Have you been thinking about starting a company? But has the whole Brexit situation left you confused and a bit unmotivated? Don’t worry; you are not the only one. Many start-ups as well as already existing business owners in the UK are contemplating their next move, figuratively as well as literally speaking.

Most business owners want to avoid becoming detached from the EU, since this would entail a significant loss in various benefits. Just think about factors such as the single market, the free trade possibilities and freedom of movement you would suddenly miss out on. To ensure you can still benefit from owning a business in one of the EU-member states, consider starting a Dutch business. In this article, will explain why this is a good idea.

What do most start-ups and aspiring entrepreneurs deem important?

The New York Times published an article exactly in the middle of 2016, in which was already foreseen that a lot of UK entrepreneurs would be actively looking for a new home for their businesses. They also published a list of criteria that seem to be important during the decision-making process:

• A high proficiency of the English language
• A good regulatory environment
• An excellent transportation infrastructure
• An equally good communications infrastructure
• Possibility to acquire prime office space
• Luxury housing options
• High quality schools
• Excellent restaurants and cultural opportunities
• “An intangible quality that includes a certain energy level and openness to an influx of highly paid, competitive City of London-Wall Street types.”[1]

Not surprisingly, Amsterdam was then named the winning city for relocation!

Why would you choose the Netherlands to start your company?

According to the same article, the Netherlands and specifically Amsterdam really is the best alternative for London: “Not only do 90 percent of the Dutch speak English, many speak it better than the English themselves. Its schools are ranked the best in Europe, and there are plenty of English-language options. The city has beautiful architecture and housing options, picturesque canals, excellent restaurants, music and theater, lively night life, and a cosmopolitan and tolerant attitude cultivated over centuries as a major global trading center. It has one of Europe’s best airports, ranked just behind Frankfurt and Vienna, and an excellent rail network connecting major European capitals, including London. It’s a short train ride to Brussels, the capital of the European Union. Amsterdam is already a center of international commerce and the financial and political capital of the Netherlands.”[2]

Intercompany Solutions can help you with the entire procedure of setting up your business in the Netherlands

Next to the country-specific benefits, the fact that the Netherlands is a highly valued member of the EU will also have a hugely positive impact on your business. Also; until 29^th of March and probably during the transition period too, you will still be able to apply for a self-employed or start-up permit as an EU-citizen. So use this opportunity to start a Dutch business easily. We will help you every step of the way, simply get in touch with us to initiate the process.

[1] Stewart, J. B. (2016, 30 June). After ‘Brexit,’ Finding a New London for the Financial World to Call Home. Link: https://www.nytimes.com/2016/07/01/business/after-brexit-finding-a-new-london-for-the-financial-world-to-call-home.html?_r=0.

[2] Idem

If you ever dreamed about setting up an your own business as a young entrepreneur, the Netherlands might just be the place to initiate your endeavor. Not only will you have access to the entire European single market, but this technologically advanced country offers many benefits that will quickly help your business grow. There are many opportunities available, for example to start an online business; you just need to know where to look and when to take action. Read on for some tips and valuable information that will help you during the process of setting up a Dutch online business as a young entrepreneur.

Why choose the Netherlands to start a new business?

The Dutch have continuously proven to be stable, dependable and welcoming to foreign investors and entrepreneurs. But Holland also excels in innovative technologies, IT and e-commerce. If there is a new gadget, app or tool on the market; chances are at least part of it might have been developed here. This makes the Netherlands extremely suitable for an online business. The Dutch population is also known to be quite internet savvy and knowledgeable, making them perfect potential clients.

Young entrepreneurs have the advantage of naturally being comfortable with many technologies and having an edge over older organisations. This is especially true with disruptive innovations, new approaches and innovating business models in the web and IT sector.

Access to amazing marketing companies

The Netherlands is home to an enormous amount of excellent marketing companies and sales operations. Thus, the online industry is thriving and offer many possibilities for new entrepreneurs. You can count on finding the perfect commercial partner to boost your business to a high level. This will make it possible for you to reach a large amount of national as well as international clients, as most marketing companies offer bilingual or even trilingual services.

The Dutch have access to a high quality IT infrastructure

One of the main factors you will probably be looking for is a technologically advanced country with an excellent infrastructure. An online company cannot exist without these basics, which makes Holland the perfect fit. The Netherlands has multiple airport and seaports, a fantastic road and rail network and a digital telecommunications network that is seen as one of the best in the world regarding speed, quality, and reliability. In other words; you will have access to one of the best infrastructures worldwide. [1]

Lots of opportunities for young freelancers

Online businesses are very versatile nowadays, which means you can sell practically every imaginable product and service online. Especially creative freelancers benefit from the internet as a medium, because it became a lot easier to sell your products to a much wider audience. Creative freelancers will have a grand time in Holland, as the country is bursting with likeminded creative professionals and companies. If you are looking for interesting possibilities for collaboration; look no further. The Dutch creative sector ranks among the world’s top 10 in terms of job opportunities, brands and trade options. [2]

E-commerce and affiliate marketing for startups

Another market that has been thriving is the e-commerce business. In the Netherlands web shops are booming, since a large portion of the population actually prefers to do their shopping online. You can easily create a startup to sell unique handcrafted products, as well as general wholesale items. Another option is to set up a blogging site and become an affiliate for already existing large corporations like Bol.com for example. This is basically a hugely successful Dutch version of Amazon. Becoming an affiliate will allow you to make money by referring clients to their website. The only thing you need is a Dutch online company with a chamber of commerce number and you are good to go.

