intra-corporate transferee permit holder include, under certain conditions, the possibility to be transferred within the EU to establishments of the company based in other EU countries, including the right to be seconded to clients of those establishments.

ii EC–Turkey Association Agreement

The purpose of this agreement is to gradually establish the unrestricted movement of employees between Turkey and the Member States of the EU or EEA by partly lifting restrictions on the freedom of establishment and freedom to provide services. With regard to Turkish workers, the agreement contains a standstill clause that prohibits EU Member States from introducing immigration conditions that are less favourable than the rules that applied in 1970.

iii Trade and friendship treaties with the United States and with Japan

The aim of the 1956 Dutch American Friendship Treaty and Protocol is to facilitate trade between the two countries. Pursuant to this treaty, US nationals who wish to be admitted to the Netherlands to operate a business or as self-employed person are exempt from the general points-based system (see also Section V). In addition, US employees of US companies can be transferred to the Netherlands for certain key functions in the Dutch establishment of the company, provided that they have been employed by the group company for 12 months prior to the transfer and that the remuneration must be at market level.

The Netherlands concluded a trade treaty with Japan in 1913, on the basis of which self-employed Japanese nationals can claim residence rights similar to those of self-employed US citizens under the Dutch American Friendship Treaty.

iv Exchange programmes

Under the exchange programmes with Argentina, Canada and South Korea (Working Holiday Program) and Australia and New Zealand (Working Holiday Scheme), nationals of these countries under 31 years of age can gain an acquaintance with Dutch culture and society by means of a paid working holiday of up to 12 months. To finance their stay, they may carry out paid work without possessing a valid work permit.

v The WTO General Agreement on Trade and Services (GATS)

Intra-corporate transferees (managers, technical specialists, trainees and business visitors) with the nationality of a WTO Member State can obtain a residence and a work permit without a labour market test. They must have been employed by the group company for 12 months prior to the transfer and the remuneration must be at market level.

III THE YEAR IN REVIEW

Highly skilled permit categories were up by 23 per cent in the first half of 2017 (from 6,410 to 7,880 applications).

A significant nationality law change that was expected to be finalised in 2017 faltered in the Senate. The increase in the required number of years of legal stay from five to seven years has therefore been put off indefinitely. The new government, which was finally formed after record-length negotiations in the autumn of 2017, announced that as part of its programme it is to introduce new exemptions to the prohibition against dual nationality. Although the government has so far refused to specify this remarkable intention, it is understood by some as a means for both Dutch nationals in the United Kingdom and UK nationals in the Netherlands to alleviate the negative effects of Brexit.

IV EMPLOYER SPONSORSHIP

All employment-based immigration is sponsored. The employer-sponsor must apply for a work permit, which is subject to a labour market test. In reality, highly skilled immigration is almost entirely channelled through permit categories that are exempt from the labour market test, such as the knowledge migrant scheme and the intra-corporate transfer scheme (see Section IV.iv).

i Recognised sponsorship

The following permit schemes require the sponsor to have recognised sponsor status:

  1.  the knowledge migrant scheme;
  2.  the researchers scheme, based on the EU Researchers Directive (2005/71/EC); and
  3.  the au pair scheme.

For other permit schemes, recognised sponsorship is not required, but it might be advisable to obtain it anyway, since it gives access to accelerated permit processing.

The conditions for recognised sponsorship are that the company:

  1.  has a clean tax record and is financially solvent, and its directors have no criminal record; and
  2.  was incorporated at least 18 months prior to the application, or, for newly formed companies, has a business plan that justifies the financial burden of the salaries associated with highly skilled employees.

As of 3 May 2018, the government fees for recognised sponsorship decreased from €5,276 to €3,861 for companies with over 50 employees and from €2,638 to €1,930 for smaller companies and other categories of recognised sponsors.

ii Work permits and GVVA single permit (residence permit with additional document)

A regular residence permit for salaried employment can only be granted if the employer-sponsor obtains a work permit for the employee. Both the residence permit and the work permit are tied to that specific employer and that specific employee.

Pursuant to the Single Permit Directive (Directive 2011/98/EU), a residence permit for employment must include work authorisation, instead of there being two seperate permits for legal stay and for work. As a result, in the Netherlands, the work permit has now taken the form of an annex to the residence permit, called an ‘additional document’. The residence permit is called the ‘GVVA single permit (residence permit with additional document)’. In essence, there is no substantial difference and, moreover, there are several exceptions. In this chapter, therefore, where the term ‘work permit’ is used, this can refer to both an actual work permit or to an additional document.

