The Dutch economy is prosperous, advanced and open for international investments. Holland is also among the oldest and most trustworthy business partners of the United States. The historical roots of this relationship can be traced to the Revolutionary War.
The tax system in the Netherlands offers incentives to encourage business and innovation activities. The favourable business climate does not bring benefits only to Dutch entrepreneurs. Holland is open to international investments and has become the home of many skilled foreign workers. It also hosts the European headquarters of many USA corporations, including UPS and Coca-Cola.
The European gateway for trade
The Netherlands is very dependent on international markets, as more than 50% of its annual GDP comes from trade with foreign partners. The country is in the global top 10 for export: a big achievement for its modest size. US companies setting up offices in Holland can make the most of the advantages offered by its strategic location. They can use and service the markets of the EU, Eastern and Central Europe, Africa and the Middle East.
Nevertheless, about 65 percent of all Dutch exports head to only 5 countries: the US, Great Britain, France, Germany and Belgium. On one hand, this is excellent for American companies aiming to develop business relationships. On the other hand, it is a limiting factor for business owners planning to operate on a bigger multinational scale.
Holland often serves as a hub for companies. A significant percentage of the imports (e.g. computers) are re-exported straight away without being processed. Every year millions of tons of North American and Asian goods arrive at Amsterdam and Rotterdam for distribution elsewhere on the continent.
Read more on import-export trade in the Netherlands
Opportunities for business
Some world-famous Dutch companies do quite well on their domestic market: from ING and Shell to Heineken, Unilever and Philips. Nevertheless, this should not deter you from investing in Holland, especially if your business is in the industry of services.
In the past several years the demands for services have increased and they have quickly become the largest sector of the Dutch economy, accounting for approximately 70 percent of the GDP. Trade is the largest industry in the sector, followed by telecommunications, construction, transport, insurance, banking and different financial services. According to experts, significant growth is expected in the field of communications and information technologies. This is not surprising, as Holland is among the most “connected” countries with respect to e-commerce, outsourcing and communications.
Labour relationships
Holland’s stability is reflected in its employment sector. Any American company intending to develop a business and hire personnel should be prepared for interactions with works councils and trade unions. Bargaining is typical for Dutch people and the trade unions have strong relationships with the government and employers’ organisations.
Forget about at-will employment. Once you hire staff on permanent contracts, you need to pay attention to their workers’ rights and follow the employment regulation. As a Member State of the European Union, the Netherlands follows the European regulatory framework, including the Directive on working time. It limits the working hours of employees to 48 a week, on average. However, individuals may voluntarily agree to longer working hours and opt out of this right. American companies with operating businesses in Holland should seek consultancy to make sure that the relationships with their employees are arranged in compliance with the regulations from the start.
Business culture in the Netherlands
According to some, the Dutch approach to business is completely different from the American, but that is an overgeneralized statement and stereotyping. Holland and the USA would not have been traditional partners if they did not work together well! Nevertheless, Americans should take into account some peculiarities when doing business with Dutch companies.
The Dutch people are honest, direct, serious and very straightforward. Sometimes this could be perceived as harshness and lack of care. Be specific and concise in your business interactions. Dutch go straight to business matters without much socialising. Handshakes always have a purpose. They do not make empty promises and expect the same from you. If you say that you will do something, even if it is small and inconsequential, you will be expected to complete the task. When negotiating, any hint of deception, evasiveness or secrecy can ruin the deal, because trust is fundamental to the prosperity of working relationships in Holland.
Establishing a business in Holland
According to the business index of the World Bank, Holland is 32nd in the world. The standard legal form for new companies is the BV (Besloten Venootschap) also known as a private company with limited liability. There are no minimum capital requirements and it takes three days to incorporate your business.
It is not surprising that Holland is among the leaders in international trade. The country is perceived by many as the Gateway to Europe, opening a world of new possibilities.
Call our local specialists who will help you with registering a company in the Netherlands and give you legal advice for a smooth start.
The creative industry of the Netherlands is gaining international recognition and is famous for its achievements in the fields of interior design, architecture, gaming and fashion. Creative companies work on the development of exciting new services, products, systems, strategies, work methods and ideas. They have the ability to consider complex issues in new, refreshing ways. As a result, creative businesses develop superior innovations of popular and controversial services and products.
If you are interested in starting a business in the Dutch creative industries, do not hesitate to contact our Dutch incorporation agents. They will provide you with more information and support on starting a new business and investing in the Netherlands.
The Dutch are not afraid of risks and unpredictable projects
The creative industries in the Netherlands embrace a quirky mentality whereby they welcome risks, rather than always count on safe choices. They go ahead with creative processes whose outcomes are difficult to predict. This has much to do with the creative thinking necessary to conceive, design and build applicable large-scale solutions for life in a region vulnerable to flooding. Dutch engineers, designers and architects are very talented and able to develop solutions in various fields, such as water security and urbanization. The creative industries are flexible: they use unconventional approaches, often collaborate in different areas and make important contributions in the search for solutions of societal issues, e.g. in the field of energy, safety and healthcare. They also catalyze the innovation processes in all sectors of the industry. Creative innovation can bring added value to various projects or products, regardless of the branch they come from.
Five astonishing facts about the creative industry in the Netherlands
Combining business and creativity
For hundreds of years, the creativity of the Dutch people has informed and inspired. The genius of Van Gogh and Rembrandt transformed our ways of perception. Contemporary Dutch masters include world-famous talents like the designers Viktor and Rolf, the illustrator and artist Dick Bruna and the architect Lucas “Rem” Koolhaas. They are prime examples of the strong sides of the signature Dutch design: pragmatism, open-mindedness, conceptuality, unconventional thinking and following the principles of minimalism. Dutch design embodies creativity, innovation and business intuition. It is a proof that creative thinking can bring business innovation, good competition and prosperity.
