Management agreements under Dutch law: rules and risks

A management agreement (managementovereenkomst) is a contract under which one party manages a business, a property portfolio or another asset for the owner, without becoming an employee. Under Dutch law it is normally a contract for services (overeenkomst van opdracht, Article 7:400 of the Dutch Civil Code, BW), but if the cooperation in practice meets the statutory definition of employment, it is an employment contract, whatever the document says.

That qualification risk is the main legal issue, and it has become more pressing since the tax authorities resumed enforcement against false self-employment in 2025. The second issue is termination: Dutch law allows the client to end a contract for services at any time, unless the parties have validly agreed otherwise. Below we explain the legal framework, the clauses that decide the outcome, the overlap with a statutory directorship and how a management agreement ends.

What is a management agreement under Dutch law?

The Dutch Civil Code has no chapter on management agreements. Almost every management agreement falls within the rules on contracts for services in Articles 7:400 to 7:413 BW, which apply to work performed for another party otherwise than under an employment contract.

A handful of provisions apply automatically, whether or not the contract mentions them. The manager must act with the care of a good contractor (Article 7:401 BW) and must follow timely and reasonable instructions from the client about the performance of the work (Article 7:402 BW). That duty is not the same as being subject to authority in the employment sense. The manager must keep the client informed and account for the way the work was carried out and for any money that passed through his hands (Article 7:403 BW). Where the assignment was given with a particular person in mind, that person must carry it out (Article 7:404 BW). These default rules matter because they fill the gaps that even a long contract leaves open.

In most Dutch arrangements, the manager does not contract personally but through a management company: a private limited company (BV) of which the manager is director and shareholder. The agreement is then concluded between the client and the management BV, and the individual is named as the person who will actually perform the work. That structure has advantages, but it does not by itself prevent the relationship from being classified as employment, and it does not by itself shield the individual from liability.

A management agreement also raises questions of VAT and, where the manager is director and shareholder of his own company, of the customary salary rules. Law & More does not advise on tax. Those questions are for a tax adviser and should be settled at the same time as the contract, not afterwards. This article deals with the legal side.

Where are management agreements used?

The three main settings are property management, artist and talent management, and corporate or interim management. The legal framework is the same, but the drafting has to follow the setting.

Property management

The most common form is the property management agreement, under which an owner or investor delegates the running of let property to a professional manager. The scope typically covers finding and screening tenants, concluding and administering leases, collecting rent and chasing arrears, arranging maintenance and repairs, carrying out inspections and reporting periodically on income and expenditure.

Two Dutch points deserve attention. First, a manager who concludes leases and gives notice on behalf of the owner acts under a power of attorney (volmacht), so the scope of that authority must be recorded precisely. If the manager exceeds it, the owner may still be bound towards a tenant who reasonably relied on the appearance of authority that the owner created (Article 3:61(2) BW). Second, residential tenancy law is largely mandatory. An owner cannot instruct a manager to agree terms that the law does not permit, and a manager who receives such an instruction must refuse it.

Artist and talent management

In the creative sector, the manager represents the artist commercially: negotiating performance and recording contracts, handling publishing and image rights, and shaping the longer-term direction of a career. The fee is usually a percentage of the income the artist earns during the term.

The points that cause disputes are predictable. Which income streams does the commission cover, and does it continue after the agreement ends for contracts concluded during it? Does the manager have authority to sign on behalf of the artist, or only to negotiate? What happens to rights and recordings created during the term? Because the artist is often an individual rather than a business, the rules on unfair terms and the limits set by reasonableness and fairness carry real weight. Long exclusive terms with automatic renewal are exactly the kind of clause a court will look at closely.

Corporate and interim management

In the corporate setting, a shareholder, a board or an investor engages an external party to run the company or a division, often during a transition, a turnaround or a period between permanent appointments. Here the management agreement most often overlaps with company law, because the manager may also be appointed as statutory director. That is a separate relationship with its own rules, which we discuss below.

Which clauses decide the outcome?

The clauses that matter most are the scope of services, the fee, the manager’s authority, liability, data protection, non-competition and the term. They determine what happens when the relationship comes under strain.

