Velocity Global’s Netherlands PEO (Professional Employer Organization) solution accelerates and streamlines your international expansion—without the need to establish an entity. International PEO expedites and simplifies international employee onboarding, making it the quickest and most agile global expansion method for companies establishing a presence in the Netherlands.
Through International PEO, Velocity Global becomes your Employer of Record, enabling us to compliantly hire and onboard your Dutch employees on your behalf. Whether you need a single employee for a short-term project or a whole team for a longer-term presence, you retain total employee oversight while we oversee all payroll, compliance, and risk mitigation considerations.
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Netherlands Fast Facts
Currency: Euro (€)
Population: 17.1 million
Economy: $913.7 billion
Top Sectors: Horticulture and propagation, agri-food, water, life sciences and health, chemicals, tech
- The following are public holidays, though collective bargaining agreements (CBAs) may outline pay, additional time off, or alternate holidays.
- New Year’s Day
- Good Friday
- King’s Day
- Liberation Day
- Ascension Day
- Christmas Day
- Boxing Day
Hiring Considerations in the Netherlands
Benefits of hiring in the Netherlands:
- The Netherlands has the world’s 12th-largest GDP, and the sixth-largest among European Union nations. The Netherlands’ largely English-speaking population, excellent connections to other European markets, and robust digital infrastructure make it a prime location for businesses looking to expand internationally.
- Dutch workers lead most other nations in terms of business skills and tech knowledge. But beyond tech, the Dutch government invests heavily in national companies. In January 2020, the government introduced a massive €1.7 billion fund to attract European investors.
- Because of the aforementioned benefits, the Netherlands lures a growing number of businesses from the UK, as many firms remain wary of Brexit’s fallout once the UK’s transition date ends on December 31, 2020.
Challenges when expanding into the Netherlands:
- Despite strong government support for trade and large numbers of regional trade agreements, companies must anticipate complex business structures that involve trade unions, government agencies, and industrial associations.
- Though the Netherlands remains one of the world’s top markets for growing tech firms, according to the 2020 State of Global Expansion Report™, it fell from first place to 16th place in one year. A drop in inward investment contributed to its lower ranking; businesses’ pessimism of the broader European market may reflect lower confidence in the Netherlands’ economic conditions.
- Some American businesses may find Dutch business practices perplexing and time-consuming. Many Dutch workers include many detailed elements of a business plan and background information rather than giving direct orders.
Cultural nuances and must-knows for doing business in the Netherlands:
- Arrive at meetings on time. The Dutch are punctual, and often limit small talk in favor of jumping directly into the meeting’s agenda. Contact meeting participants if arriving late.
- Shake hands upon arrival and introduce with first and last names. Maintain eye contact during direction conversation; the Dutch interpret this as a sign of trustworthiness.
- Participate in meeting discussions. Members should prepare themselves for the meeting, no matter their position, and contribute to conversation when appropriate.
- Dress appropriately. Dutch dress codes vary between sectors and companies. Suits remain reserved for management, government, or special occasions. More informal dress became popular in recent years; in summer, blouses, jeans, and t-shirts are appropriate.
Employment Contracts in the Netherlands
Minimum wages and salaries:
- The Netherlands’ minimum wage is €1,653.60 per month, or €381.60 per week, or €76.32 per day for all workers over the age of 21.
- Bear in mind that the national minimum wage changes twice annually, first on January 1, and again on July 1, to reflect collectively agreed upon wage averages.
- Contracts extending beyond six months may include probation periods of up to two months, but no longer.
- Both contractual and discretionary bonuses are possible in the Netherlands.
Termination and Severance Considerations:
- Employers must give all contractual employees notice of termination. Some fixed-term employees must receive a notice as well.
- Specific notice periods depend on the employment contract’s duration, with a notice period maximum of four months.
- Notice periods are not mandatory during an employee’s probation/trial period, or in dismissal cases of gross misconduct.
- Dutch law stipulates a statuary notice period of one month for employees, though individual contracts may reflect longer or shorter notice periods.
- Employer dismissal without notice may lead to additional compensation to the amount of potential employee earnings during the perceived notice period.
Paid Time Off & Benefits
- Expectant mothers receive four to six weeks of pregnancy leave before the child’s birth, and a minimum of 10 weeks leave after the child’s birth. If a mother takes fewer than six weeks of leave before birth, she receives the remaining amount (a maximum of two weeks) after her child’s birth.
- If a child’s birth occurs later than the initial due date, maternity leave begins after that date and may extend beyond 16 weeks.
- Employers apply to the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) on behalf of their employee.
- Employees with children aged eight or younger may take unpaid parental leave, and become eligible for the leave the day they begin working for an employer.
- If an employee’s partner gives birth, the employee receives one week of partner/paternity leave after the child’s birth. Partners may take 100%, employer-paid leave at any point during the first four weeks after the child’s birth.
- After July 1, 2020, partners may take up to five weeks’ unpaid leave within the first six months after the child’s birth. Employees may claim benefits through the Employment Insurance Agency at up to 70% of their salary.
Vacation and annual leave:
- All employees receive paid annual leave. The statutory number of leave hours is, at minimum, four times the number of working hours per week. For example, employees working five days per week receive 20 days per year.
- Collective labour agreements may specify additional leave provisions.
- Employers must pay at least 70% of an employee’s wages while the employee takes sick leave. The maximum sick leave is two years.
- If this amount totals less than the national minimum wage, the employer must include additional pay to meet minimum wage stands for the first year of sick leave, but not the second year.
Average workweek hours:
- In a 16-week period, the average workweek may not exceed a 48-hour workweek average.
- Working hours cap at 55 hours per four-week period. However, collective agreements may outline different working hours. Despite collective agreements, employees may never work more than 60 hours per week, as the country has specific workweek laws in place to limit working overtime.
- Overtime pay varies by industry and collective agreements.
|Premium Sector Fund||4.31%*|
|WGA/WGA Flex Fund||1.75%*|
|Premium Training Fund||1.02%|
|Plus Pension (basic pensions is 2.6%)||8.00%|
|Total||19.93% + Fixed Cost|
*Maximum contribution: €623.10 per month
**Maximum contribution: €331.24 per month
***Maximum Contribution: €83.75 per month
****Maximum Contribution; €69.20 per month
Burden for $100,000 salary: 18.63%
Choose Velocity Global
Growing into an international market is an exciting experience—but it can come with many questions and concerns. That’s why partnering with an experienced global expansion organization like Velocity Global enables your firm to pursue expansion into the Netherlands with confidence.
Through our International PEO (Professional Employer Organization) solution, our experts support your needs and onboard your international employees on your behalf. We manage all risk mitigation, payroll, and compliance concerns so you remain focused on what matters most: keeping your business moving forward.
International PEO offers essential flexibility needed to confidently pursue both short- and longer-term projects in the Netherlands. We help you navigate the complexities of expansion, and ensure an elevated expansion experience whether you hire one employee or build a brand-new team—both without establishing an entity. With international PEO, your firm saves up to 60% and begins operations in the Netherlands 90% faster compared to the restrictive entity setup process.
Ready to confidently establish your presence in the Netherlands? Let’s get started.