The UK is now no longer part of the EU and is now undergoing a transition period until the end of 2020. During this time, negotiations are underway, but it is looking increasingly likely that the UK will crash out of the EU with a 'no-deal Brexit'. The current regulations surrounding trade, transport and business will continue to apply throughout the transition phase.

At the end of June, prime minister Boris Johnson promised to proceed with a no-deal Brexit if ongoing talks with the EU fail to achieve mutually beneficial trade agreements. He had already formally notified the EU that he will not apply for the option of a two-year extension to allow more time for negotiations. Johnson has also made it clear that the UK is preparing to leave under what he terms as an Australia-type deal with the EU, a country which does not have a free trade agreement with the EU.

Brexit and corona

After the impact of the coronavirus pandemic on the UK's economy, which continues to be terribly mismanaged by the UK government; the thought of the no-deal Brexit is very concerning. Amid rising unemployment rates that are predicted to be the worst since the 1980s, many residents of the UK are worried that a no-deal Brexit will lead to food shortages, increases in crime and poverty, and widespread social unrest. The future does not look bright for the UK.

Current negotiations are having to take place via videoconferencing because of the pandemic, which is not conducive to the side-line chats that can help to resolve differences during trade talks. Unless something happens to shift the static dynamic, it looks like no-deal will be very likely at the end of the year, which, many economic experts agree, would be a terrible outcome for businesses, employment and public confidence in this most unusual of years

The Netherlands is a small country but ranks fourth in the list of most competitive economies in 2019. This ranking is prepared annually by the World Economic Forum (WEF). With the fourth position, the Netherlands is the most competitive economy in Europe and has even surpassed Switzerland.

The Netherlands is now the most competitive economy in Europe for the first time

The WEF's Global Competitiveness Index (GCI) is a particularly interesting indicator because it reveals something about whether the Netherlands is one of the most competitive economies in the world. The Netherlands held fourth place in 2019 and has risen two positions compared to last year. The top 5 of the global rankings are Singapore, USA, Hong Kong, the Netherlands and Switzerland. With the 4th position, the Netherlands is the most competitive economy in Europe for the first time and surpassed Switzerland. In 2016 and 2017, the Netherlands was already fourth and the most competitive of the European Union, but then still had to leave Switzerland. According to the WEF, the Dutch economy has become much more agile due to an entrepreneurial culture, flat organizations and the encouragement of the growth of innovative companies.

The GCI components explained in more detail

According to the GCI, the Netherlands has a very open dynamic economy (2nd position) with a high-quality physical infrastructure (2nd position), a stable macroeconomic policy (1st position), an efficient government with well-functioning institutions (4th position), and a very well-trained workforce (4th position).

There are also a number of GCI components where the Netherlands scores less internationally. For example, the Netherlands lags behind in the application of ICT (position 24). There is a decrease in seven positions compared to 2018. The low position of the Netherlands in the application of ICT is remarkable because the Netherlands scores well in the application of ICT in other rankings, such as the DESI. The Netherlands also lags behind in innovation, and in particular in terms of R&D investments (position 17).

Holland’s membership in the Organisation for Economic Co-operation and Development (OECD) is a prerequisite for its active involvement in OECD’s project to counter profit shifting and base erosion (BEPS). An agreement has been reached regarding the BEPS in the OECD and all members are engaged with its implementation. Therefore Holland shall enact legislation accordingly.

As a result of its support for the project, the country has amended the innovation box regime in its tax legislation, in force from the 1^st of January, 2017. Holland has adopted the so-called Multilateral Instrument, regardless of its reservations to particular points.

Transfer pricing documentation and CbC reporting, master and local files

The OECD implementation package on country-by-country (CbC) reporting is an example of legislation related to BEPS. The requirements for reporting are primarily intended to be used for the purposes of risk assessment by the tax authorities of the participating countries.

According to OECD’s report, multinational enterprises (MNEs) with turnovers of ≥ 750 million Euro will be required to submit CbC reports in the states where their ultimate parent companies are resident. Then the local tax authorities shall exchange the obtained information with the authorities in other involved countries participating in the agreement for mutual exchange of such reports.

Furthermore the finalized OECD report requires each company within the MNE to keep a local and master file at its administrative department. Master files contain information on transfer pricing in the whole enterprise and local files present the local company’s transactions within the enterprise. All reported information shall be kept strictly confidential and will not be publicly accessible.

Holland has adopted legislation that implements the CbC reporting package and corresponds to the methods and system prescribed therein. Additionally, Dutch enterprises with a total turnover of ≤ 50 million Euros are also required to keep master and local files.

As noted above, only parent companies of multinational enterprises are obliged to file CbC reports. Any Dutch entity included in a multinational enterprise whose turnover is equal to or exceeds 750 million Euros is required to send a notification to the tax administration specifying whether the surrogate or the ultimate parent entity will submit the CbC report. Alternatively, it must state which entity will submit the report and where it resides for the purpose of paying taxes. The deadline for sending this notification is at the end of the fiscal year.

Furthermore, Dutch companies required to file CbC reports must submit them no later than twelve months after the fiscal year’s end. The master and local files should be made available at the companies’ administrative departments by the deadline for submitting the tax returns.

Directive against tax avoidance practices

In July 2016 the European Union adopted Directive 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market. It includes several measures to counter tax avoidance. These are related to exit taxation, interest deductibility, anti-abuse and Controlled Foreign Companies.

The Directive also provides rules to address mismatches between member states (MS) of the EU stemming from the usage of hybrid entities or instruments. Its provisions have to be transposed to all MS as of December 31, 2018 and applied as of January 1, 2019. There is an exception regarding the exit taxation rule, that shall be transposed as of December 31, 2019 and applied as of January 1, 2020. As a MS of the EU, Holland is also required to implement the Directive.

