07 May Tips on Doing Business with Netherlands(Last Updated On: May 7, 2021)
It has known to be one of the leading countries for doing business. The Netherlands maintains and grows its position as the best country for technology and innovation. It is among one of the open economies in the world. However, it offers benefits to expansion-focused commerce owners. As well, provides benefits to potential investors. It is positioned as the 6th largest economy in Europe. Hence, this country is a major player in the European market. You have also heard much about the positive reputation of the Netherlands for embracing commerce, tolerance, and openness. Are you also planning how to settle up your commerce there? Let’s explore more about doing business with the Netherlands.
Globally recognized reputation
The Netherlands has great importance with respect to its geographical location. North and south Holland provinces located on the western coast have played dominant roles. Hence, they are very important for the economy. However, it offers access to the major regions like Europe, the middle east, and Africa. These are the largest markets.
About 22 million population in the Netherlands speaks Dutch as their mother tongue. However, Dutch society is very organized in terms of their ideologies and religion. 90% of the population have fluency in English. Hence, the majority of the workforce is multilingual. To start up a new or expand the business, it stands among some of the best jurisdictions.
It offers national and highly developed infrastructure. It has Europe’s largest port. Holland has world-class transport. Hence, the country has a strong treaty network and a competitive climate for trade. There are only a few barriers to trade and logistical support.
Why invest in Netherland?
- The Dutch regulatory, legal, and tax system present tax incentives. Hence, it helps stimulate business activities and innovations. It is difficult for newcomers to navigate.
- The country has one of the best educational records in Europe. However, it has nearly 100% literacy.
- It has accessibility to trade and commerce. The Netherlands opens its doors to international business. Hence, they facilitate the fairly simple, easy, and straightforward process.
- Commercial and industrial expertise is of considerable importance. Hence, it is a hub of creativity. As well, a diverse pool of consumers has their growing reach.
- It has well-organized private-public partnerships. However, it provides endless opportunities for companies to innovate and expand.
- It has proven itself as an internationally oriented and stable country.
Despite the friendly business environment and strategic location, specific challenges in the expansion of the business. As well, the struggle is required to grow with complicated regulatory and tax requirements.
Advantages of doing business in the Netherlands
Strong financial center
It has the most competitive economy according to the 2019 ranking of the competitive index of WEF (World economic forum). It is one of the top countries for investment. The financial sector is strong and stable. Hence, it plays important role in the Dutch economy. The Netherlands home to 15,000 foreign companies. Moreover, the Ministry of Finance is working continuously to make it a financial center. GDP of the country is that is derived internationally is nearly 15%.
It has a strategically advantageous position. The countries’ access to the lucrative consumer market of Europe is 95% within 24 hours of Rotterdam and Amsterdam. However, the European transportation hub also involves part of its economy. American, European, and Asian companies try to expand their reach that in turn favors the economy of the Netherlands. It is ranked number four among the best commerce and trade countries. Hence, it is a gateway to Europe for many multinational businesses.
The cost of living is affordable and the quality of life is exceptional in the country. According to the world happiness report 2020, it is ranked 6th happiest place on earth. It has a high standard of living. However, it is ranked the first country by UNICEF for the children’s well-being. The factors the contribute to the top position of the country for better life index includes:
- Best work balance life
- High levels of literacy
- Low rates of youth unemployment
- The leisure time of Dutch employees is higher than in any other country.
- Life satisfaction in childhood is very high
Competitive tax rates
In addition to the countless location benefits, the country has pro-business policies. Direct foreign investment is favored by competitive tax rates and taxation policy. Moreover, the corporate tax structure of the country promotes engaging in R & D (research and development activities). Innovation is also stimulated by R & D tax inducement. Hence, it has a highly develop fiscal climate. For international companies, the Dutch tax system has a number of important features. Paying taxes 2020 shows that the country ranks high in this regard as well.
Large talent pool
The country has an attractive pool of labor. However, it has a highly educated, multilingual, and skilled workforce. It is an appealing place for employers, managers, and workers to live. Hence, a network of suppliers is very high and the country is a home for the engineering workforce. This provides great advantages to companies in the establishment of manufacturing operations in Europe.
The country supports the expansion and innovation of businesses. This forward-thinking approach is a great advantage for investors. Cultivating and establishing the modern approaches is the commitment of the country to public-private sectors. Moreover, the country is putting efforts into International cooperation and strong participation in framework programs.
Challenges of doing business in the Netherlands
Because of the long process and processing steps required by the government, it over 161 days to obtain construction permits. Requirements of construction are unique to the country. Such as notifying various regulatory agencies on issues such as heat installation and investigation on the soil conditions.
Long procedures and registrations with local tax authorities may result in lost business, criminal litigation, or financial penalties. Hence, support an experienced partner is essential in the initial formation of the business.
It is a time-consuming process for new building projects. This may take nearly 100 days to get electricity. Before installation of the meter, a contract with an electricity supplier is mandatory. However, it creates delays in running the business operations.
Dutch culture is quite conservative, respectful, and valuable. They provide detailed instructions and information. Hence, the use of language varies according to the rank of the businesses. The process of adjusting to their culture is way time-consuming process. If you’re looking to translate important financial documents, check this out.
Tips for doing business in the Netherlands
- Here are some handy tips that you can consider before doing business in the Netherlands.
- Always try to be honest and direct while expressing yourself.
- Dutch business culture informal at work as compared to other countries but still you need to be polite while giving your opinions. Don’t get offended by others’ opinions. Hence, greeting employees or workers represent a part of Dutch culture.
- Always try to negotiate as Dutch are the tough negotiators.
- A Dutch workplace is a place of meetings. So, always be ready for discussions and meetings.
- Remain to stick to the agreement because spoken agreements are trustworthy for Dutch people. Hence, back up with your words.
- Dress codes are casual and informal. Hence, keep it like that. Business suits are required in higher circles of business or management.