Pioneering in a variety of areas with national and global examples
Holland is famous with its pioneering design, architecture, television, music, fashion and gaming.
Rotterdam is a centre of urban design and architecture. Eindhoven is the technological centre of the Netherlands. Time Magazine dubbed its Design Academy, “The School of Cool”. Delft offers the oldest and largest academic industrial design program. Utrecht is proud with its Gaming Institute. The capital, Amsterdam is a multicultural centre of interactive design, fashion and communication and the ArtEZ Arts Institute in Arnhem is famous with its own Fashion Biennale. Many fashion designers enjoying international success are among its alumni.
Long-standing traditions in interior design
Holland has long-lived traditions in interior design. Gerrit Rietveld is a prime example with his furniture designs. One of the strengths of the Dutch school of design is visual communication and typography in particular. Famous examples are the design and signs at main airports like Schiphol in Amsterdam and JFK in New York.
Prestigious architecture worldwide
Architects from Holland have worked on a variety of prestigious projects, such as the Solomon Guggenheim Museum (Las Vegas), Governors Island (New York), the headquarters of Gazprom (Russia), the Public Library in Seattle and the Dalian Stadium (China). Holland is recognized for its characteristic integrated method of approach to building projects and urban development. Architectonic design is complemented by spatial design, while the social context and sustainability of the structures are also considered.
Original and popular television formats and an active industry for Online Gaming
Dutch television producers have occupied important positions in many global channels with their original formats. These include Big Brother, Idols, The Voice, So You Wanna be a Popstar and Hunt for Millions.
A main advantage of the gaming industry is the extensive adoption of mobile technologies and broadband (second highest internet broadband penetration rate in the world). Holland’s game market is among the most dynamic in Europe and accounts for 35% of the total spending. Holland is also a leader with respect to serious gaming, producing applications for industries, businesses and for educational purposes. The country is also pioneering in the field of popular dance events and dance music.
Rotterdam offers international corporations a rewarding, internationally oriented and stable business climate. The second biggest city in the Netherland is more than a good choice for establishing a business. Rotterdam offers great quality for your money and represents a gateway to the European market.
The Netherlands is internationally oriented
Holland is an internationally oriented European country. People of any nationality are welcome to work and live here. Rotterdam hosts more than 170 nationalities (> 30 000 immigrants) that give it a cosmopolitan, global personality.
Most Dutch nationals are bilingual and the majority of them speak English, besides their native language. The local economy, which is very dependent on trade with other countries, is famous for its relatively low rates of unemployment and inflation, and its stability. Holland also offers a highly qualified, strong labour force. All these factors contribute to its attractiveness for investors and entrepreneurs.
Rotterdam is a European gateway
Holland and particularly Rotterdam are known as the gateway to the European continent and represent a major transport hub. Companies located in the city of Rotterdam can reach more than 150M consumers in a radius of 500 kilometres.
Rotterdam is easily accessible by all means of transportation: via its port, the Maas River, railroads, roads and air. In this respect, it has the best connectivity in the whole of Europe. The airport in The Hague connects it to over 40 destinations abroad, while Amsterdam’s airport, Schiphol, is 30 minutes away by train. The port of Rotterdam is the largest in Europe (8th largest worldwide).
The city also performs well in major business sectors, e.g. Agriculture and Food, Offshore and Maritime, Health and Sciences, Clean Energy and Technology, Business Services (e.g. Insurance), Gas and Oil, and Chemicals.
Innovation is ever present in the culture of Rotterdam
The favourable entrepreneurial climate of the city attracts venture capitalists, innovators and start-ups. There is a variety of programmes and centres for development of innovations focused on supporting new and expanding businesses in fulfilling their potential. The main trends of development are aimed at finding solutions for global issues such as food and energy shortage and overpopulation. Popular themes are circularity, sustainability, new economy and smart technologies. The Innovation Ecosystem of Rotterdam is a network of representatives of the national government, different corporations, research institutions, financers and service providers that collaborate actively to deliver new services, products and technologies and, ultimately, bring forward the economy of Rotterdam.
The Netherlands has an attractive tax regime
The Netherlands has an attractive fiscal climate for new businesses. The government has adopted a competitive taxation regime to stimulate entrepreneurs and foreign investors. The rate of corporate tax is lower compared to other countries in Europe and there are incentives bringing benefits to international companies that have chosen to register their businesses in the country. Incentives include programmes for development and research (WBSO, RDA) and many subsidy schemes financed by private and public organizations to support medical research. One of the most important incentives for foreign corporations is the advance tax ruling system (ATR) with respect to proposed transactions adopted by the local tax authorities. The country has also concluded numerous international treaties for the avoidance of double taxation. All these factors contribute to the attractive image of the Netherlands in the eyes of foreign companies.
Low costs for operating a business
Rotterdam is an attractive city for investing and doing business. KMPG’s ranking of major world cities, a part of the guide on Competitive Alternatives for 2016, places Rotterdam 7th (the European city with highest ranking), while Holland 3rd in the countries’ ranking. The Competitive Alternatives guide is issued biannually and compares the costs of businesses at different locations worldwide, covering ten countries and over 130 cities. It focuses mainly on the costs of international businesses by location and type of operations. Apart from the overview of the expenses for doing business, the report contains important information about other factors influencing the attractiveness of the studied locations, namely: quality and availability of labour force, infrastructure, markets, economic conditions, legislation, personal living costs and general well-being.