Work permit applications must be submitted to the CLO, which has a statutory decision term of five weeks. If the CLO is not satisfied that the conditions have been met, the employer must be given the opportunity to complete the application with additional documents, or, at the choice of the employer, present his or her case in a verbal hearing. Refusals are subject to administrative appeal.

iii Labour market regulation

The labour market test involves a check on existing priority workforce (i.e., any Dutch nationals or EU, EEA or Swiss nationals who are registered as unemployed in the industry sector and job range). If there is a priority workforce, the work permit must be refused. The employer-sponsor must actively undertake adequate and sufficient recruitment efforts to mobilise any existing priority workforce. The employer must also advertise the position with the local labour office (LLO) for five weeks before submitting an application for a work permit. The LLO lists the vacancy with a national online database. In some sectors, specific rules apply (e.g., professional footballers and professional orchestral musicians must meet a salary threshold that is annually updated).

Work permits subject to a labour market test are granted for a maximum of one year. The renewal is again subject to a labour market test.

iv Alternatives to the labour market test
Intra-corporate transfer schemes

The ICT Directive, which entered into force in 2016, has dramatically changed the landscape of highly skilled migration. On the one hand, the ICT Directive introduced important new options; on the other, it limits the freedom of corporations to decide which permit category they want to use for transfers of their international staff.

There are now several types of intra-corporate transfer (ICT) scheme: the EU ICT scheme; ICT schemes based on international agreements (including the WTO/GATS ICT scheme and bilateral ICT schemes); and the Dutch national ICT scheme. Details of these different types of scheme are outlined below.

EU ICT scheme

The ICT Directive (Directive 2014/66/EU) was implemented in Dutch legislation on 29 November 2016. Although permits based on the EU ICT Directive provide for important additional and unique rights, such as intra-EU mobility, the scheme also complicates the corporate immigration landscape. This is mainly because of its mandatory character. All intra-corporate transfers that fall within the scope of the ICT Directive must be assessed against the new rules even if in individual cases the EU ICT’s entry conditions are more onerous or cannot be met. For example, the transferee must have worked within the group company for at least three months in advance of the transfer. Consequently, the EU ICT scheme does not apply to new hires, whereas existing national schemes that allowed for new hires to be transferred (i.e., the knowledge migrant scheme and the national ICT scheme) cannot be used because of the exclusive nature of the EU ICT scheme.

The EU ICT permit can be granted to managers, specialists and trainee employees who are temporarily transferred within a group company from an entity outside the EU to an establishment in the Netherlands. The permit is issued for a maximum duration of three years for managers and specialists, and one year for corporate trainees. The permit is not renewable; after three years (or one year, in the case of trainees), the transferee must leave the EU territory, unless he or she applies and obtains a permit on a different basis. In the Netherlands, a highly skilled migrant visa is considered as a permit on a different basis, even if the employee remains under contract with the sending group entity. This means that transferees can effectively extend their stay after the expiration of their EU ICT permit without difficulty.

The requirements for the EU ICT permit are: a work contract with the sending group entity outside the European Union – the transferee must be employed, prior to the secondment to the Netherlands, for at least three months – a gross monthly salary of at least €4,404 (exclusive 8 per cent holiday allowance) or €3,229 if the transferee is under 30 – managers and specialists must hold a bachelor’s degree or have five years of previous relevant work experience; trainees must hold a master’s degree.

Provided that the Dutch group establishment is recognised as sponsor by the Dutch Immigration Service, the ICT permit application will take two to three weeks. If this is not the case, the Dutch Immigration Service will request the CLO to assess whether the offered salary is market level. This assessment can take up to 12 weeks.

Turkish nationals are exempt from the mandatory nature of the EU ICT scheme and are free to opt for other permit categories.

ICT schemes based on international agreements

The mandatory character of the EU ICT scheme does not preclude the application of existing international agreements, which have a higher level of seniority in the legal hierarchy. Therefore, where the EU ICT scheme is less favourable than these existing international schemes, corporations can still opt for the latter.

Compared with the EU ICT scheme, the following aspects of the WTO/GATS ICT scheme are more favourable:

  1.  it does not strictly demand a higher education degree (except for trainees);
  2.  it does not strictly apply the salary thresholds of the knowledge migrant scheme;
  3.  processing time is five weeks, regardless of whether the employer is a recognised sponsor.

