5 Compelling Reasons to Kickstart Your Business Venture in the Netherlands

A Glimpse into the Dutch Economy

The Netherlands, formerly known as Holland, stands as a Western European country bordered by Belgium to the south, Germany to the east and north, and the North Sea along its western coast. Ranked as the 27th most densely populated nation globally, its strategic location at the confluence of Europe’s significant rivers—the Rhine, the Meuse, and the Schelde—positions the Netherlands ideally to serve the expansive pan-European market.

Renowned as a global business center and a prime jurisdiction for company formation, the Netherlands boasts a robust physical and technical infrastructure, fosters a progressive cultural landscape, and enjoys a strategic and accessible setting.

The Netherlands, standing as the sixth-largest economy in the European Union, serves as a pivotal European transportation hub. Its advantageous positioning as the gateway to Europe makes it an exceptional launchpad into the European market. As a key economic nexus, the Netherlands reaps substantial benefits from global and European trade, maintaining a consistently high trade surplus, stable industrial relations, and moderate unemployment rates. Notably, the country holds the distinction of being the world’s second-largest agricultural exporter. Its economic drivers encompass food processing, chemicals, petroleum refining, and electrical machinery.

So, why opt for business endeavors in the Netherlands? Unraveling the 'why' sets the stage for delving into the 'how!

Why Start Your Business Venture in the Netherlands?

Let’s explore the compelling reasons to launch your business in the Netherlands.

State-of-the-Art Infrastructure:

Home to 17 million residents, the Netherlands features a highly developed infrastructure optimized for logistics. Its extensive roadways, major seaports, and airports—including the massive Port of Rotterdam, which is Europe's largest port and the third-busiest cargo airport—enhance the country’s logistical capabilities, which have continued to grow even during the pandemic. This strong infrastructure establishes the Netherlands as a key entry point to the European market.

Support for Economic Growth:

The Dutch government recognizes infrastructure development as crucial for economic advancement and improved social services. Their commitment fosters robust networks that improve delivery efficiency and support economic development.

Digital Leadership:

The Netherlands is celebrated for its advanced digital and telecommunications infrastructure, attracting both startups and established tech companies such as IBM, Booking.com, Microsoft, and Uber. With one of the most secure cyber environments globally, a third of Europe’s data centers are located here, reinforcing its position as a digital leader. According to IMD's 2021 digital competitiveness ranking, the Netherlands ranks seventh among 64 countries and fourth in the EMEA region.

Skilled Workforce:

The country boasts a highly educated and multilingual workforce. Statista reports that it has the highest number of employees in the Benelux region, exceeding the combined totals of Belgium and Luxembourg. Approximately 80% of the Dutch workforce holds higher education degrees, and nearly 90% are fluent in English. INSEAD Knowledge ranks the Netherlands sixth in the Global Competitiveness Talent Index.

Prime Consumer Market:

Strategically located, the Netherlands serves as a consumer hotspot, further enhancing its appeal as an ideal business location.

The Netherlands: An Entrepreneurial Haven

A Strategic Location:

Positioned at the intersection of major European economies—Germany, Belgium, the United Kingdom, France, and Luxembourg—the Netherlands serves as a critical hub for global trade. With its major seaports and direct access to the North Sea, Dutch businesses benefit from quick access to key markets across Europe, Africa, and the Middle East, reaching an estimated 170 million consumers within a 300-mile radius.

Abundant Tax Incentives in the Netherlands:

The Netherlands offers a variety of tax incentives designed to reduce the tax burden for businesses and investors. For example, the ondernemersaftrek allows qualifying investors to lower their taxable income under specific conditions. The country also boasts an extensive network of tax treaties with over 80 nations, which helps prevent double taxation by reducing withholding taxes on dividends, interest, and royalties—sometimes even to 0%. Additionally, the appealing 30% ruling provides tax relief for employers hiring foreign employees by allowing 30% of their salary to be paid tax-free, easing relocation costs.

Promoting Innovation:

Innovation is a priority for the Dutch government, supported through programs like the WBSO (R&D tax credit), which reimburses a portion of research and development costs for companies engaged in cutting-edge projects. Furthermore, the Netherlands offers targeted support for startups in areas like sustainability, energy transition, and healthcare. Startups can benefit from investment-ready programs and proof-of-concept funding to fuel early-stage growth.

Navigating the Legal Framework:

Before starting a business in the Netherlands, it's essential to understand the different legal structures available. The Dutch BV (private limited company) and Dutch NV (public limited company) are popular choices for foreign investors due to their flexibility and relatively simple setup. Alternatively, opening a Dutch branch allows businesses to operate in the Dutch market without creating a separate legal entity. Each structure has unique requirements and benefits, so it's crucial to choose carefully.

The Dutch BV:

For most foreign investors, establishing a Dutch BV (Besloten Vennootschap), or private limited company, is the most common and practical route to starting a business in the Netherlands.