A small country with big achievements. The Dutch Touch can be found in a wide variety of expertise; the Dutch have influenced our world with many inventions and discoveries.
The Netherlands is a constitutional monarchy with King Willem-Alexander as the head of state. On 30 April 2013, His Majesty King Willem-Alexander succeeded his mother as King of the Netherlands. The King is married to Queen Máxima and has three children. The official language in the Netherlands is Dutch, but approximately 90% of all Dutch people can speak some English.
Located in North West Europe, the capital city of the Netherlands is Amsterdam and the seat of government is The Hague. The Netherlands is made up of 12 provinces and borders the North Sea to the north and west, Belgium to the south and Germany to the east. It is a geographically low-lying country, with about 20% of its area and 21% of its population located below sea level (It measures 41.543 sq. km, 7,650 of which is water). The highest point is 322 meters above sea level and the lowest 7 meters below sea level. The Netherlands has a temperate marine climate. The average temperatures are 16 degrees C in summer and 3C in winter. The population of the Netherlands is at 16,849,510 people as of May 2014, with roughly 8.7 million (2012 est.) in the active labour force. The Netherlands uses the Euro as its national currency and its most important trading partners are Germany, Belgium, France and the United Kingdom.
The Dutch economy is noted for its stable industrial relations, lower percentages of unemployment and inflation compared to other EU countries, a sizable current account surplus, and plays an important role as a European transportation hub. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs only 1.7% of the labor force but provides large surpluses for the food-processing industry and for exports. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. Recently, amount of EU partners has increased to 18 EU partners. The country has been one of the leading European nations for attracting foreign direct investment and is one of the four largest investors in the US.
The Dutch economy has a strong international focus, as the Netherlands is one of the European Union’s most dynamic centres of trade and industry. Owing largely to its favourable location by the North Sea, it plays a key role as a main port and distribution centre for companies operating worldwide. The port of Rotterdam handled more than 440 million tonnes of goods in 2012 and is one of the largest ports in the world. Other Dutch harbors (those that also have an inland connection) handled an additional 100 million tonnes. Amsterdam’s Schiphol Airport is one of the largest airports in Europe. For these reasons, the Netherlands is often called the ‘Gateway to Europe’.
Dutch industry has reacted swiftly to technological advances, producing knock-on effects throughout the economy and became the 4th largest exporter of IT services. Some 70 per cent of innovation in the Netherlands is IT-related, enabling crucial developments in areas such as water management, food and cut-flowers, and automotive. The main strength of the Dutch IT sector lies in its ability to turn existing technologies into innovative products and services that sell well.
Sectors that play a key role in the Dutch economy are Agriculture & Food, Creative industries, Chemicals Industry, Energy, High Tech Industries, Horticulture, Life Sciences, Logistic and Water. For more information about these sectors, visit www.hollandtrade.com.
According to the Economist Intelligence Unit and the World Economic Forum, the global business environment rankings paint a relatively favorable picture of the Dutch economy. Factors that are most often cited include: the open and international outlook, its strategic position in Europe, a well-educated, multilingual and flexible working population and high levels of labour productivity. The competitive fiscal climate, top-level physical and technological infrastructure and quality of life also contribute to the excellent position that the Netherlands enjoys. The Netherlands holds a strong position in global competitiveness, placing it among the world’s top ten.
The Netherlands maintains no preferential or discriminatory export or import policies, with the exception of those that result from its membership in the European Union. The Dutch also abide by all internationally agreed strategic trade controls (e.g. the Wassenaar Agreement). In summary, Dutch domestic restrictions on foreign investment remain minimal, with no new restrictions planned. The Dutch investment climate should continue as it is, but will increasingly be influenced by EU policies.
STRATEGIC LOCATION IN EUROPE
The Netherlands provides a strategic location to serve markets within Europe, the Middle East and Africa. The central geographical position of the Netherlands, combined with accessibility and an excellent infrastructure, are only some of the reasons why numerous European, American and Asian companies have established their facilities in the Netherlands.
COMPETITIVE FISCAL CLIMATE
The Dutch tax system has a number of features that may be very beneficial in international tax planning. These include a corporate income tax rate of 20% on the first €200,000 and 25% for taxable profits exceeding €200,000. In addition, the Dutch ruling practice provides clarity and certainty in advance on future tax positions. Furthermore, in respect of R&D, companies can benefit from the innovation box resulting in an effective corporate tax rate of only 5%, an R&D allowance (WBSO) taking the form of wage tax and social security contribution deductions, as well as a tax deduction facility for R&D costs (RDA). Dutch tax law also provides the participation exemption, which states that all benefits related to a qualifying shareholder are exempt from Dutch corporate income tax, as well as the fiscal unity regime, designed to freely offset profits and losses among group members. There are also advantages in debt and loss structuring, and a wide tax treaty network, resulting in reduction of witholding taxes on dividends, interests and royalties.
In addition, there is the 30% ruling, which is a tax-free reimbursement of 30% of the employee’s salary, provided that the employee has been recruited or assinged from abroad and has specific expertise scarce in the Dutch labor market. Finally, the Dutch Customs authorities are well known for their practical and pro-active approach towards facilitating international trade and optimizing customs procedures. This fact underlies the Netherlands’ preferred status as a country in which to base importing activities.
SUPERIOR LOGISTICS AND TECHNOLOGY INFRASTRUCTURE
The Port of Rotterdam is Europe’s largest and most important seaport, while Schiphol Airport is ranked as Europe’s best airport for both cargo and passenger transport. The Netherlands is also classified as one of the most ‘wired’ countries in the world; a dynamic force in electronic commerce, communications and outsourcing. More than a decade of investment in high – speed internet, cable and digital communication systems, as well as the rapid adoption of state – of – the – art computer and cellphone technology, have created an ideal base for companies seeking to take advantage of modern technology.
Conducive innovation environment
Holland’s open innovation approach and well organized public – private partnerships offer a favorable environment for companies looking for business acceleration. Together with a mind – set of creativity, collaboration and reliability – and a top scientific sector – Holland is able to guarantee the most important drivers in ‘innovation location’ choices for foreign investors.
International Business Environment
The Netherlands, long Europe’s trading crossroads, is an obvious choice to locate a pan – European operation – whether it’s a European headquarters, a shared services center, a customer care center, a distribution and logistics operation, or an R&D facility. The country’s pro – business environment creates a gateway to Europe that helps international companies succeed throughout the continent. An international outlook and openness to foreign investment is firmly ingrained in the Dutch culture, and this has yielded a wealth of world class business partners who know how to deal with global business challenges in today’s economy.