The Netherlands consistently ranks among the world’s most competitive industrialized economies. It offers an attractive business and investment climate and remains a welcoming location for business investment from the United States and elsewhere.
Strengths of the Dutch economy include the Netherlands’ stable political and macroeconomic climate, a highly developed financial sector, strategic location, well-educated and productive labor force, and high-quality physical and communications infrastructure. Investors in the Netherlands take advantage of its highly competitive logistics, anchored by the largest seaport and fourth-largest airport in Europe. In telecommunications, the Netherlands has one of the highest internet penetrations in the European Union (EU) at 96 percent and hosts one of the largest data transport hubs in the world, the Amsterdam Internet Exchange.
The Netherlands is among the largest recipients and sources of foreign direct investment (FDI) in the world and one of the largest historical recipients of direct investment from the United States. This can be attributed to the Netherlands’ competitive economy, historically business-friendly tax climate, and many investment treaties containing investor protections. The Dutch economy has significant foreign direct investment in a wide range of sectors including logistics, information technology, and manufacturing. Dutch tax policy continues to evolve in response to EU attempts to harmonize tax policy across member states.
In the wake of the worldwide financial crisis a decade ago, the Dutch government implemented significant reforms in key policy areas, including the labor market, the housing sector, the energy market, the pension system, and health care. Dutch reform policies were crafted in close consultation with key stakeholders, including business associations, labor unions, and civil society groups. This consultative approach, often referred to as the Dutch “polder model,” is how Dutch policy is generally developed.
Until the coronavirus crisis, years of recovery and associated “catch-up” economic growth had placed the Dutch economy in a very healthy position, with successive years of a budget surplus, public debt that is well under 50 percent of GDP, and record-low unemployment of 3.5 percent. This has allowed the Dutch government significant fiscal space to implement coronavirus relief measures aimed at specific commercial sectors and at the economy at large.
Prior to the coronavirus crisis, the Netherlands Bureau for Economic Policy Analysis (CPB) forecast stable but low growth for the coming years, with annual GDP growth at around 1.5 percent. The CPB has now revised its projection downward, with various scenarios of economic decline and recovery depending on the duration of coronavirus-related mitigation measures. In late March, the CPB calculated four scenarios, all of which anticipate a recession, and the Netherlands is bracing itself for an across-the-board economic decline, the full ramifications of which are not yet captured in CPB models.
In the best-case scenario, which involves three months of mitigation measures, the Dutch economy shrinks 1.2 percent in 2020 with unemployment of around 4 percent, and grows 3.5 percent in 2021 with unemployment of around 4.5 percent. Scenario two involves six months of mitigation measures in which the economy shrinks 5 percent in 2020 and grows 3.8 percent in 2021. Scenario three involves six months of mitigation measures in which the economy shrinks 7.7 percent in 2020 and grows 2 percent in 2021. In the worst-case scenario which involves 12 months of mitigation measures and additional problems in the Dutch financial sector and from abroad, the Dutch economy shrinks 7.3 percent in 2020 with unemployment of around 6.1 percent, and shrinks 2.7 percent in 2021 with unemployment of around 9.4 percent. In the worst-case scenario, government debt will reach 73.6 percent of GDP at the end of 2021.
The Netherlands is a top destination for U.S. FDI abroad, holding just under $900 billion out of a total of $6 trillion total outbound U.S. investment – about 16 percent. For the Netherlands, inbound FDI from the United States represents 17 percent of total inbound FDI. Dutch investors contribute $367 billion FDI to the United States of the $4 trillion total inbound FDI– about 10 percent. For the Netherlands, outbound FDI to the United States represents 16 percent of all Dutch direct investment abroad.
|TI Corruption Perceptions Index||2019||8 of 180||https://www.transparency.org/cpi2019?/
|World Bank’s Doing Business Report||2019||42 of 190||http://www.doingbusiness.org/
|Global Innovation Index||2019||4 of 126||https://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, stock positions)||2018||$883,188||https://apps.bea.gov/international/
|World Bank GNI per capita||2018||USD 51,260||http://data.worldbank.org/indicator/
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
The Netherlands is the seventeenth-largest economy in the world and the fifth largest in the European Union, with a gross domestic product (GDP) of over $910 billion (€812 billion). According to the International Monetary Fund (IMF), the Netherlands is consistently among the three largest source and recipient economies for foreign direct investment (FDI) in the world, although the Netherlands is not the ultimate destination for the majority of this investment. The government of the Netherlands maintains liberal policies toward FDI, has established itself as a platform for third-country investment with some 145 investment agreements in force, and adheres to the Organization for Economic Cooperation and Development (OECD) Codes of Liberalization and Declaration on International Investment, including a National Treatment commitment and adherence to relevant guidelines.
