The director-major shareholder and employee insurance schemes

When are you a DGA?

As a director-major shareholder (directeur-grootaandeelhouder, DGA), you are the director of a company that is a legal entity. This can be a BV (private limited company) or an NV (public limited company), or a foreign legal personality, such as a GmbH or a Ltd established in the Netherlands. You are named in the deed of incorporation (akte van oprichting). Or you were appointed in the general meeting of shareholders, or by the board of supervisors. You are registered in the Business Register as director of a legal entity. You own at least 5% of your company's shares with voting rights.

You are not a DGA or director if you own an eenmanszaak (sole proprietorship) or are a partner in a VOF (general partnership).

Mandatory insurance for employees

Do you want to know whether mandatory insurance applies to you? Then consider the main rule: employees are covered by mandatory employee insurance. A director is considered to be employed by a legal entity if there is work, salary, and a relationship where the legal entity has authority. The legal entity then pays contributions for the following employee insurance schemes:

Do you work for the operating company through a personal holding company with a contract of assignment (management agreement)? Then you may also be employed. But there is another step to follow to seee if you are subject to mandatory employee insurance

Are you covered by compulsory insurance as a DGA?

Are you a director-major shareholder as described in the Regeling aanwijzing directeur-grootaandeelhouder 2016 (director-major shareholder designation regulations 2016, in Dutch)? Then you are excluded from the mandatory employee insurance schemes.

Assessment by UWV

Can you not work it out yourself? Then ask UWV to provide clarity about your insurance obligation for employee insurance. Ask for a Beschikking inzake verzekeringsplicht (Order on insurance obligation). You can do this by calling 088 898 92 94. The UWV will assess your situation and issue a decision.

The legal entity can also apply for an Order on your insurance obligation. This must be done at the Tax Administration of the region where the company is located. The UWV and the Tax Administration use the same assessment criteria to determine if a person is compulsorily insured for employee insurance.

Assessment criteria

When making the assessment, the UWV or the Tax Administration look at several issuess:

• The control you have over your dismissal. For example, do you have a minority stake and no say over your dismissal? Then you may be covered by mandatory insurance. Do you not want this? Then consult a civil-law notary. A legal entity may issue shares with special rights, for example, letter shares. Record that only the holder of those shares can decide on your dismissal.
• The content of your management agreement, service agreement, or advisory agreement. These are engagement agreements. Preferably, they do not contain elements of an employment agreement. Consider the relationship of authority. Get help from a legal adviser if you want to draw up an assignment agreement.

Arrange your own insurance

Do you not fall under the mandatory employee insurance schemes? Then you decide for yourself whether to take out disability insurance. You can also join a donation circle. A donation circle is a group of self-employed people who support each other financially with donations in case of illness. The maximum period for donations is 2 years. UWV offers voluntary disability insurance for a starting director. You can deduct the premium for disability insurance in your income tax return.

Insurance against short-term illness is not necessary. The legal entity continues to pay the salary or management fee if you are ill. Taking out unemployment insurance is not possible.