Top international schools and knowledge institutions
The region of Rotterdam hosts world-famous universities and research institutions, including Erasmus University and Medical Centre, Rotterdam School of Management, Willem de Kooning Academy (WdKA) at Rotterdam UAS, Codarts and TU Delft. Erasmus University, named after the theologian and humanist born in Rotterdam, maintains a position in top 100 in the most popular international university rankings, including Reuters’ ranking for innovative universities for 2018 where it scored 56th. Besides prestigious institutions for high education, the city hosts several renowned schools for secondary and primary education.
Qualified labour force
The city has a very productive, highly skilled labour force. The main factors that contribute to the availability of qualified professionals are the openness of the country for international businesses, including its good fiscal climate, the top-class educational institutions in the region of Rotterdam and the outstanding performance of the city in major business sectors. Holland is placed second in Europe for talent availability.
A wonderful place to work and live
Along with its competitiveness as a place for doing business, Rotterdam is an excellent city to live in: welcoming, friendly and open-minded. It already has citizens from all around the world. International workers and expats will feel at home in the dynamic metropolis. Rotterdam is rife with possibilities and areas for exploration. The Netherlands’ architectural capital is safe, accessible and offers all types of accommodation covering a wide price range.
In case you are interested in starting a business in Rotterdam, please do not hesitate to contact our incorporation agents. They will provide you with more information and legal advice. You can also read more in our in-depth guide.
Last October the government of the Netherlands released a document announcing its future plans. The paper was finalized after a negotiation of more than 200 days. The document promises changes in various aspects of society. They include additional police funding and improvements of counterterrorism and cyber security. The government also envisages reforms in the labour market concerning sick leave, procedures for dismissal, rules for paternity leave and minimum wages. It plans to adopt a new system for pensions and amend the rules for child benefits. The paper also includes schemes on climate change, immigration, education and housing.
The 30 percent reimbursement ruling
The plans of the government specifically related to foreign employees concern changes to the thirty percent rule in the framework of envisaged tax reforms.
The 30 percent reimbursement ruling gives tax advantages to highly skilled foreign employees in the country, allowing them to receive 30 percent of their wages free of tax. Therefore such employees pay tax on seventy percent of their income. The rule is a form of reimbursement of the expenses migrants make for their relocation to the country, including housing, travel and visas. This tax advantage is a method to attract highly qualified international workers and fill existing expertise gaps in Holland. Currently foreign employees can claim the advantage for 8 years, even though it has been estimated that only about 80 percent of them actually benefit from it.
Last October the government made an announcement that soon the maximum period of the 30 percent ruling will be reduced from 8 to 5 years. The change will apply to newcomers and employees that are already using the advantage.
Read more on the 30 percent reimbursement ruling in our FAQ.
A petition signed by 30 000 people
Until now approximately 30 000 have supported a petition asking the government of the Netherlands to keep the old rule for employees who have already moved to the country and currently benefit from the advantage.
People have created Facebook groups to highlight and discuss the issue and have launched a campaign to raise money to fight in court the decision of the government. They say that they recognize the government’s authority to change the policy for future foreign employees as appropriate, but the amendments should not apply to current expats who have already moved to the Netherlands with the assumption that they will be entitled to 8 – 10 years with reduced taxes.
The decision to limit the 30 percent ruling term for existing claimants without a period of transition has raised much concern among expats. Employers of international workers are also worried about the repercussions of the proposed change.
Many lawyers specializing in taxation have been contacted by people with concerns about the ruling’s implications.
The 60 000 foreign workers in the Netherlands meeting the strict requirements on income will face significant financial consequences. If, for example, an expat is earning 60 000 Euros a year, then he/she will have to pay approximately 8000 Euros more in taxes. This considerable drop in personal income will inevitably make the country less attractive for foreign professionals. Many other countries worldwide welcome skilled employees, so people willing to work abroad will likely choose other locations. To counter this trend, Dutch employers will have to offer much more attractive packages for relocation and better salaries.
International workers in the Netherlands have already voiced their concerns by lodging complaints and donating money to the campaign for challenging the decision. A person who has arrived in Holland last year commented on the page that he has recently bought a flat, taking a thirty-year mortgage. He feels cheated by the government that decided to change the rules retroactively and considers this practice dishonest.
You can find more information on the campaign at: https://www.gofundme.com/expatfund or hashtag #aDEALisaDEAL
Intercompany Solutions offers comprehensive financial advisory services to expats who live and work abroad. Regardless of your situation, we will help you see your finances clearly and prepare yourself for the future.
In 2017 a total of 143 international companies opened offices in Amsterdam’s urban area. The city remains a popular choice for foreign companies planning to develop their businesses in Europe. It is estimated that for the next 3 years these corporations will create 2700+ jobs.
Amsterdam offers thousands of jobs
In 2017 the expansion of already established foreign businesses resulted in the opening of 4100 new job positions. The European Agency of Medicines also made an announcement that it is moving its central office to Amsterdam. The Agency’s headquarters are currently located in London and need to be relocated because of Brexit.
According to alderman Udo Kock, Amsterdam is a stable competitive location for foreign start-ups and businesses due to its convenient placement in the heart of Europe, its outstanding logistic networks, its data hub function and its attractiveness to skilled professionals. The city’s top ranking has led to the opening of many new jobs in the region: a total of 6500 in 2017, excluding the positions to be opened after the move of the European Agency of Medicines. Amsterdam, however, should not take the presence of foreign businesses for granted. The city has to continue investing in new office spaces, infrastructure, housing and international schools throughout the region.
