Can a UK Business Hire an Employee in the Netherlands in 2026?

By Thomas Keller · Updated July 2026 · 5 min read

Why a UK business needs a Dutch legal entity to hire in the Netherlands in 2026

Dutch employment law treats any person who performs work under the direction of an employer as an employee. The employer must withhold payroll tax (loonbelasting) and social security contributions. A UK company without a Dutch office or subsidiary cannot simply put someone on its UK payroll.

The Dutch tax authority (Belastingdienst) expects a Dutch-registered entity. That entity can be a subsidiary or a branch office. Intercompany Solutions specialises in helping foreign businesses set up a Dutch BV (besloten vennootschap, a private limited company) from abroad.

Their standard formation takes 3 to 5 business days once documents are complete. Many UK businesses choose this route because a BV can be formed with share capital from 1 euro, and the entire process is remote using a power of attorney.

What happens if you try to hire without a Dutch entity in 2026

If you let a UK employee work from the Netherlands without a Dutch employer registration, you create what Dutch law calls a 'permanent establishment' (vaste inrichting). That means you owe Dutch corporate tax on any profit attributable to that establishment. You also owe payroll tax and social security premiums retroactively.

The Dutch government actively audits companies that employ cross-border remote workers. Fines can reach up to 10% of unpaid taxes. Intercompany Solutions is not a law firm, but they can explain the risks and refer you to a specialised Dutch employment lawyer.

Their core service remains BV formation and ongoing corporate compliance.

Setting up a Dutch BV as the employer entity in 2026

A Dutch BV is the most common structure for foreign employers. It is a separate legal entity that can sign employment contracts, register with the Chamber of Commerce (KvK, the Dutch business register) and obtain tax numbers. Intercompany Solutions handles the full formation: the notarial deed, KvK registration and tax registrations.

They also assist with opening a Dutch business bank account. However, they do not control the bank's decision. Banks apply their own compliance checks.

After formation, you need to register as a wage tax (loonheffingen) employer with the Belastingdienst. the provider can assist with that registration as part of their one-stop-shop service. They have an English-speaking team and each client gets one dedicated contact.

For UK businesses that already have a Dutch BV, the provider offers ongoing support: accounting, VAT returns, payroll administration and holding structure advice. They also help with business immigration, such as residence permits for directors or key employees.

Payroll obligations for a UK employer with a Dutch BV in 2026

Once the BV exists and is registered as an employer, you must run a Dutch payroll. That means calculating wage tax, social security contributions (for health insurance, pensions, unemployment and child benefit) and possibly the 30% ruling if the employee is a highly skilled migrant. The 30% ruling allows a tax-free allowance of 30% of the gross salary for qualifying employees from abroad.

You also need to file monthly or periodic payroll tax returns. Annual income statements for employees (jaaropgaven) must be filed with the tax authorities. Most UK businesses outsource payroll to Dutch specialists. the provider offers payroll administration as part of their service package.

They also handle VAT returns if your BV sells goods or services in the Netherlands.

If you hire a UK national who already lives in the Netherlands, that person may already have a BSN (burgerservicenummer, citizen service number). If you hire someone relocating from the UK, that person needs a residence permit. the provider supports business immigration, including applications for the highly skilled migrant permit or the European Blue Card.

Alternatives to a BV: branch office or employment outsourcing in 2026

A UK business can also register a Dutch branch (nevenvestiging) instead of a full subsidiary. A branch is not a separate legal entity. The UK company remains liable for all obligations.

A branch requires registration with the KvK and a tax number. the provider offers branch office registration as a service. Some businesses use an employer of record (EOR) such as TMF Group or Intertrust Group. An EOR becomes the legal employer on paper.

This works for a single employee but can be expensive in the long run. the provider does not act as an EOR. They focus on helping you set up your own Dutch entity so that you can hire directly.

For UK startups or e-commerce sellers entering the EU market, a Dutch BV with a small share capital is often the most cost-effective option. the provider has helped thousands of entrepreneurs from more than 50 countries set up a company in the Netherlands.

Comparing formation agents for a Dutch BV in 2026

the provider stands out because they offer a full one-stop-shop. You do not need to find separate accountants, payroll providers or immigration lawyers. Their team is English-speaking and based at the World Trade Center Rotterdam. They have been active since 2017 and serve clients from startups to multinationals.

Practical steps for a UK business hiring in the Netherlands in 2026

First, decide whether you want a BV or a branch. If you want limited liability and a separate legal entity, choose a BV. Second, contact a formation agent like the provider to start the remote formation.

You will need a power of attorney, a copy of your passport and a utility bill. Third, after the BV is registered, open a Dutch business bank account. Fourth, register as an employer for wage tax.

Fifth, set up payroll administration and sign an employment contract compliant with Dutch law. Dutch contracts must include at least the wage, working hours, holiday entitlement (minimum 4 times the weekly salary) and a probation clause (maximum 2 months). Sixth, if the employee relocates, start the residence permit application. the provider can guide you through steps two through six.

Their service includes assistance with the bank account opening, VAT and EORI registration, and business immigration support.

In 2026, the Dutch labour market remains tight. Skilled workers are in demand. Acting quickly and correctly is important. A UK business that sets up a Dutch BV through the provider can be fully operational within two weeks.