Scope of services

Describe what the manager will do, how often and to what standard, specifically enough that a third party could tell from the document whether the work has been done. “Conduct quarterly inspections and report in writing within two weeks” is a workable obligation; “manage the property professionally” is not.

The scope also marks the outer edge of what the manager is engaged to do, and therefore of what he can be held liable for failing to do. A scope left vague in the hope of flexibility tends to be read, after something has gone wrong, as covering whatever was omitted.

Fee and expenses

Dutch law only provides that the client owes a fee, a customary or reasonable one if none was agreed, and must reimburse the costs the manager incurred in performing the work (Articles 7:405 and 7:406 BW). Everything else is for the parties.

The models used in practice are a fixed periodic fee, a percentage of revenue, and a variable element linked to agreed targets. Whichever you choose, define the base precisely. Percentage arrangements founder on the difference between gross and net, on whether the percentage applies to invoiced or collected amounts, and on which items count as costs. Target-linked fees founder on targets that cannot be measured or that depend on factors outside the manager’s control. Record who calculates the figures, on what data, and what happens if the parties disagree.

Authority and powers

State which commitments the manager may make alone. The usual solution is a threshold: expenditure and obligations below an agreed limit are for the manager, and above it the owner’s written approval is required. Certain matters are normally reserved regardless of value, such as litigation, engaging staff and anything that binds the owner beyond the term of the agreement.

Two cautions apply. Internal limits do not automatically bind the outside world: if the manager holds a power of attorney and exceeds an internal limit, a counterparty who did not know and did not need to know of that limit may still hold the owner to the deal. The owner then has a claim against the manager, not a way out of the contract. And where the manager is also a statutory director, the director’s power to represent the company is unlimited towards third parties; internal restrictions only bind the director himself (Article 2:240(3) BW).

Liability, exclusions and indemnities

A manager who fails to perform is liable for the resulting damage under ordinary contract law. Contracts usually adjust that with a limitation of liability, an exclusion of indirect and consequential loss, and an indemnity for third-party claims arising from the proper performance of the work.

Such clauses are valid in principle, but not unconditionally. A court can set aside a limitation of liability where relying on it would be unacceptable under the standards of reasonableness and fairness, which it will readily do in cases of intent or gross negligence. Where the clause appears in general terms and conditions, a further layer of control applies, and where the other party is a consumer, the standards are stricter again. An indemnity should therefore be limited to acts performed in good faith within the scope of the assignment, and should exclude intent and gross negligence expressly. That makes the clause more robust, not less.

Insurance belongs in the same discussion. Professional indemnity cover for the manager, and directors’ and officers’ (D&O) cover where a statutory directorship is involved, often do more practical good than a paragraph allocating a risk that neither party can carry.

Confidentiality, data and the GDPR

A manager almost always handles personal data belonging to the client, such as tenant files, staff records or customer databases. Where the manager processes those data on the owner’s instructions and for the owner’s purposes, the owner is the controller and the manager a processor, and the GDPR requires a written data processing agreement (Article 28 GDPR).

That agreement covers the subject matter and duration of the processing, security measures, the use of sub-processors, assistance with the rights of data subjects, the handling of data breaches and what happens to the data when the arrangement ends. Where the manager determines its own purposes, for example by using the data for its own commercial activities, it is a controller in its own right and the analysis changes. Settle this at the outset. A confidentiality clause is no substitute: confidentiality protects the client, whereas data protection law protects the people whose data are processed.

Non-competition and client protection

The strict statutory rules on non-competition clauses in employment contracts (Article 7:653 BW) do not apply to a contract for services. The parties are largely free to agree what they wish, within the limits of reasonableness and fairness and competition law.

A clause that is unreasonably wide in scope, duration or geography can be moderated or set aside. In practice, a clause that protects the specific relationships and information the manager gained through the assignment is enforceable; a clause that simply prevents an experienced professional from working in his own sector for years is not. Note the reverse risk too: an unusually strict non-competition and instruction regime is one of the features that makes a court more inclined to see an employment relationship.

Term, renewal and exit

Make the term a deliberate choice. A first term of one year with an agreed extension gives both sides a genuine opportunity to reconsider. Automatic renewal for another long period, terminable only in a narrow window, produces the most complaints and is most often forgotten until it has already rolled over.

