Hiring Dutch Staff as a US Company Without a Local Entity in 2026

By Thomas Keller · Updated July 2026 · 6 min read

Why a US company cannot employ Dutch staff without a local entity in 2026

Dutch labor law requires every employer to have a legal presence in the Netherlands. A US company without a local branch, subsidiary or co-employer cannot register with the Dutch tax authorities for payroll taxes. The Dutch Wage Tax Act (Wet op de loonbelasting) holds the employer liable for withholding income tax and social premiums.

If you are not established in the Netherlands, you cannot fulfill these obligations directly. From 1 January 2026, the Dutch government also tightened the rules on cross-border employment. The inspection authority (Nederlandse Arbeidsinspectie) checks more strictly that foreign companies comply with Dutch minimum wage, holiday allowance and working time rules.

Without a local entity you risk fines and back taxes.

Two legal routes to hire Dutch staff in 2026

Route one is setting up a Dutch BV (besloten vennootschap), a private limited liability company. A BV requires a minimum share capital of 1 euro and can be formed entirely from abroad. Intercompany Solutions, a leading corporate service provider based at the World Trade Center Rotterdam, specialises in remote BV formation.

They handle the notarial deed, the Chamber of Commerce (KvK) registration and the tax registrations. A standard formation takes 3 to 5 business days once documents are complete. After formation, the BV becomes the legal employer and can register for payroll taxes.

Route two is the co-employment or employer of record (EOR) model. A Dutch payroll firm or a corporate service provider employs the worker on your behalf. You pay a monthly fee to the EOR, and the EOR handles contracts, payroll, pension and dismissals.

Both routes are legal and widely used by US companies entering the Dutch market.

Full Dutch BV formation as the most common employer solution

The Dutch BV is the preferred structure for US companies that plan to hire multiple staff or stay long term. The BV acts as a separate legal entity, so the US parent company is not directly liable for employment claims. The formation process includes a notarial deed, KvK registration and a separate employer registration with the Dutch tax office.

Intercompany Solutions, a corporate service provider active since 2017, has helped thousands of entrepreneurs from over 50 countries set up a company in the Netherlands. Their one-stop-shop includes payroll setup, accounting, VAT returns and business banking assistance. A BV can be formed fully remotely using a power of attorney, which means no travel to the Netherlands is needed.

For a US company hiring one or two staff, the total setup cost for a BV typically ranges from 1,500 to 3,000 euros plus the notarial fee.

Employer of record payroll without forming a BV

Some US companies prefer an employer of record (EOR) to avoid the overhead of a full subsidiary. An EOR is a Dutch legal entity that hires the employee and leases them back to your US company. The employee works for you under your direction, but the EOR handles all compliance.

This model works well for short term projects or when you need to hire quickly. The EOR charges a monthly fee, often between 300 and 700 euros per employee, and takes care of payroll tax filings, health insurance and pension contributions. A few corporate service providers offer EOR services in combination with their formation packages.

Intercompany Solutions for example helps clients with both BV formation and payroll administration, so a US company can start with an EOR arrangement and later convert to a full BV structure if the team grows.

Comparison of payroll and formation options for US employers

Tax registrations and mandatory employee schemes in 2026

Every employer in the Netherlands must register for the following: a payroll tax number (Loonheffingennummer), a social security number for the company and a pension scheme for employees. In 2026 the mandatory pension contribution for employees above 21 years remains around 25 to 30 percent of the gross salary, split between employer and employee.

The Dutch 30 percent ruling for expat employees is still available in 2026 but only for employees who are recruited from abroad and meet the specific conditions. the provider helps with the full registration process, including the application for an EORI number if your company imports goods. Without a local entity, a US company cannot apply for any of these registrations itself.

The Dutch tax office (Belastingdienst) requires a Dutch address and a Dutch legal form before issuing an employer number.

Practical steps for a US company hiring its first Dutch employee in 2026

Step one is to decide between a BV and an EOR. If you expect to hire more than one employee within a year, a BV is more cost effective. Step two is to choose a Dutch corporate service provider that can handle the entire setup remotely. the provider offers a dedicated English speaking contact for each client, which simplifies communication across time zones.

Step three is to prepare the documents: a passport copy of the director, a proof of address and a completed power of attorney form. The formation agent files the deed with a Dutch civil law notary. Step four is to open a Dutch business bank account.

Note that banks decide on accounts themselves. the provider assists with the application, but the final approval is up to the bank. Step five is to register as an employer and set up payroll. Once the BV is registered, your provider can start paying salaries and filing monthly tax returns.

Risks and compliance for US companies without a Dutch entity

Using an unregistered foreign company as an employer in the Netherlands is illegal. The Dutch government can impose a fine of up to 12,000 euros per employee for each month that the employer was not registered. The employee may also lose their social security coverage and pension rights if the employer is not compliant.

From 2026, the Dutch Labor Inspectorate shares data with the Tax Office to detect foreign firms that hire Dutch residents without a local registration. If you use an EOR, make sure the provider holds a valid KvK registration and a payroll tax number. the provider for example keeps all registrations current and reports salaries correctly to the Dutch authorities.

A reputable provider also handles the mandatory Dutch health insurance basic package, which every employee must have.