If you intend to start a business on the European continent, you have to choose a suitable country to begin with.  Europe includes 44 countries (28 members of the EU) of various sizes, languages and levels of economic development. You might consider the Netherlands as a good place to establish your European business. The five main reasons why you should are listed below.

1. English will do everywhere

Regardless of the part of Holland you are in, the locals will speak basic English as a minimum. Your beginner’s attempts to speak Dutch will most likely result in replies in English. The widespread knowledge of the English language has multiple advantages, among which:

• Drafting agreements in English is common practice. You don’t have to translate your contracts in Dutch for them to be legally binding.
• If you employ local personnel or use the services of Dutch vendors, you will not encounter serious communication problems.
• You will not need to adapt your manuals or product packaging;
• The marketing slogans of your company can remain in English, though it may be appropriate to translate your other advertisements.

• Short distances for travel

The big cities like the capital of Amsterdam, Utrecht, Den Hague and Rotterdam are an hour away from one another by car, at the most. The Randstad megalopolis hosts seven of the fifteen million people living in the country. Even the far-off regions or towns are no more than 3 hours away by car. Therefore you will be able to operate on the whole territory of the country from a single location.

3. Considerable spending power

Statistics show that in Holland the gross domestic product per capita rates among the highest worldwide. And, unlike in other top scoring countries, the distribution of income is relatively even. Therefore most Dutch residents have quite a bit of spending money.

4. Good opportunities online

The broadband penetration in the Netherlands rates among the highest worldwide due to the coaxial and phone networks covering the entire country. Dutch people shop readily online, while it is cheap and easy to arrange payments for the services and goods you offer. Consumers are not biased and more inclined to buy Dutch products: good deals always attract customers.

5. Setting up a company is easy

The last competitiveness ranking prepared by the International Institute for Management and Development rates the Netherlands 1^st on the European continent and 4^th in the world with respect to competitiveness. With the help of Intercompany Solutions, you can register your company within a few days. Small businesses need to meet few requirements and it is not obligatory to appoint an accountant or a local director. The rate of corporate income tax is twenty percent. You will also need to pay a fifteen percent withholding tax, but this could be settled with taxes on dividends covered by you elsewhere.

If you need further information on company establishment in Holland, please, get in touch with our qualified agents. If you are interested in starting a business in the Netherlands, you might also like our article with 5 ideas for opening a small Dutch business.

In the Netherlands, you have the option to discuss the tax position of your company with the Tax Administration and reach together an agreement regarding the consequences tax-wise. This agreement is binding for the taxpayer and the authorities. It needs to reflect the qualification and interpretation of facts and to conform to the national tax legislation, i.e. it should not contradict it. As of 2004 the policy on rulings is split in two general parts: for advance pricing agreements (APA) and advance tax rulings (ATR), respectively.

Advanced pricing agreements (APA) in the Netherlands

APAs cover the aspects of the arm’s length principle of remuneration and the methodology for transfer pricing. APAs are based on transfer pricing studies. The national tax authorities agree with the taxpayer that the income used for corporate taxation will be determined by such a study.

Advance tax rulings (ATR) in the Netherlands

ATRs cover the tax treatment related to specific circumstances and facts. Usually, ATRs are related to:

• the participation exemption regime (a one-page overview is available);
• the tax consequences with respect to hybrid financing;
• the tax consequences with respect to hybrid entities;
• the presence of permanent establishments in the country;
• the implementation of rules for foreign taxpayers.

When signing an ATR you should carefully go over and confirm the circumstances and facts forming the base of this agreement. If the circumstances and facts change it may be useful to check whether and to what degree the concluded ATR will continue to serve its purpose. Our extensive experience in ATR- and APA-related negotiations guarantees that our clients always get reliable agreements minimizing the probability of surprises.

According to the legislation on the types of investment vehicles that can be registered in Holland, these structures may be established as investment companies or funds. Investors intending to go through the procedure for starting a fund can register their vehicles as closed- or open-ended forms of business.

Legal entities applicable for investment funds in the Netherlands

The Dutch legislation relating to investment funds includes various acts concerning the different regulated vehicles. To give an example, funds with a closed end are subject to Directive 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading, and are implemented in accordance with the EU legislation. Regardless of whether a fund has been established in a closed- or open-ended form or as a related vehicle, e.g. a start-up hedge fund, the Dutch laws prescribe the following five legal entities:

• private limited company (BV);
• public limited company (NV);
• cooperative;
• limited partnership;
• mutual fund (FGR).

Businessmen willing to open a Dutch fund also have the option to establish a variable capital investment company (BMVK). This entity acts as a fund for investments because its investors can set up umbrella funds in its structure. Still, in contrast to investment funds, a BMVK is not obliged to offer its stocks on the national market.

Corporate and non-corporate Dutch entities

The Dutch legal entities that can be used for investments belong to two general categories: corporate and non-corporate. The first group includes the BV, NV, cooperative and MBVK. The second features mutual funds and limited partnerships.

All these structures are taxed differently, in accordance with the system for taxation that covers them. The tax system in Holland allows legal entities open for investment funding to be established either as opaque or transparent. For opaque entities, the tax administration levies corporate tax with respect to capital gains and income.

