Doing Business in the Netherlands
Netherlands Economy Overview
Currency
Working hours
36 – 40 hours / week
Public/bank holidays
8 public holidays
Capital
Amsterdam
Languages
Dutch
Population
Minimum hourly salary
Tax year
1st Jan – 31st Dec
Date format
DD/MM/YYYY
Misclassification penalties
Penalties include outstanding holiday payments, salary entitlements during sickness, and pension dines by the Tax Authorities for not complying with the obligation to withhold income tax and national insurance contributions.
Fun fact
The Netherlands has the highest number of part-time workers in the EU (4 out of 10 employees).
The Netherlands is a popular destination for businesses looking to begin operations on the European continent because of its location, business-friendly environment, and well-developed infrastructure. Our guide to doing business in the Netherlands gives a high-level overview of how to get started.
Overview of Netherlands
Despite having a relatively small population of around 17.6 million, the Netherlands has made the most of its strategic commercial location. The country is surrounded by large developed economies; the UK to the north, Germany to the east, and France to the west. Over 170 million consumers reside within a 300-mile radius of Amsterdam, the capital city, and there are 250 million within 600 miles. As such, the country has sought to establish itself as a key logistics and distribution hub within the European market.
The Netherlands has created an advanced logistics infrastructure for the transportation of goods. The port of Rotterdam is the largest in Europe and Amsterdam Schiphol Airport is among the largest for air cargo.
As with other European states, the Netherlands has long been an outward-looking and innovative trading nation. An advanced service-based economy, the Netherlands is known for financial and other professional services but also has a sizable industrial manufacturing sector, and a highly developed agricultural sector.
| Economic Forecast | Year | YoY GDP Growth Rate |
|---|---|---|
| European Commission | 2024 | 0.4% |
| European Commission | 2025 | 1.6% |
| ** European Commission economic forecast for the Netherlands | ||
Taxes
Employer tax: 27.65%
Social Security
27.65%
Employee tax: 27.65%
Social Security
27.65%
Income tax
The Netherlands has a progressive income tax varying from 9.32% to 49.5%
Gross income
- Up to €38,098
- €38,098 – €75,518
- More than €75,518
Progressive tax rate
- 9.32%
- 36.97%
- 49.5%
Business Regulation in Netherlands
The Netherlands’ history as a nation spreading mercantilism around the world continues to influence the Dutch way of thinking. This is a country with an exceedingly positive attitude towards commerce and the business regulations in the Netherlands reflect this. It should also be noted that, as a member state of the European Union, the Netherlands is subject to EU law which imposes regulations and directives on businesses operating within the European Union.
The Government of the Netherlands encourages business activity by maintaining a supportive business environment that’s built upon a transparent regulatory framework. Various institutions are involved with implementing business regulations, such as the Netherlands Chamber of Commerce (KVK) and the tax authority (Belastingdienst), but all maintain useful digital services that are available in English. There are excellent resources for foreign entrepreneurs that detail the ins and outs of starting a business in the Netherlands.
Benefits of Doing Business in Netherlands
There are several distinct advantages of doing business in the Netherlands, including its strategic commercial location within Europe, the pro-business environment, and a highly skilled workforce.
Strategic Commercial Location
The Netherlands is an important gateway to the European market —particularly the high-income economies of Northern Europe. Many companies therefore choose to establish a presence in the Netherlands when beginning business operations in Europe.
Vibrant Business Environment
The Netherlands has a vibrant business environment that attracts foreign investment. Multinationals from all over the globe choose to establish operations in the Netherlands. In fact, the US has particularly strong economic ties with the Netherlands and is regularly the largest foreign investor.
Skilled Workforce
The Netherlands is home to a well-educated population that supports a highly skilled workforce. For example, the Netherlands is one of the top European countries for English proficiency, with around 90% of the population able to converse in English.
Business Expansion Options in Netherlands
If you’re planning on doing business in the Netherlands, there are several considerations to be aware of. All businesses operating in the Netherlands must list themselves on the Dutch Business Register (Handelsregister) through the Netherlands Chamber of Commerce (KVK).
However, The Netherlands allows existing employers to choose between using their current (foreign) legal structure or registering as a new Dutch legal structure. Of course, the other option available is to partner with a PEO/EOR.
Netherlands Employer of Record (EOR)
The Netherlands EOR becomes the official legal employer of your Netherlands team. This method is fast and efficient, making it perfect for companies that need to quickly deploy staff on the ground.
An EOR handles payroll, benefits, taxes, and compliance with local labor laws, allowing businesses to focus on their core activities. They may also provide additional services, such as Netherlands talent acquisition and visa support.
Recruitment Agencies
Recruitment agencies in the Netherlands help businesses expand by connecting them with skilled local talent across various industries.
