Dutch law explained for expats and international businesses

Dutch law is codified law: for most questions the starting point is a statutory provision, not a line of earlier judgments. Private life and commerce are governed mainly by the Dutch Civil Code (Burgerlijk Wetboek, BW), crime by the Criminal Code (Wetboek van Strafrecht, Sr), and the relationship between citizen and government by the General Administrative Law Act (Algemene wet bestuursrecht, Awb); court decisions interpret those codes but do not create binding precedent in the common-law sense.

For internationals and foreign businesses, four areas account for most questions: employment law, which strongly protects employees; immigration law; the rules on companies and their directors; and contract law, in which Dutch courts give considerable weight to what the parties could reasonably expect of each other. Below we introduce each area and point out where the practical risks lie.

What are the key principles of the Dutch legal system?

The Netherlands has a civil law system based on written codes. Parliament makes the law, the courts apply and interpret it, and European Union law and international treaties take precedence over national law.

The constitutional framework

The Dutch Constitution (Grondwet) sets out fundamental rights and the structure of the state. One feature often surprises foreign lawyers: under Article 120 of the Constitution, courts may not review Acts of Parliament against the Constitution. They can, however, test national law against international treaties and EU law, and under Article 94 of the Constitution they must set aside national rules that conflict with directly applicable treaty provisions, such as those of the European Convention on Human Rights. In practice, European law therefore plays a large role in Dutch courts.

Private law and public law

Dutch law distinguishes clearly between private law and public law. Private law governs relationships between individuals and companies, such as contracts, property, employment, family relationships and liability. Public law governs the relationship with the government, including administrative law, tax law and criminal law.

The distinction determines which court you go to and which procedure applies. A dispute with your landlord or employer goes to the civil court. A dispute about a permit, a benefit or a fine from a government body usually starts with an objection (bezwaar) to that body, followed by an appeal to the administrative court. The deadline for objection is generally six weeks under Article 6:7 of the Awb, and missing it usually means losing the case.

Reasonableness and fairness

Dutch courts apply codified rules, but they also have room to reach fair results. Under Article 6:248 of the Dutch Civil Code, a contract has the effects that the law, custom and the requirements of reasonableness and fairness (redelijkheid en billijkheid) entail, and a contractual term does not apply to the extent that applying it would be unacceptable by those standards.

The same approach applies to the interpretation of contracts. Since the Haviltex judgment of the Supreme Court (Hoge Raad) in 1981, the question is not only what the words say, but also what the parties could reasonably infer from each other’s statements and conduct. In commercial contracts between professional parties the wording carries more weight, but it is rarely the only factor. This is different from strict literal interpretation in some common law countries, and it matters when you draft or rely on a contract.

How the courts are organised

Most cases start at one of the eleven district courts (rechtbanken). Smaller claims, employment and tenancy cases are heard by the subdistrict court (kantonrechter), a section of the district court where you do not need a lawyer. Appeals go to one of the four courts of appeal (gerechtshoven), and appeals on points of law to the Supreme Court. Judgments of the Supreme Court are not formally binding on lower courts, but they are followed in practice. For international commercial disputes, the Netherlands Commercial Court in Amsterdam hears cases in English if the parties agree.

What employment rules should expats know?

Dutch employment law applies to everyone who works in the Netherlands under an employment contract, whatever their nationality. It offers strong protection against dismissal and sets minimum standards that cannot be waived by contract.

Fixed-term and permanent contracts

An employment contract is either for a fixed term (tijdelijk contract) or for an indefinite period (vast contract). Under Article 7:668a BW, a chain of fixed-term contracts becomes permanent from the fourth contract, or once the chain has lasted more than 36 months. Contracts count as one chain if the interval between them is six months or less. A collective labour agreement (cao) can deviate from these rules in certain sectors.

A probationary period (proeftijd) is subject to strict limits under Article 7:652 BW. It must be agreed in writing and is not allowed in a contract of six months or less. For a fixed-term contract of more than six months but less than two years it is at most one month, and for a longer fixed-term contract or a permanent contract at most two months. During the probationary period either party can end the contract with immediate effect.

Minimum standards and dismissal protection

Expats have the same rights as Dutch employees. These include the statutory minimum wage, which has applied per hour worked since 1 January 2024, maximum working hours under the Working Hours Act (Arbeidstijdenwet), at least four times the weekly working hours in paid holiday per year, a holiday allowance of at least 8 per cent, and continued payment of at least 70 per cent of wages for up to two years of illness. Basic health insurance is compulsory for anyone who lives or works in the Netherlands.

An employer cannot simply dismiss an employee on a permanent contract. It needs a reasonable ground under Article 7:669 BW, such as redundancy, long-term illness or poor performance, and permission from the Employee Insurance Agency (UWV) or a decision of the subdistrict court, unless the employee agrees to termination in a settlement agreement (vaststellingsovereenkomst). If the employer ends the contract, the employee is in principle entitled to a transition payment (transitievergoeding) of one third of a monthly salary for each year of service under Article 7:673 BW. Dutch law also prohibits discrimination on grounds such as nationality, sex, age, disability and working hours.

