Unlocking New Horizons: The Dutch-American Friendship Treaty as Your Gateway to Entrepreneurship in the Netherlands

As the November presidential elections approach, an increasing number of US citizens are contemplating new beginnings abroad.

For those seeking a change of scenery, this period presents an opportune moment to explore immigration options. The Netherlands, in particular, offers a favorable environment for American citizens to obtain residence and work authorization through the Dutch-American Friendship Treaty (DAFT).

This blog provides key insights into how the DAFT operates and the advantages it offers for US citizens considering relocation to the Netherlands.

Understanding the DAFT

In 1956, the US and the Netherlands signed the DAFT as a bilateral agreement to foster trade and economic relations between the two countries. To this day, the DAFT provides an easy and straightforward immigration path for US nationals, targeting primarily those who wish to start their own business, focus on entrepreneurship in the Netherlands or invest in existing Dutch enterprises.

Under the Treaty, American citizens can obtain a Dutch work and residence permit for the purpose of entrepreneurship, so long as they set up a Dutch legal entity and invest a certain amount in their Dutch business.

Advantages of the DAFT permit

The DAFT permit boasts various advantages compared to other visa types available to entrepreneurs in the Netherlands. At its core, the DAFT permit is a more accessible version of the regular Dutch Self-Employed permit, having fewer eligibility requirements and much faster processing times.

In terms of eligibility, the DAFT visa is not restricted by the point system in place for the regular Self Employer permit, where the Dutch Immigration Authorities (IND) assess the eligibility of the business against strict categories to determine whether the business brings ‘added value’ to the Netherlands. Points are awarded for each category, and the business must score at least 90 points to qualify for the Self-Employed permit.

In addition to circumventing the point system, the DAFT permit benefits from much shorter processing times compared to the Self-Employed permit. Once an application is submitted with the IND, a decision is expected within six to eight weeks, which is substantially less than the three to six months the Dutch Immigration Authority takes to issue a decision on the regular Self-Employed permit.

Other benefits of the DAFT permit include its flexibility: the holder is free to choose among various types of Dutch entities according to what best suits their needs. This permit is open to entrepreneurs of all sizes, meaning self-employed freelancers are as eligible as large business owners. There are little to no restrictions on the type of business, its customer base, or their origin, so the permit provides great flexibility in your professional endeavors.

It is possible to benefit from the well-known 30% ruling tax exemption while on the DAFT permit. While the application of the 30% ruling in this context is restricted to the type of business entity you have established, with only Dutch BV entities qualifying for this benefit, it nonetheless remains a possibility worth exploring.

And finally, the DAFT permit offers options for both family reunification and long-term residency. American citizens living in the Netherlands on the basis of the DAFT permit are eligible to bring spouses, partners and children under certain conditions to the country. After living in the Netherlands for five years, the applicant and their family may be eligible to apply for permanent residency.

Key considerations surrounding the DAFT process

To qualify for the DAFT permit, applicants must meet specific criteria.

First, it is important to note that only US citizens are eligible for this immigration pathway.

Those looking to migrate to the Netherlands under the DAFT would first need to decide on what kind of business entity they want to set up. This business must meet the requirements of the KVK (Dutch Chambers of Commerce). To do this, one can either start a new business or take over an already existing Dutch business.

Business Type

While the DAFT requires the applicant to work on a self-employed basis, it remains flexible when it comes to the business structure one wishes to set up. Dutch law provides various familiar entities that can meet your specific needs, including the “”eenmanszaak” (equivalent to a sole proprietorship), the Dutch BV (equivalent to the American LLC) or even a ZZP (freelancer).

Starting Capital and Bank Account

Once an entity has been set up, a starting capital of EUR 4,500 must be injected into the business. The applicant will have to submit an opening balance for the Dutch company where this capital is listed. This must be prepared by a Dutch bookkeeper, who should be in possession of a valid BECON number. The capital must be available in the business bank account of the Dutch company.

This initial capital must remain in the business throughout the validity of the DAFT permit, so it is important to calculate your business costs on top of this amount. Since this amount needs to be deposited in a bank account in the name of your entity, it is also important to open a new bank account for your entity in the Netherlands.

Note that when it comes to opening a bank account, one is not restricted to a traditional bank account but can even open one with one of the many online banks recognized in the Netherlands, such as Wise or Bunq.

Application Process

The Fragomen immigration team in Amsterdam can support with your end-to-end process, including reviewing and preparing all necessary documentation and submitting the application with the Immigration and Naturalization Authorities (IND). Once the application is paid for, processed, and approved, our team can help collect the residence permit card from a local IND office.

The DAFT permit can be issued for a period of up to five years, after which it can be extended, or the applicant can explore options for permanent residence.

Dutch Caribbean applicability

The rules regarding DAFT are not only applicable in the Netherlands, but also in the Dutch Caribbean region (Aruba, Curaçao, Sint Maarten, Bonaire, Sint Eustatius and Saba). On December 15, 2014, the Joint Court of Justice ruled that US nationals needs to be treated the same as Dutch Nationals who were not born on the island, based on the DAFT. The Dutch Caribbean Islands are therefore also a great place for American entrepreneurs to thrive.

Need to know more?

In short, the DAFT offers a valuable and attractive immigration pathway for US citizens looking to establish themselves in the Netherlands.

For questions related to the Dutch-American Friendship Treaty or if you wish to explore other immigration options into the Netherlands, our Amsterdam team is ready to assist. Please contact us via [email protected].

This blog was published on 29 October 2024, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.