Remote People provides recruitment solutions that simplify hiring and ensure compliance with Dutch labor laws.
For businesses looking to grow in the Netherlands, Remote People offers the expertise and resources needed to build a local workforce quickly and effectively, making it a practical solution for market expansion.
Netherlands Professional Employer Organization (PEO)
The other option is to use a Professional Employer Organization (PEO) or Employer of Record (EOR) business model. These types of services allow you to significantly reduce your time to entry and, in most cases, the costs of entry, too. The other benefit of going with a PEO or EOR is that it allows you to test the waters without taking on too many operational risks. In other words, you can assess if doing business in the Netherlands would make sense for your business over the long term.
Partnering with a professional employer organization (PEO) allows companies to employ local staff in the Netherlands without the need to establish a legal entity. This approach is quicker and less expensive, making it ideal for businesses testing the Netherlands market or those with limited operations. PEOs handle administrative tasks and ensure that companies comply with Netherlands regulations, reducing the complexity and risk associated with hiring local employees.
Branch Registration
Establishing a branch office is a option for foreign companies looking to expand into the Netherlands. This branch could serve various functions such as a sales office, production facility, or representative office, and operates as an extension of the parent company, not requiring a separate legal entity.
Companies should register their Dutch branch with the Netherlands Chamber of Commerce (KvK). Additionally, if the company is based outside the EU and has a branch in the Netherlands, it must file its financial statements with the KvK if it is also required to do so in its home country.
Incorporating a Dutch Entity
Under Dutch law, two types of limited liability corporate entities exist: the ‘bv’ and the ‘nv’.
Besloten vennootschap / bv
The bv is a private company that is often compared to the UK’s ‘limited liability’ company (Ltd) or the German ‘Gesellschaft mit beschränkter Haftung’ (GmbH). The bv enjoys more flexibility and less regulatory oversight and is the most popular entity choice in the Netherlands.
Naamloze vennootschap / nv
The nv is the Dutch version of a public company and is most comparable to the ‘public limited company’ (Plc) in the UK. In general, the nv is a larger organization and is more strictly regulated.
The process for setting up and incorporating a business in the Netherlands will depend on the type of entity, among other factors, such as whether there’s a need to comply with the Immigration and Naturalisation Service‘s residency rules. Regardless of the type of entity being set up, the legal and regulatory requirements require foreign companies to utilize the services of a civil law notary.
Business Opportunities in the Netherlands
Expanding into the Netherlands offers numerous strategic advantages for businesses and teams. Why? Well, its central location in Europe, alongside with its advanced logistics infrastructure like the port of Rotterdam and Amsterdam Schiphol Airport, makes it an ideal hub for distribution and trade within the continent. On top of all this, the Netherlands’ strong service-based economy, supported by robust industrial manufacturing and a highly developed agricultural sector, presents diverse opportunities for growth and investment.
| Business Opportunity | Reasons |
|---|---|
| Logistics and Distribution | – Strategic location at the heart of Europe, with easy access to major markets – World-class logistics infrastructure, including the Port of Rotterdam and Amsterdam Schiphol Airport – Highly efficient customs processes and streamlined regulations – Opportunities in areas such as warehousing, transportation, and supply chain management |
| Agri-Food and Horticulture | – Highly developed and innovative agricultural sector – World leader in sustainable agriculture and precision farming technologies – Strong focus on research and development, with collaborations between industry and academia – Opportunities in areas such as greenhouse technology, plant breeding, and agri-tech solutions |
| Renewable Energy | – Government commitment to transitioning to a low-carbon economy – Ambitious targets for renewable energy production and greenhouse gas reduction – Opportunities in offshore wind energy, solar power, and green hydrogen production – Strong ecosystem for clean energy startups and innovative technologies |
| Digital Technology | – Thriving startup ecosystem and supportive government policies for innovation – Strong digital infrastructure and high internet penetration – Opportunities in areas such as artificial intelligence, blockchain, and cybersecurity – Growing demand for digital solutions across various sectors, including healthcare, education, and finance |
| Life Sciences and Health | – World-class research institutions and a highly skilled workforce – Supportive government policies and funding for life sciences and healthcare innovation – Opportunities in areas such as medical devices, biotechnology, and e-health solutions – Growing demand for healthcare services and products, driven by an aging population and rising healthcare costs |
These business opportunities, among others, are supported by the Netherlands’ business-friendly policies, strong intellectual property protection, and ongoing efforts to foster innovation and sustainability.
As the country continues to invest in its digital and physical infrastructure, promote entrepreneurship, and maintain its competitive edge in key industries, the potential for business growth and success in the Netherlands is expected to remain strong.
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