On the other hand, compared with the EU ICT scheme, the WTO/GATS ICT scheme is less favourable in that it demands not three but 12 months prior employment with the group company.

If the WTO/GATS ICT scheme does not solve the issue, there are additional options for American and Japanese employers, based on the bilateral trade treaties the Netherlands has with these countries. Other bilateral cooperation and association agreements might offer comparable alternative options as well.

Dutch national ICT scheme

Where the contract is changed to a local contract, the transfer is outside the scope of the EU ICT Directive, and the existing national ICT scheme comes back into play. The national scheme applies a stricter definition of ‘multinational corporation’ (see below), but, unlike the WTO/GATS ICT scheme, it does not demand a period of prior employment with the group company. In the case of new hires that are transferred right away, this scheme could therefore solve an issue.

The national ICT scheme defines a multinational corporation as a large group or company with subsidiaries in several countries, and with an annual sales revenue of at least €50 million (worldwide or consolidated), or (for international non-profit organisations) at least 50 full time employees (worldwide). The scheme applies the same salary thresholds as the knowledge migrant scheme.

Interns and trainees

For interns, the employer may obtain a work permit for a maximum of one year, non-renewable. The intern must be enrolled in a master’s or bachelor’s degree at a university in his or her home country, and there must be a written internship agreement between the employer and the student, as well as a detailed internship programme. The minimum salary requirement is 50 per cent of the statutory minimum wage. The university must confirm in writing that the internship is necessary to complete the education course.

For trainees (i.e., apprentices, not corporate trainees), a non-renewable work permit may be obtained for a maximum of 24 weeks. A written agreement between the sending company and the host company is required, confirming that the trainee is not taking a regular employment position within the host company and that after the traineeship is finished, the trainee will resume employment with the company in his or her home country.

Trainees must have completed education at an adequate level that is sufficiently sector-specific.

Researchers and lecturers

Academics, including PhD students, fellowship lecturers and junior researchers, are generally exempt from the labour market test, or do not even need a work permit at all (for the duration of the research project). Some researcher categories fall under the knowledge migrants scheme (see below).

Knowledge migrants

The knowledge migrants scheme is entirely based on salary thresholds; the applicant does not need to have any level of education or professional experience. The thresholds as of 1 January 2016 (gross salary per month, including a statutory 8 per cent holiday pay) are:

  1.  €4,404 for employees aged 30 or over;
  2.  €3,229 for employees under 30;
  3.  €2,314 for graduates with a recent Dutch higher education degree; and
  4.  the statutory wage for researchers at designated universities and research institutes (they must earn the salary amount that follows from the institution’s salary grid).

Regarding (a), (b) and (c), the salary offered must be market-level remuneration, which should avoid employers simply raising a candidate’s salary to make them fulfil the conditions for a permit. The salary must be transferred in monthly increments to a bank account in the name of the employee.

The application process is organised conveniently and the target processing time is two weeks. The knowledge migrant permit is granted for the duration of the employment contract with a maximum of five years and is renewable as long as the contract is not dissolved.

EU Blue Card

The requirements for a Dutch EU Blue Card are:

  1.  a job offer of at least one year at a salary of at least €5,160 gross per month exclusive of 8 per cent statutory holiday allowance;
  2.  conclusion of a higher education course with at least a three-year full-time curriculum; and
  3.  validation of the degree by the Dutch authorities.

The EU Blue Card allows for work with recognised sponsors as well as non-recognised sponsors, and is not bound to a specific employer. The card is granted for the duration of the employment contract with a maximum of four years, which is renewable. The maximum processing time is three months, not including the time required for the degree validation.

v Rights and duties of sponsored employees

Work and residence permits for employees are granted for one year, renewable under the requirement of a labour market test. In practice, however, other permit schemes are used for business immigration.

Knowledge migrant permits are granted for the duration of the contract, with a maximum of five years; the same goes for EU Blue Cards, up to a maximum of four years. Both are easily renewable, without additional requirements. Permits under the ICT schemes are granted for a maximum of three years, and can under certain conditions be renewed (WTO/GATS, bilateral and national ICT schemes), or, if not (EU ICT scheme), changed into a knowledge migrant permit or EU Blue Card. After five years, whichever previous scenario was followed, all categories of legal employees are entitled to full access to the labour market (Turkish employees after four years), provided they continue to be employed.

