Entrepreneurial residence permit
For admission as a self-employed entrepreneur the applicant must show that his/her business activity serves a Dutch (economic/cultural) interest. This could be because the business is an innovative company, or to exercise a specific profession. To answer the question of whether the presence of an entrepreneur serves this essential Dutch interest, the IND will ask advise from National Office for Entrepreneurial Netherlands (Rijksdienst voor Ondernemend Nederland or RVO), a directory of the Ministry of Economic affairs. The RVO makes use of a point system for assessing whether the business activity serves an economic interest. Points are given for three categories:
- · Personal background of the entrepreneur: education, the economic position and activities to date, and the experience with the Netherlands and the Dutch economy.
- The substantiation of ideas and plans in the business: organization, the production/service, market potential and funding plan.
- The contribution to economic activity in our country in the form of innovation (in product, process, and market activity), employment creation and investment.
To be eligible for a residence permit as a self-employed entrepreneur, the applicant must gain at least 30 points for each category, and in total of at least 90 points over the three categories.
In recent years there is increasing focus from the Dutch government on highly qualified small business start-ups (often post graduates!). These are businesses with no employees and with low initial investment. In the past these residence applications had little to no chance of success because there are little to points be gained in the third category for them. In effect it was practically impossible for a post-graduate to be able to get a residence permit as a self-employed entrepreneur. For this group the IND now states that if in each of the first two categories 45 points are scored, the third category will be disregarded. In other you don’t have to show either a significant investment, or an innovative business idea, or create jobs.
Another recent development is the so-called start-up arrangement which was implemented on January 1st 2015 for innovative starting business. The most important requirement is the condition is that the starting entrepreneur works under the supervision of a facilitator. This facilitator needs to be regarded as competent reliable and experienced. An organization is seen as such if it has in the previous two years supported and accompanied other innovative start-ups. In addition, the facilitator needs to show that it has a solid financial position.
The start-up company must be innovative. This is assumed when the one of the following conditions is met:
- · The product or service is new in the Netherlands
- · New technology is involved in the production, distribution or marketing proces
- There is an innovative working method.
If the business activity/product fall within one of the Top sectors, which the government has anointed, it is quickly acknowledged that the company has an innovative value. Also, here the IND seeks advise from the RVO to assess whether the facilitator is reliable and the business is to be regarded as innovative.
If the above listed requirements are met, then the start-up entrepreneur does not have to show that he/she will generate sufficient means of income from his/her business over the coming year, which is a condition of the regular entrepreneurial permit. Under the start-up scheme the applicant will initially get a residence permit for one year. After the first year, he/she will get a residence permit as a (regular) entrepreneur, if the applicant is still being supported by the facilitator.
Which of the two?
Which of the two residence permits is best, depends solely on your circumstances. If you don’t have a facilitator, then the only option you have is to apply under the regular entrepreneurial residence scheme.
If you do have a facilitator which is sufficiently reliable, then the second question you should ask yourself is if your business can be regarded as innovative. I know most entrepreneurs believe in the innovation of their own business idea. But be critical towards yourself here! A good business idea is not necessarily an innovative idea. For instance, many self-employed web designers create fantastic and very creative websites, but what they do in essence is the same as many of their competitors are doing. Ergo innovation would not likely be accepted here. Being creative is not the same as being innovative. If you in all honestly doubt whether your (fantastic and creative!) business idea is innovative, then you could be better served with an application for the regular entrepreneurial residence permit. A good look at the what the government considers as Top sectors is wise here. Any truly reliable facilitator would be able to help you make this assessment.
A final word of advice to all you beginning entrepreneurs. Prepare yourself for a long, time consuming and costly procedure. You will need to be willing to invest a lot time and effort (and money if possible) in an extensive and detailed business plan. Also a detailed financial plan is a necessity, preferably set up by an accountant or someone who knowledgeable in finance.
After receipt the IND sends an application to the RVO for advice. It can easily take three to six months before an advice from RVO is ready. Often an application initially gets denied, because not enough points were gained. The applicant can then appeal against this denial and repair any objections the IND (and RVO) might have. During such an appeal-procedure the applicant will continue to enjoy legal stay and be permitted to work on your business in order to produce promising results. It very frequently happens that during the course of the appeal-procedure the applicant manages to gain enough points for an approval.
Endurance conviction and determination are the traits that will get you there. Good luck!
Brian Lit, attorney and partner at Alt Attorneys, immigration lawyers