New payment regulations for Dutch large companies

From July 1st, 2023, large companies must pay small and medium-sized enterprises (SMEs) and self-employed workers within thirty days.

wilco July 13, 2023
3 min read

Starting from July 1st, 2023, there is a new update in payment regulations. Large companies are legally required to pay small and medium-sized enterprises (SMEs) and self-employed workers within thirty days. Before 2022, large companies had the option to delay payments for sixty, ninety, or even one hundred and twenty days. On July 1st, 2022, the first phase of this law was implemented, but it only applied to specific agreements. However, as of July 1st, 2023, this new payment regulation also applies to agreements made before July 1st, 2022 and mandates that large companies must pay SMEs and self-employed workers within thirty days, regardless of when the original payment agreements were made.

International effect

This new payment regulation ruling doesn’t only affect the financial landscape in the Netherlands. It also benefits overseas and international vendors as well. Dutch large companies who purchase from suppliers outside of The Netherlands are still governed by Dutch law. They will therefore have to pay those foreign SMEs within 30 days too.

Waiting upwards of 120 days for payment is pretty long, especially for businesses that find themselves relying on monthly payments. After all, rent, mortgage and personnel expenses don’t stop coming even when you aren’t receiving your payments. Failure to make payments even though the service has already been provided can ultimately cause smaller businesses to run into trouble. So this change in the law is really for the greater good.

Who does this payment regulation apply to?

What exactly determines a “large company” you ask? A company is a large company if it meets 2 of the following 3 characteristics:

  • The company has a balance sheet total of more than €20 million
  • The enterprise has a net turnover of more than € 40 million
  • The company has 250 employees or more

Looking ahead

This law will necessitate changes in the way large businesses manage their cash flow and payment cycles. But, this payment regulation is an important step in levelling the playing field for smaller enterprises. It serves as a reminder that a fair and equitable business ecosystem is crucial for fostering innovation, competition, and overall economic stability. Large companies, small to medium-sized enterprises, self-employed workers, and indeed the wider Dutch economy, will undoubtedly witness the ripple effects of this new law in the years to come. Let this be a beacon of change. Setting a precedent for other countries to follow promotes the economic vitality and resilience of businesses of all sizes.

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