Entrepreneurs from outside the European Union are allowed to reside in the Netherlands if their residency serves a vital Dutch interest. But when is such a vital interest actually served? When making such an assessment, innovation is almost always of lesser importance than financial security. This is the conclusion of a research report by Dr Tesseltje de Lange, assistant professor and immigration law researcher at the University of Amsterdam (UvA). The report will be presented on Thursday, 21 April.
In the report ‘Vital Dutch Interest: Admitting Entrepreneurs to the Netherlands from Outside the EU’ (Wezenlijk Nederlands Belang. De toelating tot Nederland van ondernemers van buiten de EU), De Lange maps the Dutch regulation on the entry of migrant entrepreneurs, considers the procedure involved in assessing an application based on a points system and examines the outcome of such an assessment.
By analysing more than 4,000 decisions on the admission of foreign entrepreneurs, De Lange looked at how the Dutch Immigration and Naturalization Department (IND), together with the Netherlands Enterprise Agency (RVO), assesses whether a vital Dutch interest is served. Such an assessment is done on the basis of a points based system whenever no international commitments (such as trade agreements) apply, and when it doesn’t concern an innovative start-up that can apply for a start-up visa. The chief criteria hereby are experience, a business plan and a solid financial basis, and ‘added value’ (innovation, a good idea, creating jobs or making an investment). The most important factor of all is whether the entrepreneur has ever previously achieved an annual turnover of €35,000 and whether it can reasonably be expected that a similar rate can be achieved in each of the following three years.
Every year several hundred entrepreneurs from outside the EU try to show how they serve a vital Dutch interest in order to obtain a Dutch residency permit. Only 21% of them are eventually successful. ‘In practice, an answer to the question whether an entrepreneur serves a vital Dutch interest equates to answering the question what are the past achievements of an entrepreneur. You have to ask yourself whether this approach isn’t causing the Netherlands to miss out on all kinds of innovative ideas or international business talent’, says De Lange. ‘The majority of applications are made by knowledge migrants: individuals who studied in the Netherlands or conducted (academic) research here and who would wish to reside in the country. They would benefit from a hybrid status by which they could pursue entrepreneurial activities alongside their study programme or job in order to gain experience.’
De Lange’s research also reveals a number of obstacles that possibly scare off potential applicants. These are: the long duration of the procedure, the lack of structured information in English, the high application costs, and the fragmented and sometimes contradictory requirements in other policy fields. De Lange: ‘The prospective entrepreneur runs into various hurdles. For instance, he or she has to start up their business activities immediately after submitting an application, despite the risk of a negative assessment. In such an event, all investments that were made up to that point would have been for nothing. It is also virtually impossible to open a bank account or rent office or residential space without a residence permit. An application could benefit from membership of a professional association, but that also requires a residence permit. To top it all, the application process is extremely time-consuming.’
If the goal is to attract more entrepreneurs, it is essential that we fine-tune the points based system, De Lange argues. ‘Just like in Germany, the assessment can be simplified and eventual risks limited by providing more personal support. Also, the points based system could take more account of the support given to foreign entrepreneurs by public and private organisations, such as in France where mayors have a say in admission, and in Germany where regional private-public committees have the same right.’
Het rapport Wezenlijk Nederlands Belang. De toelating tot Nederland van ondernemers van buiten de EU (Wolf Legal Publishers, 2016). ISBN: 9789462403031