In addition to the provisions of Council Directive (EU) 2016/1164, the EC proposed rules for mismatches between MS and non-EU countries in its plan for a European tax reform. Council Directive (EU) 2017/952 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries was adopted on 29 May, 2017. It is still unclear how Holland will implement the two directives.

The Common Consolidated Corporate Tax Base (CCCTB) Project

The Commission’s tax reform proposal includes a mandatory CCCTB for MS, as of 2021. This project is very much alike a proposal from 2011 for CCCTB introduction. Its aim is to achieve harmonization of corporate taxation in the EU and provide a formula for allocation of corporate income among MS. The CCCTB project has a two-step approach. The first proposed step is to introduce a Common Corporate Tax Base as of 2019. The goal is to align the calculation of CTB between the MS.

It remains to be seen if the MS will endorse the corporate tax base proposals and when and how they will be implemented at the EU level, thus leading to new Dutch legislation. In any case, CTB is a serious matter for discussion as regards taxation in the EU.

State aid

The EC recently started an investigation on whether particular tax agreements between enterprises and national authorities are violating the state aid provisions of the EU. The EC has already reached the conclusion that some of the considered tax rulings represent illegitimate state aid. Such a conclusion has also been reached about a tax ruling in Holland. The state government has brought an appeal against this decision before the ECJ.

It is anticipated that the EC will also look at other tax agreements. Nevertheless the Commission has specifically pointed out that no systematic irregularities are expected with tax rulings in Holland. The country’s government holds the opinion that the general practice of tax ruling excludes state aid, provided that the rulings are consistent with the national tax law. Tax rulings aim to provide advanced certainty to taxpayers.

Do you need further information or legal assistance? Please, contact us.

Update: 8 September, 2021

What do the regulation mean for the practical onboarding process?

Wallet custodians and virtual currency trading companies need to identify their clients and manage the risk of money laundering by monitoring and reporting suspicious transactions.

The client identification process will be comparable to what some regulated Western crypto exchanges currently already ask from their clients, a copy of passport, a passport selfie, a proof of address, some declarations or proof as to the source of your income, and to declare what type of transactions you will have and for what reason. Depending on the limits you want to unlock. A practical guideline for this can be crafted.

Some exchanges solve this by using new digital onboarding solutions to be able to quickly accept the clients. Clients can be identified by a live video conference in which the passport is checked by a compliance employee and compared to the person holding it. And so the identify of the client is confirmed. For higher limits of trade, additional documents may be requested.

1. What if I open a crypto company that is not a trading or exchange firm?
   If you do not trade, exchange crypto for (fiat) money or hold customer funds, you are likely not regulated.
2. What is the timeline of a registration with the Dutch Central bank if I want to start an exchange or crypto broker in The Netherlands?
   We cannot predict the processing time by the government body. But generally the whole process can take between 6 and 12 months.
3. If I have a company like Shapeshift or a Decentralized exchange, do I need to be regulated? 
   Currently there is no requirement for regulation if you only trade virtual currencies for virtual currencies. (Dutch Central Bank Link)
4. Do you have experience with these requests?
   Because Intercompany Solutions specializes in corporate law, we collaborate with a specialized law firm for the crypto license applications. Our firm can assist with all matters up to the point of application, such as: incorporation of the firm, advise on the documentation and assistance with the compliance and accounting requirements.

How can Intercompany Solutions assist your crypto company?

We have years of experience in the cryptocurrency industry and we have advised and assisted (large) foreign crypto firms in setting up a cryptocurrency company in the Netherlands. We can assist you with all practical procedures and regulatory information to make your crypto business in the Netherlands successful.

We can also assist you with:
1. Formation of the company and all requirements
2. The application for the crypto license (This part is handled by a specialized Financial law partner firm).
3. Assistance in drafting a compliance and AML policy as is required for the crypto license
4. Assistance with drafting and organizing the internal documentation, business plan and registration requirements
5. Provide you with a consultation from one of our financial lawyers

Other sources:
1. Virtual currency and fifth anti money laundering directive Link 

2. Law came into effect on 10 November 2020 Link

As the Brexit date in October is closing in, more and more British entrepreneurs and companies are chosing to move their headquarters or backup subsidiaries to the Netherlands. The future is still very unclear. No one really knows how reality will look once Brexit takes effect, but the benefits of owning a company in Holland remain plentiful. So which companies are we talking about? And what exactly are the benefits of moving your company? In this article we present you with some pretty logical reasons others deemed important enough, to register a company in the Netherlands.

Many multinationals have already preceded you

The Netherlands Foreign Investment Agency (NFIA) has released information that 98 companies have already settled in the Netherlands. An additional whopping 300+ companies are seriously considering doing the same. These are huge multinationals such as Discovery and Bloomberg, adding a nice variety of newly settled businesses in the Netherlands. It’s especially the financial sector, media and communications and IT and technology that have seen a substantial rise in newly established foreign companies.

Why all the sudden moves?

Obviously Brexit has a large amount of complicated consequences, especially for businesses operating within the European Union. For example; financial institutions are obligated to have European subsidiaries to do business with Europeans and European companies. This is not obligatory for most other companies, though British entrepreneurs will have to deal with both British as well as European clients. Having a subsidiary in the Netherlands will make your daily business activities a lot easier to handle.

The biggest reasons British companies are choosing Holland

The reasons for a company or company subsidiary in Holland are pretty clear. As already stated above; reason number one is definitely the fact that some companies might be lawfully obligated to do so. Other companies might go bankrupt if they don’t tend to their European clients’ needs in the same current timeframe. The connection with Europe stays firm that way, making it possible to continue their business as usual.

