Recognition as a sponsor

Recognition as a sponsor

Companies regularly bring employees from abroad to the Netherlands. Recognition as a sponsor is mandatory if your company wants to apply for a residence permit for one of the following purposes of stay: highly skilled migrant, researchers within the meaning of Directive EU 2016/801, study, au pair, or exchange.

When do you apply for Recognition as a sponsor?

You can apply to the IND for Recognition as a sponsor as a company. The four categories for which Recognition as a sponsor can be used are employment, research, study, or exchange.

In case of employment, one could think of residence permits for employment with the purpose of being a knowledge migrant, performing work as an employee, seasonal employment, apprenticeship, transfer within a company or business, or residence in the case of a holder of the European Blue Card. With regards to research, one could request a residence permit for research with the purpose as referred to in Directive EU 2016/801. The category of study concerns residence permits with the purpose of study. Finally, the exchange category involves residence permits with cultural exchange or au pair as a purpose.

The conditions for Recognition as a sponsor

The following conditions apply when assessing the application for Recognition as a sponsor:

  1. Entry in the Trade Register;

Your company should be registered in the Trade Register.

  1. The continuity and solvency of your business is sufficiently assured;

This means that your company can meet all its financial obligations for an extended period (continuity) and that the company can absorb financial setbacks (solvency).

The Rijksdienst voor Ondernemend Nederland (RVO) can advise the IND on the continuity and solvency of a company. The RVO uses a point system of up to 100 points for start-ups. A starting entrepreneur is a company that has existed for less than one and a half years or has yet to perform business activities for one and a half years. The start-up must have at least 50 points for a positive opinion from the RVO. With sufficient points and thus a positive opinion, the company is recognised as a referent.

The points system consists of the registration at the Dutch Kamer van Koophandel (KvK) and the business plan. First, the RVO checks whether the company is registered with the KvK. It also looks at whether there have been changes of, for example, shareholders or partners since the application for Recognition as a sponsor, but also whether there has been a takeover, moratorium, or bankruptcy.

The business plan is then assessed. The RVO evaluates the business plan based on market potential, organization, and company financing.

When assessing the first criterion, market potential, the RVO looks at the product or service, and a market analysis is prepared. The product or service is evaluated according to its characteristics, application, market need, and unique selling points. The market analysis is qualitative and quantitative and focuses on its own specific business environment. The market analysis focuses, among other things, on potential customers, competitors, entry barriers, pricing policy, and risks.

Subsequently, the RVO assesses the second criterion, the company’s organization. The RVO considers the firm’s organizational structure and the distribution of competencies.

The last criterion, financing, is assessed by the RVO based on solvency, turnover, and liquidity forecast. It is essential that the company can absorb any future financial difficulties for three years (solvency). In addition, the turnover forecast must look plausible and must align with market potential. Finally – within three years – the cash flow from actual business activities should be positive (liquidity forecast).

  1. Your company is not bankrupt or has yet to be granted a moratorium;
  2. The reliability of the applicant or the natural or legal persons or undertakings directly or indirectly involved in the undertaking is sufficiently established;

The following examples serve to illustrate situations where the IND considers that there is no reliability:

  • If your company or the (legal) persons involved have gone bankrupt thrice a year before applying for Recognition as a sponsor.
  • Your company has received a tax offense penalty four years before applying for Recognition as a sponsor.
  • Your company has received three or more fines under the Aliens Act, Foreign Nationals Employment Act, or the Minimum Wage and Minimum Holiday Allowance Act in the four years preceding the application for Recognition as a sponsor.

In addition to the examples above, the IND can request a Certificate of Good Conduct (VOG) to assess reliability.

  1. Recognition as sponsor of the applicant or legal entities or companies directly or indirectly involved with that company within five years immediately preceding the application has been withdrawn;
  2. The applicant fulfills the requirements related to the purpose for which the foreign national is staying or wants to stay in the Netherlands, which may include adherence to and compliance with a code of conduct.

In addition to the above conditions that must be met, additional conditions for the categories research, study, and exchange exist.

The ‘Recognition as a sponsor’ procedure

If your company meets the described conditions, you can apply for Recognition as a sponsor with the IND by completing the ‘Recognition as a Sponsor’ application form. You will collect all the required documents and attach these to the application. The complete application, including the requested documents, must be send to the IND by post.

After you send the application for Recognition as a sponsor, you will receive a letter from the IND with the application fee. If you have paid for the application, the IND has 90 days to decide on your application. This decision period can be extended if your application is not complete or if additional investigation is required.

The IND will then decide on your application for Recognition as a sponsor. If your application is rejected, you can file an objection. If the company is recognised as a sponsor, you will be registered on the IND website in the Public Register of Recognised Sponsors. Your company will remain a referent until you terminate the Recognition or if you no longer meet the conditions.

The obligations of an authorised sponsor

As an authorised sponsor, you have the duty to inform. Under this duty, the authorised sponsor must notify the IND of any changes in the situation within four weeks. Changes can be related to the foreign national’s status and the recognised sponsor. These changes can be reported to the IND by using the notification form.

Additionally, as an authorised sponsor, you must keep information on the foreign national in your records. You must keep this information for five years from when you cease to be the authorised sponsor of the foreign national. As an authorised sponsor, you have an administration and retention obligation. You must be able to submit the information on the foreign national to the IND.

Furthermore, as an authorised sponsor, you have a duty of care toward the foreign national. For example, you must inform the foreign national of the conditions of entry and residence and other relevant regulations.

Also, as an authorised sponsor, you are responsible for the foreign national’s return. Since the foreign national sponsors his family member, you are not responsible for returning the foreign national’s family member.

Finally, the IND checks whether the authorised sponsor complies with their obligations. In this context, an administrative fine can be imposed, or the Recognition as a sponsor can be suspended or withdrawn by the IND.

The benefits of being recognised as a sponsor

If your company is recognised as a sponsor, this comes with some advantages. As a recognised sponsor, you have no obligation to submit a minimum or maximum number of applications per year. Moreover, you need to submit fewer supporting documents attached to your application form, and you can apply for residence permits online. Finally, the aim is to decide on a recognised sponsor’s application within two weeks. Thus, being recognised as a sponsor facilitates the process of applying for a residence permit for workers from abroad.

Our lawyers are experts in immigration law and are eager to provide you with advice. Do you need assistance with the application for Recognition as a sponsor or do you have any remaining questions after reading this article? Our lawyers at Law & More are more than willing to help you.

Law & More