The Netherlands is the recipient of eight percent of all FDI inflow into the EU. Of all EU member states, it is the top recipient of U.S. FDI, at over 16 percent of all U.S. FDI abroad as of 2017. The Netherlands has become a key export platform and pan-regional distribution hub for U.S. firms. Roughly 60 percent of total U.S. foreign-affiliate sales in the Netherlands are exports, with the bulk of them going to other EU members.
In 2014, foreign-owned companies made inward direct investment worth $15.8 billion (14.2 billion euros) – just over 30 percent of total corporate investment in durable goods in the Netherlands. Foreign investors provide 19 percent of Dutch employment in the private sector (860,200 jobs). U.S. firms contribute the most among foreign firms to employment, responsible for 214,000 jobs. In its 2017 investment report, the UN Conference on Trade and Development (UNCTAD) identified the Netherlands as the world’s fifth largest destination of global FDI inflows and the third largest source of FDI outflows.
Although policy makers fear that Brexit will be detrimental for the Dutch economy, so far the Netherlands is benefitting from companies exiting the United Kingdom (UK). According to the Netherlands Foreign Investment Agency (NFIA), 140 companies have made the move from the UK to the Netherlands since the Brexit referendum and another 420 internationally operating firms that have their European base in the UK are discussing possible plans to move to the Netherlands. The companies are coming mainly from the health, creative industry, financial services, and logistics sectors. The 2019 move of the European Medicines Agency (EMA) from London to Amsterdam is proving to be a major attraction for health and life sciences, as nineteen pharmaceutical-related companies have since followed the EMA to the Netherlands. The Dutch Authority for the Financial Markets (AFM) has predicted Amsterdam will emerge as a main post-Brexit financial trading center in Europe for automated trading platforms and other ‘fintech’ firms, allowing these companies to keep their European trading within the confines of the EU after Brexit.
Dutch tax authorities provide a high degree of customer service to foreign investors, seeking to provide transparent, precise tax guidance that makes long-term tax obligations more predictable. Advance Tax Rulings (ATR) and Advance Pricing Agreements (APA) are guarantees given by local tax inspectors regarding long-term tax commitments for a particular acquisition or Greenfield investment. Dutch tax policy continues to evolve as the EU seeks to harmonize tax measures across members states. A more detailed description of Dutch tax policy for foreign investors can be found at and .
Dutch corporations and branches of foreign corporations are currently subject to a corporate tax rate of 25 percent on taxable profits, which puts the Netherlands in the middle third among EU countries’ corporate tax rates and below the tax rates of its larger neighbors. Profits up to $240,000 (200,000 euros) are taxed at a rate of 19 percent. In October 2018, the Dutch government announced it would lower its corporate tax rate to 20.5 percent in 2021, with profits up to $240,000 taxed at a 15 percent rate from 2021 onwards.
Dutch corporate taxation generally allows for exemption of dividends and capital gains derived from a foreign subsidiary. Surveys of the corporate tax structure of EU member states note that both the corporate tax rate and the effective corporate tax rate in the Netherlands are around the EU average. Nevertheless, the Dutch corporate tax structure ranks among the most competitive in Europe considering other beneficial measures such as ATAs and/or APAs. The Netherlands also has no branch profit tax and does not levy a withholding tax on interest and royalties.
Maintaining an investment-friendly reputation is a high priority for the Dutch government, which provides public information and institutional assistance to prospective investors through the Netherlands Foreign Investment Agency (NFIA) ( ). Historically, over a third of all Greenfield FDI projects that NFI attracts to the Netherlands originate from U.S. companies. Additionally, the Netherlands business gateway at – maintained by the Dutch government – provides information on regulations, taxes, and investment incentives that apply to foreign investors in the Netherlands and clear guidance on establishing a business in the Netherlands.
The NFIA maintains six regional offices in the United States (Washington, DC; Atlanta; Boston; Chicago; New York City; and San Francisco). The American Chamber of Commerce in the Netherlands ( ) also promotes U.S. and Dutch business interests in the Netherlands.
Limits on Foreign Control and Right to Private Ownership and Establishment
With few exceptions, the Netherlands does not discriminate between national and foreign individuals in the establishment and operation of private companies. The government has divested its complete ownership of many public utilities, but in a number of strategic sectors, private investment – including foreign investment – may be subject to limitations or conditions. These include transportation, energy, defense and security, finance, postal services, public broadcasting, and the media.
Air transport is governed by EU regulation and subject to the U.S.-EU Air Transport Agreement. U.S. nationals can invest in Dutch/European carriers as long as the airline remains majority-owned by EU governments or nationals from EU member states. Additionally, the EU and its member states reserve the right to limit U.S. investment in the voting equity of an EU airline on a reciprocal basis that the United States allows for foreign nationals in U.S. carriers.
