Life on the DAFT Residence Permit: Work-Life Balance

By Darien Wilson

The vision: laid-back life on a sunny terrace

If you're an American thinking about moving abroad, you're probably anticipating a work-life balance upgrade. Influencers often pitch the Dutch American Friendship Treaty (DAFT) as an “easy” way to gain residency in the Netherlands. Just start a business, deposit €4,500 in a Dutch bank account, and next thing you know, you'll be sipping wine on a sunny cobblestone terrace while church bells sing in the distance.

The realitiy of work-life balance under DAFT is that you'll probably have a laptop in front of you on that terrace, and you might find yourself drinking coffee more often than wine.

Those who promote DAFT as "easy" often gloss over the fact that DAFT is a residence permit for entrepreneurs. So if you move abroad using the DAFT residence permit, you'll be a self-employed freelancer - and being self-employed does not tend to lend itself to great work-life balance.

Your Safety Net Under DAFT is DIY

As a DAFTer, being self-employed means that, unlike most of your friends and neighbors in the Netherlands, you're not entitled to paid vacation, sick leave, or any paid time off (other than maternity leave) unless you create and fund those benefits yourself. If you lose your clients, there’s no unemployment benefit to fall back on.

If you’re used to U.S. hustle culture, or if you've been self-employed in the U.S. like I was for 20 years before our move, this will feel pretty routine. But if you have always worked as an employee in the U.S., especially if you worked for companies with great benefits, this shift can be jarring—especially if you envisioned a slower, more balanced life abroad.

The reality: some DAFTers work through sickness or risk losing clients

Working In Sickness and in Health

When we left the U.S. for the Netherlands in 2021, it looked like the pandemic was winding down. But that first winter brought a second wave, resulting in isolating lockdowns and a bout of COVID that hit our family hard. While employees in the Netherlands get up to two years of paid sick leave, when you're your own boss, you might find yourself coughing into your laptop in bed. Since others in your community have a safety net that leads them to feel less concerned about getting sick than a DAFTer might feel, you may find this to be an area of cultural disconnect.

Disability on DAFT

There’s also no automatic disability insurance for freelancers in the Netherlands. If you become sick or injured and can’t work, there is no safety net beyond what you’ve set up for yourself. Disability insurance is expected to become mandatory for Dutch freelancers, but pricing details and the exact date this law goes into effect are still unknown.

Disability insurance, or AOV, short for arbeidsongeschiktheidsverzekering, is prohibitively expensive for freelancers. In our experience, Dutch disability insurance has fewer protections than the insurance we had in the U.S., yet costs more. But coverage is especially important for those of us who move later in life. If you're in your 40s, 50s, or beyond, the runway to build financial stability is shorter, and the risks of illness or injury are higher.

"All of Europe Shuts Down in August" - Except DAFTers

In addition to sick leave, Dutch employees receive statutory paid time off for vacation - four times the number of hours you work per week. For example, if someone works 25 hours a week all year, they are entitled to 100 vacation hours per year, or four weeks of paid vacation. Additionally, they receive mandatory vacation allowance so they can cover the cost of going on vacation. So it's common for people in the Netherlands to take two or three week vacations, or even longer.

While our family has truly loved the chance to explore more of Europe while living here, we usually take our laptops if we have time to travel at all. For small business owners, taking long vacations can be challenging to build into your budget or your clients' expectations, especially if you continue to serve American clients.

Retirement as an American Entrepreneur Abroad

European employees often receive significant pension contributions through their employers. As a self-employed entrepreneur on DAFT, you’re on your own when it comes to saving for retirement. Although Americans in the Netherlands on the DAFT residence permit are eligible for AOW, similar to U.S. Social Security, it's not designed to support your full retirement. Additionally, investing can be challenging for Americans living in Europe. Please consult a professional advisor for guidance on this complicated topic.

Health Insurance Isn’t Free

Some influencers paint "Europe" in broad strokes and imply that healthcare is free across the board, but that is not accurate. Yes, the Dutch healthcare system is far more affordable than the U.S. healthcare system, but it’s not free. As a DAFTer, you are required to carry Dutch health insurance—and since you’re self-employed, you pay the full premium yourself.

This is yet another expense that you must budget for—along with taxes, accounting, marketing, and a host of other business expenses.

Weighing the Trade-Offs of Work-Life Balance Under DAFT

If you're thinking about a move under DAFT, consider:

• Do I have enough of a financial cushion to afford unpaid time off?

• What will I do if I get sick or injured?

• Can I afford disability insurance?

• How will I plan for retirement?

• What kind of support system will I have in place if I hit a rough patch?

You may weigh these risks and decide that it's still worth it - many people do! Avoiding risk completely is, of course, impossible. But it is good to be aware of potential risks when entering a whole new system so that you can manage and mitigate them as much as possible.

I'm grateful that my family had the opportunity to use the DAFT residence permit and live in this beautiful, efficient, safe country. But life on DAFT can feel like standing on the outside looking in at a culture with great work-life balance. You can see the benefits of work-life balance in action, but they don't apply to you.

Moving Soon?

If you’re preparing for your own move to the Netherlands — or anywhere abroad — check out my Values & Vision Worksheet or book a strategy session with me. I help Americans in the sandwich years make intentional, successful international moves — with fewer surprises and more joy.

© 2025 ​Darien Wilson All Rights Reserved

Disclaimer

The information provided in this blog is for general informational and educational purposes only. It should not be construed as legal, immigration, financial, tax, or medical advice. Laws, regulations, and personal circumstances vary, and the content here may not apply to your specific situation. Before making any decisions, you should consult with qualified professionals such as an attorney, immigration advisor, financial planner, tax consultant, or healthcare provider. The author makes no representations or warranties about the accuracy, completeness, or reliability of the information provided and accepts no liability for any actions taken or outcomes resulting from its use.