Work permits

Nationals of the EU, the EEA and Switzerland can work in the Netherlands without a permit. The rules are set out in the Aliens Act 2000 and the Foreign Nationals Employment Act (Wet arbeid vreemdelingen). Others usually need a residence permit that allows work, and often the employer needs a work permit or must be a recognised sponsor with the Immigration and Naturalisation Service (IND). The most common route for qualified staff is the highly skilled migrant scheme, which requires a recognised sponsor and a salary above a threshold that is adjusted every year. There are also special schemes for researchers, graduates and intra-corporate transferees. Tax facilities for incoming employees fall outside our practice; for those, consult a tax adviser.

What legal duties do companies have?

A Dutch company must be registered with the Netherlands Chamber of Commerce (Kamer van Koophandel, KvK), keep proper accounts, file annual accounts and comply with sector-specific rules. Its directors can be personally liable if they fail in their duties.

The BV and the NV

Most businesses operate through a private limited company (besloten vennootschap, BV); larger listed companies often use a public limited company (naamloze vennootschap, NV). A BV is incorporated by notarial deed and has no minimum capital requirement. The shareholders appoint the board, and the articles of association (statuten) can be tailored to a large extent. A foreign parent company can own all the shares; there is no requirement for local shareholders or local directors.

Dutch companies can have a two-tier board, with a management board (bestuur) and a separate supervisory board (raad van commissarissen), or a one-tier board, in which executive and non-executive directors sit on a single board. Large companies that meet certain thresholds must apply the large company regime (structuurregime), which gives the supervisory board additional powers.

Reporting and compliance

Companies must keep accounts and file their annual accounts with the KvK; the level of detail depends on the size of the company. They must also register their ultimate beneficial owners (UBO) in the UBO register. Other obligations depend on the business, for example data protection under the General Data Protection Regulation (GDPR), anti-money laundering rules under the Money Laundering and Terrorist Financing Prevention Act (Wwft) for financial and certain other institutions, and environmental rules under the Environment and Planning Act (Omgevingswet), which has applied since 1 January 2024.

Directors’ liability

Directors are liable towards the company for serious mismanagement under Article 2:9 BW. In a bankruptcy, directors can be held jointly and severally liable for the deficit under Article 2:248 BW (Article 2:138 BW for an NV) if they clearly failed to perform their duties properly and this was an important cause of the bankruptcy. If the company did not keep proper accounts or file its annual accounts on time, improper management is presumed. Careful records and timely filing are therefore a basic form of protection.

How are contract and commercial disputes resolved?

Most disputes are settled by negotiation, sometimes with the help of a mediator. If that fails, the parties go to court or, if they have agreed on it, to arbitration.

Before starting proceedings, a creditor usually sends a formal letter of demand (sommatie) and, where required, a notice of default (ingebrekestelling). In urgent cases a party can ask for a provisional decision in summary proceedings (kort geding), often within weeks. Claims for payment under a contract are generally time-barred after five years under Article 3:307 BW, but shorter periods apply to some claims, and a buyer must complain about defects within a reasonable time after discovering them. The Dutch Arbitration Institute (NAI) and other bodies offer arbitration, which is private and final, but usually more expensive than going to court.

Keep in mind that Dutch courts apply the principles of reasonableness and fairness, and look at what the parties could reasonably expect. A well-drafted contract, with clear general terms and conditions that are properly made available to the other party, prevents many disputes.

What should you know about property and renting?

There are no restrictions on foreigners buying property in the Netherlands. The transfer always takes place by notarial deed and is registered in the Land Registry (Kadaster).

A consumer who buys a home has a statutory cooling-off period of three days after receiving the signed purchase agreement, under Article 7:2 BW. The seller has a duty to disclose known defects, and the buyer has a duty to investigate. Transfer tax and other tax aspects of property investment fall outside our practice.

Tenants of residential property enjoy strong protection. The landlord can only terminate a lease on the grounds listed in the law, such as urgent own use, and ultimately only the court can end it. Since 1 July 2024, residential leases are in principle entered into for an indefinite period, and the Affordable Rent Act (Wet betaalbare huur) extended rent regulation to many mid-range homes. Commercial leases follow separate rules, with specific protection for retail and restaurant premises.

What about personal and family matters?

If you live in the Netherlands, Dutch law often applies to your personal and family matters too. Which law applies in an international situation is determined by EU rules and treaties on private international law.

Marriage, divorce, child custody and names are regulated in Book 1 of the Dutch Civil Code. For couples who married on or after 1 January 2018, the statutory matrimonial property regime is a limited community of property: assets acquired before the marriage generally remain separate. Couples with an international background should check which law governs their marriage, because this is not necessarily Dutch law. Names can also be changed in certain cases; our article on changing your first name in the Netherlands explains that procedure.

In summary

• Dutch law is codified; courts interpret the codes, apply reasonableness and fairness, and give priority to EU law and treaties.
• Employment law protects employees strongly: fixed-term chains become permanent from the fourth contract or after 36 months, and dismissal needs a reasonable ground and permission.
• Companies must register with the KvK, keep proper accounts and file annual accounts; directors can be personally liable in a bankruptcy.
• Contracts are interpreted by what parties could reasonably expect, not only by their wording.
• Foreigners may buy property freely, and residential tenants enjoy strong protection against termination.

Frequently asked questions

Law & More advises internationals and foreign businesses on Dutch employment, corporate, contract, real estate and immigration law, in English and Dutch. Unsure where you stand? Tell us about your situation. We will let you know your options within one working day.