Stable international position
The strong position of Amsterdam on the competitive European background is evident from last year’s international rankings. The report of IBM on worldwide location trends ranks the city second in attracting international investments. Its GPCI index is rated third in the EU for attracting foreign professionals and, according to Economist’s Index, it is considered the safest city in Europe. These outstanding results are partially attributed to Amsterdam’s convenient location, but also to the improvements in the business climate of the region and its efforts directed towards acquisition and marketing.
North American businesses are still the biggest investors
The largest source of investments for 2017 was North America with 53 percent of all created job positions and 36 percent of newly established companies. For example, one of these companies, BAMtech Media, that provides video streams covering different sport events, currently employs sixty people and has a registered office in North Amsterdam. The region of Europe – Middle East – Africa (EMEA) was the second biggest source of investments for 2017 with 23 percent of all new jobs and 36 percent of newly established companies. Asian investments continue to be stable with 23 percent of created jobs and 25 percent of newly established companies. North America is also leading in business expansion, representing 57 percent of the job positions created through expansion. Many of the USA businesses established in the Netherlands have an inherent tendency to develop quickly (e.g. FashionTrade and Netflix), but multinational companies such as Asics and Infosys also expanded.
Most newly established foreign companies operate in the field of creative industries, ICT and financial services. Nevertheless, the sectors of science, health, agriculture and food also perform well. As regards business activities, sales and marketing offices, and European headquarters are predominant.
The European Agency of Medicines (EMA) and Brexit
In 2017, in response to the plans of the United Kingdom to leave the EU, the Community made a decision to relocate the EMA’s headquarters to the Dutch capital in two years’ time. This step will attract more companies operating in the area of life science and related fields to move to Holland since they will benefit from their proximity to the vital EU agency. Amsterdam provides active support to the Agency and its staff in order to facilitate the relocation to the area of Amsterdam. The city and its partners from the network “Invest in Holland” will make sure that the companies and professionals following the Agency to the country will establish quickly in the area of Amsterdam and in other locations around the country.
Differences between the regions
Skilled international employees are vital to the success of many businesses and, in principle, these professionals prefer city life. Estimates show that the total number of businesses opened in Amsterdam City has increased in comparison to elsewhere in the region. The Amsterdam inbusiness has directed its efforts to change the situation through its communication and marketing initiatives. The municipalities of Almere, Haarlemmermeer and Amstelveen, among others, are also suitable locations for foreign businesses in the region, as it usually takes less than 30 minutes to travel from there to the centre of the city. Amsterdam is attempting to distribute evenly the skilled international professionals on the territory of the region. The establishment and enlargement of international educational institutions in Haarlemmermeer, Almere, Hilversum, Amstelveen and Haarlem undoubtedly contributes to this aim. For 2017 alone, the new places opened at international schools in the region were 850. Most of them are in the area of Amsterdam.
Holland is a global leader in water management. Over the years the nation has perfected its means for flood protection, water treatment and supply. The Dutch are maritime engineers and build ships, including utility vessels and superyachts. Their expertise is needed all over the world. The Netherlands is the main supplier of systems for sustainable water supply and production, and reintroduction (after collection and treatment) of “waste” water. In the sector, there are several significant engineering firms operating globally. The Water Partnership and other platforms in the Netherlands encourage international collaboration. The sector is mainly focused on continuous innovation and export.
If you plan to establish a business in the Dutch water sector, please, contact our agents in incorporation. They will give you more information on the investment opportunities and the procedures to establish a company in the Netherlands.
Water is an indispensable part of the local culture
The delta’s water is both life-threatening and lifesaving. This is why the water industry is perhaps the most fundamental to the Dutch character and culture. The sector is focused towards three primary areas: delta, maritime and water technology. They are directed towards land protection, energy generation, smart water recycling technologies and efficient, safe ships. The water expertise in the Netherlands is one of the best worldwide.
Five reasons why Holland handles water challenges well
1. Water takes a significant part in the Dutch history and life
Water is inextricably bound to the prosperity and history of the nation – it is a part of its DNA. Vast parts of the country were reclaimed and 2/3 of its territory would flood regularly if there were not complex interconnected systems of surge barriers and dykes in place.
2. The water technologies in the Netherlands safeguard the environment and water
The booming economy, urbanization and climate changes are threatening delta populations all over the world. Luckily the Dutch are experts in hydraulic engineering, foundation infrastructure and technology, flood protection and flood control. They are famous with their design of levees and search barriers, land reclamation through high technology dredging and engineering of entire harbours and coastal areas. The nation is also renowned for its river maintenance and engineering. It is at the forefront of climate-adapted construction that allows the building of houses in areas at risk of flood.
3. Expertise in water treatment
The Dutch sector of drinking water is owned publicly. Drinking water is supplied by 10 semi-public companies. Municipalities are responsible for the management of the system of sewers while 25 regional governmental water boards deal with wastewater treatment at a municipal level. Many local companies specialize in industrial wastewaters treatment, while several consulting bodies are world-famous for their expertise in water treatment.
Holland has been using innovative techniques for treatment of wastewaters since the 70s. Almost all households in the country have clean drinking water entirely free of chlorine. Furthermore, much of the industrial water is recycled so efficiently, that it may be even used in beverage and food production.
Meanwhile billions all over the world do not have access to sanitary facilities and clean water. In this respect, Dutch technologies can really make a difference. High-quality integrated cycles of water collection, filtration and recycling are in place to facilitate sustainability and economic development.
4. Solutions for integrated management of waters
The Netherlands is famous for its multidisciplinary approach to integrated management of waters that balances economic, social, engineering and environmental needs (“Building together with Nature”).
Dutch companies work on projects for the development of urban agglomerations at low elevations (e.g. Bangladesh and Jakarta), as well as on coastal development (Vietnam, Romania and Dubai).
