From self-employment on a DAFT Permit to a Salaried Position - Navigating a Change in Residence Purpose

Starting this year, the Dutch tax office (Belastingdienst) has begun enforcing the Employment Relationships Deregulation Act (DBA Act), which aims to conduct more thorough checks to prevent cases of “false self-employment.”

This can also affect American citizens residing in the Netherlands under the Dutch-American Friendship Treaty (DAFT), as holders generally are here with entrepreneurial pursuits. However, life can change, and DAFT permit holders may find themselves considering a transition to a salaried position with an employer. This change, while entirely feasible, requires navigating Dutch immigration and employment regulations carefully.

Understanding the DAFT Permit

The DAFT permit is designed to encourage entrepreneurial activities by allowing American citizens to establish and run their own businesses in the Netherlands. It’s a residence permit that requires a minimum investment of €4,500 in a Dutch business account and compliance with other self-employment criteria.

However, the DAFT permit does not allow you to take up a salaried position with an employer. A shift from entrepreneurship to employment necessitates changing or gaining an additional status for the purpose of your residence with the Immigration and Naturalisation Service (IND).

Key Steps to Transition to a Salaried Position

1. Secure a Job Offer Before initiating the process of changing your residence purpose, you need a concrete job offer from a Dutch employer. The employer must also meet specific requirements, including potentially being a recognized sponsor with the IND if your position requires a highly skilled migrant permit.

2. Understand Your New Permit Options The type of residence permit you need will depend on the nature of your employment. Common options include:

• Highly Skilled Migrant (Kennismigrant) Or EU Blue Card: For positions meeting a minimum salary threshold and working with an employer. For HSM’s this must be a company with recognized status with the IND.

• Regular Employment Permit: For jobs that do not fall under the highly skilled migrant a EU Blue Card category. This permit can generally only be applied for in exceptional cases AND after a DAFT permit holder has already spent more than 5 consecutive years with a  valid permit in the Netherlands.

3. Submit a New Residence Permit Application To change (or obtain a new permit aside from your DAFT status) the purpose of your residence, your employer must submit an application to the IND.

Key Considerations and Challenges

• Processing Time: Depending on the new residence purpose, changing your residence card can take weeks or even months. It’s essential to plan for this and maintain valid residency throughout the process.

• Employer Requirements: Not all employers are familiar with IND processes or requirements for hiring non-EU nationals. Be prepared to guide your potential employer or seek support from immigration specialists.

• Tax and Business Closure: If you’ve been operating a business under your DAFT permit, you may need to address tax obligations and officially close your business.

Final Thoughts

Transitioning from a DAFT permit to a salaried position is a significant but achievable change. With careful planning, clear communication with your employer, and timely action, you can successfully shift your residence purpose and take the next step in your professional journey in the Netherlands. Embrace the opportunity to broaden your horizons and continue building a fulfilling life abroad.