Management agreements under Dutch law
A management agreement (managementovereenkomst) is a contract under which an individual - typically through a personal holding company (personal holding bv) - provides management services to a client company. The managing individual is formally a service provider (via their own BV), not an employee of the client. This construction is widely used by directors-major shareholders (directeur-grootaandeelhouder, DGA) and senior executives to structure their remuneration through their own company for tax and legal reasons.
Unlike an employment contract, a management agreement is a commercial services contract governed by the general law of obligations in Books 6 and 7 of the Dutch Civil Code (specifically the provisions on assignment (opdracht, Article 7:400 onwards)). Employment law protection - including dismissal protection, sick pay, and pension obligations - does not automatically apply.
Risk of disguised employment under Dutch law
The Dutch Tax and Customs Administration (Belastingdienst) and courts scrutinise management agreements carefully to determine whether the economic reality corresponds to employment. If the working relationship shows the hallmarks of employment - personal performance, authority, and a regular salary (loon) - the Belastingdienst may reclassify the relationship as employment and impose wage taxes and social security contributions retroactively. This risk is heightened where the management agreement has been in place for many years with the same client and without genuine entrepreneurial risk for the manager.
Following the Supreme Court's 2023 ruling on bogus self-employment (Deliveroo), courts look at all circumstances holistically. The formal structure of a BV does not automatically preclude an employment relationship. The manager via a management BV may also be subject to the Wet DBA enforcement from 2025 onwards.
Termination of a management agreement under Dutch law
A management agreement may be terminated by either party subject to the agreed notice period and the statutory notice provisions for assignment agreements. Unlike employment, there is no UWV or court permission required for termination. However, where the management agreement effectively functions as an employment contract, the courts may grant the manager employment-equivalent protections, including compensation for abrupt termination.
The Dutch Civil Code in Article 2:132(3) provides that labour relationships with statutory directors of companies listed on the Amsterdam Stock Exchange, concluded since 2013, are classified as contracts for services rather than employment contracts - removing those directors from the ordinary dismissal protection regime. For all other managing directors, Dutch law has a dual-track approach: the relationship is governed both by company law in Book 2 and by general employment law in Book 7, with specific derogations applicable in areas such as dismissal, probationary periods, and the chain rule. The requirement of personal performance (Article 7:659 of the Dutch Civil Code) means that a management agreement concluded via a personal holding BV cannot in itself constitute an employment contract, since a legal person cannot be the employee-side party to such a contract.