5. Investments in R&D
Academic institutions and private companies invest considerable amounts of money in development and research related to water. This has led to many innovations if fields like filtration. Many investments in R&D and innovation go to private-public partnerships. Some of the collaborators are famous institutes of the rank of MARIN, Deltares, KWR and Wetsus. The Netherlands Organisation for Applied Scientific Research and some big private companies are also renowned for their developments in the water sector. The investments have already led to innovations such as water purification under anaerobic conditions, membrane technology, Annamox technology, and small-scale high-quality membrane bioreactors.
On September 19, 2017 (Budget Day in the Netherlands) an official legislative proposal for amendment of the Dutch withholding tax on dividends was published in connection to the Tax Plan for 2018. In summary, the proposal referred to a broadened exemption from withholding tax on dividends applied unilaterally with the aim to maintain the favourable fiscal climate in Holland.
On the same day, the Senate approved all proposals included in the Tax Plan for 2018. Therefore, the broadened exemption from withholding tax on dividends is in force since January 1, 2018.
Dutch exemption from withholding tax on dividends before January 1, 2018
For a number of years, Holland has exempted the distributions of dividends to EU or EEA (European Economic Area) parent companies from withholding tax based on Council Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. According to this document any income distributed by subsidiaries to parent companies in different member states is not subject to withholding tax on dividends in case the following collective requirements are fulfilled:
- The legal form of the parent company has to be listed in Annex I of Directive 2011/96/EU;
- The parent company has to reside in a Member State of the EU under its national law and pay corporate tax on its income without possibilities of exemption;
- The company needs to hold a minimum of 10 percent of the subsidiary’s voting rights (or capital). The Directive was amended to reduce this holding requirement. It decreased from 25% for 2005 to 20% for 2006; for the next two years it was 15% and in 2009 it became 10%.
- The requirement for minimum period of holding (if any) should be fulfilled.
Extended Exemption from Dutch Withholding Tax on Dividends since January 1, 2018
From the beginning of 2018, the Dutch exemption from withholding tax related to dividends has a broader scope. It applies to the distributions of dividends in the following cases:
- The parent corporation would have qualified for the participation exemption in the Netherlands, i.e. its interest in the distributing entity/subsidiary is 5% or more;
- The parent corporation resides in the EEA, EU or a country that has signed a tax-related treaty with the Netherlands including provisions for dividends.
- The corporation has not been denied a withholding tax reduction with regard to dividends under the treaty between Holland and the country where it resides by virtue of a counter-abuse provision.
- The parent corporation does not own a part of the distributing entity’s/subsidiary’s capital with the chief purpose to avoid the Dutch withholding tax on dividends. This condition is verified through a “subjective test”. An assessment is made to check if the company owns a part of the capital of the distributing entity/subsidiary with the intention to circumvent Dutch withholding tax on dividends and if the company was interposed to achieve a better position with respect to Dutch withholding tax on dividends. If the assessment yields a positive result, it is followed by an “objective test”. Its purpose is to ascertain if the entity is artificial, i.e. it was not established for legitimate business reasons reflecting the economic reality. In general, entities are not considered artificial in case:
- the parent corporation has an operating business; or
- the corporation is a holding that has acquired a better position with regard to the Dutch withholding tax on dividends in comparison to indirect shareholders (grandparent company) having an operating business, but its relevant substance is sufficient. This means that the parent corporation (intermediate holding) meets two additional requirements for substance, on top of the existing ones stipulated in Dutch law: 1) The parent corporation has costs for employees amounting to no less than 100 000 Euros; 2) The parent corporation has office space where it performs its business activities.
The additional requirements for substance are in effect from April 1, 2018.
Who gets an advantage?
The exemption from Dutch withholding tax on dividends benefits parent corporations based outside the EU that operate active businesses and reside in jurisdictions with which Holland has signed tax treaties. The treaties must include provisions regarding dividends that provide for partial withholding tax reductions.
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Are you developing a business outside of the EU and considering an expansion to new markets beyond your country’s borders? The broader scope of the exemption from withholding tax on dividends makes Holland a convenient jurisdiction for businesses outside the EU looking for options to expand their operations to the Netherlands and Europe.
Our team at Intercompany Solutions has the skills and knowledge to support you through each phase of your expansion process. Would it be beneficial for you to work with a competent partner to help you with your plans for expansion? Get in touch with our professionals, discuss your ideas and see what we can do for you.
The Dutch sector of horticulture sets global trends, supplies markets worldwide and leads in innovative technologies for greenhouse cultivation. Holland is the undeniable leader on the international market of plants, plant reproductive material, cut flowers and bulbs, and is rated third for its export of nutritional products of horticulture. The country is in the centre of a global network for decorative trees, bulbs, floriculture and fruit and vegetable production.
In case you are considering incorporating a business in the field of horticulture, please, contact our agents specializing in company formation. They will provide you with legal advice and information about opening a company in the Netherlands.
An important contribution to national prosperity
The problems encountered during the establishment of sustainable urban centres often have to do with basic needs, e.g. shelter and food. The supply of indispensable resources (energy, food and water) needs to be secured through creative solutions and smart thinking. For centuries the Netherlands has been developing systems to cater for the needs of its population under such circumstances and now it offers excellent possibilities for export to countries experiencing shortages in resources. Local horticulture sets global trends and is differentiated in 6 clusters (Greenports). In these centres, research institutions and businesses collaborate in the areas of research and development, production, infrastructure, export and logistics. Horticulture has significant importance for the prosperity of the Netherlands, delivering large volumes of high-quality commodities and adopting technological innovations such as automated fruit pickers, intelligent greenhouses floating on water, glasshouses consuming less electricity than they generate and feeding the grid, and innovative methods for low-energy lighting and recycling of wastes and water.
