Fast and streamlined immigration processes comes with increased self- responsibility, how to deal with this as a Sponsoring company?
The Netherlands is a top choice for multinationals, offering quick immigration processes for non-EU talent through Recognized Sponsorship. While this fast-tracked system is appealing, it comes with a big catch: companies must handle compliance on their own. With tighter government checks and new rules on the way, companies need to take their responsibilities seriously to avoid trouble.
Why Recognized Sponsorship is Both a Privilege and a Responsibility
The Netherlands has long attracted international companies due to its central EU location, great infrastructure, and business-friendly environment. For non-EU hires, companies benefit from streamlined immigration procedures, allowing employees to start work in just a few weeks.
There is a flip side: the system is built on trust and the privileges come with significant responsibility. Recognized Sponsors commit to informing the Dutch Immigration and Naturalisation Service (IND) about key changes, such as an employee leaving the company or salary changes, and are trusted to ensure all documentation is in order. The IND conducts fewer upfront checks, meaning the burden is on the company to stay compliant. If companies slip up, the consequences can be serious.
Self-Regulation more complicated than it seems
While the immigration application process may seem straightforward, Recognized Sponsors often underestimate the complexities of self-regulating immigration compliance. The paperwork to support an immigration application may seem few at first glance, but in reality, it requires companies to stay on top of various legal obligations. From maintaining valid residence permits to ensuring salary thresholds are actually met, it’s a continuous effort that requires attention to detail.
Often, companies lack dedicated internal resources or specialized knowledge in immigration law, leaving HR teams to manage these complex issues alongside their usual duties. Mistakes can easily slip through the cracks, Because the IND often doesn’t check applications upfront it often creates a false sense of security that the responsibilities are fulfilled once the application has been approved, while in fact the self-regulation is just getting started. The problem is that when the IND eventually does check, any non-compliance can result in penalties for both the company and its sponsored employees.
Most common mistakes
Despite the IND’s efforts to provide comprehensive information on the duties of Recognized Sponsors, many employers still struggle to fully grasp and implement these responsibilities. Based on our daily experience in the field we have identified the 3 most frequent mistakes made by Recognized Sponsors:
1. Failure to notify the IND about employment changes: Failing to inform the IND about things like salary cuts or the end of employment can cause problems, especially when companies delay reporting or assume it’s not required.
2. Misapplying salary thresholds: Staying compliant with salary requirements is trickier than it seems. Unauthorized deductions or benefits that don’t count toward salary thresholds can lead to compliance issues. Often Payroll providers are not aware of these restrictions either
3. Overlooking the Duty of Care: One of the most important—and often tricky—responsibilities for Recognized Sponsors. This means employers need to show they’ve hired the right person for the job, made sure the employee knows their rights and obligations, and upheld a high standard of responsible employership. Since there’s no official checklist or strict guidelines, this duty can be interpreted in different ways. As a result, some companies might not put as much focus on it as they should.
If companies fail to meet their responsibilities, they risk fines and penalties, which can lead to increased audits and scrutiny from the IND. Ongoing issues or failure to fix compliance problems could result in the IND suspending or even revoking Recognized Sponsorship status. This doesn’t just affect the company—it can also impact sponsored employees, who might lose their residence permits and be forced to find other options or leave the Netherlands.
Tips to work on being compliant
To stay on top of corporate immigration compliance, it’s crucial to take proactive steps. First, companies need to build internal awareness about what compliance entails. This involves making sure all relevant stakeholders understand their responsibilities under Recognized Sponsorship (include your payroll stakeholder too!). Often, the sponsorship process is handled by someone under pressure to quickly hire international talent, without deep expertise in immigration law. As a result, many companies don’t fully grasp what they’ve committed to.
Designating an employee or team to manage immigration compliance is another key step. Unlike other regulatory areas, Dutch immigration law offers little flexibility when mistakes are made. Even minor errors can have serious consequences, such as the revocation of an employee’s residence permit.
Also, arranging a compliance workshop or mock inspection with an external immigration expert can be extremely helpful. These professionals can pinpoint areas for improvement and provide practical advice on managing compliance risks.
Stay on top of the latest changes in immigration laws and regulations by regularly checking for updates. It might sound simple, but many Recognized Sponsors don’t do this consistently. Larger companies often have a dedicated account manager at the IND, and building a good relationship with them can be a big help. Subscribing to IND updates and connecting with professional networks or legal advisors specializing in corporate immigration can also keep you informed and ahead of any changes..
Looking Ahead
The Dutch government has ramped up inspections on Recognized Sponsors over the past few years, and with a new political push for stricter immigration controls, these checks are unlikely to ease up. Employers need to prepare for tighter rules, especially around tax benefits for expats and limits on Employer of Record (EOR) companies becoming Recognized Sponsors.
Housing is also becoming a bigger issue, with the ongoing shortage making it harder for companies to help new hires settle in. This adds another layer of complexity for companies looking to attract and retain international talent.
Given these challenges, Recognized Sponsors need to be vigilant about compliance and ensure they’re supporting their international employees. By staying on top of legal obligations, building strong internal processes, and maintaining good relationships with the IND, companies can create a smoother immigration experience and improve long-term retention of their global talent.
For further information on this topic and more, please contact the Sterling Lexicon immigration team at immigration@sterlinglexicon.com.