Coming along on an L-2: what you let go of in the Netherlands — and what you get back for it

The situation is more recognisable than it sounds. Your partner's employer transfers them to the American branch, on an L-1. You come along — without a job of your own, with children who are grown up by now and stay in the Netherlands, and with the plan to be here for a good part of the year. And somewhere between the contract and the moving box comes the question: can I just stay registered in the Netherlands?

The short answer is no, and this article explains why that's less bad than it sounds. The L-2 gives you almost everything you want. The only thing it doesn't give is a Dutch address.

The general visa routes to America are in The five keys to America; the Dutch side that applies to every accompanying partner is in Partner comes along without a job of their own. This article is about what comes on top of that for America.

What the L-2 gives you

The L-2 is a derivative status: it exists as long as your partner's L-1 exists, and no longer. An L-1A (managers and executives) has a maximum of seven years, an L-1B (specialised knowledge) of five. The spouse and unmarried children under 21 can come along on the L-2; children of 21 and over can't — they visit like any Dutch citizen, with an ESTA.

What the L-2 arranges in practice:

• Residence, for the whole duration of the L-1, without a sponsor of your own.
• The right to work. Since 12 November 2021 L-2 spouses may work on the basis of their status itself; a separate work permit (the EAD) is no longer needed. Your I-94 with the annotation "L-2S" is your proof for an employer. You don't have to work — but the door stands open, and for the partner who wants to "maybe later" that's precisely the difference with before.
• Studying, without a separate student visa.
• Free travel. The L-2 doesn't oblige you to stay in America. You enter and leave on your visa as long as your partner's L-1 remains valid. Four months a year in the Netherlands is therefore no problem on the American side.

That last point is where the confusion begins: because America doesn't force you to stay, it feels as if you don't have to change anything in the Netherlands either.

Why you deregister anyway

Whoever stays outside the Netherlands for more than eight months within a period of a year has to deregister from the Personal Records Database (BRP). The months don't have to be consecutive, and whether you work there or not is irrelevant. Eight months of America and four months of the Netherlands is therefore precisely the situation the rule was written for.

Staying registered yields nothing you don't also have after deregistering. What it does yield is a health insurance that rests on an incorrect registration and can reclaim premium and healthcare costs, allowances that get reclaimed, and at some point an ex officio deregistration by the municipality — without proof, without a chosen date.

And there's a second reason that doesn't come from the Netherlands but from America. Whoever is in the United States for most of the year becomes a tax resident there — with or without income. Then America taxes your worldwide income, and the two reporting duties for foreign accounts apply (see further on). You'd then be American for tax and Dutch for administration, and that's the worst combination of the two: all the duties, none of the advantages. How American tax liability works is in Liable for American tax.

What deregistering gives you: a departure date you choose yourself (deregistering is possible from five days before departure), an international proof of deregistration you'll still need at American counters, and an administration in which your health insurance, allowances and AOW accrual switch over on the same day instead of petering out messily.

Healthcare: no employer plan of your own

Your partner gets health insurance via the American employer in virtually every L-1 process. Three questions you ask before signing: am I co-insured as a partner, from which day, and what does the family part of the premium cost? Employer plans differ enormously in that, and the family surcharge in America is often thousands of dollars a year.

If there's no cover for you, the move to the United States is an event that opens an enrolment period of sixty days on the healthcare marketplace. If you miss it, you sit without a plan until the next open enrolment. And for the Dutch months: an American plan usually covers nothing outside the US, or only emergencies. A travel insurance that covers four months of Europe is therefore part of the yearly budget.

Money: SSN, the bank and two reporting duties

As an L-2 spouse with the right to work you can apply for a Social Security Number, even if you're not working (yet). Do that in the first weeks: without an SSN no bank account of your own, no credit history, and a joint tax return that runs less smoothly.

Your Dutch bank reports under FATCA on customers who are a "US person", and a resident of the United States falls under that too. What that means in practice differs per bank: some only ask for your American tax number, others restrict their services to customers in the US. Ask your bank before departure, in your own name — not just for the joint account.

Then the two American reporting duties, which exist side by side. The FBAR: as soon as the total of your foreign accounts exceeds 10,000 dollars at any moment in the year, you report all of them — and a Dutch savings account of a family is quickly above that. And Form 8938 with the tax return, with thresholds of its own: for US residents filing jointly 100,000 dollars at the end of the year or 150,000 at any moment. Both apply to the partner without income too, because they're about assets, not salary.

One flag, no explanation: Dutch investment funds can count as a PFIC for an American tax resident, with a tax regime that turns out unfavourable in virtually all cases. Whoever has investments puts that before an adviser who knows the American system, before departure.

AOW: the gap is yours

Your partner builds up Social Security in America, and the treaty between the Netherlands and the United States makes sure those years count later. You build up nothing — not in the Netherlands (accrual stops on deregistration) and not in America (you don't work there). Every year away is two percent less AOW (the Dutch state pension), and that gap isn't filled later.

The SVB's voluntary insurance is therefore meant for you in this situation more than for your partner: apply within one year of departure, with a premium that depends on your own income — and without income you pay close to the minimum. Apply for the Anw insurance immediately on departure. See AOW, healthcare and tax in America for the treaty side.

The house from America

The mortgage interest deduction lapses. The scheme for qualifying non-resident taxpayers is only open to whoever lives in the EU, the EEA, Switzerland or on the BES islands, and the United States isn't among them. If the house is empty and for sale, the relocation scheme applies temporarily; when renting out or keeping it, the home immediately counts as Dutch assets and stays taxed here. Rental income you also declare in America, with a credit via the treaty — a sum for an adviser, not for this article.

And the bank: renting out without written consent is a breach of contract. If your adult children live in the house, report that too. Selling, renting out or keeping for your own months is a choice you make before the deregistration, and not after.

Children staying in the Netherlands

Children of 21 and over don't fit on the L-2; children from eighteen to 21 do, but in this scenario they stay in the Netherlands. Their health insurance and healthcare allowance continue separately from yours. What runs via you is DUO's supplementary grant: that counts with the parents' income, and American income you report yourselves — with the American return as proof, and more than eight weeks of processing time. Do it every year, not just the first.

What you still have looked into yourself

Honesty first: three things no article and no step-by-step plan can decide for you. The plan does say exactly when you put them before someone — before the deregistration, not after.

• The definitive tax sum. What the house, your partner's pension and your assets do precisely under two systems at once is calculated by a tax adviser who knows both countries. This article names what is at play; the figures are yours.
• Your investments. Dutch investment funds can count as a PFIC for an American tax resident. We flag it; an adviser who knows the American system assesses it.
• Your own bank and your own state. Whether your bank keeps a customer in the US, you ask your bank. And the driving licence, state tax and the healthcare market differ per state; the plan names the differences, your state fills them in.

Your partner's L-1 application itself runs via the employer and sits outside this plan. What your partner watches in it — the timing, premium processing — is in the visa steps.

What it costs if you do it wrong, and what you get back if it's right

Wrong: staying registered, being found out, repaying premium and allowances, and then deregistering anyway with a date the municipality chooses. Meanwhile being a tax resident in America without knowing the reporting duties — and FBAR penalties aren't symbolic.

Right: an L-2 that arranges your residence and your right to work, a departure date you choose, healthcare cover without a gap on both sides of the ocean, an AOW accrual that continues for a few tens of euros a month, and four months a year in the Netherlands that nobody minds. That's no compromise; that's the life you wanted, with the administration that belongs to it.

The step-by-step plan for America puts this in the order it has to happen: what's arranged before signing the L-1 contract, what in the last month, what in the first sixty days there, and what comes back every year.