Economic advantages of youthfull entrepreneurship

The Dutch government is stimulating (youth) entrepreneurship to help combat unemployment and stimulate the economy. It does so by making the regulations increasingly simple, attractive for starting entrepreneurs as well as provide decent possibilities of education in terms of small business management.

So how can our government further improve if effort? Youth Business International made a study with Yecontexts to answer just this question. Providing guidance, performing research on effectivity and identifying the opportunities. Some of these opportunities include;

• Focus on the local target audience
• Keep in mind that ''youth'' is a very diverse target group, with different education backgrounds, experience, interests and values
• Involve the key audiences that can make a positive contribution to the end goal
• Identify specific needs to stimulate female entrepreneurship
• Include cultural biases that might affect your audience

Setting up an online business in the Netherlands is fast and easy

Intercompany Solutions can set up your online company in just a few working days. It’s wise to do some research about the products you wish to sell, if your plan is to set up a web shop. There are certain restrictions or products that require a permit. In all other cases you can start making money almost immediately. If you are interested, you can always contact us for detailed information.

Also see our complete Guide for starting a business in the Netherlands

[1] Infrastructure assets in the Netherlands can help your company grow. Link: https://investinholland.com/infrastructure/

[2] Netherlands Enterprise Agency, RVO. How to start an online business - a checklist. Link: https://business.gov.nl/starting-your-business/checklists-for-starting-a-business/how-to-start-an-online-business-a-checklist/

Brainport Eindhoven is a combination of high tech campuses and businesses. The collaboration between commercial entities and Universities providing theoretical knowledge has proven a fertile ground for innovation. Eindhoven is famous for its Eindhoven University of Technology. Eindhoven is also known for major technology companies based in Eindhoven, such as Philips and ASML.

A complete small-scale high technology infrastructure

Brainport Eindhoven attracts organizations and companies with a wide variety of technologies, top technical universities, popular Original Equipment Manufacturers (OEMs), suppliers undertaking risk-bearing innovations, international knowledge institutions, high expenditure for Research and Development, student teams, start-ups, twenty thousand researchers, shared manufacturing facilities and R&D. This outstanding infrastructure offers all that technology and R&D organizations and companies need to perform to the best of their abilities.

(Article: Netherlands The European Silicon Valley)

Many opportunities to commercialize knowledge

Brainport provides the perfect environment for organizations and companies to commercialize sophisticated products and technologies. The region has developed a comprehensive one-of-a kind technology ecosystem where more than 20 OEMs in the field of high technology work in close collaboration with knowledge institutes and suppliers and has become a lucrative market in its own right. Furthermore, by cooperating with prominent high-quality companies in the development of pilot projects used as showcase, Brainport Eindhoven has become a label of quality leveraging the reputation of businesses. Last but not least, Holland is perceived as a country of pilot projects by the EU, providing various facilities for acquisition of quality labels needed for entry on the market. Brainport can provide independent final verifications of product compliance with global standards in different fields. Thus the region provides the means for companies to establish themselves on international markets.

Cost/risk competitive manufacturing and R&D

Holland, and Brainport in particular, offers businesses and organizations the complete set of tools to perform cost/risk competitive manufacturing of high technologies and R&D. The region makes it possible to work in collaboration with various contract manufacturers of original equipment used to cooperating with giants such as Philips and ASML . They take full responsibility regarding the design and the life cycle of the product. Brainport Eindhoven also offers various R&D facilities as metered services. Thanks to this and the huge diversity of collaborators in prototype design and industrialization, even comparatively small companies have the opportunity to work flexibly on revolutionary technologies and share the involved risks. Furthermore production facilities, services and buildings can be shared flexibly to achieve outstanding cost efficiency.

Eindhoven: A fertile ground for technology and innovation spotting

Brainport has many incubator and accelerator programs and hosts Eindhoven UT, recognized for its partnerships with industry representatives and unparalleled expertise in valorization of knowledge. Therefore the region provides a fertile ground for development of spin-offs, start-ups and scale-ups. These companies make significant contributions to the unique power of innovation of Brainport and its high density of patents. Brainport is also famous with its multidisciplinary initiatives, cross-collaboration and diverse technologies and sectors leading to resourceful crossovers. This combination of factors makes Brainport a perfect region for the purposes of technology spotting.

