Netherlands Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into the Netherlands generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Dutch Visas, Work Permits and Migration

Expanding into a country or hiring a workforce abroad can lead your business to great profits, but unfamiliar laws and regulations can counteract your company’s goals and plans. At Bradford Jacobs, we want to eliminate this complicated part. By using our PEO service, we can arrange all needed visas and permits including the entire application process without your physical presence.

Dutch visa, residency and permit regulations require expert guidance as they vary according to the country foreign nationals live in – the European Union, the European Economic Area and other foreign nationals are all affected by these complex regulations.

What Types of Work Visas, and Permits for Poland are there?

Individuals from the European Union (EU), European Economic Area (EEA) or Switzerland need not apply for a work permit, residence permit or entry visa, requiring just their national ID or passport.

Some non-EU countries have agreements regarding entry visas and their citizens are exempt, usually for 90 days in a 180-day period.

Employers wanting to employ Non-EU/EEA foreigners (Third Country Nationals -TCNs) need to become a sponsor for that worker and be recognized by the Immigration and Naturalization Service (IND) in order to apply for work and residence permits for employees.

Generally, the documents required to live and work in the Netherlands are:

  • Entry Visa / temporary residence permit
  • Work Permit
  • Residence Permit

Main categories of Work Permit:

  • GVAA – combined work permit and residence permit (Gecombineerde vergunning voor verblijf en arbeid)
  • TWV – employment permit without residence (Tewerkstellingsvergunning)
  • Permit for graduates – Orientation Year (zoekjaar)
  • Entrepreneur permit / Start up permit

For most foreign workers, they will require either a GVVA or TWV permit for employment with Dutch companies. They have the same requirements regarding assessment depending on the length of time they will be working in the Netherlands:

TWV – employment permit:

  • To work for less than 90 days and this can be applied for through the Employment Insurance Agency (UWV) but there are strict compliance regulations
  • The job position has been offered and advertised to Dutch, EU/EEA, and Swiss nationals
  • Only employers can apply for this permit.

Note: Highly skilled migrants may not require the employer to apply for the permit, but they will require a residence permit and the appropriate visa (temporary residence permit)

GVVA – combined work permit and residence permit:

  • To work for longer than 90 days apply to the Immigration and Naturalization Service (IND) who takes advice from the UWV
  • Employers or employees can apply for this permit
  • The job position has been offered and advertised to Dutch and EU/EEA and Swiss nationals for between five and 12 weeks and every effort has been made to fill the position (labor market test)
  • An appropriate entry visa will still be required, if not exempt

Highly skilled migrants may not require the employer to apply for the permit, but they will require the residence permit and the appropriate visa depending on country of residence.

Main Residence Permits:

  • GVVA Combined Residence and Work Permit – generally applied for by the employer, who needs to be registered as a sponsor with the IND.
  • Highly Skilled Migrant Program (Kennismigrant) – the employer/recognized sponsor applies for Entry and Residence Procedure (TEV) with the IND – regarding policy and security which takes about two weeks. The migrant needs a Temporary Residence Permit (MVV) and Residence Permit upon arrival in Netherlands.
  • EU Blue Card is for highly skilled workers with at least a bachelor’s degree and a Dutch employment contract for one year with a minimum salary. But the employer does not need to be a recognized sponsor.

Dutch Tax Laws

Dealing with tax, payroll, and employment regulations for your staff from overseas is a tricky process. The Netherlands is no exception, with fines, sanctions and other penalties applying for not complying with the complex and many-layered aspects of taxation.

Global expansion is a great way to grow your business and the Netherlands offers many appealing opportunities. However, the tax laws can be complex and require time-consuming research. By using our PEO service we will take care of the complicated legwork so that you can focus on your business goals in the Netherlands.

Overview of Taxes in The Netherlands

  • Individual Income Tax: Up to €68,507 (US$80,330) – 37.10%; Above that – 49.50%
  • Social Security Taxes: National Social Insurance – 27.65%
  • Value Added Tax (VAT): Standard rate – 21.00%; reduced rate (food, medicines for example) – 9.00%
  • Corporate Taxes: Standard rate – 25.00%; SMEs first €200,000 (US$234,500) of taxable income – 16.05%; Some categories of intellectual property – 9.00%
  • Withholding Tax (WHT): 15.00%

Poland Individual Tax – Single, Married

Dutch residents are taxed on total income from all worldwide sources. Both residents and non-residents must pay personal tax on income sourced in the Netherlands and usually fit into Box 1, which includes all income from salaries, bonuses, self-employment, and directors’ fees. A National Social Insurance contribution of 27.65% is also deducted at some income levels.