In concert with the European Union, the Dutch government is considering how to best protect its economic security but also continue as one of the world’s most open economies. The government’s interagency Economic Security Task Force is heading up an effort to establish a domestic investment review system that will consist of existing investment review regulations that are part of sectoral legislation and a new, broad investment review mechanism for investments that are not already covered in sector-specific legislation. The government is in the process of finalizing legislation that will establish investment screening mechanisms in the first of its critical sectors: telecommunications. The Netherlands has certain limitations on foreign ownership in sectors that are deemed of critical national interest (transportation, energy, defense and security, finance, postal services, public broadcasting, and the media). There is no requirement for Dutch nationals to have an equity stake in a Dutch registered company.
Other Investment Policy Reviews
The Netherlands has not recently undergone an investment policy review by the OECD, World Trade Organization (WTO), or UNCTAD.
All companies must register with the Chamber of Commerce and apply for a fiscal number with the tax administration, which allows expedited registration for small- and medium-sized enterprises (SMEs) with fewer than 50 employees: .
The World Bank’s 2020 Ease of Doing Business Index ranks the Netherlands as number 24 in starting a business. The reports ranks the Netherlands first in terms of trading across borders, with zero costs and a small number of hours associated with border and documentary compliance, respectively. The report ranks the Netherlands better than the OECD average on registration time, the number of procedures, and required minimum capital.
The Netherlands business gateway at – maintained by the Dutch government – provides a general checklist for starting a business in the Netherlands: . The Dutch American Friendship Treaty (DAFT) from 1956 gives U.S. citizens preferential treatment to operate a business in the Netherlands, providing ease of establishment that most other non-EU nationals do not enjoy. U.S. entrepreneurs applying under the DAFT do not need to satisfy a strict, points-based test and do not have to meet pre-conditions related to providing an innovative product. U.S. entrepreneurs setting up a sole proprietorship only have to register with the Chamber of Commerce and demonstrate a minimum investment of 4,500 euros. DAFT entrepreneurs receive a two-year residence permit, with the possibility of renewal for five subsequent years.
3. Legal Regime
Transparency of the Regulatory System
Dutch commercial laws and regulations accord with international legal practices and standards; they apply equally to foreign and Dutch companies. The rules on acquisition, mergers, takeovers, and reinvestment are nondiscriminatory. The Social Economic Council (SER) – an official advisory body consisting of employers’ representatives, labor representatives, and government appointed independent experts – administers Dutch mergers and acquisitions rules. The SER’s rules serve to protect the interests of stakeholders and employees. They include requirements for the timely announcement of mergers and acquisitions (M&A) and for discussions with trade unions.
As an EU member and Eurozone country, the Netherlands is firmly integrated in the European regulatory system, with national and European institutions exercising authority over specific markets, industries, consumer rights, and competition behavior of individual firms.
Financial markets are regulated in an interconnected EU and national system of prudential and behavioral oversight. The domestic regulators are the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Market (AFM). Their EU counterparts are the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA).
Traditionally, public consultation in drafting new laws is by invitation of various civil society bodies, trade associations, and organizations of stakeholders. In addition, the SER has a formal mandate to provide the government with advice, both solicited and of its own accord. New laws and regulations are subject to legal review by the Council of State and must be approved by the Second and First Chambers of Parliament.
International Regulatory Considerations
The Netherlands is a member of the WTO and does not maintain any measures that are inconsistent with obligations under Trade Related Investment Measures (TRIMs).
Legal System and Judicial Independence
Dutch contract law is based on the principle of party autonomy and full freedom of contract. Signing parties are free to draft an agreement in any form and any language, based on the legal system of their choice.
Dutch corporate law provides for a legal and fiscal framework that is designed to be flexible. This element of the investment climate makes the Netherlands especially attractive to foreign investors.
The Dutch civil court system has a chamber dedicated to business disputes, called the Enterprise Chamber. The Enterprise Chamber includes judges who are experts in various commercial fields. They resolve a wide range of corporate disputes, from corporate governance disputes to high-profile shareholder conflicts over mergers or hostile take-overs. In 2017, as part of its takeover bid of AkzoNobel, U.S. paint manufacturer PPG appealed the AkzoNobel Board’s decision to reject PPG’s takeover offer in the Commercial Court but was unsuccessful.
On January 1, 2019, the Enterprise Chamber established an English-language commercial court. The Netherlands Commercial Court (NCC) and its appellate chamber (NCCA) offer parties the opportunity to litigate in English and will provide judgments in English. Both the NCC and NCCA will focus primarily on major international commercial cases. See also:
Laws and Regulations on Foreign Direct Investment
The Dutch government has demonstrated a growing concern with the protection of its open, market-based economy against foreign state malign activity and currently the Netherlands is in the process of finalizing legislation that will establish a formal domestic investment screening mechanism. In March 2019, the Ministry of Economic Affairs and Climate Policy submitted to Parliament its long-awaited proposal for an investment screening law in the telecommunications sector. The law is currently in the final stages of legislation and will be the first Dutch “critical” sector to have an investor-screening mechanism aimed at protecting Dutch national security.
