Guide to DAFT treaty for US citizens moving to the Netherlands (2024)

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In recent years, Europe has become an increasingly attractive destination for American entrepreneurs and professionals. The Economist recently reported that factors such as remote work opportunities, concerns about gun violence, and political polarization in the US have contributed to this trend. Additionally, the desire for work-life balance, access to universal healthcare, and the allure of rich cultural experiences have made European countries like the Netherlands particularly appealing.

For American entrepreneurs looking to make the leap across the Atlantic, the Dutch American Friendship Treaty (DAFT) offers a unique opportunity to establish a business in the heart of Europe. This guide will walk you through the process of leveraging DAFT to relocate to the Netherlands in 2024.

In this guide we will go through the advantages, requirements, a step-by-step process and timeline and an overview of pricing.

Advantages of the DAFT visa

The Dutch American Friendship Treaty is a bilateral agreement that goes beyond typical visa arrangements. It’s designed to foster economic ties between the US and the Netherlands by simplifying the process for American entrepreneurs to set up shop in Dutch territory. In fact, it also works for Dutch entrepreneurs who want to set up a business and move to the US (even though that road is a lot more complicated!).

Here’s what makes DAFT special:

2024 DAFT Requirements: What You Need to Know

To qualify for DAFT in 2024, ensure you meet these criteria:

  1. US citizenship
  2. A business plan connecting the US and Dutch markets
  3. Minimum investment of €4,500 in your business
  4. Valid US passport
  5. Clean legal record (no risk to public order or national security)
  6. Proof of sufficient income to support yourself
  7. No history of illegal stay in the Netherlands
  8. Honest representation in all previous Dutch immigration matters

Migration to the Netherlands per region in 2022 (source: national statistics agency)

The DAFT Application Process: A Step-by-Step Guide

Below is a quick summary of the process and timeline when you choose to apply for DAFT with a Dutch private limited company including the 30 percent tax break:

Step 1: Begin the process with the BV incorporation (typically takes 1-2 weeks)

First of all, you need to choose the right business and legal structure. In short, there are two main options for structuring their DAFT business: sole proprietorship (eenmanszaak) or a limited company (BV).

  1. ZZP/Eenmanszaak – Sole Proprietorship
  • Simpler setup and administration. Setup costs are 75 euros. Accounting is a bit cheaper – typically anywhere between 1000 and 2000 euros per year for a small business with a limited amount of transactions.
  • Suitable for freelancers and solo entrepreneurs
  • Personal liability for business debts
  • No access to 30%-ruling tax advantage
  1. BV (Besloten Vennootschap) – Private Limited Company
  • More complex and expensive setup.
  • Liability protection
  • Tax advantages for higher incomes
  • Access to the 30% ruling for highly skilled migrants
  • Suitable for small and larger companies, easy to scale and attract investment

Most DAFT applicants choose a BV, as you typically pay less taxes than in a sole proprietorship. Additionally, in the BV you are not personally liable whereas in the case of a sole proprietorship you are. You can read more about choosing the right legal setup in this guide. If in doubt, one can also start with the sole proprietorship and convert this into a BV at a later stage. This is a relatively costly procedure, so we do recommend setting it up right from the start.

30%-ruling

Furhermore, the BV will give you the opportunity to benefit from a large tax break: the 30% ruling. It allows qualifying expats a tax break of 30% of their gross salary to be paid as a tax-free allowance, effectively reducing your taxable income. The remaining 70% of your income is subject to Dutch income tax. This effectively reduces your taxable income, resulting in substantial tax savings.To be eligible, you must:

  1. Set up a BV (private limited company)
  2. Establish an employment relationship with your BV
  3. Complete both steps before moving to the Netherlands

As a rule of thumb: If you’re confident in earning €70,000+ annually and have never lived in the Netherlands, the BV + 30% ruling option offers significant financial advantages. For those expecting lower income or prioritizing simpler administration, an eenmanszaak might be more appropriate. As discussed, the BV setup requires more initial costs and ongoing costs, but it can pay off substantially through tax benefits if your income meets the threshold.