Cooperation in technology development decreases the period to market

Holland’s technology-minded government and Brainport’s open platforms for research, supply chains, campuses, clusters, and multidisciplinary approach to work allow companies to take advantage from sharing of knowledge, mutual strengthening of core competences, efficient use of Research and Development budgets, risk sharing and product development and testing with potential customers in public areas. The path is open for development of revolutionary technologies at reduced costs that can be quickly released on the market.

Availability of brilliant IT and tech specialists

The outstanding reputation of companies established in Brainport and the knowledge and educational institutions in the region attract talents from around the globe. These acknowledged professionals are willing to contribute to the development of sophisticated top-class technologies. Therefore companies benefit from a large talent pool, including scientists, researchers, physicists, engineers, designers and developers excelling in their fields. Attractive campuses and properties like Strijp-S (a village concept) and the local High Technology Campus offer specialists a sustainable, dynamic working environment. The options for accommodation contribute to a great extent to the attractiveness of the region.

Active support in starting new High Tech businesses

In Brainport, Research and Development companies find everything necessary for a successful business: close collaboration, easily accessible platforms for research, joint innovation programs, open supply chains and attractive campuses. On these campuses, knowledge institutions and companies work together on particular technologies, high-technology clusters and networks, as well as on various events dedicated to technology. The campuses facilitate business development and help newcomers find their way in the region. Furthermore they offer international businesses special partnerships to let them try out the benefits and become a part of the high technology ecosystem. The development agency of the region, Brainport Development, provides full support in setting up a new business locally or finding suppliers and partners.

A creative symbiosis between citizens, industries and governments

Brainport Eindhoven has a technology-minded government, adaptive and innovative citizens, cooperating industry partners, pilot opportunities and living laboratories offering organizations and companies plenty of room for experimentation. The region presents opportunities to test new services and products in real life situations, thus adding value to the goods and ensuring that they meet the end-users’s needs. Brainport is ideal for development and implementation of smart services and products in close collaboration with potential customers in realistic settings. With such background, it is not surprising that the region is leading in the area of smart mobility and city concepts.

Partners and expertise for creation of unimaginable technologies

Brainport Eindhoven is a melting pot of high technology organizations and companies specializing in diverse fields. To them collaboration is a major instrument for development. The region hosts partners who have the abilities to develop, evaluate, prototype and manufacture systems beyond imagination with unparalleled efficiency. There are also private and public partners contributing to the development of a unique platform facilitating an efficient and broad technology roll out. Therefore in Brainport the process from the initial development of products to their introduction on the market is incredibly fast.

Stability, prosperity and international orientation

Holland is a prosperous and stable country that welcomes international business entrepreneurs: a veritable European gateway. Brainport Eindhoven has a strategic location, the largest Dutch airport after Schiphol, a multilingual well-educated workforce, outstanding digital infrastructure, and a growing and thriving international community. The region offers everything needed for a great quality of life.

Do you intend to establish a business in the field of high technology in Brainport open a company? Our local office can assist you in registering your company in the region.

Last year the Dutch electronic commerce was worth €22.5 billion and can grow to approximately €25 billion before the start of 2019, showing an 11% increase. This rate of expansion is a bit slower compared to the 13% increase in the Dutch electronic commerce turnover reported for 2017.

These conclusions are based on the report of the E-commerce Foundation on the Netherlands for 2018. Wijnand Jongen, chief executive officer of Thuiswinkel.org - a Dutch electronic commerce association, stated that online shopping in Holland is steadily increasing its share. This trend has to do with the recovery of the Dutch economy, as well as with the growing confidence of the consumers. According to him, both omnichannel and online retailers can benefit from the situation.

Read here in case you are interested in starting an online shop in the Netherlands.

81.5 percent of the Dutch population buys products and services online

Reportedly, 97% of the 17M Dutch residents use the internet and 84% of them shop online. Therefore 81.5% of the whole population shop on the internet.

The average amount of money a shopper spends online is on the increase. In 2016 the average spend was €1200 per person, while in 2017 this amount increased to €1700. Electronic commerce in Holland currently comprises 24% of the national market. Nevertheless, only 27% of the people prefer making purchases online. This percentage is lower than the estimates for other countries in Europe, such as France (35%), Germany (41%) and Great Britain (45%).

According to the forecast for this year, the Dutch electronic commerce industry is expected to grow by approximately 11%. This means that the online sales industry can reach almost €25 billion before the beginning of 2019.

Most popular category: Clothing

Considering the amounts of money that Dutch people spend online, the leading category of products is clothing. Consumers have spent approximately €2.3 billion on clothes. Other popular categories are Information Technology (€1.5 billion), telecom (also €1.5 billion) and food & near-food (€1.3 billion). Currently, there are around 34,000 websites where businesses offer their products and services directly to consumers. According to the forecast, this year the number may increase to 38,000+.

Are you still doubting where to start your E-commerce business? Read here 5 reasons to start a business in the Netherlands. 