Another option after five years is a permanent residence permit, provided the employee has passed an integration test that includes basic knowledge of the Dutch language. The advantage of the permanent residence permit over mere full labour market access is that the holder is no longer dependent on an employer-sponsor.

V INVESTORS, SKILLED MIGRANTS AND ENTREPRENEURS

Investors, highly skilled contractors and entrepreneurs all fall into one residence category: the independent entrepreneurs category. Admission criteria for this category are based on the concept of added value for the Dutch economy. The value assessment is not made by the IND but by the RVO on the basis of a points system. Applicants must earn points in the following categories:

  1.  personal experience: education, business experience and Dutch contacts;
  2.  business plan: market analysis, USPs, financial plan and forecasts; and
  3.  added value for the Netherlands: innovation, job creation and investments.

In each of the three categories, 30 points must be obtained (i.e., 90 points in total) or, alternatively, 45 points in each of the first two categories (90 in total), and fewer or no points in the third category.

Processing times in practice vary from three to six months. Applicants receive a residence permit for two years (renewable).

i Specific entrepreneur schemes

Specific entrepreneur schemes that are exempt from the general points-based system are:

  1.  preferential schemes based on international obligations (United States, Japan);
  2.  the high-net-worth individuals or investors scheme; and
  3.  the start-up visa scheme.
Preferential schemes based on international obligations

Nationals of the United States and Japan are exempt from the points-based system. The Treaty of Friendship, Commerce and Navigation of 27 March 1956 between the United States and the Netherlands allows US entrepreneurs to obtain a residence permit on the sole condition that capital of €4,500 is invested in the business. A comparable rule applies to Japanese entrepreneurs, based on the 1913 bilateral Trade and Seafaring Treaty with Japan.

High-net-worth individuals and investors scheme

The applicant must invest €1.25 million in a company or investment fund, which must have added value to the Dutch economy. The value assessment is made by the RVO, using a mitigated points system. The added value requirement is waived if the applicant submits a signed investment agreement with a venture capital fund affiliated with the Dutch Venture Capital Association.

The applicant must authorise the IND to share his or her personal information and the information about his or her assets with the Dutch Financial Intelligence Unit (FIU) to investigate whether any doubtful financial transactions executed by the applicant are known.

Start-up visa scheme

The start-up visa scheme, introduced in 2015, targets the owners of newly established companies. The start-up must be enrolled in the programme of a Dutch business incubator. Qualifying incubators are listed on the IND website. The contract between the start-up and the incubator must mention the nature of the accompaniment and the conditions under which the accompaniment is offered, including the stake that the incubator may have in the company.

The start-up must substantiate that the product or service is innovative. This is assessed by the RVO, to which end a detailed milestone plan must be submitted, containing:

  1.  the role the applicant fulfils in the start-up;
  2.  the concept of the product or service the start-up delivers or will deliver;
  3.  the innovations of the product or service; and
  4.  the milestone steps anticipated to go from start-up to actual undertaking in one year.

The start-up owners receive an entrepreneur visa initially for one year. This can be renewed for another two years, provided the incubator provides a statement to the effect that during at least three months of the guidance process, the start-up has fulfilled its tasks ‘to satisfaction’.

If several persons participate in the start-up company (e.g., as shareholders), all are, in principle, eligible for a visa simultaneously.

VI OUTLOOK AND CONCLUSIONS

i National developments

Further to a 2017 survey on compliance management by the immigration authorities, the IND has announced increased compliance efforts with a focus on recognised sponsors from early 2018. Following this, there has been a gradually discernible trend of more corporations being audited and sanctioned (fines and suspension of recognised sponsor status).

ii European developments

In 2017, the case law on intra-EU service provision2 was finally implemented with the effect that employees not only of ‘pure’ service providers, but also of temp agencies and staffing companies can be seconded without a work permit.

A revision3 of the EU Blue Card Directive is currently being debated in the European institutions. The proposal, which aims to increase the degree of harmonisation and lower salary thresholds, has so far met with substantial political opposition.

Brexit’s next phase will be a transitional period, lasting from Brexit day in March 2019 until the end of 2020, the contours of which have still to be carved out, and what happens after that is also uncertain. Many potentially impacted persons are seeking dual nationality or other ways to secure a permanent status.

1 Jelle A Kroes is a partner at Kroes Advocaten Immigration Lawyers.

2 ECJ, 11 September 2014, C-91/13 Essent.

3 Proposal 2016/0176 (COD).