A warm welcome to start-ups!

30/12/15 - Stan van Liere

Start-ups are hot and happening. From Dutch successful start-ups such as Catawiki to the real “Unicorns” from the US; everyone wants to get involved on the success.

Permit for foreign enterpreneurs

On January 1st, 2015, the Dutch government introduced a new regulation for ambitious foreign entrepreneurs which made it possible to apply for a temporary residence permit for the Netherlands (“startup-regeling”). The “startup-regeling” is intended for entrepreneurs from outside the European Union and is valid for the maximum period of one year.

Conditions to obtain the permit

In general, the following conditions apply:

  • Sufficient money to live in the Netherlands
  • An innovative service or product
  • A step-by-step plan to develop the idea into a business
  • Sponsoring and coaching by an experienced facilitator
  • Registration with the Dutch Chamber of Commerce (KVK)

To apply for a residence permit, the entrepreneur must submit the application with the Naturalisation Service (IND). Once the permit is issued by the IND,  the innovative idea should be developed into a business plan within one year. After this, the entrepreneur can apply for a residence permit for entrepreneurs (“zelfstandigenregeling”).

The Netherlands is one of the few countries that adopted such a regulation for foreign entrepreneurs and it proved to generate a lot of (international) attention and over 90 requests from foreign entrepreneurs in 2015.

So far, so good, you might think.

Start-up development phases

Reality shows, however, that start-ups generally need more than one year to develop their idea into a working business plan and reach a scale-up (growth phase). In this first stage, a start-up will create and develop a minimum viable product, wants to validate this in the market and might pivot if the product or service does not meet the demand. That takes time.

Adjustment of the regulations

Because of this, the two aforementioned regulations did not connect well together with possible risk of entrepreneurs leaving the Netherlands after one year of residence. This of course is an unwanted outcome for the entrepreneur and could jeopardize the investments of – for example – business angels. Therefore, the Dutch government will adjust the “zelfstandigenregeling” and introduce the possibility for the entrepreneur to issue a statement from its facilitator to the RVO (Rijksdienst voor Ondernemend Nederland). This statement – or endorsement – from the facilitator confirms that the first startup phase has succesfully ended. The statement will provide the basis for the RVO to give a positive advise to the IND for granting a permit under the “zelfstandigenregeling”. The adjustment of this regulation will come into effect on January 1st, 2016.

The start-up permit and subsequent permit under the “zelfstandigenregeling” provides both entrepreneurs as well as the Dutch economy chances to grow and accelerate. A welcoming start of 2016!