Thanks to its history of innovations and exceptional digital infrastructure Holland hosts the largest ecosystem for start-ups in Europe. In fact, as reported in the 2016 Start-up Scoreboard of the EDF, the country has the most beneficial business climate for start-ups in the European Union. With 10+ start-up and technology centres in a ninety-minute radius, the Netherlands provides many options for the establishment of innovative companies operating in any sector. The Netherlands is also referred to as ''The European Silicon Valley''. The Dutch cities offering the best conditions for start-ups are listed below.

The Hague

The international centre of justice and peace is currently the largest security and safety cluster on the European continent due to its many embassies and international organizations alongside some four hundred security companies. The Security Delta Campus in The Hague supports specifically start-ups in the field of cybersecurity by providing living laboratories, office spaces and training facilities.

HackerOne is among the most interesting start-ups in Den Haag’s security cluster. The company is an American-Dutch venture conceived by security leaders working for Microsoft, Google and Facebook. In 2015 this resourceful start-up established a centre of operations in Den Haag, after raising USD 25 million Series B funding. Until now it has provided services to fifty companies, including Twitter, Uber, Slack and the US Defence Department, finding more than 21 000 bugs.

Read more on the city of The Hague

Rotterdam

Rotterdam is the largest city in Holland, after Amsterdam. It boasts the biggest and most active shipping port in Europe. In recent years Rotterdam has been acknowledged as an excellent location for start-ups. Last year it was featured in Financial Times as a suitable location for launching new ventures. As a shipping centre, Rotterdam has encouraged the development of start-ups specializing in port-related technologies. They are aided by a dedicated Innovation Lab, established jointly by the YES!Delft incubator and Rotterdam’s Port.

Last year the Cambridge Innovation Centre (CIC) based in the USA opened its first international hub in Rotterdam. The city is located close to numerous renowned universities and the CEO of CIC, Tim Rowe, compared it to Boston, USA.

Read more on the city of Rotterdam

Utrecht

Utrecht is located at the heart of Holland and strives for healthy people, minds and environment. It is maintaining one of the most sustainable and healthiest living environments in the world and provides exceptional quality for business and life. The EC has recognized it twice as a leader among the competitive regions in Europe.

Utrecht hosts approximately 400 start-ups that benefit from the local institutions and resources. It is the home of UtrechtInc, rated in the top 10 for European incubators, and a Science Park fostering innovation in cancer research, stem cells, sustainable urban planning and bioprinting.

Read more on the city of Utrecht

Amsterdam

Holland’s capital is a global destination for businesses, famous among visitors with its scenic canals. Dubbed the capital of start-ups in mainland Europe, it offers all the necessary ingredients to transform an idea for a start-up into a business generating billions. Amsterdam hosts top European accelerators, such as Startupbootcamp and Rockstart, and establishments of giants like Salesforce, Uber and Google.

The unicorn company Adyen operating in the field of financial technology was started in Amsterdam. It was established in 2006 and is currently valued at USD 2.3B. According to Fortune, it is certainly a unicorn that you can bet your money on.

Read more on the city of Amsterdam

Eindhoven

Utrecht is the heart of the Netherlands, while Eindhoven with its region of Brainport is undoubtedly the country’s brain. In 2011 the Intelligent Community Forum rated it as the smartest region in the world. Eindhoven, a centre for high technology development and design, boasts a huge network of R&D and academic facilities, e.g. the High Technology Campus and its Holst Center dubbed Europe’s smartest square kilometre, as well as Eindhoven Technology University. The active collaboration within this network has enabled Brainport to generate USD 2.8B in innovation spending by private organizations.

The lucrative technology environment in Eindhoven attracted the interest of the Singularity University based in the Silicon Valley. As a consequence SU opened its first international department there: an innovation centre bringing together representatives of leading research institutions, start-ups, businesses and the government to work on new revolutionary technologies, such as food scanners, DIY drones and self-driving automobiles.

Read more on the city of Eindhoven

Are you intending to establish a start-up in Holland? It is easy to do so with the special Start-up Visa for international entrepreneurs. Get in touch with our team to receive further information and consultancy on start-up establishment in Holland.

The increasing popularity and global growth of cryptocurrencies have resulted in questions regarding the regulatory status of this novel financial phenomenon. Cryptocurrencies are entirely virtual and organized via a network called a blockchain. This is a register keeping secure records of all completed transactions. The blockchain is practically controlled by no one, as it is distributed across all computers with Bitcoin wallets. Therefore there isn’t a single institution that manages the network. Logically this implies the presence of various legal and financial risks.

Cryptocurrency start-ups raise early funds by using the so-called Initial Coin Offering (ICO). In an ICO campaign a company sells digital coins publically to finance its operations and achieve other business goals. ICOs are currently unregulated by governmental agencies or law. The lack of statutory framework has been a matter of concern due to the considerable potential risk assumed by the investors. Consequently, volatility has also become an issue. Unfortunately, investors losing funds in this process have no standard options for recovery of the amounts.

Virtual currencies and the EU

The risks inherent to virtual currency use have prompted the EU institutions to adopt regulations. Still, regulation at the EU level is complicated because of the developing EU statutory frameworks and the inconsistencies across the Member States (MS).

