For expats who work in the Netherlands, a settlement agreement (VSO) can be extra complicated. In addition to the usual topics such as severance pay and end date, international aspects often play a role: residency status, tax rules, and employment conditions that deviate from the standard.
In this article, we explain what expats should look out for in a VSO and which pitfalls they can avoid.
What is a settlement agreement?
A VSO is a termination agreement between employer and employee that sets out the terms of the dismissal. For expats, the same basic rules apply as for Dutch employees:
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It is always voluntary.
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You retain the right to unemployment benefits, provided the settlement agreement is drafted correctly.
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Almost all terms are negotiable.
Special considerations for expats
1. Residence status and work permit
For expats from outside the EU, dismissal can have consequences for the residence permit.
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Check whether your residence permit is linked to your employer.
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Discuss whether a transition period can be agreed in the VSO.
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Sometimes a longer notice period or extra compensation can help to buy time.
👉 Example: An expat from India had a residence permit tied to his employer. Through negotiations, he obtained an extra half year of continued pay, so that he had time to find a new employer and maintain his residence status.
2. Taxes and the 30% ruling
Expats can make use of the 30% ruling, a tax benefit for foreign employees in the Netherlands.
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Upon termination, this benefit may lapse.
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Negotiate compensation if this causes you to lose net income.
3. International employment conditions
Expats often have additional benefits, such as:
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Housing allowance
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School fees for children
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Airfare to the home country
Make sure these provisions are properly addressed in the VSO.
4. Repayment of expenses
Some employers include in the contract that certain costs (for example relocation or training costs) must be repaid upon early departure.
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Negotiate for these obligations to be waived.
5. Non-compete clause
A non-compete clause can be especially restrictive for expats who want to continue their career in the Netherlands. Make sure this is limited or removed.
Checklist: VSO for expats
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📄 Check the impact on your residence status and work permit.
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💶 Check whether your 30% ruling ends and ask for compensation.
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🏠 Pay attention to extra benefits (housing, school fees, travel costs).
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❌ Negotiate for repayment obligations to be waived.
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🔒 Look at non-compete and non-solicitation clauses.
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⚖️ Always have the VSO checked by an employment lawyer.
Common mistakes by expats
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Signing too quickly without advice, putting the residence status at risk.
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Not paying attention to the loss of the 30% ruling.
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Forgetting to claim extra benefits (housing, school fees).
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Forgetting that unemployment benefits (WW) also apply to expats, provided the VSO is correctly drafted.
Frequently Asked Questions (FAQ)
1. As an expat, am I entitled to WW with a VSO?
Yes, provided you meet the conditions and the VSO is drafted correctly.
2. What happens to my residence permit after termination?
That depends on your status. Often you must find a new job within a few months.
3. Can I keep my 30% ruling?
Only if you start with a new employer within three months.
4. Do I have to repay training or relocation costs?
Not always. This is negotiable in the VSO.
5. Does a lawyer help with expat matters?
Yes, precisely because of the additional legal and tax complexity.
Why Arslan Advocaten?
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Specialized in employment law and expat rights
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Experience with residence status and the 30% ruling
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Negotiating for higher compensation and retention of benefits
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Assisting with international contracts and disputes
Conclusion
For expats, a settlement agreement is often more complex than for Dutch employees. Think of residence status, tax benefits, and additional employment terms. Therefore, always have a VSO reviewed, so you can be sure that you are not only fairly compensated but also secure your future in the Netherlands.