A second important reason is the ample amount of subsidies for new businesses and innovations currently offered by the EU. With Brexit these subsidies become unattainable, or at the very least harder to get. This might create stagnation in overall innovative concepts, or new startups. The third reason for a company to move or open a branch office in the Netherlands, is the fact that lengthy border procedures will be completely avoided.

Other reasons worth mentioning are specifically aimed at Holland being a very smart choice for your company. Holland has an extensive and well-operating infrastructure; physically as well as digitally. The different ports and airports are well within a maximum two hour driving distance. Also, there is a reason so many expats have happily chosen the Netherlands in the past. There is a large amount of bilingual personnel, the services Holland offers to foreigners are excellent and the Dutch business market is very stable and secure.

If you want to know more about the whole process of establishing a company in the Netherlands, or would like to hear more about all the benefits, feel free to contact our team anytime. We can answer all your questions and provide you with the necessary information to make a well thought-out decision.

Since the infamous Brexit referendum the British have become more and more cautious concerning their businesses and startups. This ultimately lead to a substantial increase in foreign investments and the relocation of businesses to the most stable EU countries. The Netherlands are currently on top of the relocation list, which is not surprising at all considering the positive economic climate in our country. Just to illustrate the difference between the two neighboring countries: investments by Dutch entrepreneurs and investors in the UK have subsequently decreased 80% since that illustrious moment in 2016.

It’s all in the numbers

Investments by British business owners and investors in the Netherlands are 6 times more frequent than before 2016. The Dutch Central Statistical Office states that during 2016, the British invested around 14 billion euros in the Dutch economy. Two years later this number had grown almost exponentially to 80 billion euros. The UK was by far the largest foreign investor in Holland during 2018.

Like previously mentioned, the investments by Dutch business owners and investors in the UK decreased: in 2016 the Dutch invested around 50 billion in the UK, but in 2017 this number went down to 25 billion. In 2018 the Dutch did not invest more than 11 billion euros in the UK: that is one fifth of the original amount just a mere two years ago. In other words: even the possibility of a hard Brexit has absolutely staggering consequences on the international investment climate, which cannot be overlooked.[1]

British entrepreneurs and companies are starting to become nervous about a hard Brexit

The in- and decrease of foreign investments is mainly due to a growing feeling of uncertainty amongst British business owners. It is very important for a large number of British businesses to remain present in a European country, simply because a different situation will have a very negative impact on the way the company does business. The option that a business will not be part of the European Single Market anymore is quite frightening indeed, especially with many European clients in their database.

The reason Holland attracts so many foreign investors

Holland has been known to be a very stable, innovative and beneficial climate for many types of businesses. From the pharmaceutical to IT and the eco industry and every kind of freelance business: as an entrepreneur or owner of a large corporation you can nearly always benefit from many of the resources the Netherlands has to offer.

In terms of innovation, the Netherlands have a prime position on the Global Innovation Index (GII) of 2019. This yearly compiled list by the World Intellectual Property Organization (WIPA) tells you exactly which country can be great for your business in terms of progressiveness and innovation. It ranks the innovative performance of 129 collaborating countries around the globe, by analyzing a special theme every year.

This year the theme was medical innovation and the potential to transform healthcare worldwide. The Netherlands were named the fourth most innovative country, with the US at number three, Sweden at number two and Switzerland grabbing the prime spot.[2] If you want to limit your risks, whatever the outcome on the 31^st of October, you would be wise to consider all your options of relocation or opening a branch office in the Netherlands. Intercompany Solutions can assist you during the whole process. Just contact us for all the information you need.

[1] Algemeen Nederlands Persbureau (ANP). (2019, 9th September). Britten investeren bijna 6 keer meer in Nederland sinds Brexit-referendum. Link: https://www.nu.nl/brexit/5989751/britten-investeren-bijna-6-keer-meer-in-nederland-sinds-brexit-referendum.html

[2] World Intellectual Property Organization (WIPA). (2019). Global Innovation Index 2019. Link: https://www.wipo.int/global_innovation_index/en/2019/

Setting up a business means you will have to make a staggering amount of choices. This is not unusual of course, since there’s simply many options to choose from. Like the specific services you will be offering, the languages you will be working in, your business address and possible office space and the company that will make your website and PR materials. But did you also consider the country?

In what country do you want to start a business? Almost all start-ups and new entrepreneurs establish their company in their country of residence. Probably a little bit out of habit. But in a lot of cases, it might actually benefit you to browse around a bit. And consider starting a business in a different country than your own. Like the Netherlands. And you definitely won’t be the first one, as the number of foreign businesses and investments in Holland keeps growing. In this article we will tell you a bit more about the ‘why’!

Foreign companies are boosting the Dutch economy to great heights

The Netherlands has been flooded with foreign investments and entrepreneurs setting up businesses in our country for a while now. For example: the Netherlands Foreign Investment Agency (NFIA) and several regional partners involved in the ‘Invest in Holland’ network assisted in attracting around 350 different foreign investment projects worldwide in 2016 alone. All these actions total a massive amount of around 1,5 billion euros in capital investments. In turn, this created more than 10.000 new jobs.

In 2017, 1,7 billion was invested. In 2018, large multinationals such as Timerland, Giant and DAZN created almost 10.000 additional jobs in the Netherlands as well. All companies combined contributed around 2,85 billion euros to our national economy. All in all, we can safely say that foreign investments and businesses in the Netherlands have a very positive influence on our economy and thus, investing in the Netherlands is surely a safe way to grow your business quite rapidly.
Brexit caused many relocations of foreign companies’ offices

One of the biggest reasons for moving is Brexit.

