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NETHERLANDS – New Rules for Recognised Sponsors and Income Declaration

Effective 1 April 2016, the assessment of the continuity and solvency of companies applying for the status of recognised sponsor at the Dutch Immigration Authorities (IND) has become more lenient. For recently established companies, a business plan is no longer required in some situations.

Additionally, since 1 April 2016, a company can lose its status as a recognised sponsor if it has not submitted any immigration application in the previous three years and has no employees registered.

Finally, for applications for a work permit for key staff / highly-skilled migrants (kennismigranten), the gross monthly salary must now be recorded in the employment contract or employer’s declaration, rather than in pay slips or other documentary evidence.

Recognised Sponsors

Dutch legal entities applying for the status of recognised sponsor at the Immigration Authorities (IND) need to demonstrate the continuity and solvency of the company. For companies recently established (i.e. not older than 18 months), the assessment is very strict and includes providing a sound business plan that evidences sufficient potential and financials for the future.

As of 1 April 2016, the assessment has now become more lenient in certain cases and the business plan is no longer required in the following situations:

  • The company is fully owned and controlled by a company which has conducted (actual) business activities for at least 1.5 years, and would therefore not be subject to submitting the business plan if it were to file for recognised sponsorship itself.
  • The recently established company arose from a merger of two companies who are already recognised sponsors or was taken over entirely by another recognised sponsor.
  • The legal form of the company has changed, meaning that the company was recognised as a sponsor before that change and, a notarial deed shows that the nature of the business activities has not expanded and the control of the new company or legal entity remains the same.
  • The recently established entity is a branch of a company which is part of a foreign group company and the Netherlands Foreign Investment Agency (NFIA) was involved in the decision to invest in the Netherlands.

The IND does have full discretion to request additional information in case there is any doubt about the solvency or continuity or in the case of penalties or offences of the entity, board members or others. Should this be the case, application processing may suffer a serious delay and can potentially be rejected.

In addition, since 1 April 2016, a new ground for withdrawal of the recognised sponsor status is applicable. A company can now also lose its status as a recognised sponsor in case no immigration application has been filed in the past three years and there are no employees registered at the recognised sponsor.

Income Declaration

As of 1 April 2016, the Dutch Labour Authorities (UWV) have explicitly indicated to employers that a work permit request for key staff / highly-skilled migrants (kennismigranten) will be strictly examined under Article 1d of the Implementation Aliens Employment Act (BuWav). This regulation requires the UWV to assess the gross salary criterion based on a monthly salary.

This means that in the employment contract or employer's declaration a gross monthly wage (excluding holiday pay) should be recorded at all times. The presentation of pay slips, annual gross income or other evidence is therefore no longer sufficient.

Action Items

  • Employers must continue to ensure that they provide satisfactory evidence of their solvency and continuity when applying for the status of recognised sponsor at the Immigration Authorities.
  • Younger companies in the above circumstances can expect a more lenient assessment of their continuity and solvency, without having to submit a business plan as evidence.
  • Employers must now make sure that an employment contract or declaration submitted in support of a work permit application for key staff / highly-skilled migrants records the employees gross monthly salary.

This news alert was prepared using information provided by Expat Management Group.

DISCLAIMER: The information contained in this immigration alert has been abridged from laws, court decisions, and administrative rulings and should not be construed or relied upon as legal advice. If you have specific questions regarding the applicability of this information, please contact Peregrine © 2021 Peregrine Immigration Management Ltd.