Box 1: Income from employment and National Social Insurance – Resident and non-resident individuals’ taxable income

  • Up to €35,129 (US$40,816) + 27.65% Social Insurance: 37.10%
  • €35,129 to €68,507 (US$79,560) + no social insurance: 37.10%
  • Over €68,507 + no social insurance: 49.50%

Married couples are considered ‘fiscal partners’ and can file joint tax returns.

Other Taxes that might affect an individual’s income include:

  • National Insurance Tax (deducted from income)
  • Employee Insurance Tax (paid by employers with rates depending on the industry and sector)
  • Inheritance, Estate and Gift taxes vary between 10% and 40%
  • Property Tax (assessed annually)
  • Transfer Tax applying to transferring property ownership
  • Insurance Tax of 21% paid by Dutch residents on premiums

Dutch Entity Set Up

Global expansion into the Netherlands generally means that you need to set up an in-country entity. However, by partnering with us you create the possibility to bypass this process and utilize our Dutch entity. By using our PEO service we take care of the complicated paperwork.

Expanding into a new country is always an adventure, but we believe this adventure should be exciting instead of just frustrating and time-consuming. Therefore, we have been supporting companies in over a hundred countries with their expansion plans.

How to set up a Dutch Subsidiary

Setting up a subsidiary in the Netherlands? Firstly, choose the company type, which most typically will be a private limited liability company, known as an (Besloten vennootschap, BV). These are some of the tasks that need to be ticked off before incorporation:

  • Obtain a ‘certificate of non-objection’ from the Dutch Ministry of Justice to register a subsidiary.
  • Check that your business name is valid and unique and register with the Chamber of Commerce and the tax authorities.
  • Confirmation of the company name enables the registration procedure to begin.
  • Open a corporate bank account to deposit initial capital and receive certificate of deposit.
  • Obtain a ‘Declaration of non-objection’ from the Ministry of Justice.
  • Have the Articles of Association, application for establishing a subsidiary and the foundation deeds notarized by a Dutch lawyer and then submitted to the Chamber of Commerce with the certificate of bank deposit and declaration of non-objection.

Benefits of setting up a Subsidiary in Netherlands

Among the legal advantages of setting up a subsidiary in the Netherlands is that the shareholders and directors of the parent company have limited liability and the parent company itself is not liable for the activities, responsibilities, or debts of the Dutch subsidiary.

The subsidiary also has the freedom to engage independently in more types of business than the parent company. The move can also have tax advantages in offsetting the losses of one company against the profits of another.

In the wider commercial sense opening a subsidiary makes a statement of a company’s commitment to expanding into foreign markets. The Netherlands is a popular target for expansion with its internationally-focused economy, strong financial sector, quality of life, a pro-business government and geographical location as a gateway to the rest of mainland Europe and even farther east.

Using a global Professional Employer Organization (PEO) such as Bradford Jacobs means staff can be sourced, placed in their roles, and be up-and-running within days, rather than months, and with all the difficulties of payroll, taxation, and compliance under control thanks to our Employer of Record (EOR) services.

The Dutch Market

The Netherlands economic influence stretches well beyond the borders of what is a relatively small country. The Dutch economy is considered the most competitive in Europe, fourth most competitive in the world according to the World Economic Forum and 2020 IMD rankings, as well as fifth in the 2020 Global Innovations Index.

Geographically, the Netherlands is ideally placed with 95% of Europe’s most lucrative markets reached within 24 hours by road from Amsterdam or Rotterdam, plus an infrastructure of airports, railways, waterways, and ports that connects the country domestically and internationally.

The Netherlands has become a main gateway to European talent for companies expanding abroad and as a magnet for business ventures from the United States, Australia, China, and India.

Expansion into a developed economy such as the Netherlands involves huge challenges – from finding highly qualified staff to complying with strict employment laws and tax and payroll regulations.