Many business owners would rather be safe than sorry, and thus decided to pro-actively move some branch-offices or even their headquarters to the Netherlands. The Invest in Holland network brought more than 40 companies to the Netherlands in the year 2018. This was a direct result of Brexit and lead to the creation of almost 2.000 new jobs, next to around 291 million euros in investments. In 2019 large multinationals such as Discovery and Bloomberg have announced their wish to invest in the Netherlands due to Brexit.

Most of these companies are British in origin, but the lost also includes American and Asian organizations. These organizations are basically reconsidering many options, in order to minimize possible uncertainties and threats when Brexit finally follows through. These companies have origins in many sectors, such as the financial sector, media and advertising, life sciences & health and logistics.

So why do so many business owners choose the Netherlands?
There are obviously some good reasons for considering our rather small country for relocation. Because the companies that already made the move are not just small players; many huge well-known organizations have already established new headquarters in Holland. More than 6.300 foreign companies have established more than 8.000 different operations in the Netherlands.

Among the international companies are North American companies like Abbott Laboratories, Boeing, Bombardier, Cisco Systems, Dow, Eastman Chemical, Heinz, Medtronic, NCR Corporation and Reebok. European companies such as Bosch, Danone, Siemens and RWE are also included. A large number of Asian and Middle-Eastern companies is also represented by companies such as Astellas, BenQ, Daewoo, Fujifilm, Giant, Hitachi, Huawei, ICBC, LG Electronics, SABIC, Samsung, Saudi Aramco, Tata Consultancy Services, Teijin and Yakult.

The most prominent reasons for relocating a business to the Netherlands are listed below:
Fantastic location, educational system and business opportunities
The Netherlands is located on a prime position, with both Schiphol as well as the port of Rotterdam as main points in an already rich infrastructure. Next to that; Holland is home to an excellent ICT-infrastructure and perfect network coverage. An internationally oriented workforce with most people speaking at least two languages, and many fantastic and high quality (international and national) schools to choose from.

The standard of living is considered to be exceptionally high, with Amsterdam as capital offering you everything in terms of culture and activities. But also other beautiful cities like Rotterdam, the Hague and Utrecht. The cities are considered to be very safe and you will have many possibilities to expand your network with many shared working spaces all over town.

Stable government and fair legal system.

The Netherlands is considered to be a very stable and vibrant parliamentary democracy, recognized worldwide for its transparency, fairness and effectiveness. The political system is characterized by plurality and consensus-building, resulting in coalition governments that truly represent the voice of the people. The legal system is also considered to be fair and transparent and well equipped to deal with business, trade, taxation and patent issues.

There are specialized courts for dealing with criminal and administrative issues, as well as with tax law, planning law, environmental law and trade and commerce. There is a rich variety of world-class law firms – both home grown and large international ones – that can provide assistance with tax law, mergers and acquisitions, and European law. The Hague is the seat of the European Patent Office.

Low taxes compared to other European countries
The corporate income tax rate in the Netherlands is very low for European standards: 16.5% for profits up to 200.000 euros and 25% for profits more than this amount. In the next years, the government will reduce the minimum and maximum tax rates even further (15% lower rate and 21% higher rate in 2021).

The CIT rates will be gradually reduced. The standard rate will be reduced in steps from 25% to 22.55% in 2020 and to 20.5% in 2021. The lower rate has decreased from 20% to 19% in 2019, to 16.5% in 2020, and to 15% in 2021. Foreign investors can also profit from some beneficial tax exemptions, like a 30% tax break for hiring highly qualified employees.

Safe and developed financial system
The Netherlands also boasts a stable financial system and climate, with a large array of strong Dutch banks such as ING Group, ABN AMRO and the Rabobank. There are also many private equity investors, venture capital funds, as well as fund managers available for the picking.

Intercompany Solutions: your partner for a business in the Netherlands
You can always contact us for more information and assistance if you are considering opening a branch office in the Netherlands, or maybe a whole new business. We have a wide variety of services at your disposal to help you in any way we can.

The whole process can be concluded in just a few business days, offering you the chance to start doing business immediately. Interested in the possibilities? Contact us for more information.

On the 31^st of December, 2018, when the clocks struck midnight, a variety of new regulations and rules came into force with the beginning of 2019. Learn about the changes in effect from the 1^st of January, 2019.

Amendments affecting families

In 2019 several amendments relevant to families were introduced. One of them is the partner leave increase from 2 to 5 days for partners of new mothers working 5 days a week. The allowed leave of partners working part-time corresponds to their hours of work for one week.

This year childcare benefit also increases to support families in covering the costs of afterschool care and day-care. Meanwhile the quality requirements for childcare providers are becoming more stringent. Previously one employee could provide care for a maximum of four children, but now this number has been reduced to three. Also now childcare providers must give feedback regarding the pedagogical development of children.

Income, pensions and employment in the Netherlands

The maximum term of the thirty percent reimbursement ruling was reduced from 8 to 5 years. This ruling allows highly qualified migrants meeting particular criteria to receive thirty percent of their salaries free of tax. The reduction of this benefit will be in transition until 2021.

2019 marks the beginning of changes in the tax system of the Netherlands. General and employee tax credits are increasing and people who work in the country can count on more money to take home. Other amendments planned by the government concern the increase of specific unemployment benefits, transition allowances for dismissed employees and the minimum salary.

Corporate income tax is also in transition: the rate for Box 1 is currently at 16.5% and the rate for Box 2 is at 25%. State pensions are also going up and people of retirement age will have the advantage of an increased tax credit.

Developments concerning healthcare in Holland

“Eigen risico” or own risk remains frozen at EUR 385, while the basic government-set package has been extended. On the other hand, premiums have increased this year. To compensate for the higher premiums per month, the healthcare allowance of people meeting certain requirements has also increased.

