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Since 1 June 2021, innovative startups can more easily attract employees from outside Europe through the pilot residence permit scheme for essential startup personnel. The scheme is intended for personnel essential for the further development of the startup. With this, the government aims to support the growth of innovative startups and strengthen their contribution to the Dutch knowledge economy.
Dialogic evaluated this pilot on behalf of the Research and Documentation Centre (WODC). The central question in this research was: To what extent is the pilot residence permit scheme for essential startup personnel effective and efficient?
To answer this question, we engaged with policymakers and implementers of the scheme, analysed data from the applications and applicants, and interviewed startups and stakeholders in the startup ecosystem.
Based on our research, we conclude that the residence permit scheme for foreign startup talent works well for the companies that make use of it. Startups can thus bring in international talent to grow faster. This talent would not be available in time through regular visa schemes. However, the overall impact on the Dutch economy is still limited. This is mainly because the scheme is still relatively unknown and startups perceive the mandatory employee participation as a high hurdle. Moreover, the application procedure for the government is complex and at around €3,000 per case, relatively expensive. Nevertheless, the scheme seems to be potentially cost-effective. Based on estimates of startup growth, the additional revenue from startups is expected to outweigh the costs of the scheme. However, it is noted that the growth depends on many more factors and the effect of this specific scheme cannot be proven in isolation.
Given these conclusions, we provide four recommendations:
- Increase the usage of the scheme. Invest in promoting awareness (targeted communication via key channels in the startup ecosystem) and simplify the application process for startups. Also, reconsider the implementation of the employee participation requirement to make the scheme more accessible, while retaining the intended policy goals.
- Invest in implementation capacity. Ensure sufficient capacity at the implementing agencies to cope with higher application pressure and keep processing times short. This will prevent startups from being discouraged by delays.
- Explore the possibility of a national certification for startups. Such a certification (as done in Italy) can reduce the administrative burden for IND/RVO and startups, lessen the need for a heavy employee participation requirement, and increase awareness of the scheme.
- Focus on structural monitoring. Establish systematic monitoring to gain better insights into the functioning and effects of the scheme. This enhances the learning capacity and enables targeted adjustments and interventions.
