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Setting up a Business or Branch Office in the Netherlands?
On September 1, 2017, the social security treaty between the Netherlands and China will enter into force.
With regard to secondments from the Netherlands to China, a declaration may be applied based on which only the relevant Dutch legislation remains applicable. The treaty, however, is limited to coverage for unemployment (WW), state pension (AOW) and survivors’ pension (ANW).
For secondments from China to the Netherlands similar rules apply.
Under this new treaty an employee who is seconded from the Netherlands to China may remain partially subject to Dutch social security for a period of up to five years. The employee must have worked for the Dutch employer at least one month immediately prior to the secondment.
The treaty also applies to persons who can “derive rights” to the seconded worker (i.e. usually the family members who go with the employee to China) unless these people work in China themselves.
As a proof of application of the Dutch social security system, a CoC must be applied with the Sociale Verzekeringsbank (competent authority in the Netherlands). The CoC must be forwarded to the company in China where the employee is seconded. Subsequently, this company needs to send the CoC within six months after the start of the secondment to the Chinese Ministry of Social Security.
For the Netherlands the application of the treaty is limited to coverage for unemployment (WW), state pension (AOW) and survivors’ pension(ANW). For the other insurances (WLZ – long-term care, ZVW – health insurance, WIA – disablement benefits, ZW – sickness benefits and AKW – child benefits) the treaty is not applicable and the employee should in principle rely upon the Chinese social security system, which may differ by Chinese region.
It is advisable to conclude additional insurance, in particular for sickness and disability.
Employees who already work in China on September 1, 2017 can also benefit from the new treaty. The CoC must be requested for them on time, so that it can be submitted to the Chinese Ministry of Social Security before 1 March 2018.