To continue our chain of blogs about the risks of contracting as a self-employed sole trader in the Netherlands, we want to touch upon the WAADI registration requirement.
Apart from registering a business in the Chamber of Commerce and reporting foreign employees (or sole traders) to the authorities under the WagwEu act (see our blog: https://mazura.com/wagweu-the-dba-and-contracting-as-zzp-in-the-netherlands/) , everyone considering embarking on a compliant journey towards working as a ZZP in the Netherlands must also consider the WAADI requirement.
The WAADI act has been in effect since 2012 but is not widely known among foreign companies wanting to start business operations in the Netherlands.
What is even less considered is the fact that even sole traders need to have this registration in place.
When contractors are presented with the option of working as sole traders in the Netherlands by foreign recruitment agencies, this is sold as a straight-forward, simple and highest retention solution that can be set up within a week.
What is largely overlooked, is what exactly needs to be registered with the Chamber of Commerce apart from the obvious company name and address.
Since 2012, every company providing personnel to another business in exchange for payment, whether on a regular or occasional basis, must be registered as such in the chamber of commerce.
This is the meaning of the WAADI act: allocation of manpower by intermediaries, represented by a specific code of registration in the Chamber of Commerce.
In practice, the registration is simple and straightforward, but one needs to be aware of it in order to remain compliant and avoid risking fines for both your own and the client company.
When advised to register as any type of company entity in the Netherlands (sole trader, BV or otherwise), any contractor must also be advised to select the correct WAADI code for the registration.
Any recruitment agency looking to operate in the Netherlands must undergo the same registration process.
A true sole trader, working on their own and without outsourcing any part of the activities to another sole trader does not necessarily require a WAADI registration.
However, if any part of their activity is outsourced or taken over, even temporarily by another sole trader, a WAADI registration is required.
In another scenario where two sole traders are working under one company registration (either a BV, NV or a Maatschap) must absolutely register for WAADI in the chamber of commerce. For example: you and your partner are registered in the UK as a limited company and only one of you travels for an assignment in the Netherlands. Your limited company must not only fully register in the Netherlands but also obtain the WAADI registration, since you will be regarded as seconding workers to the Netherlands.
The client companies engaging with foreign recruitment agencies and/or sole traders are required by the local government to perform a check on whether the correct registration is in place.
The domestic client companies are well versed in these requirements and expect these to be fulfilled by domestic supplier companies, however in cases of foreign companies supplying workforce the requirement can be overlooked due to an extensive list of other compliance needs that need to be met. Unfortunately, this does not exempt any company in the business chain from potential fines.