Working Remotely from the Netherlands on DAFT
How to maintain your US job while living in the Netherlands, tax implications, and legal requirements for DAFT visa holders.
One of the most attractive aspects of the Dutch-American Friendship Treaty (DAFT) is the flexibility it offers for remote work arrangements. Many Americans successfully maintain their US employment while living in the Netherlands, but this requires careful legal and tax planning to ensure compliance with both countries' regulations.
DAFT Visa and Remote Work Basics
The DAFT visa requires you to operate a Dutch business, but this business can provide services to your former US employer. This creates several possible arrangements:
Consulting Agreement
- • Register as independent contractor
- • Invoice US company for services
- • Maintain business relationship
- • More flexibility and control
Employee + Side Business
- • Remain US employee part-time
- • Operate separate Dutch business
- • More complex tax situation
- • May require employer approval
Legal Requirements for DAFT Remote Work
Business Registration Requirements
To comply with DAFT requirements, you must:
Register with KvK (Chamber of Commerce)
Officially register your business activities in the Netherlands
Maintain €4,500 Investment
Keep minimum investment in business bank account and use for business expenses
Demonstrate Active Business
Show genuine business activity through invoices, contracts, and financial records
File Annual Reports
Submit required business documentation to maintain DAFT status
Transitioning from Employee to Contractor
Key Considerations
- • Negotiate transition timeline with current employer
- • Establish clear service agreements and deliverables
- • Set appropriate consulting rates (often 25-40% higher than salary)
- • Define intellectual property and confidentiality terms
- • Plan for benefits replacement (health insurance, retirement)
Tax Implications
Dutch Tax Obligations
As a Dutch tax resident operating a business:
- Income Tax: Business profits taxed in Box 1 at progressive rates (36.97%-49.5%)
- VAT Registration: Required if annual turnover exceeds €20,000
- Social Security: May be exempt as entrepreneur, but consider voluntary participation
- Business Deductions: Office expenses, equipment, travel, professional development
US Tax Considerations
US citizens must still file US tax returns and consider:
Foreign Earned Income Exclusion
- • Exclude up to $120,000 (2023) from US taxes
- • Must meet physical presence test
- • Applies to self-employment income
- • File Form 2555
Foreign Tax Credit
- • Credit for Dutch taxes paid
- • Can't combine with FEIE on same income
- • May be better if Dutch rates higher
- • File Form 1116
Setting Up Your Remote Work Business
Business Structure Options
Eenmanszaak (Sole Proprietorship)
Most common for DAFT remote workers
Advantages:
- • Simple setup and administration
- • Lower costs
- • Direct profit extraction
Disadvantages:
- • Personal liability
- • Limited growth options
- • No separate legal entity
BV (Limited Liability Company)
Better for higher-income remote workers
Advantages:
- • Limited personal liability
- • Tax optimization opportunities
- • Professional credibility
Disadvantages:
- • Higher setup costs (€1,000+)
- • More complex administration
- • Annual filing requirements
Setting Competitive Rates
When transitioning to consulting, calculate your rates carefully:
Rate Calculation Formula:
Base Rate = (Annual Salary + Benefits Value) ÷ Billable Hours
Consultant Rate = Base Rate × 1.25-1.4 (markup factor)
Markup covers business expenses, taxes, vacation time, and profit
Managing International Employment
Employer Considerations
Your US employer needs to consider several factors:
- Payroll Compliance: May need to register for Dutch payroll taxes if you remain an employee
- Permanent Establishment: Risk of creating Dutch tax presence through your work
- Data Protection: GDPR compliance for EU data handling
- Employment Law: Dutch labor laws may apply to employment relationships
- Time Zone Management: Operational considerations for collaboration
Working Hours and Productivity
Best Practices
- • Establish clear core hours overlap
- • Use project management tools
- • Schedule regular check-ins
- • Maintain professional workspace
- • Document work progress clearly
Time Zone Management
- • Netherlands is 6-9 hours ahead of US
- • Plan meetings during overlap hours
- • Use asynchronous communication
- • Be flexible during US urgent needs
- • Respect work-life boundaries
Common Business Expenses and Deductions
Deductible Business Expenses
| Expense Category | Examples | Annual Cost |
|---|---|---|
| Home Office | Rent portion, utilities, internet | €2,000-4,000 |
| Equipment | Computer, monitors, furniture | €1,000-3,000 |
| Software & Tools | Professional software, cloud services | €500-2,000 |
| Professional Development | Courses, conferences, certifications | €1,000-5,000 |
| Travel | Client visits, business trips | €2,000-8,000 |
Challenges and Solutions
Common Challenges
Isolation and Communication
Join coworking spaces, expat groups, and maintain regular video calls with colleagues
Currency Fluctuations
Consider currency hedging or adjust rates based on exchange rate changes
Benefits Gap
Arrange private health insurance and retirement savings to replace employer benefits
Administrative Complexity
Work with accountants familiar with US-Dutch tax situations
DAFT Renewal Considerations
Maintaining DAFT Status
For DAFT renewal, you must demonstrate:
- Continuous Business Activity: Regular invoicing and business transactions
- Financial Records: Proper bookkeeping and tax filings
- Investment Maintenance: €4,500 minimum still in business account
- Legal Compliance: All Dutch business regulations followed
- Tax Compliance: Current on all Dutch and US tax obligations
Success Metrics
Immigration authorities look for:
- • Consistent business income over €20,000+ annually
- • Professional business setup and operations
- • Contribution to Dutch economy through taxes and spending
- • Integration into Dutch society
Getting Started Checklist
Before You Move:
- ☐ Negotiate transition with current employer
- ☐ Research Dutch business registration requirements
- ☐ Plan tax strategy with international tax advisor
- ☐ Set up business banking arrangements
- ☐ Arrange health insurance transition
First Month in Netherlands:
- ☐ Register with municipality (BSN)
- ☐ Open Dutch business bank account
- ☐ Register business with KvK
- ☐ Set up accounting system
- ☐ Arrange professional workspace
Ready to Start Your Remote Work Journey?
Our team can help you structure your business, navigate tax obligations, and ensure DAFT compliance while maintaining your US employment.
Get Remote Work Guidance