The contract should set out the notice period, the form in which notice must be given, what happens to work in progress, how the final account is drawn up, and the obligations that survive termination: normally confidentiality, the return of records and data, and the transfer of files needed to keep running the asset. Dutch law has its own rules on termination, which we discuss below.

Is it a contract for services or an employment contract?

If the manager in practice performs work personally, for pay and under the client’s authority, the agreement is an employment contract under Article 7:610 BW. The label the parties chose does not decide the matter.

The Supreme Court (Hoge Raad) settled that point in 2020: what the parties intended to call their arrangement plays no role in the qualification. What matters is the rights and obligations they agreed, and whether those meet the statutory definition. In its Deliveroo judgment of 24 March 2023 (ECLI:NL:HR:2023:443), the Supreme Court explained how that assessment is made. All the circumstances of the case must be weighed together, including the nature and duration of the work, how the work and working hours are determined, whether the worker is embedded in the client’s organisation, whether the work must be performed personally, how the contract came about, how the remuneration is determined and paid and its amount, and whether the worker runs commercial risk. Whether the person also behaves as an entrepreneur in other respects, for example by working for several clients, building a reputation and investing, may also count. No single factor is decisive.

Applied to a management agreement, some features point towards a contract for services: working for several clients, bearing genuine commercial risk, being free to organise the work, being allowed to send a substitute and invoicing on commercial terms. Other features point towards employment: fixed monthly payments regardless of results, integration in the organisation, an obligation to be present at set times, a duty to follow instructions that go beyond the content of the assignment, continued payment during illness and holidays, and a single long-standing client.

Enforcement has resumed

The Tax and Customs Administration (Belastingdienst) ended its enforcement moratorium on 1 January 2025 and has enforced the rules on false self-employment again since that date, without retroactive corrections for earlier periods. During 2025 a transitional approach applied to parties who could show they were actively bringing their arrangements into line. The underlying rules did not change: they are simply being applied again.

The legislative picture is still moving. The act introducing a legal presumption of employment for self-employed workers paid below a set hourly rate (EUR 38 at the reference date of 1 January 2026) was adopted and published in the Bulletin of Acts and Decrees (Staatsblad) on 29 June 2026 (bill 36.783). It enters into force on a date to be set by royal decree, so check that date before relying on it. Until then, the assessment described above applies.

The consequences of getting this wrong fall mainly on the client. Reclassification can mean payroll taxes and social security contributions being levied, pension obligations and dismissal protection. A relationship the client believed it could simply end may then require the permission of the Employee Insurance Agency (UWV) or a decision of the subdistrict court (kantonrechter). Our guide to Dutch employment law sets out that protection in more detail.

What if the manager is also a statutory director?

Then there are two relationships that end in different ways: the appointment as director under company law, and the management agreement under contract law. The drafting must keep them apart and link them expressly.

The body that appoints a director of a BV, normally the general meeting, may suspend and dismiss that director at any time (Article 2:244 BW). That power cannot be contracted away, and no notice period in a management agreement changes it. What a dismissal decision does not automatically do is end the contract under which the manager is paid, and this is where careless drafting becomes expensive.

Where an individual is both director and employee, Dutch case law holds that a valid dismissal as director in principle also ends the employment relationship, unless a statutory prohibition on termination applies (for example during illness) or the parties have agreed otherwise. Where the manager is engaged through a management BV, the dismissal ends the directorship but leaves the management agreement in place until it is terminated in accordance with its own terms or the law. A well-drafted agreement therefore states what happens to the assignment if the appointment ends, and on what terms.

Liability deserves the same care. A director who performs his task improperly can be held liable to the company where a serious reproach can be made (Article 2:9 BW). A management BV does not shield the individual behind it from that exposure, nor from liability towards third parties in cases of serious personal fault. D&O insurance and a clear division between the tasks performed as director and those performed under the assignment are the practical answers. Our overview of Dutch corporate law explains the wider framework.

How does a management agreement end?

Under Article 7:408 BW, the client may terminate a contract for services at any time, while a professional manager may only terminate an agreement for an indefinite period or for compelling reasons. Where the client is a business, the parties may limit or exclude the client’s right to terminate in the contract.