In addition, the personal contribution to the cost of prescribed medicines is limited to EUR 250. Any expenditure made above this threshold must be reimbursed by the insurer.

Increasing consumer prices

The low VAT rate has increased from 6 to 9%. Therefore water costs, groceries, books, hair styling services and many other things will cost more. In addition to paying more for food, the gas you use at home will be more expensive, as its tax increases. On the other hand, the electricity tax will decrease.

2019 changes in housing: mortgages and rent

The rent paid by tenants may rise by no more than 5.6% from the 1^st of July, 2019. For persons occupying social housing the maximum rent per month is set at EUR 720.42. Now mortgages can be borrowed only for ≤100% of the property value. Costs accrued when purchasing a house, e.g. notary, appraisal and consultancy fees, cannot be covered from the mortgage.

Amsterdam, being Holland’s capital, is the obvious choice for expats, but surprisingly it does not offer them the best living and working conditions in the country. The Expat Insider 2018 City Ranking of InterNations puts The Hague at the top of the list.

The InterNations Expat Insider City Ranking for 2018

In 2018 InterNations conducted a survey with the aim to produce the latest edition of its Expat Insider city ranking. More than 18 000 expatriates from 187 countries/territories representing 178 different nationalities participated. The respondents rated nearly 50 factors relevant to life abroad using a 1-to-7 scale.

The factors were distributed in subcategories of the main categories relevant to life quality, working abroad, settling in, personal finance and family life. The average rating of these subcategories and the general satisfaction of the participants with their life abroad formed the total scores of the 68 countries included in the InterNations Expat Insider ranking for 2018.

The survey was also used to rank the cities where expats live, considering 25 factors relevant to urban living. The City Ranking is focused on the categories of finance, housing, urban living, work and settling in. It is based on the responses of nearly 12 000 expats from 55 countries. However the requirements for sample size limit the scope of the ranking to 72 cities in 47 countries.

The best Dutch city for expatriates

Holland ranks 16^th in the 2018 Expat Insider rating as an expat destination. A closer look at the results for the country shows how popular particular Dutch cities are. The Hague holds the first place for Holland and comes out 11^th in the 2018 City Ranking. For comparison, Amsterdam is 13^th and Rotterdam is 17^th.

The survey results show that The Hague scores high with respect to the work and life balance subcategory. According to this criterion it holds the 3^rd place and 84% of the respondents are satisfied with the balance between their work and life. The international city of justice and peace also impresses with its scores for job satisfaction, as 73% of the respondents like their jobs. This result is quite high compared to the 65% average for the whole survey.

Local friendliness is another subcategory where The Hague performs better than Rotterdam and Amsterdam, showing that expatriates perceive the locals as welcoming and friendly. Interestingly, one respondent remarked that regardless of the positive attitude of the population, locals refrain from establishing real friendships.

Starting an own business comes with challenges, many starting entrepreneurs have to make alot of personal sacrifices in the first years of starting their business. It is not always easy for starters to accomplish their goals, or to make a business that is self sustainable.

In this article we will discuss some of the common difficulties of starting entrepreneurs.

Starting a business or paying the bills?

Starting entrepreneurs have the difficulty in the beginning of not always having enough profits to cover the bills . This means that they will have to find a way to be able to pay the bills in the time until they archieve a healthy client base.

Finding credit in the starting phases is generally difficult, as the lender will want some guarantees to ensure the loan will be paid back.

This means that many people do not start a business until they build up a sufficient bankroll. Or they are able to acquire initial funds from friends and family.

When you are just starting up and have a limited budget, you should of course make due with the resources you have. Many CEO's pride themselves for doing everything for their own business in the startup phase.

But watch out for taking on too many aspects yourself. If you want to do everything from marketing, sales, backoffice, accounting, graphic design, website and so on. You could get overwelmed and forget your core business. Tim Ferriss, author of ''The 4-hour workweek'', advises you to set yourself an hourly rate. If outsourcing a certain aspect of your business costs you less than your hourly rate, you should outsource it.

Reaching (potential) customers before you start

Another philosophy is written in the book ''The Ultralight Startup'' by Jason Baptiste. The book is aimed at internet and tech based entrepreneurs. A core idea is to release a minimal viable product as soon as possible, or even to already reach out to the potential customer audience before your company is operational. This can be done for example by launching a ''coming soon'' page, in which you have a signup form to which potential future clients can subscribe.

The idea of finding customers before you launch a service, with the minimal viable product (the concept or idea) is happening more and more. For example on kickstarter.com, it gives starting entrepreneurs the possibility of finding buyers before the product is made, fully completed or even before a prototype is designed.

Of course the imagination does not end there, if you are a photographer, you can start by publishing your portfolio. If you are a writer, you can start with one blog post. And so on.

But when is the perfect time to start a business?

Many people who consider starting an own business wait for the perfect time to start their business and realize their dreams. Waiting to archieve a certain own capital on the bank, waiting until they finish their studies, waiting because they have recently bought a new house, married, have got a promotion, are out of a job, or have recently become a parent. When is the perfect time? When the economy recovers? When the housing market is back up?

Robert Kiyosaki, the author of ''Rich dad poor dad'', would say the perfect time will never come, if you have a dream, the best time is now to start working on it. If you are working a job, nobody is preventing you from making preparations for a business in your free time. Making a small test case of can be a perfect way to test the waters for your business idea.

A similar concept comes from the book ''Think & Grow Rich'', by Napoleon Hill. Napoleon mentions that the best way of archieving your goals, is by working on them right away. He is also not very conservative in his advice to ''burn your ships behind you'' and press forward towards your goals. For most, this is an absolutely terrifying concept. However, it might be the only way to overcome the infinite possible doubts and reasons why you should NOT do something. While the reason that you should, is simply because it is your desire to do so.

