An umbrella company is a payroll organization in the Netherlands which can offer services for foreign companies with employees which are stationed in the Netherlands. The payroll organization will act as the formal employer, which means that they will take over the whole staff and salary administration and other services as taxation and legal issues pertaining to employing workers.
You (as a foreign company) don’t want to work with a Dutch payroll organization?
Then you will be responsible for a number of official documents and administrative obligations. For example, there are some required documents which you will have to ensure on behalf of your (prospective) employees. Think about the residence permit, work permit, visa (for employees outside the EU) and the citizen service number.
There are also some administrative obligations which are important, such as the income tax, health insurance and the social security premiums.
After all, it’s so much work what you have to do for an employee without an umbrella company. And because of that reason is why we think it is highly adviseble to make use of these Dutch payroll organizations and their services.