Why would you choose to establish a business in the Netherlands?

When contemplating the possibility of becoming a business owner, most (future) entrepreneurs generally choose to register their business in their home country. The reason they often state, is because this is the most practical option that doesn’t involve too much hassle and paperwork. When you set up a business in a different country, you automatically also have to comply with the (tax) laws and regulations of that country. So it takes a bit of legal and financial research, when you decide to start a business in a different country than your own. Nonetheless, it is still a very lucrative decision for many foreign entrepreneurs to expand internationally. For starters, you get to benefit from all facilities and regulations a certain country has to offer. In this article we will outline why starting a Dutch company is often a very good idea, what you have to think about when starting a company overseas, and we will also sum up many of the benefits the Netherlands has to offer to foreign investors and entrepreneurs. If you are already enthusiastic about the possibility of starting a Dutch business, then Intercompany Solutions can assist you during the entire registration procedure.

The Netherlands is a very competitive country businesswise

More than most countries in the world, the Dutch offer a very friendly and competitive business climate, meant to push you to your limits as an entrepreneur. Doing business is substantially different from being an employee, since you are solely responsible for all your daily business activities. This means, that you need a focused and disciplined approach to everything that you undertake. According to the Dutch Central Bureau of Statistics (CBS), approximately 13% of all Dutch citizens are self-employed. This amounts to roughly 1+ million Dutch people who own a company. Next to Dutch citizens, many foreigners have also decided to start a Dutch business, alongside many well-known multinationals who also have at least one base of operations in the Netherlands, which makes the total number of Dutch companies even larger. This means, that you will find healthy competition in the country, as well as ample possibilities to network with fellow entrepreneurs. There are also many events and incentives that you can attend, in order to help grow your company even further. You need to take into account, however, that competition can also be fierce. So a good dose of ambition and competitiveness will certainly help you along the way.

The Dutch love innovation and improvement

One of the most striking qualities of the Dutch is their insatiable appetite for constant improvement, innovation and reinvention. You only have to look at the way the Dutch handle water crises, to see how incredibly versatile their approach to different sets of problems is. This is palpable in almost every market or niche the Dutch enter: in every way, they always strive for new possibilities to solve old problems. If you are someone who likes to do things better than they were done before, then the Netherlands offers you plenty of space to innovate. There are many business opportunities within progressive niches such as clean energy, the bio-industry, pharmaceuticals, technology, IT and logistics. Next to that, many online entrepreneurs will find the fast-paced climate to their liking, since new technology is being invented in consecutive timeframes. You will also find many professionals within their fields, who can help you build your company to a higher level. If you are looking for qualified employees, then the Netherlands also offers you a wide variety of expertise and experience overall. We will discuss the multilingual and highly educated workforce later in this article. Innovative ideas and progressive solutions are always welcomed in the Netherlands!

Many different niches to operate in

As we already briefly discussed above, you can choose a wide variety of niches to start a business in the Netherlands. Logistics is a very popular market until today, mostly due to the fact that the country is highly accessible. You can access an airport or port within a maximum of 2 hours from every location in the Netherlands, making the Netherlands a perfect country for web shops, drop-shipping businesses and general logistics companies. If you are looking for online business possibilities, then the country also facilitates many startups in this regard. Experts and specialists within any field are also welcome, especially if you are able to implement new solutions that make existing processes more efficient and cost-effective. The new way to do business is the way that improves old ways and structures. There are already so many businesses operating in most niches, that you generally only stand out of the crowd, when you have something innovative or completely new to offer. If you love changing old ways into fruitful and efficient new procedures. Then the Netherlands is definitely the place to start your business.

The pharmaceutical business is also continuously growing, so if you happen to have a degree in that direction, you will find plenty of possibilities in the Netherlands. One of the fastest growing sectors is the agricultural sector and the food sector. There are many farmers in the Netherlands, who are basically always looking for ways to improve their way of growing crops and holding livestock. During the past decade, there has been a lot of attention aimed at the bio-industry, specifically some of the horrendous conditions animals are being kept in. Thus, the government is trying to change the way livestock is kept and handled. If you happen to have any experience or ideas in this regard, you could actually make a huge impact on a global scale. This is due to the fact, that a very large percentage of all crops and food originating from Dutch farmers is being exported all over the world. Furthermore, you will also be doing nature a favor by making sure, that the bio-industry becomes more friendly towards animals. As the Netherlands is famous for its import and export activities, you will obviously also find many business opportunities here in that direction. If you are ambitious and driven, there is almost nothing you will not be able to achieve in this amazing country.

One of the best infrastructures of the world

A very particular benefit of the Netherlands is its solid infrastructure. This doesn’t just apply to the physical infrastructure, but also the digital variant. Holland is relatively small, but it's well-known for the fantastic quality of the roads and highways. Which is not really a surprise, since the road tax Dutch citizens pay in the Netherlands is one of the highest in the world. Nonetheless, if you own a company that needs to transport a lot of shipments, you will find that such activities go very well here. The connections between highways are also plenty, which allows you to get out of the country in a maximum of 2 hours. The digital infrastructure is also one of the best in the world, especially now that fiber optic is being installed in almost the entire country. The Netherlands has also placed 5G towers all over the country, generating high-speed internet access wherever possible. If you need to hire an office and house employees, at the very least you can be sure that everything related to connectivity is very well taken care of.