What entrepreneurs gave up to start their business

Everyone is well aware of the sacrifices that some famous entrepreneurs make, Elon Musk is working somewhere in the region of 100 hours per week. Some famous entrepreneurs have bet their entire fortune on the company to succeed.

But what are the main sacrifices that small businesses entrepreneurs make? Annamaria Mannino White is featured in a Business article on CNN, about her firm White Star Communcations. A marketing and public relations agency. She mentions that she just started her business as her husband had to relocate to another country with the military. She had to stay behind and run her business, despite the personal cost.

Starting today

If you need assistance with starting a business in the Netherlands, you can contact Intercompany Solutions. We provide accounting services, company incorporation services and much more.

Businesses importing goods from third countries into the EU and Holland, in particular, need to declare the goods at the customs. Some imports are subject to VAT and customs taxes. Due to the established Customs Union the whole EU is considered one territory with respect to customs policies. Therefore, in general, the same rates and rules apply for all Member States (MS). Once goods enter “free circulation” (all duties are paid and the import formalities are completed) in a particular MS, for example Holland, they can circulate freely between the other MS without any further duty payments or customs formalities.

It must be noted, however, that even though the regulations are common for the EU, their application and/or interpretation may be different depending on the MS. Holland has long-standing traditions in trade and offers a business friendly, open environment. As regards customs supervision, the local Customs Authorities put a lot of effort in providing flexible solutions. There are not any reductions in duty taxes or customs control, but the Dutch Authorities usually try to perform their supervision and control in a way that has as little impact as possible on the companies’ activities.

Customs duties in Europe

The duties payable for import of goods from third countries into the EU are determined by the three main criteria described below.

Classification

The Combined Nomenclature (CN) of the EU (a list of goods with assigned codes and customs tariffs) determines the extent of payable duties as it states which goods are taxed using ad valorem duty rates (a certain percentage of their value), other specific duty rates (for example, a set value per unit of volume), or are not subject to customs duties (the so-called zero rate). When an application is submitted, the Customs Authorities issue a resolution on the product classification. A Binding Tariff Information decision ensures the correct classification of goods, because it binds all EU customs administrations and its holder. We can help you determine your goods’ classification and assist you in preparing and justifying your Binding Tariff Information application.

Valuation

When ad valorem duties apply, the EU rules for customs valuation are based on those of the World Trade Organisation and correspondingly require the application of an approach related to transaction values: the payable or paid price of the goods determines their customs value, i.e. the valuation is based on a sell/buy transaction. So basically the business transactions of the trading parties are used to specify the transaction value. The customs administrations may additionally request proof that the parties are independent and on an equal footing to demonstrate the arm’s length quality of the purchase prices. Alternative methods can only be used when transaction values are unavailable or inapplicable.

When a sell/buy transaction is used for customs valuation, particular cost elements can be added, if they have been excluded from the paid price (e.g. insurance and transport to the border of the EU, research and development costs, royalty payments or assists). Under particular circumstances some elements such as inland transport or installation can be excluded, provided that they constitute a part of the purchase price.

Origin

The European Union has concluded agreements for preferential and free trade with many countries. Provided that the strict requirements specified in these agreements are fulfilled, goods originating from the participating countries can enter the Union at a lower duty rate or free of customs charges (i.e. zero rate). Still the EU applies measures for trade defence related to imports, namely safeguard, anti-subsidy (countervailing) and antidumping measures, which usually result in additional duty. Such measures are frequently taken for goods that originate from specified countries. Therefore the customs expenditures must be carefully considered when making any production or sourcing decisions.

In contrast to the United States of America, the European Union lacks a general system for refund of paid customs duties. Therefore, when imported goods are re-exported any duties paid at the time of importation cannot be refunded. For the purpose of avoiding needless payment of duties for goods destined for markets outside the EU one can use different suspension arrangements, including customs transit (with regard to transport), inward processing (for processing) and customs warehousing (for storage). Such arrangements can also be made to postpone the transfer of import VAT and customs duties. The use of these suspension regimes usually requires authorisations that may be granted only to companies established in the EU.

Various customs reliefs are available to importers if they meet specific criteria.

Also there are simplified customs procedures for export, import and/or transit. These procedures often allow for more flexibility in managing the (logistics) operations, as customs supervision can be performed at the company’s administrative division instead of requiring a physical check. The simplification can also allow exporters to self-issue origin certificates and origin statements for commercial documents, e.g. invoices (authorised exporters). By virtue of these origin statements or certificates reduced duty rates may apply at import in the state of destination.

Excise duty

By definition excise is a type of consumption tax on particular consumer goods specified in the context of the EU. Examples of excisable goods are wine, beer, spirits, mineral oils and tobacco. Payable excise duties may reach substantial amounts and such imports require more complex customs procedures. Therefore it is advisable to seek consultancy before importation.

UCC (Union Customs Code)

At the beginning of May, 2016, the existing Community Customs Code was replaced by the new UCC. The main principles considered above remain unchanged, but the UCC introduces some significant amendments with respect to the provisions for customs value. Also the first-sale principle can no longer be applied in determining customs value.

It has almost been two years since the infamous Brexit referendum. A small minority of Brits then made it clear, that they no longer wish to be part of the European Union. And so Brexit was born. After many negotiations and struggles there is still no clear view about the road ahead, meaning that the UK may or may not become independent on March 29, 2019.

In either case, there will be consequences for every single party involved. Of course if there is no deal, the situation can become frantic as there will be no agreements with the EU. The UK might find itself in a very uncomfortable position, and not just with the EU but with many other nations that have trade agreements with the EU. In the case of a deal, there are still many factors that will influence business owners and entrepreneurs who work either from the UK or from an EU-member state.