Five reasons why the Netherlands is leading in the supply of trees, plants and flowers in the world
1. Developments in the field of Green Genomics
Holland is among the leaders in Green Genomics. The aim of this scientific field is to provide safe and sustainable production, higher yields, changed taste or design, and disease resistance in plants. TTI Green Genetics and Plant Research International are leading institutes in this area.
2. A large diversity of shrubs and trees
The variety of shrubs and trees produced in the Netherlands is unmatched. The industry is underpinned by a strong national market. Holland also maintains a leading position in R&D and trade related to tissue cultures, propagation material, young plants and seeds.
3. An original approach to innovation
The Netherlands has adopted a unique R&D approach to bring innovations: the government works closely with research institutions and companies in a “golden triangle” to complete innovation-related programmes and projects. Some examples of excellent innovations are intelligent greenhouses floating on water, robots, moving platforms, energy-saving lighting and recycling of water and wastes, glasshouses consuming less electricity than they generate and contributing to the reduction of carbon dioxide emissions, etc.
4. The famous greenhouses in the Netherlands: Glass City
Modern Dutch greenhouses already generate about 10% of Holland’s electricity by using a combination of power and heat (CHP). The country is famous with its inventive solutions for greenhouse cultivation and unrivalled scale of production. Its glasshouses cover over 60 square kilometres and look like a glass city, while their environmental impact is relatively low. Efforts are directed towards technologies and concepts facilitating adaptability to the changes in climate and energy-efficiency. Read more on the Dutch energy industry.
5. Logistics hubs and production of excellent quality
Rotterdam’s port and Schiphol Airport in Amsterdam are the most important logistics hubs in the country. Holland is conveniently located in the heart of Europe with easy access to the continent’s half a billion consumers. Furthermore, the development of methods to obtain high-quality produce has enabled its horticultural sector to gain global recognition. The Netherlands has developed effective supply chains capable of delivering freshly cut flowers to New York in less than a day. Also, true to their entrepreneurial spirit, the Dutch have set up nurseries in Ethiopia, Kenya, Costa Rica, Portugal and France.
Many enterprises and companies treat intellectual property as a significant asset. The rights related to it – copyrights, trademarks, patents – often prove to be more profitable in comparison to physical assets. Therefore, it is important for corporations to develop adequate strategies with respect to their intellectual property in order to guarantee the best use and protection of their assets. The present brief overview provides information on the major rights relevant to intellectual property and their protection under the law in Holland.
Patents in the Netherlands
In the Netherlands, the Act on Patents (Rijksoctrooiwet) from 1995 protects patent rights. By definition, patents are exclusive rights to inventions in all technological fields. Inventions are patentable if they meet several requirements:
- they concern a technical process or product;
- they are novel, i.e. have not been publicly disclosed by any means before the day of submission of the application for patent registration;
- they involve inventive steps, i.e. the inventions are not too obvious;
- they have industrial applications.
Applications for Dutch patents are submitted to the national Patent Office. The applicant must request a search for novelty 13 months after the submission of the application. In another 9 months, the search results become available. These results, however, do not decide whether the invention will be patented or not, even if it lacks novelty according to the report. In a dispute, the requirement for novelty is considered in court. The patent or application is included in the patent registry of the Netherlands eighteen months after the submission of the application. The protection term is twenty years from the filing date.
The owner of the patent has exclusive rights to prohibit the use of the invention for commercial aims by third parties. Invention use means production, placing on the market, lending, selling, offering, supplying, storing and importing the patented invention.
Trademarks in the Netherlands
Trademarks are signs that distinguish companies’ services or products (goods) from others on the market. They can be either logos or brand names. Company names or trade names can be considered trademarks.
The BCIP (Benelux Convention related to Intellectual Property) states that a trademark must first be registered to ensure protection in Belgium, Luxembourg and the Netherlands. The BOIP (Benelux Intellectual Property Office) is the institution for official registration of trademarks in Benelux. The definitive registration of a trademark is completed in about 4 months. The payment of an additional fee can speed up the procedure. The Office will refuse to register a trademark if, among other reasons:
- it lacks distinctive characteristics or does not satisfy the trademark definition;
- it conflicts with morality or public order;
- it can mislead the public.
All trademark registrations in Benelux are valid for 10 years. They are renewable every 10 years if the renewal request is submitted 6 months before the trademark expiration date. Trademarks need to be actively used to maintain their rights.
Trademark owners have the exclusive rights to prohibit other parties to use or register newer signs, identical to their trademarks and use them for identical services or goods. The registration or use of similar newer signs for similar services or goods may also be banned if there is a probability of confusion. Trademark owners that are popular in the region of Benelux can also dispute the usage of similar or identical newer signs for any services or goods (regardless of their level of similarity) if this usage takes unjust advantage of the original reputation or character of their trademarks or brings unfavourable consequences for the owners.
Certain multinational organisations give the possibility to foreign entrepreneurs to use their trademarks as a franchise. This can be concluded as part of a franchise contract, which regulates the franchise requirements and financial compensation between the franchisee and the franchisor. Naturally, franchise agreements have to comply with the Dutch law. Read here for more information on franchise agreements.
Trade names in the Netherlands
In Holland, trade names are protected by the Dutch Act on Trade Names (Handelsnaamwet). Trade names are defined as the names that companies trade under. In general, a company can freely choose a trade name, as long as the chosen name is not misleading, for example as regards the entity’s ownership or legal nature.
Protection does not require trade name registration, e.g. in the Commercial Registry of the Netherlands. The rights connected to trade names arise from their use. In contrast to trademarks, trade names do not have to be original. Still, descriptive names have limited protection.
