Current Situation
We aimed to bring foreign employees (expats) to our shipyard in the Netherlands for positions requiring technical expertise. Upon reviewing traditional expat programs, we encountered two main issues:
Age Limitation and Cost: Since our employees are over 30 years old, the tax advantages provided by standard expat programs (e.g., 30% ruling) are limited, which increased the total cost of the employee.
Highly Skilled Employment Criteria: Although our employees possess valuable experience and expertise, they could not be classified under the “Highly Skilled Migrant” category in the Netherlands due to not meeting the mandatory university degree requirement.
Our Approach
To overcome traditional barriers, we developed an innovative model leveraging the principles of flexible employment and free movement within the EU:
Temporary Employment Agency
We employed our employees through a temporary employment agency (service provider company) established in another EU country instead of directly through a Dutch company.
Posted Worker Application
Initially, we applied for legal residence and work permits for employees in this EU country. Subsequently, we sent them to the Netherlands under the status of “Posted Worker” for the duration they would work at the shipyard.
Working as Leased Personnel
Our client in the Netherlands (shipyard) legally started employing this personnel as leased personnel from our employment agency within the EU.
We employed our employees through a temporary employment agency (service provider company) established in another EU country instead of directly through a Dutch company. Initially, we applied for legal residence and work permits for employees in this EU country. Subsequently, we sent them to the Netherlands under the status of “Posted Worker” for the duration they would work at the shipyard. Our client in the Netherlands (shipyard) legally started employing this personnel as leased personnel from our employment agency within the EU.
Amazing Results
Some of the social security and income tax obligations of the employees were managed through the Temporary Employment Agency in the EU country with a more favorable tax regime. This allowed us to achieve a long-term and significant reduction in total personnel costs without getting caught up in the high social contribution rates and strict age/education requirements of the Netherlands’ expat programs.
Strict criteria such as the university degree requirement mandated by the “Highly Skilled Migrant” program were overcome thanks to the free movement within the EU and the “Posted Worker” mechanism. Our company gained rapid and bureaucratic barrier-free access to a skilled workforce with technical expertise and experience, but who did not meet traditional expat criteria.
The established structure was meticulously designed to be not only cost-focused but also fully compliant with EU Directives and the Netherlands’ leased labor (A-1/Posted Worker) legislation. This provided our company with a legally secure, long-term and sustainable employment solution against potential audits.
Managing employee employment through an office within the EU provided operational flexibility for quickly assigning and withdrawing personnel based on projects in the Netherlands. This model particularly offered the ability to respond rapidly to periodic or project-based labor needs at the shipyard and easily scale the international workforce.
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“We wouldn’t have gotten to where we are today without Finovate. The Finovate spent time with us to better understand our processes and where our bottlenecks were.”
Rebecca Roy
H&N – CEO & President
