By: The Knowledge Management team at Pro-Link GLOBAL
The Netherlands became the fifth European Union (EU) nation to implement the provisions of the EU Intra-Company Transfer (ICT) Directive. The new rules took effect November 29 and present long-range benefits for companies and employers. However, sponsoring companies should be aware of the short-term advantages and disadvantages over the current rules and processes. For temporary work assignments to the Netherlands under the applicable conditions, this new ICT Permit will be the single available immigration route from November 29 forward.
The European Union Intra-Company Transfer Directive
First adopted May 13, 2014, the European Union Intra-Company Transfer (ICT) Directive (2014/66/EU) endeavors to establish an EU-wide standardized scheme for multinational corporations to transfer and assign their non-EU national employees among their affiliated entities located throughout EU member states. To that end, the directive mandated that all EU countries had until November 29 of this year to develop legislation implementing the scheme into their national law. To date, the response by member nations has been less than overwhelming, with only five states – Spain, Romania, Hungary, France, and now the Netherlands – having done so.
The ultimate goal of the ICT Directive is increased intra-EU mobility for multinational corporations that will, in turn, benefit the European economy through the greater transfer of knowledge and expertise within companies and countries. The direct advantages of a standardized EU-wide system for ICTs are two-fold. First, standardizing the rules governing these types of highly-utilized assignments will both allow companies to manage their budgets and global mobility programs more easily, and provide foreign employees with a more flexible and streamlined immigration option throughout the EU. The second – and potentially greater benefit, once implemented throughout the EU – is that an ICT Permit issued in one state and recognized in all other member states will avoid duplicitous administrative cost and effort each time an employee moves from one corporate location to another. While we are just beginning to realize the first benefit in the initial five implementing states, the extent of the second benefit will not be fully realized until more EU members implement the Directive.
Starting November 29, the Dutch Immigration and Naturalization Authority (IND) rules and procedures will include the provisions of the EU ICT Directive, which the Netherlands implemented into its law October 13 by Decree Nr. 408 of 2016. While Intra-Company Transfer assignees were already provided for in the current process under the highly-skilled “Knowledge Migrant” program, the new rules will harmonize the Dutch system with the EU Directive and the other nations implementing it. Thus, from November 29 forward, applicants who fall under these new ICT provisions will no longer be eligible for Knowledge Migrant permits but instead will apply for work and residence authorization in the form of the new “ICT Permit.”
The new Dutch ICT Permit will apply to applicants meeting the following conditions:
Non-EU/EEA/Swiss foreign nationals;
Employed as Managers, Specialists, or Trainees. Managers and Specialists must hold at least a University degree or five years of experience at their current level. Trainees must have a University degree. All applicants must have been employed by the sending company for at least three months;
Assigned to a Dutch company in the same corporate group as their employer. The employee remains employed by the foreign company and is not on a local employment contract; and
Sent on an assignment of more than 90 days, but either less than three years (for Managers and Specialists), or less than one year (for Trainees).
While there is no express minimum salary threshold, the employee’s salary must be “according to market conditions.” Authorities have indicated that the minimum threshold applicable to Knowledge Migrants is acceptable, which is currently EUR €4,240 per month for those over 30 years-of-age and EUR €3,108 for those under 30 years-of-age.
These new regulations will have a significant effect on the popular Knowledge Migrant program: applications meeting the conditions of the new ICT Permit, but that are filed under the Knowledge Migrant program will be denied and must be resubmitted under the proper immigration stream. It is important to note that the primary determining factor between these two immigration options will be whether the employee remains on a foreign employment contract and payroll (ICT Permit rules apply), or whether they will be placed on a local Dutch employment contract and payroll (Knowledge Migrant rules apply).
While there may be some opportunity for companies to select the desired permit for a particular assignment by restructuring the employment relationship, companies should consult their labor counsel and immigration advisors prior to any change in their current plans. Sponsoring companies will not have the option to merely choose whether to apply as an ICT or a Knowledge Migrant.
Application Process and Procedures Still to be Announced
The details of the application process are still being formulated, and we hope to receive further guidance from IND in the coming days before implementation. However, it is likely processes will generally mirror those under the Knowledge Migrant scheme. Processing times for ICT Permits are estimated to be 90 days for standard adjudication and two weeks through the expedited process for Authorized Sponsors.
During the transition to the new permit, applications filed before the November 29 implementation date will handled under whichever scheme (either the ICT Permit or Knowledge Migrant Permit) will produce the most favorable result for the company and employee applying. Where necessary, IND authorities have indicated that they will be reaching out to applicants regarding which permit is preferable in their case.
Employees Currently Holding Qualifying ICT Permits from Other EU Nations
Ultimately the greatest benefit to companies and employees of the ICT Permit will be the greater intra-EU mobility. However, this benefit is currently limited until more nations adopt the EU Directive. Under the rules, foreign nationals who meet the above profile of an ICT worker and who already hold a qualifying ICT Permit from one of the other issuing EU-member nations (currently Spain, Romania, Hungary, and France) can begin work immediately upon entering the Netherlands. The employee must merely register with the Dutch labor authority (UWV) once in-country.
Comparison to Knowledge Migrant Permit – Disadvantages and Advantages
As with all new immigration regulations, these changes will bring forth both positive and negative developments for sponsoring companies and foreign assignees alike.
Some disadvantages to the new rules do exist, including the reduction of the maximum duration of ICT assignments from five years to three years. Employees who previously qualified for Knowledge Migrant permits, which carried five-year maximum durations, but who will now be given ICT Permits, will be limited to a maximum assignment of three years. Once the foreign national has hit the three-year maximum stay, they must exit the Netherlands for a six-month “cooling-off” period before returning for an additional three years. As another draw-back, holders of ICT permits will not accumulate time towards residence rights in the Netherlands, unlike Knowledge Migrants.
On the other hand, additional advantages beyond the previously mentioned greater EU-mobility do exist. In order to sponsor employees for an ICT Permit, companies are not required to be “Authorized Sponsors,” though Authorized Sponsors will receive expedited processing and streamlined application requirements for ICT Permits. In addition, ICT Permit holders’ spouses and children under 18 years-of-age will be eligible for residence permits during the duration of the assignment which allow them to work in the Netherlands without additional work authorization, and all family members will be exempt from the civic integration exam.
How These Changes Affect You
In the long-term, the ICT permit will be a tremendous benefit for multinational companies and their non-EU national employees by providing standardized immigration processes throughout the EU and greater mobility using a single ICT Permit. The implementation by the Netherlands is a laudable step in the direction of that goal of greater intra-EU mobility. However, until the EU ICT Directive is implemented in more EU-member nations, sponsoring companies and assignees alike will see both advantages and disadvantages to the program, especially when compared to the current Knowledge Migrant scheme. Regardless, starting November 29, the only option available for employees assigned as Intra Company Transferees to the Netherlands will be the new ICT Permit.
Caveat Lector - Warning to Reader
This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. We would like to remind you that Immigration laws are fluid and can change at a moment's notice without any warning.