There are speedier and more cost-effective alternatives, with Bradford Jacobs opening the door to a hassle-free route into the Netherlands.

Starting a Business in The Netherlands

The usual choice for foreign companies establishing a legal entity in the Netherlands is a private limited liability company, known as a Besloten vennootschap, BV. The subsidiary is a separate legal entity from its parent company, due to having its own capital and independent administration.

Set procedures include the following steps:

  • Apply to obtain a ‘certificate of non-objection’ from the Dutch Ministry of Justice in order to register a subsidiary.
  • Check the business name is valid and unique and register with the Chamber of Commerce and the tax authorities.
  • Open a corporate bank account to deposit any initial capital and receive certificate of deposit.
  • Obtain the ‘declaration of non-objection’ from the Ministry of Justice.
  • Have the Articles of Association and all relevant documents notarized by a Dutch lawyer and then submitted to the Chamber of Commerce.
  • All documents are submitted to Chamber of Commerce with the certificate of bank deposit and declaration of non-objection.
  • The subsidiary must register with tax and social insurance authorities.

Once the company has been cleared to operate, to employ and payroll staff other procedures must be followed, including:

  • Registering with the tax authorities through the Dutch Tax and Customs Administration (Belastingdienst).
  • Registering with the Social Security Bank (SVB) which coordinates the social insurance systems – national insurance for individuals legally living in the Netherlands and employee insurance for those working in the country.
  • Registering with the Employee Insurance Agency (UWV), which operates under the Ministry of Social Affairs and Employment (SZW) and handles benefits covering such as unemployment and sickness.
  • Obtaining the Citizen Service Number (BSN) for all employees so they can interact and liaise with national, regional and municipal authorities.

Expanding into The Netherlands

Foreign companies expanding into the Netherlands are entering one of Europe’s leading economies, in a prime geographical location for extending their reach into the continent’s massive consumer market numbering hundreds of millions. The World Bank ranks the Dutch economy as 17th largest in the world and fifth in the European Union with a Gross Domestic Product (GDP) expected to reach 1,012 billion US dollars by the end of 2021.

Leading sectors include agriculture and agri-food research, creative industries, chemicals, energy and high-tech systems and materials. The Netherlands is a popular target for global expansion with its internationally focused economy, strong financial sector, quality of life, a pro-business government and its geographical location as a gateway to the rest of mainland Europe and further east.

The Netherlands Business Facts

  • Capital City – Amsterdam
  • Population – 17 million
  • Official language – Dutch, Frisian (spoken only in Friesland).
  • Economy and world ranking – 2021 – €862 (US$1,012) billion; 17th-largest economy in world; 5th-largest in EU
  • Leading sectors – Agriculture and agri-food research, creative industries, chemical industry, energy and high-tech systems and materials
  • Main exports – includes machinery, transport equipment, refined and crude petroleum, broadcasting equipment, food, packaged medicaments, computers, office machine parts
  • Main imports – includes electrical machinery and computers, mineral fuels and oil, food and live animals, vehicles, pharmaceuticals, optical, technical and medical apparatus
  • Main trading partners – EU, UK, USA, China
  • Government – The Hague. Constitutional monarchy – parliamentary democracy
  • Currency – Euro

Advantages and Challenges of the Dutch Market

Advantages of expanding into Dutch market include:

  • Logistics: Ranked second best globally for logistics by the World Bank
  • Innovation: The Global Innovation Index ranked the Netherlands fifth-best in the world in 2020
  • Workforce: Highly skilled and multi-lingual from an outstanding education system
  • Location: Ideally placed for further expansion into the wider European market
  • Trade: Over 90% of Europe’s most lucrative consumer markets are within 24 hours by road or rail
  • Communications: More than 90% of households have high-speed broadband
  • Taxation: Double taxation treaties with over 80 nations

Challenges of operating in the Dutch market:

  • Property: If setting up a subsidiary requires registering a property, this involves a notary conducting a title search at the Land Registry, transferring the deed and notifying the tax authorities
  • Taxation: Dealing with corporation taxes can take up to 10 payments annually
  • Permits: Construction licenses involve 14 separate procedures and can take up to five months to obtain

Limited Company / Subsidiary or Branch in Netherlands?

