Are You a Statutory Director in the Netherlands?

Special thanks to GMW lawyers for this practical, helpful article.

Many expats who move to the Netherlands for a director or managing director role assume it’s mostly a matter of job title. In their home country, that’s often true. In the Netherlands, though, that title can hide two very different legal positions. And the difference matters a lot if you get sick, face a reorganisation, or run into conflict with your shareholder.

It all comes down to one question: are you simply an employee with a nice job title in the Netherlands, or are you legally a statutory director (statutair bestuurder)?

Title vs Formal Appointment

“Director” is often just a job title on your business card or in your contract. Legally, you’re then simply an employee, with all the protection of regular Dutch employment law. That means your employer needs a valid reason to end your contract, plus approval from the UWV or a court decision.

A statutory director is something different. This is someone formally appointed by the general meeting of shareholders (or another authorised body) and registered as such with the Dutch Chamber of Commerce (KvK). That appointment makes you a director under corporate law. If you also have an employment contract, you’re also an employee. In that case, you have two separate legal relationships: one under corporate law (your appointment as director) and one under employment law (your contract).

This distinction matters especially for expats, because “director” titles used abroad don’t always match the Dutch concept of statutory director. A “VP” or “Managing Director” at an international group is often not formally appointed as director of the Dutch entity. On the other hand, someone with a modest title might actually hold that formal appointment and therefore have that status.

Why This Matters: Dismissal Works Differently

For a statutory director, Dutch law has an important exception to the usual dismissal rules. A valid dismissal decision by the shareholders normally ends both your role as director and your employment contract at the same time. You do not need a separate UWV procedure or court case. This follows from long-standing Dutch Supreme Court case law.

There are exceptions to this rule. If a legal ban on dismissal applies, for example during illness, or if the parties agreed something different, the dismissal decision does not automatically end the employment contract either. In that case, a separate step is also needed to end the employment relationship.

Example

A good example is a 2019 ruling by the Rotterdam District Court. A statutory director who had been ill for a long time was dismissed as director by the shareholder, without a separate step to end his employment contract. Because a legal ban on dismissal during illness applied at the time, the court ruled that the dismissal decision ended only his role as director; his employment contract continued. The employer could not end the entire relationship with a single decision.

In that same case, the employer also handled the director’s illness and reintegration poorly, and it handled the dismissal decision poorly and failed to communicate it clearly. He wasn’t given the chance to give his opinion beforehand, and it took months of unclear communication afterwards. The court found this to be serious employer misconduct. As a result, the director, who had asked the court to end the contract, was awarded fair compensation of €400,000 gross.

Read Also: Fixed-Term Contracts in the Netherlands: A Guide for Expats

What Does This Mean in Practice?

If you’re not a statutory director (title only, no formal appointment):

Regular Dutch dismissal law applies in full.
Your employer needs UWV approval or a court ruling to end your contract.
You may be entitled to a transition payment and, if your employer acted unfairly, additional fair compensation.

If you are a statutory director in the Netherlands:

A valid dismissal decision by the shareholders normally ends both your directorship and your employment contract right away, without a separate UWV or court procedure.
The correct process still has to be followed (the right corporate decision, being consulted, a fair hearing). If not, you can still challenge the dismissal or bring a claim for damages.
If a legal ban on dismissal applies (such as during illness) or different arrangements were agreed, your employment contract keeps running until it’s properly ended through a separate step or a court decision.
A statutory director can also still claim a transition payment, a contractual severance payment, or fair compensation if the dismissal was handled carelessly or unfairly.

What Should Expats Specifically Check?

If you’re offered a “director” role in the Netherlands, it’s worth getting clarity on the following before you sign:

Am I actually being appointed as statutory director (shown in the shareholder decision and the KvK registration), or is director just a job title?
What does my employment contract say about the link between my director appointment and my employment? Is there a separate severance arrangement, and exactly when does it apply?
Do I know what happens if I get sick while I’m a statutory director in the Netherlands? As the Rotterdam case shows, a legal ban on dismissal during illness can stop your employment contract from ending automatically.

Pro Tip: Before taking on a director role in the Netherlands, get legal clarity on whether you’ll become a statutory director or simply an employee with a director title. That question decides how much protection you have, how your contract can be ended, and what compensation you can claim if things go wrong. Getting this wrong from the start often leads to unnecessary disputes, uncertainty, and sometimes significant costs for the employer.

GMW lawyers – Experts in Employment Law

Do you need legal advice? Contact our team of English-speaking employment lawyers for assistance. Call us at 070 361 5048 or send us an e-mail. We can work it out!

Written by Anja Blijham from GMW lawyers.