The Act on Trade Names prohibits the usage of a name, similar or identical to a name in use by another entity if such usage is likely to cause confusion, given the location and nature of the entities.
Copyrights in the Netherlands
In Holland, the Act on Copyright (Auteurswet) protects copyrights. It gives authors of artistic, literary or scientific works exclusive rights to reproduce their works and make them publicly available.
According to Dutch law, works should have original, individual characters and reflect the personal imprints of their authors. The provisions contain an exemplary list of copyright-eligible works: paintings, books, computer programs, brochures, etc. Logos and website/product design can also be protected by copyrights. Ideas, concepts and formats are not protected if they are not embodied in specific works.
Copyrights are obtained through the creation of works meeting the abovementioned conditions. No official requirements, e.g. usage of a sign like “©“ or registration, exist. The protection of copyright ends 70 y. after the author’s death. If the creation is authored by a legal person, the copyright is protected for 70 y. after the work’s first publication.
There is an option to submit an i-DEPOT at the BOIP. This can prove the existence of a creation at a particular time and might be helpful when considering whether a particular work is original. The i-DEPOT, however, does not create an independent intellectual property right.
Copyright owners can prohibit other parties to publish or reproduce their work without authorization. If a particular product and a copyrighted work leave identical overall impressions, then there is an infringement of copyright. Disputes are taken to competent courts that assess the cases by considering the work’s copyrighted features.
If you have questions concerning intellectual property and the relevant rights or intend to develop a business in the Netherlands, you can contact our Dutch agents specializing in company set-up.
In the Netherlands, a subsidiary is a normal company – a separate legal entity with share capital partially or fully owned by an international company. This is an important difference from the Dutch branch – an entity that is more strongly linked to its international founder.
The international company established abroad can control its subsidiary in Holland, but, in contrast to the situation with branches, it does not carry full liability for the Dutch subsidiary’s debts, obligations and actions. The subsidiary does not have to engage in the same operations as its parent company and, if necessary, it can register for the performance of more activities. This and the limited liability of the parent company are the two main advantages when opening a subsidiary.
The founders of a Dutch subsidiary are able to choose between 2 very common types of entities: private or public companies with limited liability.
Types of legal forms for Dutch subsidiaries
The private company with limited liability (or BV) is suitable for small and medium businesses. There is no minimum capital requirement for the incorporation of a BV as a Dutch subsidiary – it can be established with 1 Euro. Its share capital has to be split into non-transferable registered shares. The shareholders carry limited liability to the extent of their contributions to the capital of the company. One or multiple directors can be appointed to manage the business. There are different methods for BV incorporation, depending on the main goal: privacy of the directors and shareholders, tax minimization, a holding structure for international business or a BV owned by a special structure, e.g. a foundation.
Entrepreneurs can also open public limited liability companies (NVs) as subsidiaries. The minimum capital required to establish an NV is EUR 45 000 split into bearer and registered shares. NVs can issue certificates of shares with respect to bearer shares, in contrast to private companies with limited liability. Shares can also be transferable. The shareholders carry limited liability covering the capital they have provided to the company. In contrast to BVs, NVs can be traded on the Securities Exchange.
Dutch subsidiaries must have a minimum of 2 managers, forming a management board. A board of supervisors can also be formed to oversee the activities of the managers. Large companies like NVs follow more stringent requirements in yearly reporting, auditing and accounting.
The procedure for registering a Dutch subsidiary
The first step in registering a Dutch subsidiary is to open an account in a local bank, deposit the required capital and obtain a document to certify the deposit.
The subsidiary founders need to check whether the name they chose for the subsidiary is unique. This is done at the Commercial Chamber. A confirmation of the name’s validity is sent by email. If the name is available, the founders can proceed with registration.
Before registration at the Commercial Chamber, the subsidiary founders must obtain a non-objection declaration issued by the Ministry of Justice. For this purpose, they have to file an application and pay the relevant fees.
The association articles, the subsidiary establishment application and the deeds of foundation need to be notarized. All documents mentioned above have to be presented at the Commercial Chamber, accompanied by a deposit certificate and the non-objection declaration.
Taxation of Dutch subsidiaries
Any subsidiary registered in Holland is considered a resident company and has to pay corporate taxes identical to those of any other local company. Therefore, registration at the Tax Office is obligatory. The subsidiary should be registered at the Administration for Social Security in order to hire employees locally.
The corporate tax in Holland is 19% for yearly profits up to EUR 200 000 and 25,8% for income exceeding this threshold in 2024. Local companies pay taxes with respect to any profits generated worldwide. Holland is an EU member, so the EU Directive for parent companies and subsidiaries is applicable to Dutch subsidiaries of international companies. The Directive and the treaties for avoidance of double taxation between Holland and other countries guarantee significant tax relief and incentives.
Other taxes that Dutch companies need to pay include the tax on real property, transfer tax and contributions to social security. The fiscal year usually matches the calendar one. All subsidiaries of international companies need to follow the Dutch reporting and accounting principles. Incompliance with the filing requirements can result in fines and penalties.
The procedure for subsidiary registration for business purposes in Holland is uncomplicated and takes approximately 8 work days.
If you need more information on the procedures for setting up a Dutch business, do not hesitate to contact our local agents. They will provide you with more information on company formation and legal advice.
The Dutch sector of agriculture has succeeded to maintain its position as the second largest exporter in the field of agriculture. For 2017, the total value of agricultural exports reported by the Central Bureau of Statistics (CBS) is 113.5 billion US dollars or 92 billion Euros, which is 7% more in comparison to 2016. Thus the country ranks second among the top agricultural exporters in the world, after the United States. The agricultural exports of the US for the fiscal year of 2017 were estimated at 140.5 billion dollars or 114.2 billion Euros.