International companies targeting Netherlands for expansion will generally choose a limited liability subsidiary (Besloten vennootschap, BV) as they have independent legal status from the parent company, which are generally free from responsibility for any debts or liabilities of the subsidiaries.

The parent company has the advantage of exploring the potential of the Netherlands’ market. There is also the potential to move further afield across Europe and into Scandinavia.

However, it is also important to see what other options are out there.

Dutch Contracts

International companies hiring employees for their global expansion into the Netherlands face wide-ranging tax, employment, and social insurance regulations. Compliance is essential with regulations set at national level and by Collective Labor Agreements (CAOs), as well as directives from the European Union (EU). The Dutch Civil Code, Dutch Tax and Customs (Belastingdienst) and the Ministry of Social Affairs and Employment also feature. To hire from abroad, employers must comply with the Foreign Nationals Employment Act (WAV).

This legal framework covers payroll and tax law, social security, termination and severance rights, vacations, sick leave, minimum wages, and other areas. These factors apply particularly when a foreign company wants to hire local employees in the Netherlands, as they must comply with all obligations on behalf of the employees

Employment Contracts in Netherlands

  • Permanent or Indefinite Employment Contracts (Vast contract): These are the norm and can be either written or verbal. In the absence of a written contract, once an employee begins employment the contract is deemed to be in place and the employer must supply written details of the terms within one month, indicating whether a CAO applies.
    Written contracts are strongly advised, however, as under Dutch law certain clauses are valid only in written form. The contract can be ended by either party, adhering to terms of notice. Where an employee does not agree to reasons for dismissal, employers need permission from the Employee Insurance Agency (UWV) to carry out the dismissal.
  • Fixed-term or Temporary Employment Contracts (Tijdelijk contract): After receiving three fixed-term contracts, or if contracts cover three years, the employee must by law be given an indefinite, permanent contract. Even when an end date is specified, employers must give one month’s notice that they do not intend to offer a new contract, at risk of being fined one month of the employee’s salary.
  • Probationary or Trial Period Employment (Proeftijd): The maximum permitted period is two months for indefinite contracts and for fixed-term contracts of more than two years. Fixed-term contracts of less than six months cannot specify a probationary period, but a contract between six months and two years can have a one-month trial period.
  • Recruitment Agency Employment Contracts (Uitzend contract): The employee signs the contract with the agency, who place the worker with a company for a specific project or period.
  • Freelance Employment Contracts (DBA modelovereenkomst): Companies are obliged to give contracts to freelances working for them under the provisions of the Declaration of Employment Relationships Act (DBA). The contract differentiates the freelance from salaried employees.

Employee Benefits

Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in the Netherlands might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labour contracts for employees in Italy including local benefits.

When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In Holland, benefits are guaranteed by national legislation as well as collective agreements with trade unions or workers’ councils.

What Compensation Laws exist in The Netherlands?

In the Netherlands, a wide-ranging and daunting framework of employment laws and regulations guarantee employees enjoy protection throughout their working life and into retirement. Legislation covers such as minimum wages, social insurance, redundancy, termination, and severance, working hours, vacation leave, maternity, and paternity benefits and more. Statutory and mandatory minimums cannot be undercut by collective or trade union agreements, although these can improve entitlements for employees.

Drawing up contracts is complex enough, but in the Netherlands, it is vital to fulfil responsibilities to your employees over benefits, compensation, and minimum requirements. Do not take the risk of ignoring them. Compensation and benefits include:

