Who employs your people in Europe between signing and closing?

Signing a deal in Europe does not give your own people a European employer. A share deal changes the owner of a company, not its employer. Meanwhile, merger rules can stop you from implementing the deal before clearance. Your staff therefore need an employer from day one. This guide explains where an employer of record during an acquisition fits.

Why does buying a European company not give you an employer?

In a share deal, or stock purchase in US terms, the target stays the employer. Its staff keep their contracts, and your people do not join them. Before closing, the target still belongs to the seller. In addition, where merger clearance applies, you cannot implement the deal before approval.

The EU Merger Regulation sets this standstill for large deals, and national regimes such as the Dutch one work similarly. Lawyers call acting early gun jumping, and EU fines can reach 10% of turnover. In an asset deal, by contrast, the staff of the business usually transfer with it. US buyers know the same split from the asset purchase vs stock purchase choice. Either way, share deal employees stay with the target, and your own team still needs an employer.

What are the options for employing your own people?

You have three ways to hire in the Netherlands before your entity exists, or while you build it. You can set up your own Dutch BV, register as a non-resident employer, or use an employer of record during an acquisition. Each route leaves different duties with you, as the table shows.

Route	What it takes	What stays with you	When it fits
Your own Dutch BV	A notarial deed, Chamber of Commerce registration, a bank account and payroll registration	Every employer duty, plus Dutch corporate tax	A long-term team after closing
Non-resident employer registration	Registration with the Dutch Tax Administration and a Dutch payroll	Every employer duty, Dutch premiums and permanent establishment risk	One or two hires, if you can run Dutch payroll yourself
Employer of record	A service agreement; the provider becomes the legal employer	Daily direction, pay decisions and permanent establishment risk	From signing until your BV is ready

Two points apply to every route. First, a non-resident employer in the Netherlands still pays Dutch employee insurance contributions. That applies whenever its staff fall under Dutch social security. Second, staff working in the country can create a permanent establishment for corporate tax. An employer of record lowers that risk but does not remove it, for example when staff sign contracts for you. Our guide to permanent establishment risk explains when an entity makes more sense. For a wider comparison, see our guide to employer of record Netherlands.

Can you use contractors instead employer of record during an acquisition?

Only with care, because the Netherlands now enforces contractor misclassification. The Dutch Tax Administration resumed normal enforcement on 1 January 2025. Since 1 January 2026, it can impose fines for gross negligence or intent. Moreover, from 31 December 2026, Dutch law presumes employment when a worker’s hourly rate is low.

The law sets that threshold at €36 an hour, and the government can index it. Below it, the client must show that no employment contract exists. If the tax authority reclassifies the work, it can issue payroll tax assessments directly. This matters for interim managers or consultants hired locally before closing.

Does employer of record during an acquisition work in every European country?

Not in the same way. In Germany, an employer of record arrangement counts as employee leasing. It needs a license, and the same worker can generally serve the same client for 18 months at most. In Spain, Belgium and Portugal, placing staff with another company needs the right license or legal exception. Otherwise, it counts as unlawful labor leasing.

The consequences fall on you as the client. Without a license, German law can create an employment contract between the worker and your company. Belgium has a similar rule. So check each country before you treat employer of record in Europe as the default.

When do you move people to your own entity?

Move them once the deal has closed and your BV can run payroll. For many buyers, that point falls after acquisition integration. Until then, an employer of record during an acquisition bridges the gap. Octagon’s approach is simple: we employ your people in the Netherlands until your entity is ready, then transfer them.

The move means new contracts with your BV and one clean payroll handover. Dutch law may treat your BV as a successor employer when the work stays the same. Earlier service can then count, for instance towards the transition payment. Our checklist on when to outgrow your EOR covers the steps.

Employing talent across borders with an employer of record during an acquisition

Deals move people before they move companies. Since 1987, Octagon Professionals has helped international organizations employ talent across Europe with clarity, compliance and trust. Today, we support employers in the Netherlands, Germany, France, Italy, Cyprus and the UK.

Our HR experts reduce the risk of employment gaps, misclassified contractors and missed payroll duties. Meanwhile, you keep full control over salaries, benefits and daily work. We handle the complexity so your team can focus on the deal. Contact Octagon Professionals to plan who employs your people.

Frequently asked questions

Can our integration lead start in Amsterdam before closing?

Yes, if a lawful employer is in place and they may work in the Netherlands. A US citizen staying over 90 days usually needs a residence permit, such as a highly skilled migrant permit. That permit requires an employer recognised as an IND sponsor, as Octagon is. Before closing, the lead may plan integration but should not run the target.

Does the target’s HR team employ our staff before closing?

Usually not. Until closing, the target belongs to the seller and employs only its own staff. Asking it to hire your people can also look like taking control early. While clearance is pending, that is a gun jumping risk. A separate employer, such as an employer of record, avoids both problems.

Do we need a Dutch entity to hire one person?

No. A foreign company can register with the Dutch Tax Administration and run a Dutch payroll itself. Alternatively, an employer of record can employ the person for you. Either way, Dutch employment law, social insurance and permanent establishment rules still apply. A Dutch BV makes most sense once the team and long-term plan are clear.