Benefits for foreign entrepreneurs

Pleasant business

Enterprising and punctual: it is a stereotypical, but largely accurate image of 'the Dutchman', And that is reflected in the business culture. In the IMD World Digital Competitiveness Ranking 2022, the Netherlands ranked 6th in 2022: in the field of knowledge and technology, the Dutch are among the top globally. The high technological and economic quality in the country makes doing business in the Netherlands a pleasant experience.

In addition to a solid technological basis and a good digital infrastructure, the physical infrastructure in the Netherlands is also attractive for entrepreneurs. The port of Rotterdam is an important gateway to Europe with great international importance. In addition, Schiphol Airport is a central 'hub' for business transport and Utrecht train station will become a 'railport' where 55 million passengers board, transfer and disembark every year.

Strong sectors

The Netherlands is known as a knowledge economy: on average, the Dutch are highly educated and, in addition to being enterprising, also innovative. In the field of water management, it is (by necessity) a forerunner worldwide. In addition, the Eindhoven region is known as a European 'Brainport'. Here, ASML, Phillips and DAF, among others, develop high-tech products and knowledge on a large scale. Furthermore, the agricultural sector and floriculture sector are traditionally very active in the Netherlands. There is a highly developed international market for Dutch (greenhouse) horticulture. The fertile polder landscape and mild climate are highly suited to large-scale agricultural production. Add to this the stable political-economic structures and a workforce that has mastered the English language well, and you have an appealing series of reasons to consider The Netherlands as an option to establish your business.

Politics and policy

The Netherlands is a constitutional democracy. In this system, several parties form a coalition, in which liberalism, socialism and confessional principles predominate. The liberalist basis in particular has led to various (tax) advantages being included in Dutch legislation and regulations to make the business climate attractive for entrepreneurs.

Tax benefits

An example of a tax advantage that may be of interest to foreign entrepreneurs is the reduced VAT rate of 9% on various activities and products. For example, this reduced rate applies to activities that fall under the innovation box. The innovation box offers tax relief to encourage innovative research. In this article you can read more about the reduced VAT rate. And there is a large number of other schemes that can make doing business in the Netherlands fiscally attractive. Other tax benefits for entrepreneurs regarding income tax can be found in this overview. Is your company a partnership? Then you can read here which tax benefits you may be entitled to.

Challenges when doing business from the Netherlands

Although the Netherlands generally has a pleasant business climate for foreign entrepreneurs, there are also a number of challenges that you may have to consider.

Down-to-earth and no-nonsense

The down-to-earth no-nonsense mentality on the Dutch market is often (wrongly) perceived as unfriendly by non-Dutch people. Successful foreign entrepreneurs quickly realize that this apparent disadvantage is often an advantage: The Dutch are generally honest and clear: What you see is what you get.

Employment law for employees

Legally speaking, employees have a relatively strong position in the Netherlands. The law requires employers to provide good working conditions and the employee often occupies a stronger position legally than the employer. In addition, you have to take into account that (especially by women) a lot of part-time work is done. In the case of hiring and dismissing staff, it is important that you are well advised about your rights and obligations. To help prevent you as a small or start-up business from having legal obligations that are too weighty for your company to manage, it is interesting to note that in the Netherlands there are many self employed people who can be hired with fewer obligations, and on a project basis.

Complex laws and regulations

On the website business.gov.nl, the Dutch government tries to make it easy to find your way through the maze of Dutch laws and regulations. But the Dutch tax system is generally complex and contains numerous regulations, exceptions and benefits that you as an entrepreneur may or may not want to use. Knowing which legal and tax obligations, plus the advantages and disadvantages that apply to your specific situation is time-consuming and often unclear. In addition to the aforementioned website, it is advisable to inform yourself well and, where necessary, to seek advice and (tax) support. In this article we explain which taxes you may be liable, and how you can further orientate yourself fiscally towards entrepreneurship in the Netherlands.

Further reading about doing business in the Netherlands

Would you like to know more about establishing a company or entrepreneurship in the Netherlands? The Dutch government has an extensive, English-language website with, among other things, checklists for entrepreneurs who want to establish their business in the Netherlands. We have written several articles on, for example, tax regulations and benefits for entrepreneurs regarding Dutch income tax and corporate income tax. If you have any questions or would like tailor-made advice about doing business in, with or from the Netherlands, please feel free to contact us. Moneywood has many years of experience in international accountancy.