There’s a rather large grey area between deal and no deal, which will have various consequences depending on the scenario playing out. Plus; the financial losses to sustain the whole process up until now have been severe. The big question for everyone is whether the UK will stay involved with the EU at all, and if yes; in what role? The long-term relationship between the UK and Europe is very unstable and this can have massive effects on your business. It doesn’t even matter if that business already exists, or is just an idea at this moment.

From the UK to a business in the Netherlands

In this article we will inform you about the most important details of Brexit and the possible consequences of all scenarios. You will also find information about the benefits of having a business in an EU-member state, and why the Netherlands is possibly one of your best options. Huge companies like Sony, Discovery and Panasonic are already moving their headquarters from the UK to the Netherlands. We will discuss why this is a solid and smart move that might be beneficial for you too.

Start a business in The Netherlands

Why is Brexit bad for business?

The negotiations between Brussels and the UK have been going on for almost two years by now, and still there is no consensus. Major issues like the border between North-Ireland and Ireland are unresolved up to this date. This leaves a huge amount of entrepreneurs, business owners and foreign investors in the dark about the choices they should make.  In the case of a deal, which means the UK will not be a member state of the EU any longer but with the inclusion of agreements between both parties, there will be losses in terms of national income. The Financial Times assessed the situation and according to their expertise, the outcome would be as follows:

• If the UK stays a member of the single market: 2% loss
• In the case of a free trade deal with the EU: 5% loss
• If trade between the UK and EU is commenced under WTO rules: 8% loss[1]

Needless to say, that a no-deal situation resulting in a hard Brexit may include financial consequences which will be far more severe. Large corporations and companies have already initiated steps towards damage-limitation. Companies like Bentley were slowly returning to profit but might fail anyway, when a hard Brexit becomes reality. Adrian Hallmark, Bentley’s CEO, explained to The Guardian: “It’s Brexit that’s the killer, if we ended up with a hard Brexit... that would hit us this year because we do have a potential to get beyond break-even to do the turnaround. It would put at fundamental risk our chance of becoming profitable.”

In the eventuality that he would need to stop production in the UK-based Crewe plant, this would cost Bentley millions a day.[2] And Bentley is not the only worried company, which is exactly why many multinationals are swiftly moving their headquarters to ‘safer terrain’ like the Netherlands. Because the benefits and profits of staying within the EU are very real for most business owners.

The repercussions of Brexit: More than 250 companies are considering relocation to Holland

Hundreds of businesses are discussing options for relocation with Holland’s government, as they are worried about their trade on the European market after the British exit from the EU. Several popular companies have declared their firm decisions to relocate.

Consequences for businesses

Brexit and the uncertainty about its specifics strongly motivate companies to leave Great Britain and move to Holland. In 2018 Panasonic announced its intention to move to Amsterdam. More recently Sony also communicated its plan to relocate, citing Brexit as the reason for these developments.

The Dutch Agency for Foreign Investment claims that it has been contacted by more than 250 companies to discuss their relocation to Holland. In 2017 the number was 80, and at the beginning of 2018 it increased to 150.

More businesses are expected to express interest in moving to the country of windmills and tulips before the total figure is announced the following month. A representative of the Dutch Foreign Investment Agency stated that every company’s arrival, regardless of its size, is good news.

The United Kingdom loses and the Netherlands wins?

Britain recently lost a major player in the face of EMA (European Medicines Agency), an institution employing approximately 900 highly qualified workers. EMA has decided to establish in Amsterdam. Other countries are also benefitting from Brexit, because a number of companies in the financial sector plan to move their operations and employees overseas to cities such as Luxembourg, Frankfurt, Paris and Dublin.

It may seem that Holland is benefitting much from Brexit because of the rapidly increasing interest in the country as a destination for business establishment. Still, the companies that actually move will only alleviate the negative consequences of Brexit for Holland. The effects of Brexit are still ambiguous but the country has considered a no-deal situation regarding the rights of British residents.

The European Union in a nutshell

Every member state has accepted the four freedoms of the EU, which are basically the pillars of its existence:

• Free movement of goods
• Free movement of capital
• Free movement of services
• Free movement of people

It is obvious how these freedoms are beneficial for companies based in one of the member states. All companies inside ‘the bloc’ can buy and sell products and services freely within the borders of the EU. To keep the market fair for everyone, a regulatory framework exists that prevents a party from gaining unfair competitive advantages.

Member nations also have the obligation to implement EU law into their own national law and to recognize mutually shared standards. Another important role the EU plays, is that of a common customs union. The member states can trade freely within the borders of the EU, though all non-EU countries are bound to common tariffs on imports. All in all, the EU protects its member states in many ways but also limits countries’ autonomy. This is exactly why the UK decided to leave the EU.

What are the benefits of trading within the EU?

The European single market is obviously the main benefit here. Currently the EU is the largest single trader in the world, accounting for 16.5% of the total sum of imports and exports around the globe.[3] The main goal of the EU is not only the possibility for free trade amongst its members, but also the liberalization of world trade. Some tangible benefits of owning a business in an EU member country such as the Netherlands include:

• No internal trade barriers
• Healthy competition in services
• Reduced overall business costs
• No monopolies or cartels counteracting competition
• Reduced amount of paperwork
• Various harmonized standards
• A more efficient way of doing business
• Free movement of people resulting in a multinational labor force
• A single trade currency – the Euro

This is why being a member of the EU has offered key benefits to UK businesses. The EU includes some of the wealthiest and most prosperous countries worldwide, offering every business owner access to an enormous amount of suppliers. You can basically see the EU like a big marketplace, which offers an amount of convenience similar to doing business in your own country. No customs, no import taxes and a lot less regulations to slow trade down.

