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Netherlands: Operating a Business

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
The BV (Belosten Venoostschap met beperkteaansprakelijkhei) is a Private Limited Company. Minimum capital: 18,000 EUR. Up to 20% must be subscribed.	One or more. It can be constituted of several legal entities or individuals, and 1 shareholder for a BV proprietorship Liability of each partner is limited to the amount of capital contributed.
The NV (Naamloze Vennootschap) is a Public Limited Company. 45,000 EUR at least. 20% should represent the subscribed amount and 25% the amount released at the incorporation	One or more Liability is limited to the amount of capital contributed.
The VOF (Vennootschap Onder Firma) is a general partnership. No minimum capital.	Minimum 2 partners. Partners' liability is joint and several.
CV (Commanditaire Vernootschap) is a limited partnership. No minimum capital.	Minimum 2 partners. 2 types of partners: active partners and sleeping partners. Active partners have an unlimited liability, notably corporate management. Sleeping partners have a liability limited to the amount contributed.
Bijkantoor is a branch. No capital is required, if the branch is registered with the Trade Register .	No legal entity, it depends on the status of the parent company. The parent company is liable for actions carried out by the branch except for management which is limited, joint and several.

Enterprises Federation: Small and Medium Enterprise Representative
Information for the Small and Medium sized companies
Search a Company or a Financial Report: Handelsregister

Business Setup Procedures

Setting Up a Company	Netherlands	OECD
Procedures (number)	6.00	5.60
Time (days)	8.00	13.80

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Netherlands.
Trade Register
The Competent Organization: the Trade Register.

Recovery Procedures

Principle: Insolvency does not directly lead to bankruptcy, more deatils can be found in the Netherlands insolvency law.
Minimum Debt-to-Capital Ratio Triggering Liquidation: None
Bankruptcy Laws: Consists out of the insolvency laws, more details can be found in the book Netherlands insolvency law.
Reorganization and Rehabilitation Laws: All of them can be found in the book Netherlands insolvency law.

The Active Population in Figures

	2010
Labor Force	7,860,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	66.10%
Men activity rate	72.90%	-
Women activity rate	59.50%	-

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2005
Agriculture and Fishery	1.4%
Mineralextraction	0.1%
Industry	12.0%
Public Services	0.4%
Construction Industry	5.3%
Commerce	16.5%
Hotel and Catering Industry	3.7%
Transport and Communication	6.1%
Financial Services	3.7%
Business Services	17.0%
Public management and Social Security	7.2%
Education	6.7%
Healthcare	16.0%
Culture and Recreation	4.0%

Source: Dutch Statistics Office

Working Conditions

Opening Hours

Legal Weekly Duration

37 hours

Maximum Duration

Officially 45 hours. Occasionally, overtime, with a maximum shift duration of 11 hours, a maximum working week of 54 hours and a maximum of 585 hours worked per 13 weeks.

The Ministry for Social Affairs and Employment passed a decree in late 2005 stating that employees also performing on-call shifts may choose to opt out of existing rules and work up to 60 hours a week. The hours worked per week are then averaged over a 26-week period, rather than the 13 weeks at present.

Night Hours

Between midnight and 6 am.

Working Rest Day: Sunday, unless the worker has expressly agreed to work. If work is conducted on Sundays, the worker must be given at least four Sundays off in any 13-week period.
Paid Annual Vacation: The minimum is four times the average number of days worked per week. If, for example, an employee works five days per week, the minimum right is 20 days holiday. A collective agreement can increase the minimum, normally to 25 days, depending on the sector. Legally mandated paid leave of one to four days is given for personal events (marriage, death in the family, family obligations or moving house). Extended leave is also possible for certain personal circumstances.
Retirement Age: 67 years
Child Labor and Minimum Age For Employment: 16 years
Informal Labor Market: The market is fairly developed, there is no official estimate available.

