12 February 2019

Business advantages Dutch Services Act and EU Services Directive

Category: Company law

Because of the European Services Directive, incorporated into the Dutch Services Act, there are now rules that the licensing system for services must comply with. Through the Services Act, the Dutch government has adapted the components of the Services Directive to the situation in the Netherlands. Various bodies, such as the municipality, provinces, water boards, supervisory bodies and other administrative bodies, issue licences for services in the Netherlands. This is done on the basis of various methods of distribution. All methods and requirements for granting licences for services must comply with the Services Directive and the application of it in the Services Act.

What does an entrepreneur gain from the Dutch Services Act?

The Act ensures transparent procedures with equal opportunities for entrepreneurs. This also applies to entrepreneurs from outside the EU who do business through an entity in the EU. Incorrect licensing procedures can be tackled by an entrepreneur and their lawyer. Cronyism in the licensing of certain companies is no longer possible. The law provides better information for licensing procedures. In the retail sector, the Services Act has already resulted in positive decisions for businessmen.

General rules for authorisation schemes in the Netherlands

The Services Directive has a number of basic principles in relation to licensing systems that are in line with the Services Act. In addition to the fact that a licensing system must be non-discriminatory, necessary and proportionate (Article 9 of the Services Directive), the Services Directive and the Services Act also impose requirements on the structure and principles of the licensing system.

For example, a licence must be clear, unambiguous, objective, transparent and accessible, and made public in advance (Article 10 of the Services Directive). In addition, as a primary rule, a licence that is not scarce may no longer be granted for a limited period of time (Article 11 of the Services Directive and Article 33 of the Services Act). However, the licence may be for a limited period of time, in the case of:

• licences which, by their own nature, are limited in time;

• licences that are limited in number by the scarcity of available natural resources or technical possibilities.

Special attention for scarce licenses in Dutch Services Act

The Services Directive (Article 13(3) and (6)) and the Services Act (Articles 31 and 32) deviate from the provisions of the General Administrative Law Act (Awb) in relation to the deadline for a decision request. One of the deviations from the General Administrative Law Act is that, in principle, after an application for a permit, the time limits are not suspended. In this way, Article 31 of the Services Act regulates Article 4:15 of the General Administrative Law Act. Additionally, as a result of the Services Directive and the Services Act, a licence is more likely to be offered automatically if the licensing authority does not make a decision within the decision period of 8 weeks. Local authorities and administrative bodies must ensure that their licensing systems are, and remain, in accordance with the Services Directive.

Limitation of a licence’s period of validity

If a non-scarce licence is granted for a limited period of time, the justification must be based on one of the grounds mentioned in Article 11(1) of the Services Directive (Article 33 of the Services Act). A limited period of validity can be justified if:

(a) the authorisation is automatically renewed or is only subject to continuous fulfilment of the conditions;

(b) the number of available authorisations is limited by an overriding reason relating to the public interest; or,

(c) there is an overriding reason relating to the public interest for a limited period of authorisation.

If a limited period of authorisation can be justified, this justification shall be duly substantiated in order to ensure that the licensing authority is well prepared for any future procedures. In this case, there is no need to further amend the regulations if the current rules meet the criteria set out in the Services Directive and the Services Act.

Right to digital licensing procedure in the Netherlands

The obligation for local and regional authorities to enable service providers to complete all (authorisation) procedures and formalities remotely and electronically with the local and regional authorities concerned via the Service Desk is also referred to as the transaction function (Articles 6 and 8 of the Services Directive and Articles 13 to 16 of the Services Act). This means that the applicant for a service licence must be able to complete the administrative steps required to comply with a requirement or obtain a licence electronically. In practice, this means, for example, that it must not only be possible to submit an application for a licence that falls within the scope of the Services Directive electronically, but that it must also ultimately be possible for the licence in question to be issued electronically.