What is the Role of a Legal Sponsor in the Netherlands?
Expat Management Group
Personalized Immigration & Relocation Solutions with a Digital Approach.
Do you know your legal responsibilities as a Recognized Sponsor? We understand that the obligations can be tricky to navigate and mistakes happen. In this month's newsletter, we dive into the role of legal sponsors in the Netherlands and the risks and obligations to help you stay compliant and avoid any potential issues.
First of all, what is a Legal Sponsor?
Every foreign national (non-EU national) requires a sponsor to be able to legally reside and work in the Netherlands. Sponsorship can be in different forms either through a sponsorship by a company (company-sponsored application), sponsorship by a foreign, European, or Dutch national as a (core) family member, or through a different purpose such as self-employment, secondment, or studies.
In 2004, the Netherlands introduced the kennismigrantenregeling, the Highly Skilled Migrant Scheme, to attract foreign nationals who are highly educated and skilled to come to the Netherlands in a fast and quick way.
In this article, we'll focus on company-sponsored applications, particularly applications by companies that possess a sponsorship license (so-called recognized sponsors, ‘erkend referent’ in Dutch).
What is a Recognized Sponsor?
According to the Dutch Immigration Authorities (IND), a recognized sponsor is a “company, school or organization that has an interest in the arrival of a third-country national”. It is divided into 4 categories:
There are certain conditions to become a Recognized Sponsor: the company needs to be registered in the Commercial register, and it is financially solvable and stable. Background checks of the directors might be conducted (police clearances can be requested in case of doubts and if it is deemed necessary to do so).
What are Your Rights as a Recognized Sponsor?
Once your company has attained Recognized Sponsor status, you can streamline your application process. By combining your entry, work, and residency application, you'll benefit from shorter processing times, fewer supporting documents, and the option for online applications with the IND. The cooperation between the IND and the Recognized Sponsor is built upon self-control and trust.
Once sponsorship is granted to a legal entity, it is granted for a lifetime and can only be revoked in case of severe/frequent incompliance with the recognized sponsor's responsibilities or in case no foreign nationals are hired.
What are Your Duties and Responsibilities as a (Recognized) Sponsor?
A recognized sponsor has certain legal obligations and responsibilities. The three main conditions are the following:
Relevant information needs to be reported within 28 days after the event, in case of a change of address of the administration, within 14 days. The obligations apply to both the sponsor and the employee. The employee will only be addressed if the sponsor does not adhere to his obligation to provide information.
2. Obligation to Keep and Retain Records: Up to 5 Years
All documents relevant to the employment relationship and the right to residence need to be saved in the administration for up to five years following the year in which the sponsorship for the relevant employee has been terminated. The legal entity is obliged to make the information at the address that is known with the IND available in hard copy or digitally.
3. Duty of Care: Ensure the Return of Highly Skilled Migrants
A special requirement applies in cases of Highly Skilled Migrants, which entails that the employer is responsible for careful recruitment and selection of potential highly skilled employees and any intermediaries abroad.
Sponsors need to ensure the return of their employees after the sponsorship has been terminated. The former employee needs to leave the Netherlands or prolong his stay in the Netherlands for a different residence purpose. If the former employee is still in the Netherlands within twelve months after the sponsorship has legally terminated and he/she needs to be deported by the authorities, the IND could recover the costs of deportation on the last known sponsor (so-called "administrative cost recovery”).
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Highly Skilled Migrants also need to be made aware of the rights and obligations they have regarding legal residence and working rights by the recognized sponsor.
What Happens When You Fail To Comply?
A growing amount of complaints/warnings are being issued by the IND towards companies that do not comply with particular duties. As the relationship is based on trust between the enterprise and the IND, they do not check applications thoroughly submitted by recognized sponsors. The IND focuses on compliance checks afterward.
However, some companies that fail to comply with their duties and responsibilities appear on IND's radar and are monitored more strictly. The IND might perform random checks and request more documents in case of doubts/incompliance.
In addition, before becoming a recognized sponsor, the IND now examines companies with a lot more care and checks the financial solvability and continuity more often than they used to in the past.
If there is the least doubt that financial numbers are insufficient to prove the financial solvability and continuity of the entity within the last 3 years, the IND will seek advice from the RVO (Rijksdienst voor Ondernemend Nederland), the Dutch Enterprise agency. The RVO will then further examine the application and processing times will at least increase by 6 months.
It is advisable for companies to pay special attention to the following:
Sanctions by the IND in Case of Non-Compliance
If the legal sponsor does not fulfill his obligations, the IND can impose the following sanctions:
Expat Management Group and Audits
So, what is our role in ensuring your company's compliancy as a recognized sponsor? First of all, we can assist you with submitting recognized sponsorship applications. Hereby a pre-screen is made to decide whether your company is eligible for recognized sponsorship and if additional documents might be requested by the Dutch authorities. But the work doesn't stop here.
We see a growing number of complaints and warnings being issued by the IND towards companies not complying with their duties after gaining their recognized sponsorship status, such as the duty to inform the IND when an employee leaves the company or when a new employee starts to work at a new company. We also see that problems arise with payroll when employment contracts and Dutch immigration law rules are not aligned. We may assist you with preparing for audits from the Dutch labor authorities.
How Can You Prepare for an Audit?
Initially, inspection visits by the IND are announced in advance and agreements are made about the necessary preparation for the inspection visit to run as smoothly as possible.
The inspection visit consists at least of an interview and inspection of all documents related to the obligations of the recognized sponsor.
During the visit, all facts related to compliance with the obligations are recorded in a report, which will be signed and copied after the interview.
As random compliancy checks have occurred more frequently in the last years, companies need to be aware of their duties and obligations to adhere to Dutch immigration law rules. To avoid big financial fines and in the worst case scenario, losing the recognized sponsorship license, HR departments need to ensure having all relevant documents on file and ready for the Dutch authorities in case of an inspection. Relevant changes need to be reported in time to the IND and a careful selection of stuff is important to comply with the duty of care.
In case of any questions regarding obtaining a sponsorship license or how to prepare for an audit, don't hesitate to contact us at info@expatmanagementgroup.com.
This article was written by our Senior Immigration Consultant Anja Seling and was originally published in CONVINUS global mobility solutions magazine.