Essential start-up personnel
Innovative start-ups can apply for a work and residence permit for employees from outside the European Union against a reduced salary threshold: the permit for ‘essential’ start-up personnel. The salary threshold is € 2497 gross per month. A number of other conditions do apply.
Innovative and scalable start-up
The start-up must be innovative with scalable activities. The Netherlands Enterprise Agency (RVO) assesses the start-up and innovative character of the start-up. The RVO also assesses whether the business activities are scalable.
By 'scalable' activities is meant: that the start-up can continue to deliver a product or service sustainably while the start-up achieves rapid growth.
Continuing to supply sustainably means that the start-up can continue to meet all its financial obligations during the rapid growth.
Achieving rapid growth: this means accelerated (non-linear) value development.
The start-up is assessed as innovative if at least one of the following aspects is present:
- The product or service is new to the Netherlands.
- The start-up uses new technology in production, distribution or marketing.
- The start-up has a new way of working and organizing.
Founders of the start-up
It is also required that the founders of the start-up have an active role in the company. This means that the founder is not just a shareholder or investor.
Financial position of the start-up
- The RVO also assesses whether the solvency and liquidity are appropriate for the start-up and its plans.
- RVO assumes that the financial situation is in order if the start-up has an investment agreement of at least €100,000 with a venture capitalist or Dutch bank.
Maximum number of employees and permits essential start up personel
- A maximum of 15 employees can work for the start-up when a work and residence permit for essential start up personel is applied.
- A maximum of 5 foreign employees of the start-up can obtain a permit for essential start-up personnel.
Who is considered an essential employee?
The essential employee for whom a permit is being requested must play an active role in the scalable and innovative business activities of the start-up. This role should be described in the business plan. The essential employee may therefore not only be a shareholder or financier.
Essential employee gets 1% stake in the start-up
The 'essential' foreign employee for whom a permit is requested must acquire a minimum interest of at least 1% in the start-up. What can that look like?
The employee gets:
- Shares in the company of at least 1% at the time of conclusion of the agreement.
- Depositary receipts for shares in the company of at least 1% at the time of conclusion of the agreement.
- Stock Options: these stock options give the right to buy shares in the company at a pre-agreed price.
In addition, there can be:
- No individual performance conditions attached to the right to the shares or stock options.
- The term on which the entitlement to the shares becomes unconditional can be a maximum of three years, after the entry into force of the employment contract.
The RVO assesses which important role the employee will have within the company. And whether the employee receives the employee participation.
A salary threshold of € 2497 gross per month excluding 8% holiday allowance applies. This salary threshold is in line with the lowest salary threshold of the highly skilled migrant scheme.
Duration of work and residence permit essential start-up personel
The permit is granted for the first time for a period of one year. The residence permit can then be extended.
Duration of validity RVO advice on start-up
The RVO advice on whether the start-up is innovative and meets the other conditions is valid for 3 years from the start date of the first work and residence permit for essential start-up personnel. If the start-up applies for a new permit for a new essential start-up employee within this 3-year period, the RVO will only issue advice on:
- The question of whether the employee will fulfill an essential role within the start-up.
- Whether the employee will acquire an interest of at least 1% in the company.
Temporary Immigration Scheme
This scheme for essential start-up personnel is still a temporary scheme, and will end on 1 June 2025. An evaluation will take place in June 2024 to determine whether the scheme is successful. It will then be determined whether this new immigration scheme will become definitive or whether the regulation will be abolished again. If the scheme for essential start-up personnel is abolished, employees who have this work and residence permit may continue to work at the start-up for one year after the abolition of this scheme.
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