Competition and Anti-Trust Laws
Structural and regulatory reforms are an integral part of Dutch economic policy. Laws are routinely developed for stimulating market forces, liberalization, deregulation, and tightening competition policy.
As an EU and Eurozone member, the Netherlands is firmly integrated in the European regulatory system with national and European institutions exercising authority over specific markets, industries, consumer rights, and competition behavior of individual firms.
The Authority for Consumers and Markets (ACM) provides regulatory oversight in three key areas: consumer protection, post and telecommunications, and market competition.
Expropriation and Compensation
The Netherlands maintains strong protection on all types of property, including private and intellectual property rights, and the right of citizens to own and use property. Expropriation of corporate assets or the nationalization of industry requires a special act of Parliament, as demonstrated in the nationalization of ABN AMRO during the 2008 financial crisis (the government returned it to public shareholding through a 2016 IPO). In the event of expropriation, the Dutch government follows customary international law, providing prompt, adequate, and effective compensation, as well as ample process for legal recourse. The U.S. Mission to the Netherlands is unaware of any recent expropriation claims involving the Dutch government and a U.S. or other foreign-owned company.
ICSID Convention and New York Convention
As a member of the International Center for the Settlement of Investment Disputes (ICSID), the Netherlands accepts binding arbitration between foreign investors and the state. The Netherlands is one of the initial signatories of the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (UNCITRAL) and permits local enforcement of arbitration judgments decided in other signatory countries.
The Hague is the seat of the Permanent Court of Arbitration (PCA), an intergovernmental organization that is not a court, but like the ICSID, is a facilitator of independent arbitral tribunals to resolve conflicts between PCA member states, including the United States.
International Commercial Arbitration and Foreign Courts
The Netherlands has maintained a Treaty of Friendship, Commerce, and Navigation with the United States since 1957 that provides for national treatment and free entry for foreign investors, with certain exceptions. The Embassy is not aware of any American company raising an investment dispute with the Netherlands over the last 10 years.
Dutch bankruptcy law is governed by the Dutch Bankruptcy Code, which applies both to individuals and to companies. The code covers three separate legal proceedings: 1) bankruptcy, which has a goal of liquidating the company’s assets; 2) receivership, aimed at reaching an agreement between the creditors and the company; and 3) debt restructuring, which is only available to individuals.
The World Bank’s 2020 Ease of Doing Business Index ranks the Netherlands as number seven in resolving insolvency. The Netherlands ranks better than the OECD average on bankruptcy time, cost, and recovery rate.
4. Industrial Policies
General requirements to qualify for investment subsidy schemes apply equally to domestic and foreign investors. Industry-specific, targeted investment incentives have long been a tool of Dutch economic policy to facilitate economic restructuring and to promote economic priorities. Such subsidies and incentives are spelled out in detailed regulations. Subsidies are in the form of tax credits disbursed through corporate tax rebates or direct cash payments if there is no tax liability. For an overview of government subsidies and investment programs, see: .
FDI tends to be concentrated in growth sectors including information and communications technology (ICT), biotechnology, medical technology, electronic components, and machinery and equipment. Investment projects are predominantly in value-added logistics, machinery and equipment, and food.
Since 2010, the government has shifted from traditional industrial support policies to a comprehensive approach to public/private financing agreements in areas where investment is deemed of strategic value. Government, academia, and industry work together to determine recipient sectors for co-financed (public and private) R&D. The government’s industrial policy focuses on nine “Top Sectors”: creative industries, logistics, horticulture, agriculture and food, life sciences, energy, water, chemical industry, and high tech. (For more information, see .)
Foreign Trade Zones/Free Ports/Trade Facilitation
The Netherlands has no free trade zones (FTZs) or free ports where commodities can be processed or reprocessed tax-free. However, FTZs exist for bonded storage, cargo consolidation, and reconfiguration of non-EU goods. This reflects the key role that transport, transit, logistics, and distribution play in the Dutch economy. Dutch Customs oversee a large number of customs warehouses, free warehouses, and free zones along many of the Netherlands trade routes and entry points.
Schiphol Airport handles nearly 1.75 million tons of goods per year for distribution, making it the third largest cargo airport in Europe. Specific parts of Schiphol are designated customs-free zones. The Port of Rotterdam is Europe’s largest seaport by volume, handling over 37 percent of all cargo shipping on Europe’s Le Havre-Hamburg coastline and processing nearly 470 million tons of goods in 2018. Many agents operate customs warehouses under varying customs regimes on the premises of the Port of Rotterdam.
Performance and Data Localization Requirements
There are no trade-related investment performance requirements in the Netherlands and no requirements for employment of local capital or managerial personnel.
