A warm welcome to foreign entrepreneurs?

The Netherlands is a country of entrepreneurs. Entrepreneurs are the engine that drives our economy. They are a source of innovation and new jobs. Thus, they make an important contribution to economic growth.

Therefore, it is hard to explain why the residence permit for self-employment is so difficult to obtain and applications for this permit have such a low success rate. Often, expats employed by a company ask us if they can easily change their residence permit into a self-employment one. Usually, we have to disappoint them.

A brighter future?

The future started looking brighter on January 1, 2015, when new, more supportive rules came into force for innovative start-ups from abroad.

The most important condition under these rules is that the foreign entrepreneur must have a reliable "facilitator" with more than two years of experience in guiding start-ups.

In addition, the entrepreneur must show that their product or services are innovative. The latter will be assessed by the Netherlands Enterprise Agency (RVO), a part of the Ministry of Economic Affairs. If the entrepreneur has already started their company in the Netherlands during their short legal stay of less than three months, they do not have to return to their home country to wait for the decision regarding their application.

However, this start-up visa is only meant for a small group of entrepreneurs. Just a few dozen residence permits have been issued since the introduction of the start-up rules. The rules are not lenient for the bigger group of entrepreneurs who would like to settle in the Netherlands with a profitable company.

This is made clear when you look at the numbers issued by the Dutch Immigration Department (IND). In 2015, the IND dealt with 470 applications from entrepreneurs (this includes the start-ups). In 2016, the IND dealt with 530 applications. In both years, only three percent received a residence permit.

Negative advice most common

In 2008 (slightly adjusted in 2013), a points-based system was introduced for residence permit applications of foreign entrepreneurs. This system is divided into three categories concerning the entrepreneur and their company.

Those categories are:

• Personal experience (category a): the level of knowledge of the entrepreneur, their experience as an entrepreneur and employee and their "ties" to the Netherlands are assessed.
• Business plan (category b): the type of company, product or service, the organisation and financial position of the company are assessed.
• Added value (category c): added value for the Netherlands, job creation and investments must be shown.

The entrepreneur needs to be awarded at least 30 points in all three categories or 45 points in both categories a and b.

The RVO issues the points and advises the IND about the application. The IND will skip the advice procedure if the department is of the opinion that the application is lacking supporting documents. Based on the aforementioned numbers, one can conclude that the advice of RVO is almost always negative.

A warm welcome

Last year, by the request of the Expat Center of Amsterdam, a research project was started called: "Warm welkom voor Talent" (please give talented entrepreneurs a warm welcome).

On May 19, 2017, the report which resulted from this research project was issued to the deputy mayor of Amsterdam. It contains recommendations to make the Netherlands more attractive to talented foreign entrepreneurs. However, so far, we are not aware of any changes to the current policy.

Some positive news

There is also some positive news. Since April 1, 2017, highly skilled migrants, EU Blue Card holders, students and scientific researchers can take up work as an entrepreneur next to their regular job.

If you have any questions about the application procedure for a residence permit based on self-employment, kindly contact Everaert Advocaten for more information and advice:

• Telephone: +31 (0)20 752 32 00
• Email: info@everaert.nl