Registration of sole proprietorship:

  • Make an appointment with the Chamber of Commerce (KvK). You can make an appointment at any of their locations, which office does not matter as the company will be centrally registered.
  • Prepare a short business description in Dutch.
  • Pay the registration fee of €75,00. There is no VAT on the invoice.
  • Receive your KvK number and open a bank account. Wait around 1 week for your VAT number.

Incorporation and registration of a limited liability company:

  • Choose between single BV or holding structure. If you need help understanding the difference you can contact us at the bottom of this page or on our contact page.
  • Incorporate at the notary (takes 1-2 weeks) – sign paperwork in person or remotely.
  • Receive your KvK number, open a bank account. Wait 1 week for your VAT number.

Step 2: Simultaneously, file for a DAFT application to obtain a V-number (around 3 weeks)

  • Complete the IND application form for self-employed individuals
  • Gather supporting documents:
    • Passport copies (all pages with stamps)
    • Business plan (while optional, it’s highly recommended)
    • Proof of €4,500 investment (to be obtained later in the process)

Make sure to also make an appointment for biometrics. You can either do this later or simultaneously. Here you can read how this works and what to bring with you.

Enter the Netherlands: You can begin the process on a 90-day tourist entry.

Step 3: Employment contract (only if you apply for 30% ruling)

Sign an employment contract with yourself for the 30% ruling (if applicable). This should be done before you move. Make sure that the employment contract meets the requirements of the ruling.

Step 4: Register with the Municipality

  • Schedule an appointment with your local municipality (overview and contact information of all Dutch municipalities).
  • Bring with you:
    • Passport
    • Proof of address (rental agreement or host’s declaration)
    • Birth certificate (apostille recommended but not always required). You can find out how to verify documents in the US for use in the Netherlands in this database.
    • Letter from immigration authorities

After this you will receive a BSN number.

Step 5: Open bank accounts

Start the process of applying for a business bank account, which can take anywhere between 1 week and 2 months.

Step 6: Secure Your €4,500 Investment

Transfer the funds to your Dutch business account. You can use a service like Wise for cost-effective international transfers. If you are setting up a BV limited company, the investment is typically done through paying up the share capital.

Step 7: Obtain a Certified Opening Balance Sheet

  • Engage an accountant to verify and certify your opening balance.
  • Expect to pay around €500 for this service
  • Have the accountant activate your wage tax number.

Step 8: Submit Your Complete Application to IND

Mail your DAFT application or schedule an in-person appointment. The following paperwork is required:

  • Bank statement with proof of the €4,500 transferred into the bank account
  • Opening balance made by Dutch accountant
  • Passport copy
  • Proof of registration from the KvK – company registration extract

Timeline and Costs for 2024

The entire process, from start to finish, typically takes about 2-4 months to complete.

  • IND application fee: €380
  • Legal & notary services: €1,500-€3,200 depending on complexity
  • KVK registration: €75
  • Bank account fees: Typically €100-150 euros per year.
  • Accountant services: Around €350-€500 for the DAFT paperwork. Typically €1500-3000 per year for BV bookkeeping, tax returns and all compliance work.
fact box from eu commission on non-eu citizens in the eu

Further reading:

Our Guide for Americans moving to Europe

IND permit page

Overview of taxation in the Netherlands

PDF of the Dutch-American Tax Treaty

The Netherlands compared to other European countries

30% ruling guide

Get in touch with DAFT professionals

The DAFT visa offers a unique opportunity for American entrepreneurs to expand their horizons and tap into the European market. While the process requires careful planning and patience, the rewards of living and working in the Netherlands – with its high quality of life, robust economy, and central location in Europe – make it an attractive option for those seeking new adventures and business opportunities in 2024.

Our network of relocation and immigration experts can help you through the entire DAFT procedure. From planning your departure, choosing the right legal structure to the actual application at the migration office, we are happy to help you move forward and welcome you to the Netherlands.

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