Expanding your business to the Netherlands or hiring local talent? With a strong economy, a highly skilled workforce, and a business-friendly environment, the Netherlands is an attractive destination for companies looking to grow. However, Dutch labour laws, tax regulations, and compliance requirements can be complex.
This guide breaks down everything you need to know—from employment laws and hiring costs to work permits and payroll taxes. We also offer you solutions to make the process easier and swifter.
Three ways to hire in the Netherlands
Expanding your team in the Netherlands? Global employers have three main options: setting up a local entity, partnering with an Employer of Record (EOR), or engaging Dutch contractors. Each approach has its benefits, depending on your business goals and long-term strategy.
1. Setting Up a Dutch Entity
For companies planning a long-term presence, establishing a legal entity like a Besloten Vennootschap (BV) or Naamloze Vennootschap (NV) allows direct hiring and full control over employment processes. However, this requires:
- Opening a local bank account
- Registering with the Dutch Trade Register and Tax Office
- Notarizing legal documents
While this option provides stability, it’s costly and time-consuming—taking at least one month to complete. If you need a faster, hassle-free hiring solution, an EOR is a smarter alternative.
2. Partnering with an Employer of Record (EOR)
A Dutch EOR allows companies to hire talent without setting up an entity, ensuring full compliance with Dutch labor laws. With WTS Energy’s EOR services, you can:
- Hire employees in days, not months
- Avoid legal and tax complexities
- Ensure compliant payroll & benefits management
- Focus on business growth—while we handle HR, contracts, and compliance
This approach is ideal for testing the Dutch market or scaling quickly without long-term commitments.
3. Engaging Dutch Contractors
Hiring independent contractors offers flexibility and lower overhead costs, but it comes with worker misclassification risks. If a contractor is treated like an employee—such as receiving company-provided equipment or working under direct control—they could be legally reclassified as an employee, leading to fines and back payments.
To stay compliant, businesses must ensure proper contractor classification and follow Dutch labor regulations.
Hire Smart, Hire Compliantly with us
Expanding in the Netherlands? Skip the complexities of entity setup, compliance, and payroll management. With WTS Energy’s EOR and recruitment services, you can hire top talent quickly, legally, and stress-free.
What your company needs for hiring foreign employees in the Netherlands
Hire in the Netherlands without setting up a local entity Our Employer of Record (EOR) services allow you to onboard and pay Dutch employees compliantly—without the hassle of entity registration.
To hire employees in the Netherlands, companies must establish a local presence and meet employer obligations. Most international businesses opt for a Besloten Vennootschap (BV) (private limited liability company), while some consider a Naamloze Vennootschap (NV) (public limited company). Setting up a subsidiary typically takes around one month if the process runs smoothly.
Determine Work Permit Requirements
- EU/EEA and Swiss nationals don’t need a work permit.
- Non-EU nationals typically require a residence permit and work authorization.
- Highly Skilled Migrant visas offer a fast-track option for top talent.
Become a Recognized Sponsor
To hire foreign talent, companies must register with the Dutch Immigration and Naturalization Service (IND) as a recognized sponsor. Sponsorship streamlines visa applications and reduces processing time.
Apply for the Right Visa
Options include the Highly Skilled Migrant Program, Intra-Company Transfers, and Startup Visas. Employers must provide a contract meeting minimum salary thresholds.
Handle Employee Registration and Taxes
- Once in the Netherlands, employees must register at the local municipality.
- Employers need to report new hires to the Tax Authority and social security agencies.
Ensure Compliance and Onboarding
- Provide proper induction, training, and workplace policies.
- Stay compliant with Dutch labor laws regarding working hours, wages, and benefits.
What to know before hiring in the Netherlands
Before bringing talent on board, it’s essential to understand Dutch labour laws, contract types, and employee rights. Compliance is key—get familiar with the basics to ensure a smooth and legal hiring process.
Free movement of workers in the EU
- Citizens of EU/EEA countries and Switzerland can work in the Netherlands without a visa or work permit.
- Non-EU employees typically require a visa and work permit.
- Highly Skilled Migrant Program offers a streamlined process for skilled foreign workers.
Employment laws and regulations
- The Netherlands has strict labor protections covering work hours, leave, and termination.
- Standard workweek: 36-40 hours, with overtime compensation rules.
- Employees have strong rights regarding job security, redundancy, and notice periods.
Types of employment contracts in the Netherlands
- Permanent Contracts: Default contract type, offering long-term job security.
- Fixed-Term Contracts: Limited duration with clear end dates, renewable under conditions.
- Zero-Hour Contracts: Flexible but must comply with Dutch labor laws.