Cryptocurrencies remain unregulated at the level of the European Union and without close supervision by public authorities. Nevertheless, the participation in virtual currency schemes may lead to liquidity, credit, and legal and operational risks. Therefore MS authorities should decide whether to accept or, alternatively, regulate and formalize virtual currencies.

Cryptocurrencies in Holland

The national Act on Financial Supervision (AFS) states that electronic currencies are monetary values stored magnetically or electronically. Their intended use is to perform transactions and they are accepted as payment by parties different from the party issuing the money. Cryptocurrencies, however, do not match the definition of electronic money, since they do not meet all statutory criteria. This begs the question how exactly to define them.  In the framework of the AFS a virtual currency is just an exchange medium. Individuals are free to perform barter trade and no legal permission (license) is required. The Finance Minister expressed an opinion that it is not advisable, at least up to this point, to revise the existing definition of e-money, considering the comparatively low acceptance level, restricted scope and limited economic importance of bitcoins. He pointed out that only consumers carry the responsibility for cryptocurrency use.

The District Court of Overijssel and the Finance Minister of the Netherlands accept virtual currencies, e.g. Bitcoin, as exchange media. In an appeal procedure, the Dutch Court acknowledged that bitcoins qualify as objects for sale by virtue of Art. 7:36 of the Dutch Civil Code. It also concluded that virtual currencies can be considered as exchange media, but they do not satisfy the criteria for legal tender. On the other hand, the Court of Justice of the European Union (CJEU) ruled that cryptocurrencies should be perceived as a means of payment, thus suggesting indirectly that they are comparable with legal tender.

Read here for information on bitcoin and tax

Conclusions

The issue of cryptocurrency regulation proves to be quite complex and the CJEU will likely need to go into terminology clarification. Any MS choosing to adopt terminology different from the legislation of the EU may thus cause difficulties with law interpretation on the background of the European Union legislation. Having this in mind it is recommended that MS follow the terminology of the common EU legislation while amending their national laws.

In case you are planning to start a cryptocurrency business in the Netherlands, do not hesitate to get in touch with our team. They will give you more information on the situation with cryptocurrencies in the Netherlands and help you establish your business.

Last October the government of the Netherlands released a document announcing its future plans. The paper was finalized after a negotiation of more than 200 days. The document promises changes in various aspects of society. They include additional police funding and improvements of counterterrorism and cyber security. The government also envisages reforms in the labour market concerning sick leave, procedures for dismissal, rules for paternity leave and minimum wages. It plans to adopt a new system for pensions and amend the rules for child benefits. The paper also includes schemes on climate change, immigration, education and housing.

The 30 percent reimbursement ruling

The plans of the government specifically related to foreign employees concern changes to the thirty percent rule in the framework of envisaged tax reforms.

The 30 percent reimbursement ruling gives tax advantages to highly skilled foreign employees in the country, allowing them to receive 30 percent of their wages free of tax. Therefore such employees pay tax on seventy percent of their income. The rule is a form of reimbursement of the expenses migrants make for their relocation to the country, including housing, travel and visas. This tax advantage is a method to attract highly qualified international workers and fill existing expertise gaps in Holland. Currently foreign employees can claim the advantage for 8 years, even though it has been estimated that only about 80 percent of them actually benefit from it.

Last October the government made an announcement that soon the maximum period of the 30 percent ruling will be reduced from 8 to 5 years. The change will apply to newcomers and employees that are already using the advantage.

Read more on the 30 percent reimbursement ruling in our FAQ.

A petition signed by 30 000 people

Until now approximately 30 000 have supported a petition asking the government of the Netherlands to keep the old rule for employees who have already moved to the country and currently benefit from the advantage.

People have created Facebook groups to highlight and discuss the issue and have launched a campaign to raise money to fight in court the decision of the government. They say that they recognize the government’s authority to change the policy for future foreign employees as appropriate, but the amendments should not apply to current expats who have already moved to the Netherlands with the assumption that they will be entitled to 8 – 10 years with reduced taxes.

The decision to limit the 30 percent ruling term for existing claimants without a period of transition has raised much concern among expats. Employers of international workers are also worried about the repercussions of the proposed change.

Many lawyers specializing in taxation have been contacted by people with concerns about the ruling’s implications.

The 60 000 foreign workers in the Netherlands meeting the strict requirements on income will face significant financial consequences. If, for example, an expat is earning 60 000 Euros a year, then he/she will have to pay approximately 8000 Euros more in taxes. This considerable drop in personal income will inevitably make the country less attractive for foreign professionals. Many other countries worldwide welcome skilled employees, so people willing to work abroad will likely choose other locations. To counter this trend, Dutch employers will have to offer much more attractive packages for relocation and better salaries.

International workers in the Netherlands have already voiced their concerns by lodging complaints and donating money to the campaign for challenging the decision. A person who has arrived in Holland last year commented on the page that he has recently bought a flat, taking a thirty-year mortgage. He feels cheated by the government that decided to change the rules retroactively and considers this practice dishonest.