According to CBS, approximately 40.5 billion Euros come from products made in Holland and another 3.5 billion Euros are attributable to commodities that were imported from elsewhere, underwent some processing and were exported. If products related to agriculture were included in the calculation, then the Dutch participation in the global economy would increase to 48 billion Euros.
Flowers and bulbs were first among the top export products. Dairy products were second, overtaking meat that was ranked in second place the previous year.
Destinations for export
The agricultural produce for export of the Netherlands is mainly destined for Germany (34 billion Euros for 2017). Holland is the most significant export market for Germany as regards agricultural products. Other significant export flows are directed towards Belgium (10.4 billion Euros), the United Kingdom (8.6 billion Euros) and France (8 billion Euros). According to CBS, the trend shows an increase in exports to France and Belgium and a decrease to the United Kingdom, perhaps due to the weaker GBP in connection to Brexit.
The net export value of products related to agriculture, e.g. pesticides, fertilizers and farm equipment, reached 9.1 billion Euros bringing the sector’s total to 101 billion Euros.
A wonder in the agri-food industry
The area of the Netherlands is only 41.500 square kilometres and its population is approximately 18 million. The country brings hope for finding solutions to the challenges of world hunger. Although small, it has a very strong position in the world’s sector of agriculture; Holland is a driving force leading globally in the field of innovative solutions and food security.
If you are wondering how to start a business in the Dutch agricultural sector, please, contact our incorporation agents in the Netherlands. They will give you more information and legal guidance regarding the procedure of company establishment.
The Netherlands is among the leading exporters of food and agricultural products worldwide due to its innovations in agri-food technology. The sector offers a reliable source of safe and healthy food produced using nature- and environment-friendly methods.
In case you are in interested in establishing a business in the agriculture and food sector of the Netherlands, please contact our agents specialised in company formation. They will provide you with legal advice and additional information on how to set up a Dutch company.
Delivering healthy food from sustainable sources
The rapid global urbanization and the migration of people from rural areas to the big cities lead to an increasing demand for healthy and sustainable food supplies in the urban zones. The security of food is paramount to social wellbeing and economic performance. The search is on for solutions regarding food safety, animal welfare, habitation and waste-disposal, as well as education, governance and social fairness. The Netherlands is located in a relatively small delta region with low elevation, where the land is a precious resource. This is one of the reasons why the local farms are among the most efficient, sustainable and intensive worldwide.
Due to the fertile soil, high produce quality, intensive farming, trading expertise and extensive knowledge in agriculture, the Netherlands exports food products on a global scale. This covers products of both plant and animal origin, i.e. poultry (meat), eggs and livestock. Other key export items are automated food processing machines such as pickers for soft fruit, meat separators and equipment for potato processing, as well as knowledge on food processing. Twelve of forty leading companies producing foods and drinks have Research and Development centres in the country.
Five reasons to choose the Netherlands for your business in the food and agriculture industry
1. The country is a world leader in innovation and export of foods and agricultural products
After the United States, Holland is second in export of agricultural products in the world. It falls in the global Top 3 of fruit and vegetable producers, along with the US and Spain, supplying 25% of all vegetables for export from the European continent. The Dutch sector of agriculture is diverse and covers a variety of plant cultivation and animal husbandry subsectors, including field and greenhouse cultivation, fruit-growing, pig and dairy farming.
The Netherlands sees things in perspective. This is evident from the world-famous innovation and research infrastructure in the country. The University of Wageningen was rated first among agricultural universities worldwide for three consecutive years in the Taiwan Ranking that includes 300+ universities dealing with scientific research. Of the leading twenty-six companies in the sector of agriculture and food, five have Research and Development facilities based in the country. Here are some examples of investments made by private companies:
- a new Research and Development centre of Danone in Utrecht concentrating the European research of the company on children nutrition and clinical nutrition;
- a new European Research and Development centre of Heinz in Nijmegen;
- a new Research and Development centre of Royal FrieslandCampina in Wageningen;
2. The Netherlands has a mild climate, fertile soils, flat terrain and favourable location in the centre of the European continent
Next to its excellent geographic characteristics, the country has extremely well-developed infrastructure, logistics, food processing branch and commerce.
3. Successful renewal of the chains of agri-food production
For many years the agriculture in the Netherlands has maintained its leading position in the international competition through active investment aimed to renew the chains of agricultural production. Growers and farmers are eligible partners in this chain. Their main goal is to supply food and plants (including ornamentals) with the best possible value for money using sustainable, innovative and socially responsible methods.
4. The Netherlands supports the Global Food Security Alliance
It has been estimated that by 2050 the world population will reach 9 billion. If the current levels of food production remain unchanged, there will be a 70% shortage. The Alliance plans to solve this problem by using a Dutch approach based on climate-smart systems in agriculture. It intends to intensify and expand small-scale projects of fishermen, small farmers and horticultural growers and to maintain a high level of food safety by focusing on beneficial private-public partnerships.
5. Environmentally friendly and sustainable agriculture
Regardless of the tight margins of profit, the agricultural business invests significant resources in protection of the environment and implements improvements regarding animal welfare. While the agricultural business is a main engine of the national economy, it carries certain risks for the environment. During the past decades, agriculture has shown a trend of increasing scale and intensity of production, leading to a growing impact of manure and fertilizers in non-urban areas. Farming needs to be more sustainable. Currently, the agricultural sector in the Netherlands is directed towards sustainability in order to provide safe and healthy food, produced with care for the environment and the landscape.