The Cost of Labor

Pay

Minimum Wage: EUR 1,300 per month. The wage is regularly adjusted.
Average Wage: Annual average is EUR 27,800.
Other Forms of Pay
Pay For Overtime: Overtime in most industries receives a 25% premium for the first two hours, 50% for subsequent hours, 75% for Saturdays and 100% for Sundays and holidays.
Pay For Rest Days Worked: Around the 50% in most industries.
Pay For Night Hours: Night-shift workers are entitled to a 10–15% premium.
Pay For Overtime at Night: Overtime in night duty is allowed, but then a shift may not last more than nine hours. The maximum number of nights worked may not exceed ten over a four-week period.

Social Security Costs

The Areas Covered: Medical insurance 12.25%, pension insurance 17.9%, unemployment insurance 0.65%
Contributions: Contributions Paid By the Employer: 15.90 %.
Contributions Paid By the Employee: 6.45 %.
Competent Organization: Social Insurance Agency

Management of Human Resources

Recruitment

Method of Recruitment: Usually an advertisement is placed in a paper or magazine. Aspiring candidates send their CV accompanied by a letter after which a number of candidates are selected for an interview. Recruitment by means of a headhunter and the internet are becoming more popular.
Recruitment Agencies: - Public Employment Offices
- Private Employment Agencies
- Labor Dispatch Business.
Recruitment Websites: The public employment office of the Dutch government
Digital recruitment ground for both employers and employees
A private recruitment agency
Sam Headhunting
Labor dispatch company
Labor dispatch company

The Contract

Type of Contract: Regulated by legal clauses and to a lesser degree by collective agreements and individual negotiations.The terms of employment contracts cannot be changed, the conditions for hiring and the limits for dismissal are rather rigid.

Breach of Contracts

Retirement

Normal resignation (once the employee becomes 65) or resignation by agreement or by the employee's request.

Dismissals

An employee can only be fired if the government agrees with the decision. Valid reasons for firing someone can be:

- That the employee is incapable of executing his tasks;

- a vexed relation between employer and employee;

- when the employee is ill too often;

- when the employee is incapacitated for work.

Other Possible Methods

Collective dismissals (possible for economic reasons)
Disciplinary dismissals
Resignation

Labor Laws

Dutch Ministry of Social Affairs and Employment

Dispute Settlement

Conciliation Process

Cases of Dispute

The employee was incapable (23%), the business is doing bad (21%), a vexed relation between employer and employee (17%), the employee is incapacitated for work (16%).

Legal Framework

Companies must notify local labor offices and trade unions before dismissing any worker. Only with agreement from the labor office (via a permit) may a firm dismiss workers. The head of the local labor office looks at the circumstances and decides whether to grant a permit.

An employer can appeal against a negative ruling by a labor office to a civil court. The criteria used by the labor office (and by the civil court on appeal) are based on recent court rulings and provisions of the Dutch civil code. A dismissal is usually considered unjustified if the consequences for the employee outweigh those for the employer, if no reason for the dismissal is given, or if the dismissal runs counter to current practice or agreement in that industry or company.

Procedure

Termination of employment in the Netherlands is governed by the Civil Code (CC), the Extraordinary Labor Relations Decree (ELRD), the Dismissal Decree (DD) and the Collective Redundancy (Notification) Act (CRNA).

In cases where the law remains silent, or where its regulations are not mandatory, collective labor agreements may also constitute a source of law. Some subsections of the CC stipulate that departure from the main principle is allowed, but only under a collective agreement or an arrangement made by or on behalf of a competent public body.

Additional information can be found the website of The international labour organization.

Judicial Structures

Legal Framework: Standard civil procedures
Competent Legal Body: Local labor officers, trade unions, labor court and civil court.

Social Partners

Social Dialogue and Involvement of Social Partners: The main trade unions are the FNV (Dutch trade union center) and the CNV (Christian trade union center).
Unionization Rate: 28 %.
Unions: FNV
CNV
De Unie
List of all Dutch trade unions
Regulation Bodies: Ministry for Social Affairs & Employment
Confederation of Netherlands Industry and Employers (VNO-NCW)

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