Good and stable tax rates

A very important factor most (aspiring) entrepreneurs look at when deciding where to base their company, are the current tax rates, of course. Since this will provide you with a rough calculation regarding the amount of money you will actually be able to keep and spend yourself, once profits have been taxed. The Netherlands has been known for its very stable economic and fiscal climate for decades, which provides many interesting benefits for both starting entrepreneurs, and already existing companies and multinationals. If you establish a small sole proprietorship in the beginning, there are multiple interesting tax deductions you can benefit from. Once you start making a larger sum of money in a certain timeframe, we always advise converting your sole proprietorship to a private limited company. In Dutch, this is named a Besloten Vennootschap (B.V.). This is due to the fact, that the benefits of a Dutch BV exceed the benefits of a sole proprietorship above a certain amount of profit. Currently, the corporate tax rates are as follows:

Taxable amount	Tax rate
< € 200,000	19%
> € 200,000	25,8%

These rates sometimes change a bit, but the difference is never very noticeable. If you compare the Dutch tax rates to some of the neighboring countries such as Belgium and Germany, you will see that the rates are quite modest and reasonable. If you would like to know more about current tax rates and what this will mean for your company, please don’t hesitate to contact Intercompany Solutions for more information.

A multilingual and highly educated workforce and freelance pool

We already briefly discussed the fact that most Dutch citizens are highly educated, and in most cases also bilingual. If you are starting a company that will also be hiring employees, then this little fact will be of the utmost importance to you as a business owner. Hiring employees requires a certain amount of trust, since you will be outsourcing a part of the daily business activities to complete strangers. Therefore, knowing that a potential employee is skilled and knowledgeable, at the very least, will provide you with more certainty. According to some recent numbers from the Dutch Youth Institute (NJI), more teenagers are going to HAVO or VWO and fewer to VMBO. In the Netherlands, high school is categorized in multiple levels, which ranging from lowest to highest are as follows:

• Practical education
• VMBO
• HAVO
• VWO
• Lyceum
• Gymnasium

With diplomas of the last three mentioned levels. You automatically are eligible to attend university. In some cases, you can also get into university with a HAVO degree, by doing an extra test that is aimed at the specific degree you want to do. In 2020/2021, 45% of students in the third year will are in HAVO or VWO. 22.5% of third-year students in secondary education follow a VWO course, and almost 23 percent are in the third year of HAVO. Ten years earlier it was 21.7% and 20.7% respectively. The share of third-year students in pre-vocational secondary education fell from 52 percent in 2010 to over 48.7 percent in 2020.[1] Of course, you will not always need university-educated employees for all jobs. An administrative assistant, for example, will do fine with a practical education degree. This will also be more profitable for you when looking at salaries, since the higher the education, the higher the monthly wage.

But this proves that more than 50% of all Dutch youngsters are eligible for a university course and degree, and in most cases they obtain these too. Nowadays, plenty of degrees are taught in two languages, the second language mostly being English. The Dutch are actually the best English-speaking citizens in the world, with English not being their mother tongue. Only people from English-speaking countries are more proficient in the language. That is quite a feat! So if you are looking for customer service representatives, or account managers, for example, you will find a large number of excellent and qualified candidates here. Another plus: since Holland is such a densely populated country, most people will live close to your office and won’t need to travel far. This ensures, that employees are always on time for work.

The Netherlands is a member state of the European Union

One of the most important benefits of doing business in the Netherlands, is the fact that the country is a member of the European Union. This ensures free trade possibilities in the European Single Market. If you are planning to start a business in fields such as import, export and/or logistics, then this offers you a lot of benefits. You will not have to pay any VAT for goods or services from one of the other EU member states, for example. Neither do you have to charge VAT to other EU member state companies. There is also a lack of customs procedures, since the entire EU is considered to be open to trade freely. This also applies to personnel, next to goods and services. Again, if you are in the logistics sector, this will save you an enormous amount of time, since you won’t have to bother with filling in endless of customs forms ever again. If you currently own a business that operates within the EU, but you don’t have a physical office in the EU, then we strongly advise you to consider this. This will make your daily business activities much smoother and easier. Intercompany Solutions can assist you with setting up a new office, or branch office in the Netherlands. This will make it possible for you to trade with(in) the EU directly.

Your Dutch company can be set up in just a few business days!

As you can see, setting up a business in the Netherlands has a very wide variety of interesting benefits and possibilities for any imaginable business. It doesn’t really matter whether you are an already established entrepreneur, or currently in the startup phase: the Netherlands offers opportunities for anyone who is ambitions and driven. If you already have a general vision about the company you would like to set up, then Intercompany Solutions can arrange the entire procedure for you in just a few business days. We can also immediately take care of extra tasks for you, such as setting up a Dutch bank account and finding a suitable location for your offices. If you haven’t got a clear picture yet about the business you want to start, but you are interested in establishing a Dutch business, then we can also help you. We can aid you in looking for a direction that you feel comfortable with, for example. We can also tell you more about certain niches that are doing well at the moment, meaning that there are business opportunities to be made in certain directions. If you tell us a little bit about your expertise and ambitions, we can think along with you to find something that fits your preferences perfectly. Please feel free to contact us anytime with all the questions you might have. We will make sure you receive all the answers you need, to be able to open up a potentially successful Dutch business that will thrive from the start.

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[1] https://www.nji.nl/cijfers/onderwijsprestaties