The Dutch government does not follow a “forced localization” policy and does not require foreign information technology (IT) providers to turn over source code or provide access to surveillance. The Dutch Data Protection Authority (DPA) monitors and enforces Dutch legislation on the protection of personal data ( ). The Dutch DPA is active in the EU’s Article 29 Working Party, the collective of EU national DPAs. The primary law on protection of personal data in the Netherlands is the Dutch law implementing EU directive 95/46/EC. The new European General Data Protection Regulation (GDPR), which is directly applicable in member states, entered into force May 25, 2018, as part of the EU’s comprehensive reform on data protection.
The Dutch DPA recognized U.S. firms that registered and self-certified with the U.S.-EU Safe Harbor program that began in 2000 and focused on safe transfer of personal data between the European Union and the United States. On July 12, 2016, the European Commission issued an adequacy decision on the EU-U.S. Privacy Shield framework ( ), which replaced the Safe Harbor program, providing a legal mechanism for companies to transfer personal data from the EU to the United States. In an October 2019 report, the European Commission confirmed that the EU-US Privacy Shield framework continues to ensure an adequate level of protection for personal data transferred from the EU to companies participating in the Privacy Shield program in the United States. The Dutch government strongly supports Privacy Shield.
5. Protection of Property Rights
The Netherlands fully complies with international standards on protection of real property. The World Bank’s 2020 Ease of Doing Business Index ranked the Netherlands 30 out of 190 countries in terms of property registration. The number of procedures involved is at the OECD average, while the processing time of 2.5 days is nearly ten times faster than the OECD average.
The Netherlands’ Cadaster, Land Registry, and Mapping Agency (Cadaster) was established in 1832 to collect and register administrative and spatial data on real property. The Cadaster is publicly available and can be accessed online ( ).
Intellectual Property Rights
The Netherlands is a member of the World Intellectual Property Organization (WIPO) and party to many of its treaties, including the Berne Convention, the Paris Convention, the Patent Cooperation Treaty (PCT), the WIPO Copyright Treaty (WCT), and the WIPO Performances and Phonograms Treaty (WPPT). The Netherlands generally conforms to accepted international practice for the protection of intellectual property rights (IPR),including the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Despite participating in negotiations on the Anti-Counterfeiting Trade Agreement (ACTA) treaty, the Netherlands, like other EU member states, has stated it will not sign the treaty in its current form. The EU has requested the European Court of Justice to advise on the compatibility of ACTA with existing European treaties, in particular with the EU Charter of Fundamental Rights of the European Union.
The Netherlands is a signatory to the European Patent Convention and so is a contracting state of the European Patent Organization. In the Netherlands, patents for foreign investors are granted retroactively to the date of the original filing in the home country, provided the application is made through a Dutch patent lawyer within one year of the original filing date. Dutch patents are valid for 20 years, in line with EU regulations. Because the Netherlands and the United States are both party to the PCT, U.S. inventors may file for rights in the Netherlands using the PCT application. Legal procedures exist for compulsory licensing if the patent is inadequately used after a period of three years, but these procedures have rarely been invoked.
With the implementation of EU Directive 2004/48 on the enforcement of IPR, rights holders have a number of instruments at their disposal to enforce their rights in civil court. In addition to possible civil remedies, all IPR laws contain penal bylaws and reference to the Criminal Code. In 2012, the Dutch Parliament passed legislation that strengthened oversight and coordination of seven different collective institutions that oversee control, administration, and remuneration for commercial use of IPR. Policymakers agree on the need to raise public awareness of IPR rules and regulations and to strengthen enforcement. The Dutch government has recognized the need to protect IPR, and law enforcement personnel have worked with industry associations to find and seize pirated software. Current Dutch IPR legislation explicitly includes computer software under copyright statutes.
The Netherlands has resisted criminalizing online copyright infringement for personal use, instead placing a surcharge on the sales of blank media, such as CDs, DVDs, and USB storage devices, to remunerate rights holders for the downloading of material from legal and illegal sources alike. A 2014 ruling by the EU Court of Justice requires the government to change this policy and ban online infringement, but since this ruling the Dutch Supreme Court has determined that the original Dutch law can stand albeit that the surcharge does not cover downloading from illegal sources. Thus, the Dutch law remains in place without alteration and is considered by the government to conform to the EU Court ruling. No specific measures have since been taken by the government to actively pursue persons in violation of the law because the government considers enforcement of this law to be largely a matter for the civil courts. Dutch associations for rights holders, such as Stichting Brein, focus their efforts on reducing the supply of illegal downloads rather than pursuing consumers who acquire illegal downloads.
The Netherlands is not included in the USTR Special 301 Report but is mentioned as hosting infringing websites in the 2019 Notorious Markets List, which also notes that Dutch law enforcement has assisted in seizing some domain names, thereby shutting down those infringing sites.
