Moving to the Netherlands as a US citizen? Here are the critical points every entrepreneur and expat needs to know before making the leap. A more extended version of this article was written by our partner Richard.
1. DAFT Visa: Your Fast Track to Dutch Residency
The Dutch-American Friendship Treaty (DAFT) is your best bet as an American entrepreneur. You only need €4,500 in business capital, no points-based test, and can get approved in 4-6 weeks. It’s renewable for up to 5 years, leading to permanent residency.
In short: DAFT makes starting a Dutch business remarkably accessible for Americans. You receive right of residence by making a small investment into your own (new) business.
2. Yes, You File Taxes in Both Countries
As a US citizen in the Netherlands, you’ll file tax returns in both countries annually. The good news? The US-Netherlands tax treaty prevents actual double taxation through foreign tax credits and exemptions.
Bottom line: Double filing, not double paying but get professional help to navigate this correctly.
3. Your US Business Structure Could Cost You
Here’s where it gets tricky. The Netherlands doesn’t recognize the pass-through nature of US LLCs or S-Corps. Your LLC might face Dutch corporate tax while you pay US personal tax on the same income – creating real double taxation.
Bottom line: Consider restructuring or establishing a Dutch BV to avoid costly tax mismatches.
4. The 30% Ruling Can Slash Your Tax Bill
If you qualify, 30% of your salary becomes tax-free for up to 5 years. Requirements: recruited from abroad, minimum €46,660 salary (2025), and specialized skills. Apply within 4 months of starting work.
Bottom line: This ruling can save thousands annually, but recent changes limit high earners and it drops to 27% in 2027.
5. Dutch University Costs Are a Fraction of US Prices
US private universities average $40,000+ annually. Dutch universities charge international students around €9,000-€17,000 per year for quality English-taught programs.
In short: Significant education savings for expat families, even at international rates.
6. Your Retirement Accounts Get Different Treatment
- 401(k)/Traditional IRA: No annual Dutch wealth tax, but distributions taxed as income
- Roth IRA: No tax on distributions, but account value subject to annual wealth tax
- US Social Security: Remains taxable only in the US
Bottom line: Account type matters for your annual Dutch tax bill.
7. Planning Prevents Expensive Mistakes
The intersection of Dutch and US tax systems creates numerous pitfalls. From business structure mismatches to missed treaty benefits, poor planning can cost thousands.
Bottom line: Invest in professional advice upfront to avoid costly corrections later.