You can find more information on the campaign at: https://www.gofundme.com/expatfund or hashtag #aDEALisaDEAL

Intercompany Solutions offers comprehensive financial advisory services to expats who live and work abroad. Regardless of your situation, we will help you see your finances clearly and prepare yourself for the future.

In 2017 a total of 143 international companies opened offices in Amsterdam’s urban area. The city remains a popular choice for foreign companies planning to develop their businesses in Europe. It is estimated that for the next 3 years these corporations will create 2700+ jobs.

Amsterdam offers thousands of jobs

In 2017 the expansion of already established foreign businesses resulted in the opening of 4100 new job positions. The European Agency of Medicines also made an announcement that it is moving its central office to Amsterdam. The Agency’s headquarters are currently located in London and need to be relocated because of Brexit.

According to alderman Udo Kock, Amsterdam is a stable competitive location for foreign start-ups and businesses due to its convenient placement in the heart of Europe, its outstanding logistic networks, its data hub function and its attractiveness to skilled professionals. The city’s top ranking has led to the opening of many new jobs in the region: a total of 6500 in 2017, excluding the positions to be opened after the move of the European Agency of Medicines. Amsterdam, however, should not take the presence of foreign businesses for granted. The city has to continue investing in new office spaces, infrastructure, housing and international schools throughout the region.

Stable international position

The strong position of Amsterdam on the competitive European background is evident from last year’s international rankings. The report of IBM on worldwide location trends ranks the city second in attracting international investments. Its GPCI index is rated third in the EU for attracting foreign professionals and, according to Economist’s Index, it is considered the safest city in Europe. These outstanding results are partially attributed to Amsterdam’s convenient location, but also to the improvements in the business climate of the region and its efforts directed towards acquisition and marketing.

North American businesses are still the biggest investors

The largest source of investments for 2017 was North America with 53 percent of all created job positions and 36 percent of newly established companies. For example, one of these companies, BAMtech Media, that provides video streams covering different sport events, currently employs sixty people and has a registered office in North Amsterdam. The region of Europe – Middle East – Africa (EMEA) was the second biggest source of investments for 2017 with 23 percent of all new jobs and 36 percent of newly established companies. Asian investments continue to be stable with 23 percent of created jobs and 25 percent of newly established companies. North America is also leading in business expansion, representing 57 percent of the job positions created through expansion. Many of the USA businesses established in the Netherlands have an inherent tendency to develop quickly (e.g. FashionTrade and Netflix), but multinational companies such as Asics and Infosys also expanded.

Most newly established foreign companies operate in the field of creative industries, ICT and financial services. Nevertheless, the sectors of science, health, agriculture and food also perform well. As regards business activities, sales and marketing offices, and European headquarters are predominant.

The European Agency of Medicines (EMA) and Brexit

In 2017, in response to the plans of the United Kingdom to leave the EU, the Community made a decision to relocate the EMA’s headquarters to the Dutch capital in two years’ time. This step will attract more companies operating in the area of life science and related fields to move to Holland since they will benefit from their proximity to the vital EU agency. Amsterdam provides active support to the Agency and its staff in order to facilitate the relocation to the area of Amsterdam. The city and its partners from the network “Invest in Holland” will make sure that the companies and professionals following the Agency to the country will establish quickly in the area of Amsterdam and in other locations around the country.

Differences between the regions

Skilled international employees are vital to the success of many businesses and, in principle, these professionals prefer city life. Estimates show that the total number of businesses opened in Amsterdam City has increased in comparison to elsewhere in the region. The Amsterdam inbusiness has directed its efforts to change the situation through its communication and marketing initiatives. The municipalities of Almere, Haarlemmermeer and Amstelveen, among others, are also suitable locations for foreign businesses in the region, as it usually takes less than 30 minutes to travel from there to the centre of the city. Amsterdam is attempting to distribute evenly the skilled international professionals on the territory of the region. The establishment and enlargement of international educational institutions in Haarlemmermeer, Almere, Hilversum, Amstelveen and Haarlem undoubtedly contributes to this aim. For 2017 alone, the new places opened at international schools in the region were 850. Most of them are in the area of Amsterdam.

On September 19, 2017 (Budget Day in the Netherlands) an official legislative proposal for amendment of the Dutch withholding tax on dividends was published in connection to the Tax Plan for 2018. In summary, the proposal referred to a broadened exemption from withholding tax on dividends applied unilaterally with the aim to maintain the favourable fiscal climate in Holland.

On the same day, the Senate approved all proposals included in the Tax Plan for 2018. Therefore, the broadened exemption from withholding tax on dividends is in force since January 1, 2018.

