In a major boost for start-ups, the Netherlands has announced plans to relax some of its regulations to help international entrepreneurs establish businesses and get permanent residency. According to the Financieele Dagblad, foreign start-ups that come to the Netherlands will now have not one, but two years to set up their business.
Ease of establishing business and friendly regulations
State Secretary for Justice and Security Eric van der Burg wrote to the second chamber Tuesday that the new agenda comes in response to the findings of a study into the effectiveness of the start-up scheme which was introduced in 2015. This scheme grants a foreign start-up a one-year residence status, after which a permit to work as a self-employed person must be applied for. The research has shown that a one-year period is insufficient to set up a business.
In addition, the study suggests more time is needed for budding enterprises to develop into profitable companies. Some start-ups, especially in such fields as medical technology and life sciences, need at least several years to produce results, which means they cannot meet the capital test that the Immigration and Naturalization Service sets for the extension of their self-employed status, even when they support themselves and do not rely on public funds. Van der Burg said he is still looking into possible solutions for the problem.
The report also aims to define the role and status of the so-called facilitator. The facilitator provides the entrepreneur with a package of support tailored to the specific needs of the start-up. For example, the facilitator can assist with operational management, marketing, research, and investment acquisition for setting up an innovative business. Having a facilitator is a requirement for obtaining a residence permit, and his judgment is often crucial when the decision to grant a self-employment status to a start-up is made. Currently, the start-ups face potential complications when the periodic recognition of facilitator status expires during their first year of operation. The research, therefore, recommends the decoupling of the approval process from facilitators and their status.
Attractive business climate for start-ups
The evaluation shows that the government scheme has largely achieved its objective of attracting innovative start-ups to the Netherlands. Since 2015, 933 applications have been submitted from 79 different countries to launch a business in the country. Most applications came from India (16%), followed by Iran (10%) and the U.S. (7%). The program helped 649 foreign entrepreneurs become permanent residents of the country.
The Netherlands is more successful in attracting start-ups from outside the EU than other member states, Van der Burg writes in his letter to the lower chamber of the parliament. “The arrival of these start-ups strengthens the competitive position of the Netherlands within Europe and on the world stage,” he says.
Aimed specifically at foreign nationals who wish to start their own business and gain permanent residency in the Netherlands, the program aims to create an attractive business climate, identify innovative entrepreneurs, link them with Dutch private sector businesses such as venture capital funds or business incubators, and facilitate setting up a business in the country.
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