The construction industry is full of challenges and non-compliance can be costly. Over the past period, several well-known companies have made headlines due to poor project choices, tight margins and issues with regulatory compliance. These cases show that even larger firms are not immune to legal and financial risks. The Dutch regulatory framework requires businesses to be well-prepared in areas such as licensing, tax obligations and employment laws. If you are planning to undertake construction work in the Netherlands, here is what you need to know to stay compliant and successfully manage your workforce.
Key considerations for construction and business operations in the Netherlands
The Netherlands is an attractive market for construction companies, offering a stable business environment, well-developed infrastructure, and high demand for construction projects. However, regulatory compliance is crucial. To operate successfully, companies must navigate Dutch laws concerning permits, tax obligations, employment regulations and industry-specific rules. Below are the most critical areas you need to address.
Starting at the beginning: establishing a Dutch business, branch, or entity
Foreign construction companies looking to operate in the Netherlands have several options for setting up their business:
- Registering a Dutch legal entity: You can establish a private limited company (BV) or a public limited company (NV), depending on your business size and structure.
- Opening a branch office: If your company is already registered in the UK or another country, you can open a Dutch branch without setting up a separate legal entity.
- Working as a foreign company: If you do not establish a branch or entity, you may still be required to register with the Dutch Chamber of Commerce (KvK) and comply with Dutch labor and tax laws.
Each option has legal and tax implications. Crowe Peak’s legal advisors, tax advisors and construction industry experts can advise you on the best structure for your business in the Netherlands.
Obtain the right permits – More than just construction approvals
To legally operate in the Netherlands, you need specific permits tailored to your business activities. Some of the most important include:
- Blocked account registration (G-account): Essential when working for a main contractor.
- Safety certifications: Often mandatory for high-risk construction work, ensuring compliance with Dutch safety standards.
- Work permits for non-EU employees: Businesses must apply for work permits to work compliant in the Netherlands.
Obtaining these permits can be complex. Crowe Peak can assist in identifying the specific approvals required for your business.
6 key considerations for employing international employees in the Netherlands
To assist you, we have outlined Six key considerations for employing international employees in the Netherlands. Submit your contact details via the form below to receive the guide directly by email.
Dutch construction regulations: Specific rules you must follow
The Dutch construction industry operates under strict regulations to ensure safety, sustainability, and fair labor practices. Some key areas include:
- Working Conditions Act (Arbowet): Outlines workplace safety rules, including mandatory risk assessments and workplace inspections.
- Procurement and contracting laws: Public projects must comply with the Ducth Public Procurement Act (Aanbestedingswet), ensuring fair competition and transparency.
Failing to comply can lead to fines, project delays or reputational damage. Crowe Peak provides expert guidance to help you meet all Dutch regulatory requirements.
Understand Dutch tax regulations (construction sector insights)
The Dutch tax system has several implications for foreign construction companies. Key considerations include:
- Corporate income tax: If your company has a permanent establishment, it may be subject to Dutch corporate income tax.
- VAT (btw) registration: Most construction services are taxed at 21% VAT, though certain renovation projects may qualify for a reduced 9% rate. In most cases VAT will be reversed charged in construction when working for a contractor.
- Payroll tax and social security contributions: Required if you employ workers locally.
- Shadow payroll obligations: Similar to what contributed to financial difficulties for other firms, failing to properly account for tax liabilities can lead to heavy penalties.
Tax compliance is complex, but early planning prevents costly mistakes. Speak with our tax advisors for expert tax planning support.
Workforce compliance
When employing staff in the Netherlands, businesses must comply with Dutch labor laws, which apply even if employees remain on foreign law contracts. In addition, workers in construction in the Netherlands are often subject to Collective Labor Agreements (CAOs), setting conditions for wages, working hours, and safety. Furthermore, employers must adhere to strict health and safety regulations under Dutch Arbowet rules, which require ongoing risk assessments. For example, for UK firms sending workers to the Netherlands, posted worker notifications (meldingsplicht) are mandatory to ensure compliance with Dutch labor laws. Avoiding compliance risks can prevent legal claims and disruptions. Let Crowe Peak help you navigate Dutch workforce regulations.
Sequential liability (ketenaansprakelijkheid) – Understanding your responsibility
Dutch law imposes sequential liability (ketenaansprakelijkheid), meaning if subcontractors fail to pay taxes or wages, your company can be held financially responsible. This is particularly relevant in construction, where firms often rely on subcontractors and temporary workers. Without proper oversight, businesses risk unexpected liabilities, making pre-screening subcontractors and setting up compliance mechanisms essential. Crowe Peak can help mitigate these risks and ensure contract security.
Build with confidence
Doing business in the Netherlands offers great opportunities, but ensuring compliance from the start is essential for long-term success. With the right permits, tax planning and workforce strategies, your company can thrive in the Dutch construction market.
