Changes to recognized sponsorship now in effect

IMPACT – MEDIUM

What is the change? The Netherlands has changed certain rules affecting recognized sponsors.

What does the change mean? A company’s recognized sponsorship may be revoked by the Immigration and Naturalization Service (IND) if the company has not sponsored highly skilled migrants for three years. Under another change, some companies are now exempt from submitting a business plan when registering for recognized sponsorship.

• Implementation time frame: The changes took effect April 1.
• Visas/permits affected: Highly skilled migrant work permits.
• Who is affected: Recognized sponsors in the Netherlands.
• Impact on processing times: Companies that are exempt from submitting a business plan will be able to register as recognized sponsors much faster, as the business plan review process takes approximately three months. Companies that lose recognized-sponsor status will have to spend additional time and resources to reapply for recognized sponsorship.
• Business impact: Companies whose recognized sponsorship is revoked and who later want to hire highly skilled migrants will need to reapply and pay the government fees of €5,183 again.

Background: Recognized sponsors are employers who have been approved by the IND to hire foreign workers under the highly skilled migrant program. Previously, companies that were established for less than 1 ½ years were required submit a business plan demonstrating financial solvency. Under the new rules, a company with less than 1 ½ years in business is exempt from the business plan requirement if it is:

• A wholly owned subsidiary of a company that is a recognized sponsor. If the parent company is exempt from submitting a business plan, the subsidiary may submit a tax declaration from the parent company instead of a business plan.
• The result of a merger, where the merged parties are recognized sponsors.
• Taken over by a company that is registered as a recognized sponsor.
• A company that was registered as a recognized sponsor whose legal framework changed, and notary documents of the corporate structure demonstrate that the company’s management and commercial activities remain the same.

If the IND or Netherland Enterprise Agency has any doubts about a company, they may request additional proof. Also, companies established and active for more than 1 ½ years may be required to show additional proof, which may include a business plan, verified financial statements, and liquidity projections for the next two years.

BAL Analysis: Companies that are recognized sponsors should be aware that they may lose their sponsorship if they stop sponsoring highly skilled migrants for a period of three years. Companies applying for sponsorship may be exempt from submitting a business plan, but should also note that they may be asked for additional proof of financial solvency.

This alert has been provided by the BAL Global Practice group and our network provider located in the Netherlands. For additional information, please contact your BAL attorney.

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