Our company in the Netherlands can provide you with further information regarding the taxation of the structures listed above. Please, get in touch with our agents to receive detailed information on the legislation governing investment funds.

The procedures for appointment and dismissal of staff are partially covered by the Civil Code of the Netherlands and partially clarified by the judicial system. It is relatively easy to employ staff, but it may prove tricky to dismiss employees.

Employment contracts under Dutch law

The Dutch law on employment does not require a contract in written form. However, it is advisable to conclude written contracts with your employees to avoid discussions about the arrangements. It is good to start your employment contract with definitions of the most significant conditions for work.

The written employment contract also allows both the employer and the employee to include particular clauses, for example regarding non-competition, trial period, company secrecy, working hours, salary, bonus regulation, holidays, pension scheme, terms of termination, etc.

The contract for employment can be prepared in a language other than Dutch or English, but in such case, there is a risk of misinterpretation. Therefore a contract in one of those two languages is preferable.

If the hired employee is living and working in Holland, then the applicable law would be the Dutch one. In special cases, however, where the individual works in two or more countries, the provisions may be different. The particular circumstances will be determined by the governing law. The parties may need to consider the legislation of different countries.

In the Netherlands, it is advisable for employers to draft their contracts according to the local Dutch laws. Otherwise, some conditions or arrangements may prove to be invalid.

Agreements for employment in the country can be concluded for a particular or indefinite time period. However, fixed-term and open-ended contracts are subject to specific legislative provisions. Furthermore, the law is continually changing and therefore the agreement for employment needs to be revised regularly.

Dismissal of staff in the Netherlands

It may prove difficult to fire an employee by reason of various legal provisions related to dismissal.

First of all, you should have reasonable arguments in support of your decision to end the employment agreement. The law in the Netherlands mentions eight possible reasons, including economic circumstances, underperformance, serious misconduct, sick leave with a duration of more than 2 years and frequent illnesses.

The employment contract can be terminated via different routes. The easiest approach is to conclude a termination agreement ending the employment with mutual consent. During this process, the two parties often enter negotiations. You can also terminate the employment agreement by asking the Agency for Insurance of Employees (or UWV) to issue a permit for dismissal. This is a possible solution only in case the employee has been on a sick leave for 2 years or more or the job has become redundant because of technical, economic or organizational reasons. The third possibility is to seek contract dissolution in court due to shortcomings such as underperformance.

The UWV and the Court would not permit termination of an employment agreement if there is a prohibition for dismissal (e.g. during sick leave or pregnancy).

In the Netherlands, the dismissal procedure is heavily regulated. We are prepared to assist you in understanding the rules and applying them in your best interest.

In case you have questions on the mentioned topics, our Dutch office will be happy to give you answers and provide you with the ins- and outs of the Dutch workforce.

The flourishing city of Utrecht is famous for being creative, healthy, talented and smart. Its residents, knowledge institutes, local authorities and companies work in collaboration to achieve social sustainability. This is the ideal location for establishing a business, thanks to its central position on the map, accessibility, favourable business atmosphere and highly qualified workforce. Furthermore, Utrecht offers various office and business locations in its historic inner part and its innovative Science Park.

One of the most competitive regions in Europe

According to the EU Regional Competitiveness Index Utrecht is the second most competitive region on the European continent after London. The region offers excellent business climate, qualified workforce and a strong economy. The region achieves regular high ranking, much better than the indices for Paris, Frankfurt and Amsterdam. Utrecht is famous for its superior digital infrastructure, institutions for higher education, job market, innovation and technology, and healthcare.

Healthy city life

Utrecht is the healthiest and fastest growing city in Holland. It has achieved outstanding results in combining economic growth and rapid urbanization with the ambition of healthy living. Health, prosperity and well-being are the main points in the development of a sustainable and healthy environment for living. The region cooperates for innovative, creative solutions, services and products to guarantee that the environment remains liveable, healthy and green.

Central location, excellent accessibility

Many consider Utrecht as a central intersection point. It offers great accessibility by any means of transport. All important Dutch highways lead to the city. Schiphol Airport is 30 minutes away. Utrecht boasts the biggest railway station in Holland that offers transport to any destination, both in the country and abroad. The business park of Lage Weide accommodates a large inland port. Furthermore, Utrecht has an outstanding digital infrastructure.

Young, qualified labour force

The smart, vibrant Utrecht has young and bright residents. The city hosts many students and every year it attracts a new flow of smart, talented, young individuals. Many of them decide to remain in Utrecht and work here after their graduation. In general, it is fairly easy to reach ambitious entrepreneurs and innovative talents in the area of Utrecht.

High living standards

Utrecht is a compact metropolis, welcoming, open and accessible. Due to its relatively small size, the city can easily be explored by bicycle or on foot. Utrecht is popular with its charming historic inner city, various cultural amenities and extensive shopping area. It offers lively festivals, gorgeous parks, inspiring museums, exciting architecture and unique events. The city offers an excellent environment for living, working and studying and takes the second place in the countdown of the most inviting cities in Holland (Dutch Councils Atlas, 2017).