Dutch exemption from withholding tax on dividends before January 1, 2018

For a number of years, Holland has exempted the distributions of dividends to EU or EEA (European Economic Area) parent companies from withholding tax based on Council Directive 2011/96/EU on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. According to this document any income distributed by subsidiaries to parent companies in different member states is not subject to withholding tax on dividends in case the following collective requirements are fulfilled:

• The legal form of the parent company has to be listed in Annex I of Directive 2011/96/EU;
• The parent company has to reside in a Member State of the EU under its national law and pay corporate tax on its income without possibilities of exemption;
• The company needs to hold a minimum of 10 percent of the subsidiary’s voting rights (or capital). The Directive was amended to reduce this holding requirement. It decreased from 25% for 2005 to 20% for 2006; for the next two years it was 15% and in 2009 it became 10%.
• The requirement for minimum period of holding (if any) should be fulfilled.

Extended Exemption from Dutch Withholding Tax on Dividends since January 1, 2018

From the beginning of 2018, the Dutch exemption from withholding tax related to dividends has a broader scope. It applies to the distributions of dividends in the following cases:

• The parent corporation would have qualified for the participation exemption in the Netherlands, i.e. its interest in the distributing entity/subsidiary is 5% or more;
• The parent corporation resides in the EEA, EU or a country that has signed a tax-related treaty with the Netherlands including provisions for dividends.
• The corporation has not been denied a withholding tax reduction with regard to dividends under the treaty between Holland and the country where it resides by virtue of a counter-abuse provision.
• The parent corporation does not own a part of the distributing entity’s/subsidiary’s capital with the chief purpose to avoid the Dutch withholding tax on dividends. This condition is verified through a “subjective test”. An assessment is made to check if the company owns a part of the capital of the distributing entity/subsidiary with the intention to circumvent Dutch withholding tax on dividends and if the company was interposed to achieve a better position with respect to Dutch withholding tax on dividends. If the assessment yields a positive result, it is followed by an “objective test”. Its purpose is to ascertain if the entity is artificial, i.e. it was not established for legitimate business reasons reflecting the economic reality. In general, entities are not considered artificial in case:
• the parent corporation has an operating business; or
• the corporation is a holding that has acquired a better position with regard to the Dutch withholding tax on dividends in comparison to indirect shareholders (grandparent company) having an operating business, but its relevant substance is sufficient. This means that the parent corporation (intermediate holding) meets two additional requirements for substance, on top of the existing ones stipulated in Dutch law: 1) The parent corporation has costs for employees amounting to no less than 100 000 Euros; 2) The parent corporation has office space where it performs its business activities.

The additional requirements for substance are in effect from April 1, 2018.

Who gets an advantage?

The exemption from Dutch withholding tax on dividends benefits parent corporations based outside the EU that operate active businesses and reside in jurisdictions with which Holland has signed tax treaties. The treaties must include provisions regarding dividends that provide for partial withholding tax reductions.

Intercompany Solutions B.V.

Are you developing a business outside of the EU and considering an expansion to new markets beyond your country’s borders? The broader scope of the exemption from withholding tax on dividends makes Holland a convenient jurisdiction for businesses outside the EU looking for options to expand their operations to the Netherlands and Europe.

Our team at Intercompany Solutions has the skills and knowledge to support you through each phase of your expansion process. Would it be beneficial for you to work with a competent partner to help you with your plans for expansion? Get in touch with our professionals, discuss your ideas and see what we can do for you.

 

The Dutch sector of agriculture has succeeded to maintain its position as the second largest exporter in the field of agriculture. For 2017, the total value of agricultural exports reported by the Central Bureau of Statistics (CBS) is 113.5 billion US dollars or 92 billion Euros, which is 7% more in comparison to 2016. Thus the country ranks second among the top agricultural exporters in the world, after the United States. The agricultural exports of the US for the fiscal year of 2017 were estimated at 140.5 billion dollars or 114.2 billion Euros.

According to CBS, approximately 40.5 billion Euros come from products made in Holland and another 3.5 billion Euros are attributable to commodities that were imported from elsewhere, underwent some processing and were exported. If products related to agriculture were included in the calculation, then the Dutch participation in the global economy would increase to 48 billion Euros.

Flowers and bulbs were first among the top export products. Dairy products were second, overtaking meat that was ranked in second place the previous year.

Destinations for export

The agricultural produce for export of the Netherlands is mainly destined for Germany (34 billion Euros for 2017). Holland is the most significant export market for Germany as regards agricultural products. Other significant export flows are directed towards Belgium (10.4 billion Euros), the United Kingdom (8.6 billion Euros) and France (8 billion Euros). According to CBS, the trend shows an increase in exports to France and Belgium and a decrease to the United Kingdom, perhaps due to the weaker GBP in connection to Brexit.

The net export value of products related to agriculture, e.g. pesticides, fertilizers and farm equipment, reached 9.1 billion Euros bringing the sector’s total to 101 billion Euros.

A wonder in the agri-food industry

The area of the Netherlands is only 41.500 square kilometres and its population is approximately 18 million. The country brings hope for finding solutions to the challenges of world hunger. Although small, it has a very strong position in the world’s sector of agriculture; Holland is a driving force leading globally in the field of innovative solutions and food security.

