Employer Of Record in Netherlands
We make it easy and painless to expand your business into Netherlands. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.
Accelerate your growth into Netherlands Compliantly and hassle-free
How we can help you expand in Netherlands
As your EOR in Netherlands we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Your candidate is hired by a PEO in Netherlands provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.
Expand to Netherlands with Serviap Global
Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity.
In just a few days, you can easily and safely build a presence in Netherlands being sure that your staff will be hired in compliance with labor and tax regulations.
Table of Contents
Netherlands Country Facts
The Netherlands is a small country, densely populated with a valuable strategic commercial location. Over one-third of the population of the European Union live within a 300-mile radius of the Netherlands.
Historically known for windmills, tulips, bicycles and cheese, today the Netherlands is also home to electrical engineering, creative and high-tech industries.
The Netherlands is one of the highest-earning nations in the world and its economic structure runs on the principles of an open economy. The Netherlands is a prosperous economy dependent on foreign trade.
The Importance of Small and Medium-sized Companies
Small- and medium-sized companies (SMEs) are a vital part of the Dutch economy. They have become such a staple in the EU that they have standardized the SME concept.
The Department of Trade and Industry in the UK and governments within the EU use the following definitions: Micro firm: 0 – 9 employees
Small firm: 10 – 49 employees
Medium firm: 50 – 249 employees Large firm: over 250 employees
There are 17.1 million citizens in the country. The vast majority of the population can speak the English language, with estimates of English proficiency reaching anywhere from 90% to 93% of the population. We know the people as the Dutch and have a famously tolerant society.
The Netherlands has an economy which relies heavily on foreign trade. The economy is noted for stable industrial relations, fairly low unemployment and inflation, and a major transportation hub for all of Europe.
Post-pandemic–as life and the economy get back to normal–new opportunities will arise for global business.
Key Sectors of the National Economy
The Netherlands is one of the ten largest exporters in the world.
One of the largest industries in the country is the food industry with other large businesses in:
• Electrical commodities plus sign services
Foreign companies choose the Netherlands because many employees are multilingual, making this a prime location. Furthermore, almost 90% of Dutch nationals are fluent in English, an important asset.
The Dutch are proactive and dependable, with a friendly attitude towards cooperation at work. Business owners can find incredible employees for part-time projects or for permanent employment and on top of this, the wages and benefits that are offered to employees are fair when one compares them to the skill of that employee.
Prominent Cities for Business
Amsterdam is a thriving tech hub. Over 200,000 people work in the creative industries in the Amsterdam area, which is also a world leader in life sciences and health. Amsterdam has a rich history of financial innovation.
Rotterdam is the biggest port in Europe–but that’s not the only large travel destination, Amsterdam also has one of the biggest airports in the world.
Industrial activity in Rotterdam is mainly in food processing, petroleum refining, high-tech, financial
services, and electrical machinery.
- The Hague
The Hague’s tech sector is booming. The Hague is the administrative and royal capital of the Netherlands and its seat of government, as well as the capital of the province of South Holland. It hosts the International Court of Justice and International Criminal Court.
Prominent industries in Utrecht include the financial sector, healthcare, and creative industry companies. It’s an excellent location for new businesses thanks to its central location, accessibility, ideal business climate and well-educated workforce.
Its incredible digital infrastructure helps the Netherlands’ maintain a technological environment. Also, 98% of households have broadband connection, therefore this country is the second in the world for online connectivity. The Netherlands is also home to one of the world’s leading digital data distributors, the Amsterdam Internet Exchange (AMS-IX).
Facilities for Foreign Investment
The Dutch investment policy is liberal towards foreign investment and has a robust international orientation. Many Dutch companies are multinational. Some are listed on foreign stock markets. Plus, there are no regulatory restrictions on foreign direct investment into the Netherlands
Business Culture in Netherlands
- Corporate Social Responsibility
Historically, the Netherlands is incredibly environmentally conscious, due to a continuous battle against waters that draw ever closer.Protecting the quality of the Rhine, the Maas and the Scheldt rivers is a cause taken up by individuals and companies.
Punctuality in business is regarded as a virtue. If you are running late, call ahead. This goes for both business and social meetings.
- Gift giving
The Dutch dislike to feel obligated. An aspect of their even-handed approach to most things in life, they do not expect to give or receive anything other than the due reward for services rendered. It is not common to give gifts when you have a business relationship with someone.
Netherlands Gastronomy: regional and traditional cuisines
Poffertjes are incredibly well known as a Dutch dish. They are small pancakes that you bake in an iron skillet, then place melted butter and icing sugar on top.
Hollandse nieuwe haring is as strange as its name. This is a pickled herring.
