Business Climate

"We deliberately chose a country within the EU with a politically and economically stable climate ...the good relationship we have with the NFIA and the Dutch government is very much appreciated and respected by Eastman!"
Godefroy A. Motte, Vice President and Managing Director, Eastman Chemical (EMEA)

A culture steeped in international business

The Netherlands has long been acknowledged for its conducive business environment. For example, IMD's 2010 World Competitiveness Yearbook ranked the Netherlands well ahead of its key competitors in terms of its "lack of bureaucracy."

In addition, IMD found the Netherlands to have a legal and regulatory framework which encourages business competitiveness, and as a venue from which it is relatively easy to do business.

And, since 2003, Dutch government reforms have either eliminated or strongly committed to eliminate 4 billion euros of administrative burdens on business, making the Netherlands the first country to achieve a 25% reduction in administrative costs. To quote the World Bank Group: "Dutch regulatory reform is among the world's best. It is well-known internationally as the most innovative initiative in cutting red tape."

All this recognition is well earned. The Netherlands has one of the EU's most politically stable and pro-business governments. Its economy is internationally oriented. Its financial sector is sophisticated. Its regulatory climate is simple and straightforward.

High standards of corporate governance

The capability of businesses to comply with both U.S. (i.e. Sarbanes-Oxley) and EU financial reporting requirements is becoming increasingly important. And the ability to implement corporate governance reliably and cost-efficiently is directly impacted by the quality and experience of the local workforce and service organizations.

The Netherlands has distinct advantages in this regard. For example, according to the Ethical Investment Research Services (EIRIS), companies based in the UK and  the Netherlands have developed the best overall corporate governance standards in the world.

Also, recent studies by IMD have shown the Netherlands superior in terms of its auditing and accounting practices, as well as offering a financial system that lowers risk.

Tax Environment

"The Netherlands’ favorable tax structure and relative lack of bureaucratic red tape is critical." - Fritz Meijaard, CFO for EMEA and General Manager for the headquarters office, NetApp

Profitability is your company's first priority. You'll find the Netherlands' corporate tax structure advantageous to achieving your goals.

For centuries, the Netherlands has been a nation of traders.  To ensure that this longstanding tradition endures, the Dutch government has created a competitive tax regime that stimulates entrepreneurship and foreign investment in the Netherlands.

The Dutch tax system has a number of features that may be very beneficial in international tax planning:

• Relatively low statutory corporate income tax rate of 25% (20% for first 200,000 Euro)
• Possibility of obtaining advance tax rulings from the Dutch tax authorities giving certainty on future tax position
• Innovation box resulting in an effective corporate tax rate of 5% for qualifying profits
• R&D allowance for qualifying R&D wage costs (WBSO)
• Tax deduction facility for R&D operating costs and investments in R&D assets (RDA)
• Favorable participation exemption regime
• Fiscal unity regime providing for a tax consolidation of companies within a group and therefore to freely offsetting profits and losses among group members
• Transfer pricing practice in accordance with OECD Transfer Pricing Guidelines and the possibility to obtain an Advance Pricing Agreement (APA)
• The possibility to carry forward losses for nine years and to carry them backward for one year
• Wide tax treaty network to avoid double taxation and reducing withholding taxes on dividends, interests and royalties (for interest and royalties often to 0%)
• No statutory withholding tax on outgoing interest and royalty payments
• Favorable tax treatment for foreign employees (30% tax ruling)
• VAT deferment upon import: no upfront payment of VAT
• Dutch Tax Authorities: access to the tax inspector
• Dutch Customs Authorities: practical and pro-active approach

For a detailed description of the highly competitive fiscal climate, please click here for the Why Invest in Holland? tax brochure.