This is where Dutch law departs most sharply from the Anglo-American templates that many management agreements are copied from. The client’s right to terminate exists by law. Only where the client is a consumer is it mandatory (Article 7:413(2) BW). Between businesses, a fixed term or a notice period in the contract can therefore restrict the client’s right to terminate, but it must be drafted clearly. A vague clause will be read against the background of the statutory rule that the client may terminate at any time.

The manager is in a different position. A manager who took on the assignment in the course of a profession or business may only terminate if the agreement is for an indefinite period and does not end on completion, or if there are compelling reasons (gewichtige redenen).

Termination is not free of consequences. Where the fee depends on completion of the work and the assignment ends earlier, the manager is entitled to a reasonable part of the fee (Article 7:411 BW). A long-term agreement for an indefinite period can normally be terminated, but reasonableness and fairness may require a sufficient notice period or compensation, particularly where the manager has made substantial investments or depends heavily on this one client. A clear notice period and a clear settlement clause reduce the risk for both sides, because they replace an argument about what is reasonable with a rule the parties chose.

Termination for breach

A party faced with a serious failure by the other may dissolve the agreement (Article 6:265 BW), in most cases only after giving written notice of default (ingebrekestelling) with a reasonable period to put things right. Skipping that step is the most common reason that a dissolution turns out to be unlawful, leaving the terminating party liable for damages.

If performance is falling short, record it, set a deadline in writing, and only then act. Where the arrangement has in reality become employment, none of this applies and the stricter dismissal rules do; our article on how to terminate employment in the Netherlands sets out that route.

Two practical points are worth settling in advance. First, decide what happens on the day notice is given: does the manager continue to work through the notice period, or does his authority end while the fee runs on? For a manager holding a power of attorney over money and property, the second is often safer. Second, agree how the handover works: which records, keys, passwords, accounts, contracts and data must be transferred, in what form and by when. A manager who leaves holding the administration of a portfolio has considerable leverage, and the moment to remove that leverage is when the contract is signed.

What happens if the asset is sold?

A management agreement does not automatically follow the asset. Transferring a contract as a whole requires a deed and the cooperation of the other party (Article 6:159 BW), and without it the seller remains bound.

In a share sale, the company itself usually remains the contracting party, so the agreement continues. That is why a buyer should review it during due diligence and why change of control provisions belong in the drafting. In an asset sale, the seller is left with an agreement to manage something it no longer owns, and the only way out is termination on the contractual or statutory grounds. Decide in advance what a sale means for the assignment.

How do you draft an agreement that holds?

Describe accurately what the parties actually intend to do, in plain and concrete language, and make sure daily practice matches the document. A contract contradicted by daily practice is worth very little.

Dates, quantities, thresholds and deadlines are worth more than adjectives, and an obligation that cannot be tested is not an obligation. Define how performance will be measured, in terms that both sides can verify from records that already exist. Targets that depend on data only one party holds cause conflict rather than prevent it. Set out how the parties will deal with a disagreement before one arises: who talks to whom, within what period, and whether a step such as independent advice on the contract or mediation comes before proceedings.

Review the arrangement periodically, particularly where a temporary engagement has quietly become permanent. The longer a single client relationship lasts, the more the qualification question presses.

Finally, be careful with international templates. Clauses on indemnification, termination for convenience and governing law are drafted for legal systems that allocate risk differently, and provisions that make sense elsewhere may be unenforceable, superfluous or harmful under Dutch law. The reverse also holds: the statutory rules on contracts for services apply whether or not the contract mentions them.

In summary

• A management agreement is normally a contract for services under Article 7:400 BW, but it becomes an employment contract if the practice meets Article 7:610 BW.
• Since 1 January 2025, the Belastingdienst enforces the rules on false self-employment again; a new presumption of employment below EUR 38 per hour awaits entry into force.
• Define scope, fee, authority, liability and data protection precisely; internal limits do not bind third parties.
• The client may terminate at any time under Article 7:408 BW, unless a business client has validly agreed otherwise; always give notice of default before dissolving for breach.
• A dismissal as statutory director does not automatically end a management agreement with a management BV: link the two in the contract.

Frequently asked questions

Law & More drafts and reviews management agreements for owners, investors, companies and managers, assesses the risk of reclassification as employment and advises on termination and disputes.

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