A pro-business climate, its strategic location, a stable legislative system, a highly educated multilingual workforce and superior infrastructure are just some of the many advantages of doing business in the Netherlands. These elements show, in our view, that the Netherlands serves as the (digital) gateway to Europe.
Ranked number 4 in the world by the World Competitiveness Ranking 2021 of the Institute for Management Development (IMD), the Netherlands, is a truly world-class destination for business activity and has a very competitive international climate. According to the IMD ranking, the Netherlands scores particularly strong on economic performance (2nd) and business efficiency (4th). On infrastructure the Netherlands ranked 7th and on government efficiency 12th.
In the World Economic Forum Global Competitiveness Report Special Edition 2020, which focuses on priorities for recovery and revival in relation to the COVID-19 crisis, the Netherlands ranks fourth on general economic transformation readiness, after Finland, Sweden and Denmark. The Netherlands scores particularly high on transformation readiness priorities like infrastructure and digital networks and skills and training for the future labour market. Also on priorities like reliable public institutions, social protection and labour reforms for the new economy, expansion of care infrastructure, public-private partnerships for future markets and the stimulation by companies of diversity and inclusion, the Netherlands scores relatively well. Two years after the COVID-19 pandemic started, the Dutch economy has proven to be very resilient. De Nederlandsche Bank, the central bank of the Netherlands, in December 2021 expected the Dutch economy to have grown by 4.5 per cent in 2021, after a decline of 3.8 per cent in 2020.
The Netherlands’ strategic location at Europe’s front door provides the perfect springboard into the European market – with access to 95 per cent of Europe’s most lucrative consumer markets within 24 hours of Amsterdam or Rotterdam. Add to that its supportive legal and tax structure to set up operational business, highly educated, multilingual workforce and superior logistics and technology infrastructure and it is no wonder so many multinational businesses – from small and mid-sized to Fortune 500 leaders – have chosen the Netherlands as their gateway to Europe.
In addition to having an outstanding business climate, the Netherlands offers an affordable cost of living and an exceptional quality of life. Ranked as the 5th happiest place on earth by the World Happiness Report 2021 and ranked 1st in the area of children’s well-being according to a survey by UNICEF, the Netherlands has a high standard of living. The Netherlands occupies a 7th position in the OECD Better Life Index. The Netherlands has a top position in work-life balance and scores above average in jobs and earnings, housing, education and skills, subjective well-being, social connections, environmental quality, personal security, civic engagement, and health status.
According to the World Bank, the government of the Netherlands is one of the most effective in the world, ranking 6th worldwide in the government effectiveness index. To add, the Netherlands is one of the most politically stable nations in the world, thus making it easier for companies to make medium and long-term decisions.
The Netherlands also offers a wide tax treaty network, special measures for highly skilled expats and often certainty in advance of interpretation of tax law — just a few of the features that help multinational companies to thrive in the Netherlands.
The Netherlands is home to a highly skilled, productive, flexible and multilingual workforce. The country ranks 1st out of 100 countries on the EF English Proficiency Index 2021. In addition to English, a higher percentage of the Dutch population than their counterparts elsewhere also speaks German and French. According to the OECD Skills Outlook 2019, the Netherlands, together with a few other countries, is ahead in the digital transformation of the workplace, with most of its workers intensively using technology in their job and predominantly performing non-routine tasks. It also mentions the Netherlands as being among the countries with the highest share of individuals with well-rounded cognitive (literacy, numeracy and problem-solving) skills.
The Netherlands has been named as one of the world’s best countries for talent competitiveness. The annual Global Talent Competitiveness Index 2021 (INSEAD, 2021) ranks the Netherlands 6th. According to the specific GTCI Country Report on the Netherlands: The Netherlands (6th) is ranked in the top 10 in three of the six talent competitiveness pillars: Grow (4th), Enable (5th), and Retain (8th). Its scores on the Grow and Enable sub-pillars Business and Labour Landscape (3rd) and Access to Growth Opportunities (2nd) are particularly impressive.
The Netherlands has a population of 17.65 million people. A large proportion of the Dutch population is in the economically ‘active’ age range (15-67 years) and the availability of skilled labour outpaces major competitors. The Dutch workforce outranks many of its competitors when it comes to productivity, largely as a result of our high standard of education and training, pragmatic labor laws and commitment to IT investment. Thanks to the stability of the Dutch government and its pragmatic approach to business, very little time is lost to labor disputes or labor relations compared to Europe as a whole.
