Guidelines for US Entrepreneurs: How to Start a Netherlands Company
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.
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.
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.