AVG’tje is the term for a Dutch dinner. This word stands for Aardappel, Vlees, Groenten, or translated: potato, meat and vegetables. A lot of Dutch households like to stick to the traditional foods, and mostly combine essentials.
|Num. States / Province||12 provinces|
|Principal Cities||Amsterdam, Rotterdam, The Hague and Utrecht|
|Thousands Separator Format||99,999,999.99|
|Country Dial Code||+31|
|Time Zone||Central European Time (CET)|
|Border Countries||Germany, Belgium|
|Continental surface||41,528 km 2|
|Fiscal Year||January 1 – December 31|
|Minimum Wage||€8.80 per hour (approximately $9.97 USD)|
|Taxpayer Identification Number Name in the country||BSN|
|Current President||Mark Rutte|
What you need to know about employing personal in Netherlands:
Laws and Agencies that regulate labor relationships
|Employment contracts are mainly governed by Book 7 of the Civil Code|
This is a personal contract of employment that determines pay and specific conditions.
|Dutch Labor Law||This regulates the legal relationship between employees and employers|
Dutch Tax Code
Algemene wet inzake rijksbelastingen
|This helps to provide a framework for entities and people to follow in terms of tax. It gives the rules that one must follow each year in this regard.|
|Dutch Social Security System|
• Family benefits
• Maternity and paternity leave
• Unemployment benefits
• Long-term care
• Sick leave
• Disability benefits
Key Tax and Labor Authorities
|Tax and Customs Administration||They collect income tax|
|The Social and Economic Council (WER)||This helps to oversee changes in employment laws and decisions affecting employment|
An employment contract in the Netherlands is called an arbeidscontract and is an agreement between an employee and an employer.
Contracts must contain
• The name and place of residence of the employer and the employee
• The location(s), at which the work is carried out
• The employee’s job or the nature of the work
• The usual working hours
• The amount of the salary and the payment periods
• Date when the employee joined the company
• Term of the contract (if for a fixed term)
• (if applicable:) Length of the trial period
|The International Labor Organization||They are a member|
|Work Hours||36-40 hours per week over five days per week.|
There are three common labor contractual options. These are:
- Temporary labor contract
- Permanent labor contract
- Contract with an employment agency
Legal Benefits in Netherlands
|Minimum Wage||1725 euros per month (approximately $1,953 USD)|
|This is often spelled out in employment contracts, and supplemented by the employee handbook or within a collective labor agreement.|
|Under the Dutch employment law, employees are allowed to have at least 8% of their annual salary as holiday pay, including bonuses.|
|Occupational risk insurance||An employer must pay 70% of their employees’ pay to the social security system when an employee has fallen ill.|
Vacations or PTO
|20 days per year on average but it is common practice for employers to offer 25 days of paid leave, on top of 10 public holidays in the Netherlands.|
Leaves of Absence
Employees have the right to paid absences for the following things:
When an employed person becomes sick, the employer is obligated to continue paying up to 70% of the employee’s salary for a maximum of two years.
Employers Contribution or Labor Cost
Annual Taxable Income
|Over this amount||Not over this amount||Tax % on Excess|
|Up to EUR 395,000||15%|
|Above EUR 395,000||25.8%|
Corporate Tax Rates
|Taxable Gross Income||Tax Rate|
|There are no provincial or municipal corporate income taxes in the Netherlands|
Those sick longer than two years and remain at least 35% disabled may apply for social security disability insurance (WIA).
The Labor Code provides for public holidays that are observed in the Netherlands:
|1 January||New Year’s Day|
|Friday before Easter|
Good Friday, official holiday only for government
|Monday after Easter||Easter Monday|
|Tuesday after Easter||King’s Day|
|24 May||Whit Monday/Pentecost|
|25 December||Christmas Day|
|26 December||Boxing Day|
The Dutch Civil Code has eight statutory reasonable grounds for dismissal.
|Type of Termination||Brief Description|
(The a-h grounds)
Redundancy due to a company who must shut down or reorganize. Long term illness (104 weeks);
Illness that makes it regularly impossible to perform their work; Employees incapability/lack of competence to perform the agreed work; Culpable behavior of the employee;
Employee refusing to work due to serious conscientious objections;
Work related conflict between the employer and employee;
Other circumstances that are not listed here but are of such nature that the employer cannot reasonably be expected to prolong the employment contract.
|If the employee does not agree with the dismissal, an employer needs the approval of the Employee Insurance Agency or the sub-district court. The grounds for dismissal determine which entity you need to ask for permission.|
Mutual consent Resignation
Notice of termination with the employee’s consent
Other forms of compensation upon termination include:
The transition payment is paid upon termination, which depends on the monthly salary and number of years of employment.
Length of Employment
Per year of employment
1/3 of the gross monthly wage per year from the first day of employment
• When applicable the employer needs to add:
• holiday allowance
• overtime compensation
• shift work allowance
• profit distribution
• year-end bonuses
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