  • National Minimum Wage: Minimum wages paid to full-time employees over the age of 21 increased from €1,684 to €1,701 (US$1,997) from July 1, 2021. The new weekly rate is €392.55 (US$460) and €78.51 (US$92) per day.
  • Working Hours: These are between 36 and 40 hours weekly, or seven to eight hours per day usually between 6am and 6pm, five days a week. The maximum number of hours is 60 per week with a maximum of 12 hours per shift.
  • Health Care: All Dutch residents must be covered for basic public health insurance (ZVW). Private healthcare is funded both by contributions from employees, starting at around €100 (US$117) annually, and from employers paying an amount that depends on employees’ salaries.
  • Notice Periods: Minimum periods of notice must be given both when a company releases staff or an employee terminates their employment. Employees on a permanent contract must always be given notice. Dutch law provides for the following terms of notice: Fewer than five years’ service – 1 month; more than five years, fewer than 10 years – two months; more than 10 years, fewer than 15 years – three months; 15 years’ service or more– four months. If the employee’s notice period is more than one month, the employer’s reciprocal notice period must be twice as much up to a maximum of six months.
  • Redundancy, Termination and Severance: Regulations for dismissals are strictly applied in the Netherlands. Employers must have a valid reason for terminating employment. If dismissals are mutually agreed the employer must make a written statement of the terms. If the employer terminates employment and the employee agrees with the reason in writing, they receive a transition payment. This is like a severance payment and applies if the employee has been in position for a minimum of two years. However, employees have a 14-day ‘reconsideration period’ to revoke their agreement and do not need to give a reason. If termination is not mutual, the employer needs approval from the Employee Insurance Agency (UWV).

Social Security in The Netherlands

While all social security and benefits apply to people living and working in the country, exceptions may apply depending on the contract conditions and the employees’ country of origin

There are two types of compulsory social insurance for eligible expat workers. They are:

  • National insurance schemes (Volksverzekeringen)
  • Employees insurance schemes (Werknemersverzekeringen)

Newly arrived workers must attend the registration office (Dienst Burgerzaken) in the (Gemente) municipality where they live to obtain a BSN number and enroll with the tax and social insurance system.

EU and EEA-nationals need only to take their ID (passport or national identity card), but non-EEA nationals need a work permit stating they are permitted to work in the EU or EEA.

Statutory Employer Costs in The Netherlands

Employer Payroll Taxes

  • 2.70% or 7.70% – Unemployment Insurance (WW)
  • 7.03% – Health Insurance
  • 0.5% – Child Care Premium
  • 10.23% or 15.23% – Total Employment Cost

Unemployment Insurance depends according to type of contract. The lower rate is applicable to employees with a contract of indefinite duration, whilst the higher rate applies to employees with a temporary contract.

Other statutory employer costs include:

  • National Minimum Wage: The minimum wages paid to employees over the age of 21 in full-time employment increased from €1,684 to €1,701 (US$1,997) from July 1, 2021. The new weekly rate is €392.55 (US$460) and €78.51 (US$92) per day.
  • Corporate Tax: The standard rate is 25% with 16.5% applying to the first €200,000 (US$234,500) of taxable income for Small and Medium Enterprises (SMEs), and 9% to some categories of intellectual property. Resident companies are taxed on their worldwide income, whether private or public limited companies. Foreign companies are considered resident if incorporated under foreign law but managed in the Netherlands.

Dutch Top Talent

Recruitment can be a tricky business, especially when a company is venturing to unfamiliar countries and exploring new markets. This is where we come in to oversee the process for you – Bradford Jacobs’ expertise and over 20 years of experience in international recruitment services is indispensable for global expansion into the Netherlands.

Hiring the right talent in the Netherlands to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in Holland yet. Our PEO and EOR service can be the solution for your company.

The Recruitment Process in The Netherlands

Recruitment is the first stage of making your company operational in the Netherlands. It is vital to know where to locate the best talent to be a perfect fit for your company’s plans.

Employers hiring foreign employees must meet various legal requirements. The employee must possess a residence permit and the employer must obtain an employment permit. Employees with Dutch nationality and citizens from the European Union (EU), European Economic Area (EEA) and Switzerland are exempt. Unless recruiting into a sector with skill shortages, employers must try to fill positions first from the Netherlands or a member nation of the EU or the EAA.

International companies expanding into the Netherlands need not operate through a local entity to recruit employees but will still have a lot of questions, and the answers are not easy to find. Once the right employees are located, employers must follow strict registration and payroll procedures for their new staff. These include:

  • Registering with the tax authorities through the Dutch Tax and Customs Administration (Belastingdienst).
  • Registering with the Social Security Bank (SVB) which coordinates the social insurance systems – national insurance for individuals legally living in the Netherlands and employee insurance for those working in the country.
  • Registering with the Employee Insurance Agency (UWV), which operates under the Ministry of Social Affairs and Employment (SZW) and handles benefits covering such as unemployment and sickness.
  • Obtaining the Citizen Service Number (BSN) for all employees so they can interact and liaise with national, regional, and municipal authorities.

