Starting a Business in the Netherlands as a U.S. Citizen: the DAFT Residence Permit

The Dutch-American Friendship Treaty (DAFT) offers U.S.entrepreneurs a relatively straightforward route to live and work in the Netherlands as business owners. The treaty has been in place since 1956 and allows self-employed individuals to live and operate a business in the Netherlands without being subject to the strict requirements normally applied by the Dutch Immigration Service (IND) to self-employed residence permits for non-EU nationals (such as an assessment based on a scoring system). 

What is a residence permit under the Dutch American Friendship Treaty?

Just as important is what it is not: a residence permit under DAFT is not an investment or investor visa. A residence permit for self-employment under this Friendship Treaty (similar treaties with largely identical conditions apply to Japanese and Bolivian nationals) constitutes an exception to regular Dutch immigration law.

A key advantage of a DAFT residence permit is that the IND does not assess whether the business is innovative. A business plan is not a formal requirement, and no scoring system applies. Applicants who meet the conditions are granted access to the Dutch market as self-employed entrepreneurs. 

Who is this scheme intended for?

The DAFT scheme is intended, among others, for:

• U.S. self-employed entrepreneurs
• and their family members (spouse or registered partner and minor children)

The key requirements

The core requirement is an investment of at least €4,500 in the applicant’s own business. This amount must remain available as business equity. This goes beyond simply having money in a Dutch bank account. 

In practical terms: what is required?

To qualify for a DAFT residence permit, the following is required:

• a BSN (citizen service number) obtained through municipal registration
• a business registered with the Dutch Chamber of Commerce (for example, a sole proprietorship or private limited company)
• an investment of at least €4,500 in the business
• active business operations (developing and managing the business)
• maintaining the investment at the required level throughout the permit’s validity.

Access to the Dutch labor market

A DAFT residence permit allows self-employment only. Employment in salaried work is generally not permitted under a DAFT permit, unless the holder is already authorized to work in salaried employment in the Netherlands under a different scheme. Even in that case, all DAFT permit conditions must continue to be met.

Family members benefit from broader labor market access.

They are free to work on the Dutch labor market, both as

• employee
• and as self-employed individuals, including for the business of the spouse or registered partner

In practice, this can be a significant advantage, as it reduces the family’s dependence on the results of the entrepreneur’s own business for their livelihood. 

Important note on renewal

At renewal, the IND checks whether the investment in the business has remained above €4,500 for the entire residence period. If this has not been the case, the residence permit may be withdrawn retroactively. This can cause complications later on, for example when applying for permanent residence or Dutch citizenship. If the investment is subsequently restored to the minimum required level, the IND will generally renew the residence permit, but with a residence gap. 

Duration and future prospects

• An initial DAFT residence permit is granted for two years.
• Upon renewal, a residence permit is generally issued with a validity of five years.
• No civic integration requirement applies to DAFT residence permits.
• After five years of uninterrupted lawful residence, permanent residence or Dutch citizenship may become possible, provided all applicable conditions are met.

If you have any questions about the DAFT scheme or your specific situation, please feel free to contact us.