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What Happens if you Fail to Comply as a Legal Sponsor in the Netherlands?
A growing amount of complaints/warnings are being issued by the IND towards companies that do not comply with their duties as a Legal Sponsor in the Netherlands. What do you need to pay special attention to and what happens if you fail to comply with your duties?
The relationship between enterprises and the IND is built on trust, so applications submitted by recognized sponsors are not thoroughly checked upfront. Instead, the IND focuses on compliance checks afterward.
However, companies that fail to meet their obligations may draw the IND's attention and face stricter monitoring. In such cases, the IND may conduct random checks and request additional documents if there are concerns or signs of non-compliance.
Before granting recognized sponsor status, the IND now performs more thorough evaluations, frequently checking a company’s financial solvency and continuity. If there is any doubt about the financial stability of the entity within the last three years, the IND consults with the Dutch Enterprise Agency (RVO), which may extend the processing time by at least six months.
Companies should pay close attention to the following:
Leave of absence or reduced working hours: Salary reductions may cause an employee’s salary to fall below the required threshold.
Working or residing abroad: A shift in primary residence outside the Netherlands may affect residence permits, taxes, and social security.
Salary calculation to meet thresholds: Strict monthly requirements apply, and allowances or benefits can only count if they are detailed in the contract, specified, guaranteed, fixed, and paid directly to the employee's bank account.
Family members of employees: Consider who qualifies as family, whether they will accompany the employee or join later, and ensure proper documentation (legalized certificates) and be mindful of processing times.
Sanctions by the IND in Case of Non-Compliance
If the legal sponsor does not fulfill his obligations, the IND can impose the following sanctions:
A warning: The warning is valid for 24 months. If within this term the same legal obligation is violated again, the IND could impose an administrative fine. In case of a serious violation, no warning will be issued and a possible consequence could be withdrawal of the residence permit from the foreign national/sponsorship license.
Administrative fines: Administrative fines vary between a maximum of € 1,500 for natural persons and € 3,000 (100% increase of €1,500) for legal entities, companies and other organizations.
Criminal offense: In very severe cases, a criminal offence maybe reported and persecuted by the public prosecutor (administrative sanctions are not used in this case).
Revoking the sponsorship license: A company can lose the recognized sponsorship status or sponsorship status can be temporarily suspended. This can lead to foreign nationals, with a valid residence permit, losing their status with this legal entity and needing to change their residence status to a different purpose. Once the recognized sponsorship status is lost by a company, you can only hire Highly Skilled migrants through a long, more bureaucratic process.
Read more about your duties and responsibilities as a Legal Sponsor in the Netherlands in our article here.
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