As an internationally oriented country, the Netherlands is home to many foreign workers and offers a ‘Highly Skilled Migrant Visa’, which allows companies to bring highly qualified expats to their Dutch operations.
The Netherlands ranks 6th on the Global Innovation Index 2021 (World Intellectual Property Organization 2021). The Netherlands scores highly for the innovation inputs sub-rankings in ICT infrastructure (4th) and knowledge absorption (2nd). Dutch innovation outputs continue to rank highly (3rd) due to the Netherlands’ strengths in online creativity (3rd) and knowledge creation (6th) and diffusion (8th). The country remains in the 1st position for IP payments.
Dutch industry includes a large number of innovative and knowledge-intensive companies that enjoy a worldwide high reputation and that carry out a great deal of R&D. The Netherlands houses a number of highly successful and innovative clusters like agrifood, life sciences & health, hightech systems, chemicals, clean energy, IT and creative industries.
With a competitive corporate income tax rate in Europe – 15 per cent on the first 395,000 euro and 25.8 per cent for taxable profits exceeding 395,000 euro – as well as a number of attractive incentive programs, the Netherlands offers a supportive fiscal climate for international companies.
The Netherlands actively promotes engaging in R&D activities through a favourable corporate tax structure and specific R&D tax incentives to stimulate innovation.
We will elaborate on the Dutch incentives and taxes later on.
The Netherlands has ranked first on the DHL Global Connectedness Index every year since 2005. In the 2020 edition of the index the country is praised for its deep integration of global trade and links to many different countries.
Driven by world-class seaports and airports, an extensive network of roads, rail and waterways and a telecommunications network that ranks among the world’s best for quality, speed and reliability, the Dutch infrastructure is one of the best on the planet. With its logistics infrastructure and central location in the heart of the European Union, the Netherlands gives companies unparalleled access to the continent and beyond. By rail, road or water, companies can reach 170 million consumers within 24 hours of Amsterdam or Rotterdam.
Furthermore, the Dutch dense, high-quality telecommunications infrastructure offers fast connections no matter how or where you and your products or services are traveling. With one of the highest broadband penetrations per capita in the world, one of the world’s fastest average broadband speeds and a 99% 4G coverage, the Netherlands is also the digital gateway to Europe. It directly links continental Europe to North America, with most transatlantic sea cables going directly to the Netherlands.
The European Investment Bank (EIB) ranks the Netherlands as one of the digital frontrunners (2nd position after Denmark) on its EIBIS Digitalisation Index. According to the EIB, the Netherlands is the best performing EU country on the digital intensity and digital infrastructure index components. Furthermore, it has adoption rates of the technologies IoT, big data and platforms which are above the EU and US average.
Strategically located at the center of Europe’s largest markets, the Netherlands has established itself as a magnet for international companies and a leading site for European or regional headquarters. With its strong international orientation, pro-business environment, highly educated workforce and its top logistics and technology infrastructure and innovation ecosystem the Netherlands offers companies a perfect climate to compete successfully in Europe. Being one of the European Union’s most dynamic trading and industrial hubs, the Netherlands is a perfect springboard for Europe for many international companies.
The Dutch transport and logistics infrastructure, including world-class seaports, centrally located airports and an extensive, modern network of roads and highways, and presence of top-grade logistic service providers is a major asset to companies looking to establish international logistics/distribution operations in Europe. Amsterdam Airport Schiphol is the world’s 2nd best-connected airport based on direct connectivity (Airports Council International, 2019) and one of the largest cargo airports in Europe. The Port of Rotterdam is the largest seaport in Europe and the world’s largest seaport outside of East Asia.
These and other factors make the Netherlands a true gateway to Europe and home to an abundance of European and regional distribution centers across a multitude of industries like agri/food, fashion, high-tech and medical technology and for e-commerce and spare parts logistics activities.
Renowned internationally for its open culture and emphasis on entrepreneurship and innovation, the Netherlands is home to a thriving, collaborative startup ecosystem. The Netherlands boasts a creative atmosphere for entrepreneurs and is developing into a startup hub in Europe. Dutch society is open to new concepts and thus seen by many as a ‘living lab’.