Fair and open trade possibilities

The World Trade Organization ensures that obligations and trade agreements between countries worldwide are transparent and fair. All EU regulation and trade policy is made on behalf of the EU by the Commission, who work closely within the framework of the WTO in order to ensure fairness and openness. The commission also works very closely with national governments, the European Parliament and global organizations to be able to adapt quickly to necessary worldwide and local situations and changes.

Because the EU has an extensive network of worldwide trade relations, favorable agreements can be negotiated. This is something a country on its own would not be capable of. All these partnerships are aimed at creating and maintaining a stable and fair single market that provides business owners with many benefits. It also makes it safer for business owners to trade outside of the EU, being protected by numerous multilateral agreements.

The EU provides safety and stable conditions

Next to creating opportunities for business owners, the EU also strives for better working conditions in poorer countries. The EU trade policy is aimed at reducing and putting a stop to malpractices such as child labor, the use of harsh chemicals and creating environmental hazards as well as combating price volatility. Countries in distress can be actively pushed forward by actions such as temporarily lowering duties, providing governance advice and supporting smaller national businesses. By choosing to establish a company in the EU, you automatically choose safe conditions.

Is a company in the Netherlands a good Brexit alternative for your business?

In general, starting a Dutch business is almost always beneficial due to the large amount of benefits and possibilities the Netherlands has to offer. If you’re still in doubt though, you can ask yourself a few questions first. The answers will determine whether Holland is a good place to start your company:

• What kind of business are you planning to establish?
• Is it possible for you to start such a company in the Netherlands?
• Is there a fitting niche for the services or products you want to offer?
• Would your company be competitive in certain ways?
• Will it be easier for you to trade with a business based in the Netherlands, or would this entail certain financial benefits you currently miss out on?

It’s a wise to answer these questions for yourself beforehand, since you might need to answer them once you decide to start the process of establishing a Dutch business. If you already own a successful UK business but want to move it to the Netherlands, you might also have to explain how your company will be beneficial for the Dutch economy.

''The Netherlands to become the centre for financial trading infrastructure of the EU27

The AFM conducted more than 150 interviews with companies that are interested in applying for a licence. ‘We assume that between thirty to forty percent of the European trade in financial instruments will opt for the Netherlands as a location. Thus, the Netherlands will become the financial trading centre within the EU27’, according to Merel van Vroonhoven, Chair of the AFM. ‘The arrival of these parties will also attract other service providers. Moreover, it strengthens the access of Dutch pension funds and other portfolio managers to the capital market’. '' [4]

How can setting up a Dutch business benefit you?

If you have already been thinking about starting or moving your business, the Netherlands proves to be a fantastic choice for almost every single investor or start-up. A business in the Netherlands offers a wide amount of perks and benefits to foreign entrepreneurs. The Dutch have been ranked 4^th on the Global Competitiveness Index of the World Economic Forum, the 3^rd best country in the world for business by Forbes Magazine due to the profitable business conditions.

A few very good reasons to start a Dutch business:

• One of the lowest tax rates in Europe: between 16.5% and 25% (15-21% from 2021)
• You don’t pay value added tax (VAT) for transactions within the EU
• The Netherlands has the largest number of treaties worldwide for double tax avoidance
• The Dutch have a solid reputation in global (e-)commerce
• More than 90% of the population speaks English and in most cases a second foreign language
• The Dutch labor force is highly educated and ranks 3^rd in the global top
• The Dutch offer an innovative international business atmosphere
• Foreign entrepreneurs and investors will profit from a stable legal and political climate and a plethora of outstanding international relations

The procedure for starting a Dutch business

If you want to be able to enjoy all the benefits the Netherlands has to offer, you will need to follow a certain procedure to establish your company here. This is where Intercompany Solutions comes into the picture. We can help you set up a Dutch business in just a few working days. We can also assist you to transfer your current business to the Netherlands. Our procedure consists of 3 general action steps:

Step 1

You will be asked to send in all the necessary documentation as well as proof of your identity, which we will check thoroughly. If you already have a company name in mind, we will check the availability of that name during this stage too.

Step 2

After all the checks we prepare all the documentation that will be needed to register your company. When these documents are finished, we send them over for you (and possible other shareholders) to sign. Once signed, you send everything back to us so we can start the registration process.

Step 3

With all the signed documents we go to a notary public, who will sign the deed of incorporation and submit the deed of formation to the Chamber of Commerce. You will then receive your registration number as well as your VAT number. Your company officially exists! If you wish, we can also take care of other matters such as applying for a Dutch bank account.

Contact Intercompany Solutions for more information

Intercompany Solutions has many years of experience in setting up businesses for foreigners, as well as handling a great many cases. We can help you with any question you might have related to starting a business in the Netherlands. From the permit you will need to finding the best Dutch bank for your business. Simply contact us for more information, and we will get back to you as soon as possible.

[1] Strauss, D. (2018, 9 October). Brexit explainer: what’s at stake for EU single market and customs union. Link: https://www.ft.com/content/1688d0e4-15ef-11e6-b197-a4af20d5575e.

[2] Neate, R. (2019, 23 January). Companies press Brexit panic button in further blow to Theresa May. Link: https://www.theguardian.com/technology/2019/jan/22/no-deal-brexit-panic-grips-major-uk-firms.

[3] European Union. (2018, 13 November). Trade | European Union. Link: https://europa.eu/european-union/topics/trade_en.

[4] Dutch Authority for the Financial Markets (AFM) (2018, 29 October) The Netherlands to become the centre of European financial trading post Brexit. Link: https://www.afm.nl/en/professionals/nieuws/2018/okt/trendzicht-2019

Updated 11-12-2019