The recruitment process is time-consuming and requires dedication – which is a difficult task when faced with several other complicated issues involved in international expansion. Partner with Bradford Jacobs as your Employer of Record (EOR). We will provide all the answers, and can convert your expansion blueprint for the Netherlands into an action plan with a few simple steps, including:

  1. Bradford Jacobs locates the ideal employees for your company, then steps in as EOR to ensure they comply with Netherlands’ employment contracts law, payroll, HR, visa requirements and permits (if required).
  2. We manage all work-related registration formalities and on-going employment issues while you have daily control of your employees.
  3. The employees complete their time sheets, and any expenses claims, and we invoice you, the client. Once paid, we deduct all contributions to the relevant Dutch authorities and transfer the balance into the employees’ accounts.

Legal Checks on Employees in The Netherlands

  • Scope: During the pre-employment phase, only personal data specifically relevant to the position applied for can be screened. Extra personal data about the candidates may also be obtained, but only if there are exceptional requirements for the vacancy that make it necessary. Background checks should not contravene an individual’s rights under European Union’s General Data Protection Regulation (GDPR), as fines and other sanctions can be imposed on the employer.
  • Criminal Record Checks: In specific roles, such as judges, lawyers and advocates, the applicant must provide evidence they have no criminal record.
  • Discrimination: Screening should be within the parameters of the Equal Treatment Act, which protects Dutch employees from discrimination on the grounds of race or nationality, religious beliefs, political affiliations or memberships, gender, and sexual orientation, civil or marital status.
  • Required checks include verifying candidates have necessary work permit and/or residence permits, and permitted checks include employment references, but this can only be done with the candidate’s permission.

Basic Facts on Hiring in The Netherlands

  • At interview the employer may ask questions only relevant to the nature and working conditions of the role and the applicant’s ability to carry them out.
  • Applicants can refuse to answer questions that impinge on their privacy or anti-discrimination rights.
  • Employers and employees must comply with all minimum entitlements and benefits as set down in law or by Collective Labor Agreements (CAOs).
  • Contracts can be either verbal or in writing, but in every case the employee must be informed of certain basic legal requirements in a written agreement. There is no legal requirement to deposit contracts with third parties.
  • Employees must be registered with the Dutch Tax and Customs Administration (Belastingdienst), Social Security Bank (SVB) and the Employee Insurance Agency (UWV), as well as obtain their citizen service number (BSN).
  • Minimum wages paid to employees over the age of 21 in full-time employment increased from €1,684 to €1,701 (US$1,997) from July 1, 2021. The new weekly rate is €392.55 (US$460) and €78.51 (US$92) per day.
  • The Working Hours Act and the Working Hours Decree regulate working hours between 36 and 40 hours a working week, or seven to eight hours per day scheduled between 6am and 6pm, five days a week. The maximum number of hours is 60 per week and a maximum of 12 hours per shift.
  • Sick pay applies for the first two years of incapacity to work, paid either by the employer or via the Employee Insurance Agency (UWV). Sick pay is a minimum 70% of salary, including overtime payments and other personal benefits.
  • Full-time employees receive at least four weeks paid holiday annually. Holiday allowance is 8% of total gross salary, paid in May or over 12 months at the employer’s discretion.
  • Maternity leave is four to six weeks pre-natal and 10 weeks after the birth. Employers apply to the Employee Insurance Agency (UWV) for the maternity allowance for their employee, who receives their 100% daily salary capped at €223.41 (US$261).

Work Culture

To do business in the Netherlands, it is vital to have a good understanding of its business or work culture. Making the right impression with the right people is the key to success in Holland, and it is important to back this up with the right research on the market and potential business associates.

As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Dutch work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in the Netherlands to start your expansion well-informed.

The Netherlands, which is ideally situated at the commercial heart of the European continent, offers great opportunities. However, understanding the work ethic and culture of the Netherlands will go a long way to creating the right business environment for your company and staff.

Dutch business culture is relatively flexible. The openness characterizing Dutch society is reflected in the horizontal structure of business culture seen in many companies, where the managing director and employees are all considered co-workers. Executives do not usually display their power – but still have the authority.

