Removing hurdles to growth
The Netherlands is trialling a new residence permit for startup employees. The trial decreases the minimum salary normally required for hiring non-EU employees, removing a hurdle that was often too high for young companies. The minimum monthly salary requirement for companies to hire non-EU staff is currently set at €4,752 (€3,484 for under-30s). For the startup residence permit, this is lowered to €2,497 (valid until 31 December 2021).
A stronger position in the international labour market
As startups often find themselves in need of international expertise and can struggle to compete in a competitive labour market, the permit comes as a helping hand for innovative companies. It is part of a trial that will initially run for four years, with employees who have the permit allowed to stay on for another 12 months after the end of the trial. The permit is not to be confused with the startup visa, which only applies to founders of new startups.
Conditions for the startup residence permit
In addition to the reduced salary requirement, the main conditions for utilising the permit are:
- the employee must be ‘essential personnel’
- the employee will work in paid employment at a young and innovative company
- the company employs a maximum of 15 employees
- the company uses the startup residence permit for no more than five employees in total
- the employee receives at least 1% of employee participation in the startup. This can be given as stock options, depository receipts for shares or shares without voting rights
Understanding startups’ needs and practices
The lowered salary combined with the requirement to offer employee participation aligns more closely with startups’ situations and practices than the general residence permit for highly skilled migrants. It is common practice for startups to offer shares in addition to a salary. This is not just to attract talent but also to ensure employees benefit directly from the success of the startup. With the new rule for the residence permit, the IND supports this practice, allowing startups to attract the employees that are essential for the company’s growth.