Direct Hiring vs Employer of Record (EOR): Which is Right for you?
When expanding into the Netherlands, businesses must decide whether to hire employees directly or partner with an Employer of Record (EOR). Both options have advantages, but the right choice depends on your company’s goals, resources, and risk tolerance.
Which Option is Right for You?
- Long-term expansion & full control? → Set up a Dutch entity
- Fast, compliant hiring with no local entity? → Use an EOR like WTS Energy
- Need flexibility & project-based work? → Hire Dutch contractors carefully
Seamless hiring in the Netherlands, easy.
Navigating Dutch labor laws, payroll, and compliance can be overwhelming—but it doesn’t have to be. With WTS Energy’s EOR and recruitment services, you get a fast, compliant, and hassle-free hiring solution without the need for a local entity.
The true cost of hiring an employee in the Netherlands
The average hourly cost of labour in the Netherlands as of 2019 was 36.40 euros. That’s a bit higher than the average of 27.70 euros for the European Union but is still relatively affordable and in line with labour costs in several other competitive European market.
Hiring an employee in the Netherlands typically costs 35-50% more than their salary due to employer contributions for social security, healthcare, unemployment, pensions, and mandatory holiday pay.
However, total costs can vary based on factors like age, income, job type, and company structure.
When you’re expanding into the Netherlands for the first time, recruitment costs may include:
- Advertising job positions
- Incorporating your business in the Netherlands
- Traveling to and from the Netherlands to set up your business or conduct interviews
- Outsourcing background checks to a third-party company
- Hiring local experts to help you draft contracts and set up payroll
- Training new employees
Compliance risks when hiring employees in the Netherlands
Non-compliance can lead to fines, penalties, and operational challenges, particularly for companies hiring from abroad. Understanding the key risks—such as worker classification, payroll taxes, permanent establishment, and immigration requirements—can help businesses navigate the Dutch labor market smoothly.
Misclassification
- Employees and contractors are classified differently under Dutch law.
- Misclassifying contractors as employees can lead to hefty fines and back payments.
- Factors like income dependency, hiring control, and work schedules determine classification.
- Tip: Work with legal experts to ensure compliance
Payroll Contribution Errors
- Employers must calculate and remit income tax and social security contributions accurately.
- Payroll errors can result in compliance issues, fines, and legal complications.
- Tip: Use a professional payroll provider or EOR to ensure accuracy.
Permanent establishments
- Operating in the Netherlands through a local presence may subject your company to corporate tax.
- If your business has a fixed location, it may be considered a PE under Dutch tax law.
- Tip: Work with a tax expert to determine if your company has PE obligations.
Immigration requirements
- Non-EU employees require visas and work permits, which can be complex to obtain.
- Employers must be a recognized sponsor with the Dutch Immigration and Naturalization Service (IND). See if you fulfil the requirements to become a recognized sponsor.
- Tip: Have a dedicated HR team or partner with an EOR for smooth visa processing.
Hire compliantly with WTS Energy EOR services
Expanding into the Netherlands? Navigating complex labor laws, payroll taxes, and compliance requirements can be overwhelming. With WTS Energy’s Employer of Record (EOR) services, you can hire talent quickly and compliantly—without setting up a local entity.
- Full compliance with Dutch employment laws
- Seamless payroll management and tax contributions
- Fast-track hiring of local and international employees
- No legal headaches—we handle contracts, benefits, and HR support
Frequently asked questions
1. What are the legal requirements for hiring employees in the Netherlands?
To hire employees in the Netherlands, employers must comply with Dutch labor laws, which include providing a written employment contract, registering with the Dutch Tax Authority, and contributing to social security, pension, and healthcare systems. Non-EU hires require a valid visa and work permit, and employers must become recognized sponsors with the IND. Partnering with an EOR like WTS Energy simplifies compliance and onboarding.
2. How much does it cost to hire an employee in the Netherlands?
The total cost of hiring an employee in the Netherlands is typically 35–50% higher than the gross salary due to employer contributions for social security, healthcare, unemployment insurance, and holiday pay. Using an EOR service can reduce overhead and streamline payroll and benefits administration.
3. Can I hire employees in the Netherlands without opening a local entity?
Yes, you can hire employees in the Netherlands without setting up a legal entity by using an Employer of Record (EOR). An EOR like WTS Energy handles employment contracts, payroll, taxes, and compliance on your behalf, allowing you to onboard local or international talent quickly and legally. This is a smart solution for companies testing the market or expanding rapidly. Our travel packages typically include accommodation, transportation, and some guided tours. Check the details to see what’s specifically covered for each package.