Resources for Rights Holders
Contact at American Embassy The Hague:
Alex Mayer – Economic Officer
John Adams Park 1
2244 BZ Wassenaar
Telephone: +31 (0)70 310 2270
American Chamber of Commerce in the Netherlands:
P.O. Box 15783
1001 NG Amsterdam
Telephone: +31 (0)20 795 1840
6. Financial Sector
Capital Markets and Portfolio Investment
The Netherlands is home to the world’s oldest stock exchange – established four centuries ago – and Europe’s first options exchange, both located in Amsterdam. The Amsterdam financial exchanges are part of the Euronext group that operates stock exchanges and derivatives markets in Amsterdam, Brussels, Lisbon, and Paris.
Dutch financial markets are fully developed and operate at market rates, facilitating the free flow of financial resources. The Netherlands is an international financial center for the foreign exchange market, Eurobonds, and bullion trade.
The flexibility that foreign companies enjoy in conducting business in the Netherlands extends into the area of currency and foreign exchange. There are no restrictions on foreign investors’ access to sources of local finance.
Money and Banking System
The Dutch banking sector is firmly embedded in the European System of Central Banks, of which the Dutch Central Bank (DNB) is the national prudential banking supervisor. AFM, the Dutch securities and exchange supervisor, supervises financial institutions and the proper functioning of financial markets and falls under the EU-wide European Securities and Markets Authority (ESMA).
The highly concentrated Dutch banking sector is over three times as large as the rest of the Dutch economy, making it one of Europe’s largest banking sectors in relation to GDP. Three banks, ING, ABN AMRO, and Rabobank, hold nearly 85 percent of the banking sector’s total assets. The largest bank, ING, has a balance sheet of around $1 trillion (€887 billion).
The DNB does not consider Bitcoin and similar cryptocurrencies to be legitimate currency, as they do not fulfill the traditional purpose of money as stable means of exchange or saving, and their value is not supported via central bank guarantee mechanisms. DNB considers current cryptocurrencies to be risky investments that are especially vulnerable to criminal abuse and has begun requiring that providers of financial services related to exchange and deposit of cryptocurrencies register with the DNB, per anti-money laundering (AML) legislation.
The DNB acknowledges however that in the future, cash transactions will likely be replaced with digital transactions that require central bank-issued and -guaranteed cryptocurrencies. Dutch society has already embraced cash-less commerce to a high degree – seventy percent of over-the-counter shopping is via PIN transactions and contactless payment – and DNB is participating with central banks from Canada, Japan, England, Sweden, Switzerland and the Bank for International Settlements in research about a possible central bank-issued cryptocurrency.
Foreign Exchange and Remittances
The Netherlands is a founding member of the EU and one of the first members of the Eurozone. The European Central Bank supervises monetary policy, and the president of the Dutch Central Bank (DNB) sits on the European Central Bank’s Governing Council.
There are no restrictions on the conversion or repatriation of capital and earnings (including branch profits, dividends, interest, royalties), or management and technical service fees, with the exception of the nominal exchange-license requirements for nonresident firms.
The Netherlands does not impose waiting periods or other measures on foreign exchange for remittances. Similarly, there are no limitations on the inflow or outflow of funds for remittance of profits or revenue. The Netherlands, as a Eurozone member, does not engage in currency manipulation tactics.
The Netherlands has been a member of the FATF since 1990 and – because of the membership of its Caribbean territories in the Caribbean FATF (C-FATF) – strongly supports C-FATF.
With the promulgation of additional, preventative anti-money laundering and counterfeiting legislation, the Netherlands has remedied many of the deficiencies revealed in a 2011 Mutual Evaluation Report. As a result, FATF removed the Netherlands from its “regular follow-up process” in February 2014. The State Department’s Bureau of International Narcotics and Law Enforcement’s International Narcotics Control Strategy Report (INCSR) has listed the Netherlands as a “country of primary concern,” largely because the country is a major global financial center and consequently an attractive venue for laundering funds generated by illicit activities. More information can be found at [2 MB].
Sovereign Wealth Funds
The Netherlands has no sovereign wealth funds.
7. State-Owned Enterprises
The Dutch government maintains an equity stake in a small number of enterprises and some ownership in companies that play an important role in strategic sectors. In particular, government-controlled entities retain dominant positions in gas and electricity distribution, rail transport, and the water management sector. The Netherlands has an extensive public broadcasting network, which generates its own income through advertising revenues but also receives government subsidies.
Private enterprises are allowed to compete with public enterprises with respect to market access, credits, and other business operations such as licenses and supplies. Government-appointed supervisory boards oversee state-owned enterprises (SOEs). In some instances involving large investment decisions, SOEs must consult with the cabinet ministry that oversees them. As with any other firm in the Netherlands, SOEs must publish annual reports, and their financial accounts must be audited.
The Netherlands fully adheres to the OECD Guidelines on Corporate Governance of SOEs.
There are no ongoing privatization programs in the Netherlands.