Companies have specialized employees while managers are seen more as a problem solver or facilitator. There is emphasis on bringing multiple specialists together, thereby improving diversity and expertise. The Dutch like consensus so are fond of meetings, which combine informality with protocols and a strict agenda.

The Dutch traditionally keep their professional and private lives separate – do not expect too much socializing. Here are a few tips on business interaction as you get ‘down to business’:

  • Punctuality: After fixing an appointment arrive on time for the meeting – it shows you can keep to deadlines. Allow time for the traffic and call if you are going to be late.
  • Language: If you are more comfortable discussing business in English, the Netherlands is the place to be as most Dutch professionals speak the language fluently. It is still best to speak plainly – English idioms may be misunderstood by your opposite numbers.
  • Business Relationships: Realize the business relationship will revolve around strict agendas and sticking to the point. Small talk is unlikely to feature in the early days as the Dutch will be keen to get down to business, while expecting all team members on both sides to be fully briefed and taking part in discussions.
  • Introductions and Greetings: Shake hands firmly, maintain trust-building eye contact and make the introduction using your first and last name.
  • Business Cards: These are generally exchanged towards the end of the introductory meeting. Dutch business cards typically include any academic qualification. They may also show a home address and telephone number – but this is not an invite for ‘after hours’ contact.
  • Dress Code: This varies, but always within the boundaries of being presentable. Suits and ties may prevail in the upper levels of business hierarchy or government, but in the summer particularly shirts, blouses, jeans, slacks, trainers and even tee-shirts are typical office wear.
  • Gift-giving: This is not a common practice in Dutch business, and any gifts exchanged at the conclusion of the deal should be modest and neutral.
  • Sealing the Deal: As meetings are very much agenda-driven there will be attention to detail in following the planned course of action, and with the egalitarian approach towards involving everyone, progress could be slow. But once a decision and agreement is reached, setting the deal in stone will be confirmed by rigidly enforced contracts.
  • Business Meals: Another concept not overly common in Dutch commerce. Business lunches are unusual, and dinner is kept generally as a private social occasion. But if a business meal is called for there will be little small talk.

Dutch Minimum Wage

The minimum wages paid to employees aged over 21 in full-time employment increased from €1,684 to €1,701 (US$1,997) from July 1, 2021. The Dutch government adjusts the rate annually in January and July in line with collective agreements. The new weekly rate is €392.55 (US$460) and €78.51(US$92) per day.

The law does not decree a minimum hourly wage as hours vary between businesses depending on the number worked in a week. Part-time workers calculate their entitlement by taking the minimum weekly wage, dividing that by the number of hours in a full working week and multiplying the result by the number of hours they work.

Probation Periods in The Netherlands

Probationary or Trial Periods (Proeftijd) are allowed by law in the Netherlands and written into the employment contract but both employer and employee must agree to it, unless covered by a collective labor agreement.

The maximum permitted period is two months for indefinite contracts, and for fixed-term contracts of more than two years. Fixed-term contracts of less than six months cannot specify a probationary period, but a contract between six months and two years can have a one-month trial period. An employment contract can be terminated by either party during the probationary period.

Working Hours in The Netherlands

Working hours’ regulations are included in the Working Hours Act and the Working Hours Decree (ATB) and apply to all workers including foreigners. Employers must make a record of all hours worked by their employees.

Between 36 and 40 hours generally comprise a working week, or seven to eight hours per day, scheduled between 6am and 6pm, five days a week. The maximum hours is 60 per week and 12 hours per shift, which must average out to 55 hours over four weeks and 48 per week over 16 weeks.

Employees must have 11 hours consecutive rest between workdays. Working a five-day week, there must be 36 consecutive hours of rest for workers in a 14-day period.

Employees receive 30-minutes rest after working over 5½ hours, which can be split into two 15-minute breaks. More than 10 hours must include at least 45 minutes rest, again split into several breaks. A collective arrangement may allow for more break time but not less. An employee working for 5½ hours, must have a 15-minute break.

Overtime in The Netherlands

This is a legislative grey area in Dutch labor law, which has no specific provisions regulating overtime or any compensatory payments. Agreements regarding overtime may be agreed contractually, or as stipulated in the employee handbooks or by a Collective Labor Agreement (CAO).

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