In 2021 several Dutch companies made it to the Financial Times FT1000 fastest growing company list. According to NimbleFins the Netherlands is the 4th best country in Europe for startups, while according to Startup Genome the Amsterdam-Delta is among the top three best startup ecosystems in Europe Ranked number 5 in the EU on the 2021 European Innovation Scoreboard of the European Commission, the Netherlands is home to more than ten leading innovation hubs, where start-ups benefit from world-class incubators and R&D facilities. Under conditions, the Dutch startup visa scheme makes it possible to apply for a temporary residence permit as 'start-up', which gives ambitious starters one year to get their innovative business started.
Fueled by world-class research institutes, supportive R&D tax credits and a number of strategic partnerships between science, industry and government, the Netherlands is a hub for R&D activities.
As the European R&D location of various major multinationals, the Netherlands has the 4th highest number of patent applications per million inhabitants in Europe (2020, European Patent Office). Also, the flourishing startup scene results in a large number of patents every year.
The Netherlands has many innovation hubs across the country among which ten campuses designed to facilitate ground-breaking advances, including High Tech Campus Eindhoven, TU Delft Campus, Kennispark Twente, Wageningen Campus, Amsterdam Science Park and Campus Groningen. These clusters of companies and knowledge institutes offer an excellent opportunity to collaborate and accelerate research and innovation.
Home to marketing and sales operations of major multinational companies and a thriving creative industry, the Netherlands has established itself as a magnet for foreign-owned marketing and sales operations.
The Netherlands’ strategic location in Europe ensures easy access to Europe’s most lucrative markets. Moreover, the presence of international talents allows international companies to reach a wide range of consumers around the world.
The Netherlands’ strategic location, highly developed telecommunications and transportation infrastructure and international service-oriented culture, provide an ideal environment to establish or consolidate a shared service centre (SSC) in Europe.
As one of the multilingual hotspots in Europe, the Netherlands is home to a diverse, skilled and productive workforce. The Netherlands’ cultural amenities and relatively low cost and high standard of living make it easy to attract skilled employees and expatriates to an SSC.
Considered one of the most wired and cyber-secure countries in the world, the Netherlands is home to one of the most advanced markets for data center operations in Europe. About one third of all European data centers are located in the Amsterdam area and take advantage of AMS-IX – one of the world’s largest internet exchanges. According to the Dutch Datacenter Association almost all important players in the international digital economy are established in our country with equipment and head offices.
The Dutch telecommunications network ranks among the world’s best for quality, speed and reliability. Plus, the country’s mild climate and robust renewable energy cluster provide sustainable and affordable options for data center energy efficiency needs.
The Netherlands’ highly skilled engineering workforce and advanced collaborative networks of suppliers in a wide variety of value chains offer major advantages to companies looking to establish or reshore manufacturing operations in Europe.
Major multinationals in a wide range of industries have already established advanced manufacturing operations in the Netherlands - from life sciences to chemicals, maritime industry and IT.
Through research and development, the Netherlands is advancing manufacturing operations in nearly every sector. Embracing Industry 4.0, also known as 'Smart Industry', manufacturing companies can optimise production processes and create more efficient business models. In 2018 the Dutch government launched the Smart Industry Implementation Agenda. As part of this approximately 40 fieldlabs have been created to develop, test and implement Smart Industry solutions, and train people to apply them. Around 300 companies, knowledge institutions and governments are collaborating in the fieldlabs and use Pilot Plants to develop new production processes and test technological innovations before they are introduced to the market.
From life sciences & health to creative industries, the Netherlands is home to thriving industry clusters driven by talent, innovation and collaboration. Some of the biggest and fastest growing companies in every sector have chosen the Netherlands as their gateway to Europe.
In order to remain a leader in solving global challenges, the Dutch focus lies on measures for all businesses and a number of key industries in particular. We elaborate on some key industries below:
There are several ways to operate a business in the Netherlands via a legal entity. A distinction can be made between entities with legal personality (corporate entities) and entities without legal personality (non-corporate entities). It is also possible to perform business activities through a branch office of a foreign legal entity. Below we discuss the main legal entities used by foreign investors and companies expanding their businesses to the Netherlands.