If you are wondering how to start a business in the Dutch agricultural sector, please, contact our incorporation agents in the Netherlands. They will give you more information and legal guidance regarding the procedure of company establishment.

The economy of the Netherlands is increasing in strength with the most recent forecast of the Dutch Bureau analysing economic policy (CPB) predicts economic growth of 3.2% in 2018 and 2.7% in 2019.

An economic boom

The Central Economic Plan for 2018 prepared by CPB forecasts the economic situation in the Netherlands this year and next year. Estimates are made for a smooth Brexit where trade with the UK will continue on the basis of a new agreement. If, however, the situation turns out otherwise, the national economy may suffer damages. Recently there has been a small migration of UK based companies to leave with their headquarters to the European mainland.

The report of the CPB predicts economic growth of 3.2% for 2018 and 2.7% for 2019. If the estimate proves accurate, Holland will surpass the economy of the Eurozone by 0.6% for the period from 2017 to 2019.

This economic boom is a result of several factors including expanding budgetary policy, strong housing market, low interest and a good international economic climate.

Even though the Dutch economy is growing, the surplus of the government is unlikely to increase. Last year it was 1.1% GDP. The report forecasts 0.7% surplus for this year and 0.9% for 2019. The decrease is mainly due to greater governmental spending.

Unemployment in Holland is expected to decrease

CPB’s report raises the hopes that the unemployed in the country will decrease. The figures are 4.9% for 2017, 3.9% for 2018 and 3.5% for 2019. The rate for next year will hit a record low since 2001.

This decrease in the number of unemployed people means that businesses will have to work harder in searching for employees. This will likely bring an increase in the number of permanent employment contracts and higher salaries to attract and retain staff.

Dutch households will be able to purchase more

The report of the CPB foresees a 1.6% average increase in the purchasing power of households by next year. This will affect differently certain households. The ones on welfare benefits shall experience only 0.8% increase, the employed will notice a 1.8% increase and retired persons will experience an increase of 1.3%.

The Dutch government has decided to support a new policy on taxes proposed by Menno Snel, State Secretary of Finance and to take action with respect to the first priority on the agenda: stop tax evasion and avoidance.

For the coming years, the policy includes 5 priorities:

1. to stop tax evasion and avoidance;
2. to reduce the taxes on labour;
3. to promote a competitive tax climate for real activities in the economy;
4. to make the system for taxation greener,
5. and more workable.

According to Snel these five priorities constitute a big step towards an improved tax system. He adds that the new system is still incomplete. This and the next government need to put continuous efforts in pursuing a more comprehensible, workable, fairer and simpler tax system in order to ensure unbiased taxation for businesses and individuals alike.

Stopping tax evasion and avoidance

The State Secretary’s policy to tackle tax evasion and avoidance includes two pillars: to promote integrity and transparency and to protect the tax base.

Introducing a withholding tax system

In 2021 Holland plans to adopt a withholding tax system with respect to royalty and interest flows to jurisdictions with low taxes and cases of abusive arrangements for taxes. In this way, Holland will no longer be a channel to low-tax countries. Mr. Snel makes it clear that he aims to stop tax evasion and avoidance and to end the image of Holland as a state that facilitates tax avoidance by multinationals. The good investment climate is threatened by this impression.

Treaties

It is the government’s aim to provide Holland and its partners with efficient tools to counter tax avoidance. Therefore, the government is adding more provisions than numerous other countries to stop abuse in its treaties for tax by virtue of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. This action is aimed at preventing improper use of the extensive Dutch system of tax-related treaties.

Building on the European tax avoidance directives

Holland will adopt more stringent measures in the implementation of the two EU directives preventing tax avoidance (ATAD1 and ATAD2) than foreseen in these directives., e.g. no group exemption regarding the rule for earnings stripping. Furthermore, no stand-still clauses will be applied with respect to existing loans and the maximum threshold shall be decreased from 3M to 1M Euros.

Holland will introduce a rule for minimum capital for insurance companies and banks to promote more equivalent treatment of equity and debt for all sectors. This action is expected to result in a healthier economy and greater company stability.

Non-disclosure right and public announcement of fines

Transparency is very important in tackling tax evasion and avoidance. The general policy aims in this aspect are inherited by the previous government. Holland shall clarify the non-disclosure right for notaries and lawyers. Culpable negligence fines will be announced publicly so that these providers of financial services become more accountable in giving advice on planning taxes.

Financial market integrity

The Dutch government is preparing legislation for the creation of a registry for ultimate owners. The legislation regulating trust offices will become more stringent.

European initiatives for culture change

The Dutch government approves the proposals of the EC to increase transparency. The Commission has proposed a mandatory disclosure directive requiring financial intermediaries (lawyers, tax advisers, trust offices, notaries, etc.) to inform the authorities of possibly abusive cross-border schemes for tax planning. The legislation proposed regarding the reports of multinational enterprises for tax jurisdictions will show the extent of compliance with tax obligations.