The Netherlands holds the 4th position of the global competitiveness index

Updated on 26 June 2023

In 2020, the Netherlands has reached the 4^th position in the latest World Economic Forum ranking of the world’s most competitive economies. This is quite an achievement, considering the relatively small area the Netherlands covers on the world map. Nevertheless, the Dutch are quite apt at creating and keeping solid international relations, and have been doing this successfully for centuries. Doing business in the Netherlands is booming, you can clearly prove this by looking at positive experiences from a multitude of foreign investors and entrepreneurs. A very large portion of Dutch startups actually generate high profits in just a few years, due to the competitive and innovative business climate in the country. We will explain in further detail what the global competitiveness ranking means in this article, next to outlining some of the Netherlands’ biggest benefits and feats for business owners.

The global competitiveness index

The global competitiveness index is a yearly report, which is generated by the World Economic Forum. This report measures, analyzes and identifies certain factors that have proved to contribute to rather high rates of economic growth in any country. This is done for a timeframe of around 5 years, so it’s measured over the years. You can access a world map on the website, that shows the current state of all world countries in combination with the Index of Competitiveness. The report itself is published yearly, though please note, that there have been no reports during the pandemic. The 2020 report is thus the most recent index. The index has been created since 2004, and is therefore one of the world’s leading reports when it comes to the competitiveness of any given country in a particular year. If you are contemplating starting a business in a foreign country, we recommend this report, so you can make an informed decision regarding the best base of operations for your future company.

Before the WEF global competitiveness report was created, competitiveness was rated with the help of both macroeconomic and microeconomic ranks, based on Jeffrey Sachs's Growth Development Index and Michael Porter's Business Competitiveness Index respectively. The global competitiveness index  of the WEF manages to integrate the macroeconomic and the microeconomic aspects of competitiveness into a new single index. Amongst other factors, the index assesses the ability of countries in which they are able to provide high levels of prosperity to their citizens. This is also based on the productivity of any country when using available resources. It therefore also focuses on sustainability in the near future, and whether current national and international goals are achievable.

The Dutch ranking in the index

The Netherlands holds a fantastic fourth position in the latest index, outranking for example Germany, Switzerland, Japan, Sweden and the United Kingdom. This makes the Netherlands one of the world's most competitive economies and an ideal base for any business venture. The index maps the competitiveness landscape of a total sum of 141 national economies, via a complex procedure using i03 indicators. These indicators are then organized into 12 themes, that cover a wide variety of issues such as the infrastructure of any country, its macroeconomic stability, the quality of IT and ICT, overall health, expertise and experience of the workforce and its general economic stability. The report also states that “the country’s own performance is consistently strong across all pillars, and it appears in the top 10 of six of them”. Some of the factors the Netherlands has a leadership position in, are its macroeconomic stability, overall health and of course its high-quality infrastructure. The authors of the report also state, that the innovation ecosystem is also well-developed.

Benefits the Netherlands offers to potential business owners

As already stated above, Holland houses an astounding infrastructure, both physical and digital. The roads are of the best quality worldwide and are well-maintained. You can reach any part of the country in around two hours, making it possible to ship goods abroad very fast. The infrastructure is also well-connected to the port of Rotterdam and Schiphol Airport, next to Amsterdam. The digital infrastructure is one of the fastest of the planet with the highest coverage per household, which is around 98%. You will also find a very lively and vibrant entrepreneurial market in the country, since a lot of foreign multinationals have already decided to move their headquarters here, or branch out in the form of a branch office. These are huge companies such as Panasonic, Google and Discovery. But it’s not just large corporations that thrive here; small businesses are also plenty and doing very well. The tax climate in the Netherlands is very stable and moderately low, compared to some other countries. If you set up a Dutch BV, you will be able to profit from the low corporate income tax. This also makes it easier to pay dividends.

A lot of foreigners state that they also feel very safe in the Netherlands, even in large cities. There is a very busy atmosphere with plenty of things to do, whilst the cities also offer plenty of coworking spaces for starting and already existing entrepreneurs. This makes it easier for you, to meet potential new business partners and/or clients. We also want to point out that the Dutch are extremely innovative and always look for ways to make current processes better, faster and more efficient. They are absolute geniuses with water, for example. Other countries often ask the Dutch for support when new dams need to be built, or measures taken against floods. If you like edgy niches and technological development, the Netherlands offers a very positive and future-oriented ambiance in which you can thrive.

How Intercompany Solutions can help your Dutch business grow and expand

Are you enthusiastic about starting a Dutch business? Starting a company in the Netherlands is not complicated at all, once you know exactly which documents and (possibly) permits you will need. The Dutch government offers an extensive list of visas and permits necessary to do business here from a foreign country. In any case, you have come to the right address for issues such as:

• Company establishment
• Legal and financial advice
• Support with various tasks such as opening a bank account
• Advice about the best options for your business

Establishing a business in the Netherlands can be accomplished in just a few business days. Please look on our website for detailed information about company establishment. If you have any questions, feel free to contact our team anytime. We will happily offer you the support and advice you need, or create a clear quote for you.

Sources

https://www.imd.org/contentassets/6333be1d9a884a90ba7e6f3103ed0bea/wcy2020_overall_competitiveness_rankings_2020.pdf

https://www.weforum.org/reports/the-global-competitiveness-report-2020