Holland’s economy is progressive, thriving and welcomes foreign investments. The Netherlands is also one of the first and most dependable US commercial partners. This relationship dates back to the American Revolutionary War in the late 18th century.
The Dutch tax system offers different benefits aimed at supporting the development of businesses and innovation. The healthy business climate brings advantages to local and foreign entrepreneurs alike. The Netherlands welcomes international investment and already hosts many qualified foreign workers. Many US companies have established their European headquarters in the Netherlands, including Coca-Cola and UPS.
The gateway to European trade
Holland is highly dependent on the international market and more than half of its yearly Gross Domestic Product is derived from commercial transactions with international partners. Despite its small size, the country falls in the world top ten for export. The American companies that have established offices in the Netherlands can take full advantage of the country’s strategic location with easy access to markets in the European Union, Central and Eastern Europe, Middle East and Africa.
Still, approximately 65% of Dutch exports are destined for only five countries: USA, the United Kingdom, Belgium, France and Germany. This gives a clear advantage to American companies that aim to establish business relationships, but may represent an obstacle for entrepreneurs intending to trade on a larger multinational scale.
The Netherlands is often used as a trade hub. A large amount of all imports (for example, computers) are exported immediately to other countries without processing. Millions of tonnes of goods from North America and Asia arrive at Rotterdam and Amsterdam every year to be distributed elsewhere in Europe.
Learn more about Dutch import and export.
A number of world-renowned Dutch companies are faring well on the domestic market. Some examples include ING, Shell, Heineken, Philips and Unilever. Still, this must not put you off investing in the Netherlands, particularly if you are a service provider.
The demand for services has increased over the last few years and the service sector has experienced rapid growth to become the strongest in the local economy. Currently it accounts for about 70% of the Gross Domestic Product. The biggest industry in this sector is trade. Other important industries are construction, transport, telecommunications, banking, insurance and various financial services. Experts predict substantial growth in the area of information technologies and communications. This hardly comes as a surprise since the Netherlands is one of the best “connected” countries in terms of communications, outsourcing and electronic commerce.
The stability of the Netherlands is evident from the employment sector. US entrepreneurs planning to establish businesses in the country and hire staff must keep in mind that they will need to interact with trade unions and work councils. Bargaining is a typical Dutch trait and trade unions work closely with employers’ organizations and the government.
Forget about employment at will. If you intend to hire permanent staff, you will have to follow the regulations for employment and respect their labor rights. The Netherlands is a member of the EU and, as such, follows the EU legislation, including the Working Time Directive. This legislative document limits the employees’ hours of work to an average of 48 per week. Employees, however, can relinquish this right and volunteer to work longer hours. US companies intending to operate businesses in the Netherlands are advised to seek professional consultancy in order to guarantee that their employment relationships will be arranged in line with the legislative requirements from the very beginning.
Dutch business culture
Some perceive the Dutch business approach as totally different in comparison to the American. However this is stereotyping and overgeneralization. The Netherlands and the United States of America are traditional partners and, of course, they work well together. Still, Americans need to consider some peculiar details when dealing with companies from the Netherlands.
The Dutch are direct, serious, honest and very blunt. For this reason some may unjustly perceive their attitude as harsh and uncaring. You need to be concise and specific in your interactions with your Dutch business partners. They get straight to the point and avoid socializing too much. Handshakes are always meaningful. The Dutch always keep their promises and assume that you will do the same. If you agree to do something, regardless of how insignificant it may seem, they will expect you to do it. During negotiations any indication of evasiveness, secrecy or deception can break the deal, as in the Netherlands prosperous working relationships are always based on mutual trust.
Setting up a Dutch business
The Doing Business indicators of the World Bank rate the Netherlands 32nd worldwide. New companies usually assume the legal form of BV, i.e. private limited company. The process of incorporation takes only 3 days and there is no requirement for a minimum capital.
The Netherlands is an undoubted leader in international commerce and intercompany solutions. Many perceive the country as a European Gateway providing access to countless opportunities.
If you need help to set up a business in Holland, do not hesitate to get in touch with our local experts. They will give you the legal advice necessary for a great start.