International communities

The region of Utrecht hosts sixty thousand international professionals and 900+ foreign companies. Its International School has a diverse range of European Baccalaureate programmes for secondary and primary education. For international students pursuing higher education, Utrecht has an International Campus and a University College. The Centre for Expats in the city welcomes newcomers to obtain practical information on studying, working and living in Utrecht.

In case you are interested in establishing a business in Utrecht, contact our incorporation agents. They will lead you through the process of starting a company in the Netherlands.

The Netherlands has a rare combination of characteristics that encourage international investments and form the country as a competitive and highly popular business centre.

Holland is strategically located in Western Europe, allowing investors to establish suitable bases for their shipping and trade operations. Furthermore, the outstanding infrastructure and accessibility make the country an extremely popular destination for European, American and Asian investors who have opted for setting up an office in the Netherlands.

Advantageous taxation principles

The tax system in the Netherlands offers international investors a 15% income tax for profits up to EUR 245 000 per year and 25% for amounts exceeding this threshold. It also ensures certainty and clarity regarding future tax liabilities. Investors can take advantage of certain benefits related to royalties, interests, debts, taxation of dividends and loss structuring. Holland offers various investment deductions and tax reliefs. A special tax regime called “innovation box” provides for preferential tax rates for income generated as a result of the development of intellectual property. Furthermore, freight companies benefit from a tonnage tax regime.

Holland has concluded numerous treaties for the avoidance of double taxation (>95 agreements). Therefore entities deriving income from Holland and a country that has signed a double tax treaty with Holland can be taxed using preferential rates.

Sound legal and financial systems

In addition to the abovementioned tax benefits, the Netherlands has a straightforward legal system allowing international investors to efficiently deal with legal issues arising from different transactions, e.g. patent/trademark or tax. Judgements from other countries can be enforced in Holland under specific conditions. As an EU member, Holland conforms to all European laws relevant to trade and business.

The area of Amsterdam hosts numerous globally acknowledged financial institutions and banks. Various banks have established branches in Holland, thus contributing to the good financial climate. Many investors of private equity and managers of trust funds have chosen the Netherlands as their base of operations.

Highly educated labour force

In case you intend to establish a business in the Netherlands, you are free to choose from different types of companies. If your scope of activities includes shared services, customer care or distribution/logistics, Holland is the perfect choice as it offers an unparalleled business environment for such operations.

Furthermore, Holland’s workforce is among the most qualified, motivated and flexible in the world. Most Dutch employees have good knowledge of two foreign languages, so they are a perfect match for foreign companies in any industry sector.

Great logistics and infrastructure

The Netherlands is a popular European destination for companies thanks to its superb transportation network. The country boasts the largest port in Europe, the Port of Rotterdam, and the best European airport for transport of cargo, Schiphol Airport.

As regards innovation and technology, Holland has made investments in e-commerce, communications, outsourcing and high-speed digital systems for communication and internet. The country has adopted the latest cell phone and computer technologies, creating ideal conditions for companies needing modern technologies for their operations.

If you intend to establish a Dutch company and take advantage of the opportunities for business offered by the country, please, contact our local agents in company formation. They will assist you in completing the necessary procedures.

Last year the Dutch electronic commerce was worth €22.5 billion and can grow to approximately €25 billion before the start of 2019, showing an 11% increase. This rate of expansion is a bit slower compared to the 13% increase in the Dutch electronic commerce turnover reported for 2017.

These conclusions are based on the report of the E-commerce Foundation on the Netherlands for 2018. Wijnand Jongen, chief executive officer of Thuiswinkel.org - a Dutch electronic commerce association, stated that online shopping in Holland is steadily increasing its share. This trend has to do with the recovery of the Dutch economy, as well as with the growing confidence of the consumers. According to him, both omnichannel and online retailers can benefit from the situation.

Read here in case you are interested in starting an online shop in the Netherlands.

81.5 percent of the Dutch population buys products and services online

Reportedly, 97% of the 17M Dutch residents use the internet and 84% of them shop online. Therefore 81.5% of the whole population shop on the internet.

The average amount of money a shopper spends online is on the increase. In 2016 the average spend was €1200 per person, while in 2017 this amount increased to €1700. Electronic commerce in Holland currently comprises 24% of the national market. Nevertheless, only 27% of the people prefer making purchases online. This percentage is lower than the estimates for other countries in Europe, such as France (35%), Germany (41%) and Great Britain (45%).

According to the forecast for this year, the Dutch electronic commerce industry is expected to grow by approximately 11%. This means that the online sales industry can reach almost €25 billion before the beginning of 2019.

Most popular category: Clothing

Considering the amounts of money that Dutch people spend online, the leading category of products is clothing. Consumers have spent approximately €2.3 billion on clothes. Other popular categories are Information Technology (€1.5 billion), telecom (also €1.5 billion) and food & near-food (€1.3 billion). Currently, there are around 34,000 websites where businesses offer their products and services directly to consumers. According to the forecast, this year the number may increase to 38,000+.

Are you still doubting where to start your E-commerce business? Read here 5 reasons to start a business in the Netherlands.