Starting a company oversees can involve many important choices, such as choosing the most profitable location and country for establishment. The Netherlands has been holding top positions in many economic and financial listings, due to the stable nature of the Dutch economy. In this article we will outline some interesting facts about the economy in the Netherlands, trending topics and current developments. This will provide you with enough information to seriously consider the Netherlands to branch out your business, or establish an entirely new business.
The current Dutch economic situation in a nutshell
The Netherlands is the sixth-largest economic power in the eurozone and the fifth-largest exporter of goods. The Netherlands, as a trade and export nation, is very open and therefore vulnerable to fluctuations in the global economy. In recent years, the recovery in the European Union (EU) has enabled the Dutch economy to grow dynamically. However, the uncertainty of world trade, the Brexit process and, above all, the spread of the COVID-19 pandemic led to a decline in the Dutch economy. In addition, exports and imports decreased by 3.9% and 5.3% respectively in 2020 compared to the previous year.
Political developments in the Netherlands in 2021
This year, acting PM Mark Rutte won the election with his center-right ‘Party for Freedom and Democracy’. It is his fourth consecutive election victory (2010, 2012, 2017, 2021). He has even gained a little more with 22% of the vote compared to 2017 and has a clear lead with 34 seats in the 150-seat parliament. The big surprise of the latest elections is Sigrid Kaag of the left-liberal Democrats 66 and currently acting Minister for Foreign Trade and EZA. It became the second-strongest political force with 14.9% of the vote and 24 seats.
In the past, the formation of a government in the Netherlands took an average of three months. In 2017, it took as much as 7 months. This time, all parties, especially the VVD, want a quick result in terms of the pandemic. Until a new government is appointed, Rutte will continue to do business with his current government. This means that no new trade agreements or restrictions currently apply, enabling foreign investors and company owners to steadily do business with the Netherlands.
Many interesting opportunities for foreign companies
Many foreign companies which have generally successfully gained a foothold in different countries through a healthy product and quality policy, also find opportunities in the Netherlands. There Is a wide plethora of sectors to do business in, such as the organic products sector in particular, which shows very good absorption potential. E-commerce and online businesses are also rapidly gaining in popularity, this is partly due to the effects of Covid as well. Many small entrepreneurs are selling unique goods online, which makes the Netherlands a perfect country to invest in if you have original or handmade products to sell.
Focus sectors within the Netherlands
There are many sectors within the Netherlands that offer potential for foreign entrepreneurs. These can vary from agriculture, technology to the food and beverage industry and clean energy. The Dutch always try to be at the forefront of innovation, providing efficient solutions for interdisciplinary problems. We will outline a few sectors that are particularly popular right now and, thus, provide a stable basis for investment.
Furniture and interior design
The Dutch furniture industry is located in the middle and upper price segment, where the market demands quality and luxury. About 150,000 people are employed in the furniture industry. The furniture industry in the Netherlands had 9,656 stores in 2017. The housing sector generated 7% of sales in the retail sector in 2017, with sales of EUR 7.9 billion. The housing industry faces major challenges in the coming years. House and apartment prices in 2018 (excluding new buildings) have risen by an average of 8.9% compared to 2017. In the future, consumers expect a business to be more accessible, meaning the opportunities will continue to extend to digital communication. If you have a talent within this sector, the Netherlands offers ample opportunities in the form of both small projects and large corporations.
The food and soft drinks industry
The Netherlands is one of the world’s largest producers of cheese, dairy, meat, charcuterie, fruit and other consumer goods. The majority of the smaller supermarket companies have merged into the shopping cooperative Superunie, which is part of EMD. Supermarket chain Albert Heijn (Ahold) has the largest market share of 35.4%, followed by Superunie (29.1%). Sales of Dutch supermarkets amounted to 35.5 billion euros in 2017. The Dutch consumer is currently increasingly interested in business models in which a shop simultaneously functions as a supermarket, snack bar, traiteur and an electronics or clothing store. The boundaries between LEH, hospitality and lifestyle are rapidly blurring. This makes it an excellent possibility for foreign companies to profit from this interdisciplinary approach.
In the field of renewable energy the Netherlands amounts to almost 6% of the total usage nationwide. Although the use of solar energy has increased significantly since 2011, it still accounts for less than 5% of renewable energy sources(1). This has motivated the Dutch to invest in renewable energy solutions. EU Directive 2009/28/EC set a binding target of 20% share of renewable energy in energy consumption by 2020; in the case of fuels, the share of renewable energy sources should be 10%. These measures are expected to increase the share of renewable sources by 27% by 2030(2). Energy is one of the top nine sectors formulated by the Government to play a leading role internationally. The Netherlands is leading the way in the field of electro-mobility.
If you would like to become involved in the renewable and clean energy sector, the Netherlands can offer you all the tools and knowledge you need. Even though the Netherlands has a lot of catching up to do regarding renewable energy, there is an ample amount of funds being invested in new solutions and inventions. This creates opportunities for foreign companies in areas such as energy saving for new buildings, decentralized energy generation such as wind energy, smart grids and also infrastructure projects, innovative soil remediation and waste processing techniques and flood protection. The Netherlands also offers environmental subsidies for certain green technologies and investments.
Want to invest in the Dutch economy?
Next to these sectors, the Netherlands also provides opportunities in many other areas. If you are thinking about setting up a company in the Netherlands, Intercompany Solutions can assist you during the entire process. If you are not a citizen of an EU member state, we can also help you with the applications for necessary permits. Feel free to contact us for professional advice or a quote.
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