8. Responsible Business Conduct
The Netherlands is a global leader in corporate social responsibility (CSR). Principles of CSR are promoted and prescribed through a range of corporate, governmental, and international guidelines. In general, companies carefully guard their CSR reputation and consumers are increasingly opting for products and services that are produced in an ethical and sustainable manner.
The Netherlands adheres to OECD Guidelines for Multinational Enterprises, and the Dutch Ministry of Economic Affairs and Climate Policy houses the National Contact Point (NCP) that promotes OECD guidelines and helps mediate concerns that persons, non-governmental organizations (NGOs), and enterprises may have regarding implementation by a specific company. For more information, visit .
The Dutch government strongly encourages foreign and local enterprises to follow UN Guiding Principles on Business and Human Rights, which states that businesses have a social responsibility to respect the same human rights norms in other countries as they do in the Netherlands.
The Netherlands has no special government programs that promote women’s empowerment or women’s access to investment. Under the law, there is no differentiation for men and women regarding equal access to investment. Furthermore, no groups are excluded from participating in financial markets and the financial system.
The Netherlands has strong standards for corporate governance. Publicly listed companies are required to publish audited financial reports. As of 2017, the EU requires these companies to include a chapter on Responsible Business Conduct.
The Ministry of Economic Affairs and Climate Policy established an independent networking organization on CSR called MVONederland in 2004. MVONederland currently has over 2050 members, including SMEs, multinational corporations, and NGOs, as well as local and national administrative bodies. See
The Dutch government also encourages companies to engage in CSR through incentive programs and by setting high standards. Examples include:
- The government reviews CSR activities of more than 500 corporations annually and presents an award to the company with the highest transparency score.
- The government boosts the development of sustainable products through its own sustainable procurement policy.
- Dutch companies can only join government trade missions if they have endorsed OECD Guidelines for Multinational Enterprises.
- Companies that observe the OECD Guidelines for Multinational Enterprises are eligible for financial support for their international trade and investment activities.
- The government supports the Sustainable Trade Initiative (IDH), which helps companies make their international production chains more sustainable.
- The government conducts sector-risk analyses to identify where problems are most likely to occur and target improvements.
- The government has completed seven of 13 sector-wide Responsible Business Conduct Agreement it intends to make with the private sector in the area of international CSR. The seven agreements cover textiles, banking, pensions, insurance, promotion of vegetable proteins, sustainable forestry, and gold.
The 2020 National Trade Estimate of the Office of the U.S. Trade Representative (USTR) refered to some Dutch sustainability criteria that can bring about trade impediments: “The Sustainable Trade Initiative (IDH) and the Forest Stewardship Council (FSC) have developed standards for soybeans and wood pellets, respectively, that have been supported by the Dutch government and effectively require U.S. producers to meet onerous certification requirements. [… ] These criteria include a requirement for sustainability certification at the forest level, which effectively precludes reliance on the U.S. risk-based approach to sustainable forest management. As a result of the implementation of the criteria, wood pellet exports to the Netherlands have dropped from 7 percent of total U.S. wood pellet exports in 2014 to less than one percent in 2018.”
The Netherlands fully complies with international standards on combating corruption. Transparency International ranked the Netherlands eighth in its 2019 Corruption Perception Index.
Anti-bribery legislation to implement the 1997 OECD Anti-Bribery Convention (ABC) entered into effect in 2001. The anti-bribery law reconciles the language of the ABC with the EU Fraud Directive and the Council of Europe Convention on Fraud. Under the law, it is a criminal offense if one obtains foreign contracts through corruption.
At the national level, the Ministry of the Interior and Kingdom Relations and Ministry of Justice and Security have both taken steps to enhance regulations to combat bribery in the processes of public procurement and issuance of permits and subsidies. Most companies have internal controls and/or codes of conduct that prohibit bribery.
Several agencies combat corruption. The Dutch Whistleblowers Authority serves as a knowledge center, develops new instruments for tracking problems, and identifies trends on matters of integrity. The Independent Commission for Integrity in Government is an appeals board for whistleblowers in government and law enforcement agencies.
The Netherlands signed and ratified the UN Anticorruption Convention and is party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
Resources to Report Corruption
The Government agency that aids and protects whistleblowers is the Dutch Whistleblowers Authority or “Huis for Klokkenluiders.” The Whistleblowers Authority Act, which came into force in the Netherlands on July 1, 2016, underlies the establishment of the Whistleblowers Authority. An English version of the Act can be found at https://www.huisvoorklokkenluiders.nl/Publicaties/publicaties/2016/07/01/dutch-whistleblowers-act.
Huis for Klokkenluiders
3581 CV Utrecht
Telephone: +31 (0)88 – 133 1000
The Dutch office of Transparency International is located in Amsterdam:
Transparency International Nederland
Offices at KIT: Royal Tropical Institute, room d-3
1092 AD Amsterdam
Telephone: +31 (0)6 81 08 36 27
10. Political and Security Environment
Although political violence rarely occurs in the highly stable and consensus-oriented Dutch society, public debate on issues such as immigration and integration policy has been contentious. While rare, there have been some politically and religiously inspired acts of violence.
