What is an Umbrella Company?

Umbrella Companies are used by recruiters and freelancers in the UK. An Umbrella Company offers the freelancer an alternative to a Limited Company (legal entity in the UK). They essentially serve as an ‘employer’ to contractors by providing the intermediary services between a recruitment agency or end client and the contractor who will be conducting the work. The umbrella company provides payrolling and invoicing services to the freelancers.

What kind of a services does an Umbrella Company offers?

These services are in The Netherlands known as Freelance Payrolling.

Services they usually offer are:

  • Immigration Services
  • Salary processing and invoicing
  • NEN certification, sometimes required by user companies for compliance issues
  • Arranging the highest Net Pay (30% facility)
  • Tax administration
  • Helpdesk for Dutch legal issues
  • Participation employee insurances
  • Participation StiPP Pension scheme

What are the advantages of a Umbrella Company?

As an employee of the Umbrella Company, the freelancer has access to various employee facilities such as continued payment of (part of) the wage in the event of illness, employee insurance for disability and unemployment and continued payment of wages during maternity leave. In addition, wage tax and national insurance contributions are already paid to the tax authorities as a type of withholding tax, and a pension scheme can be opted for.

An additional advantage is that the freelancer can also be eligible for the 30% ruling. This is only accessible to people with an employment contract and ofcourse meets the other conditions.

Does the client has a positive creditrating (think of a Creditsafe rating), than pre-financing the salary payments and payments to the tax authorities and, if applicable, the pension fund is also part of the service.

Does All About Expats offers Umbrella Services?

Yes and no.

For Highly Skilled Migrants outside the EU, EEA of Switzerland without a permanent Dutch residence permit All About Expats doesn’t offer Umbrella Services. Although All About Expats offers similar services, it is technically not an Umbrella Company. Umbrella Services is a service that in almost all cases acts as an intermediary that mainly regulates the invoicing and compensation of billable hours. In the Netherlands this service is called Freelance Payroll. By default, the wage payment obligation is excluded here, which means that if no hours are invoiced, no salary payment will take place.

All About Expats is of the opinion that the regulations concerning knowledge migrants from outside the EU, EEA of Switzerland and the services offered by traditional Umbrella Companies do not go together. Excluding the obligation to continue paying wages jeopardizes a current residence permit and will stand in the way of the application for a new residence permit. After all, there is a wage standard that must at least be achieved during the term of the employment contract.

All About Expats only works on the basis of fixed term agreements where wages are guaranteed during an assignment. This means that during the hiring assignment in the event of illness, public holidays and holidays, at least the standard wage will be paid on. With an Umbrella Company there is a risk that these hours will not be continued or paid at a lower value. This can have negative consequences for the right of residence of the highly skilled migrant and for the application of the 30% ruling.

Are you citizen of the EU, EEA of Switzerland or do you have an permanent Dutch residency, than we can offer you freelance payroll construction, which is 100% the same as the services of an Umbrella Company.