There is a large talent pool of independent professionals in The Netherlands, and you can hire a freelancer for almost any task: design, coding, growth hacking, marketing, social media but also construction, advice or general management. Whenever you have a sudden need to strengthen your team, you can use freelancers as a way to get things done.
One could argue that the ZZP-ers are one of the hidden assets of the Dutch economy, and one of the engines behind startup growth: freelancers provide access to talent and flexibility to scale up and scale down to startups, and also act as a network for knowledge sharing between startups. Many startups are founded by freelancers, and some startups are bootstrapped by founders who do freelancing on the site. Understanding the concept of the Dutch freelancers is therefore important for international startups that want to come to The Netherlands.
Hiring people as employees in The Netherlands is not harder than it is in other countries, but it still is complicated and caries some risks. Many companies therefore prefer to hire people as freelancers. Especially for startups this can be attractive since they operate in an uncertain environment.
At the same time, the Dutch tax regime has been structured in such a way that there are large financial benefits for freelancing: one often has to pay no taxes at all in the first few years. As a result, many people have opted to start an one-man-business and become a ZZP-er (independent professional without personnel). The ZZP-ers are officially entrepreneurs, but in practice for a middle group between employees and entrepreneurs with personnel: they are more risk-taking than traditional employees, but often do not make large investments in offices and business assets. Indeed for many ZZP-ers, freelancing is a part-time activity and for some it is even a temporary activity between jobs.
If you pay someone as a freelancer, you pay the person and VAT but you pay no extra taxes or benefits. If it later turns out that the person worked for you exactly like an employee, you should have paid benefits and you will be liable for paying the benefits and a substantial fine.
In addition, all Dutch labor laws would apply and there are a lot of labour laws: There are fines applicable if you underpaid the person, did not provide a proper work environment, paid them afterwards, etc. This is not a risk you want to run as a startup, so it is important to get clarity beforehand on whether your contract with the freelancer will be seen by the tax authorities as a proper freelancing contract.
First of all, the basics. You should, when hiring someone, check whether they are registered as a company at the KvK. The KvK is a public register that you can check for free online. If someone is not registered yet they can register. Secondly, you should only pay freelancers after you have received a proper factuur or invoice, that specifies the services delivered, time period, name and address of company, VAT amount and invoice number.
The second step when hiring someone as a freelancer, is to make sure that there is an accepted proposal or contract in place, that describes what the freelancer is doing in your company. Without a contract, there is no documentation that can be used for determining whether someone is an employee. The contract can take two forms:
The new law, Wet Deregulering Beoordeling Arbeidsrelaties describes what elements the tax authorities should use in assessing contracts. The following elements are relevant:
There is a guidelines document that tries to explain the criteria, but the guidelines document itself concludes (p.4) that using the criteria is ‘not an exact science’. Apparently, the law is not completely clear to the tax authorities.
As a solution to the insufficient clarity of the law, the lawmakers have introduced the idea of model contracts. Model contracts are contract templates that have been reviewed beforehand by the tax authorities. If you use a model contract and you stick to the contract, the tax authorities promise that your freelancer will not be seen as an employee.
Using model contracts is not mandatory, but can be a convenient solution. There are model contracts for many uncommon situations: if your startup hires an musician, doctor, midwife or dentist, there is a good model contract available. There are also a few model contracts that are more widely applicable and that are probably more useful to startups. We believe that the following contracts are most applicable:
There are no English language model contracts yet.
If you would like to hire someone and they are not a freelancer, you can either hire them directly as employee, or use a payrolling company. Payrolling companies charge you extra but take care of all labour law details.
We hope that this explanation was helpful and that you are able to help yourself directly. If not, you probably need professional advice based on your specific situation. There are many Dutch lawyers who can help you, or legal services from Dutch startups such as Ligo, VraagHugo and Legalloyd that provide legal advice.
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