The Dutch economy derives much of its strength from a stable business climate that fosters partnerships among unions, business organizations, and the government. Strikes are rarely used as a way to resolve labor disputes. With ten workdays per 1000 employees lost to industrial action, the Netherlands ranks tenth on the list of OECD countries with the lowest incidence of strikes, behind other major developed economies like the United States (four days) and Germany (three days).
11. Labor Policies and Practices
The Netherlands has a strongly regulated labor market (over 75 percent of labor contracts fall under some form of collective labor agreement) that comprises a well-educated and multilingual workforce. Labor/management relations in both the public and private sectors are generally good in a system that emphasizes the concept of social partnership between industry and labor. Although wage bargaining in the Netherlands is increasingly decentralized, there still exists a central bargaining apparatus where labor contract guidelines are established.
The terms of collective labor agreements apply to all employees in a sector, not only union members. To avoid surprises, potential investors are advised to consult with local trade unions prior to making an investment decision to determine which, if any, labor contracts apply to workers in their business sector. Collective bargaining agreements negotiated in recent years have, by and large, been accepted without protest.
Every company in the Netherlands with at least 50 workers is required by law to institute a Works Council (“Ondernemingsraad”), through which management must consult on a range of issues, including investment decisions, pension packages, and wage structures. The Social Economic Council has helpful programs on establishing employee participation that allow firms to comply with the law on Works Councils. See .
Prior to the Covid-19 outbreak, the annual unemployment rate was forecast to be 3.2 percent in 2020, well below the EU average of 6.5 percent and less than half of Eurozone unemployment. In March 2020, the Dutch government established various economic relief measures designed to preserve employment by providing Dutch corporations that suffer coronavirus-related problems with wage subsidies up to 90 percent.
The working population consists of 8.9 million persons. Workers are sought through government-operated labor exchanges, private employment firms, or direct hiring. At 47 percent, the Netherlands has the highest share of part-time workers in its workforce of all EU member states (in 2017, the EU average of part-time workers was 19 percent). A rise in female participation in the workforce led to a 37 percent increase in the share of part-time workers in the total working population. Three-quarters of women and one quarter of men work less than a 36-hour week. Labor market participation, especially by older workers, is growing, and the number of independent contractors is rapidly increasing.
To ensure continued economic growth and address the impact of an aging population, increased labor market participation is critical. The age to qualify for a state pension (AOW) will increase from age 65 to 67 by 2023. Governmental labor market policies are targeted at increasing productivity of the labor force, including the expansion of working hours. For example, access to daycare is improving in order to raise the average number of hours per week worked by women, which is 10 hours below the average of hours worked by men.
Effective July 1, 2020, the minimum wage for employees older than 20 years is €1,680 ($1,820) per month.
12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs
The U.S. International Development Finance Corporation (DFC) does not operate in the Netherlands. However, DFC insurance and funding is available for U.S. companies that partner with Dutch companies in third-country markets where DFC operates. The Netherlands is a member of the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA).
Dutch-registered companies investing abroad can insure their investments against non-commercial risks through the privately owned Atradius Dutch State Business, N.V., which issues export credit insurance policies and guarantees to businesses on behalf of the Dutch government. The legal basis for investment insurance is contained in the Framework Act for Financial Provisions. Insurance covers assets and cash, as well as loans related to an investment. Both new and (under certain circumstances) existing investments are eligible.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|Host Country Statistical source*||USG or international statistical source||USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other|
|Host Country Gross Domestic Product (GDP) ($M USD)||2019||$ 909,000||2018||$ 913,658||World Bank|
|Foreign Direct Investment||Host Country Statistical source*||USG or international statistical source||USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
|U.S. FDI in partner country ($M USD, stock positions)||2018||$ 852,871||2018||$ 883,188||BEA|
|Host country’s FDI in the United States ($M USD, stock positions)||2018||$ 992,500||2018||$ 479,039||BEA|
|Total inbound stock of FDI as % host GDP||2018||582%||2018||699%||Total outbound stock of FDI as % of GDP|
* Source for Host Country Data: CBP, DNB (see notes below)
Note 1: Host country source for GDP 2019 is The Netherlands Bureau for Economic Policy Analysis (CPB). CPB provides more recent data than World Bank. For a breakdown of Dutch GDP, see:
Note 2: Host country source for FDI stocks and flows is the Dutch Central Bank (DNB). For Dutch outward FDI destined for the U.S., the accumulated value in 2018 is 865,458 million euros and for inbound FDI originating from U.S. the accumulated value in 2018 is 743,704 million euros. The dollar value of Dutch FDI numbers is obtained with the official Treasury annual rate for 2018 of USD = 0.872 euros. This shows $992,500 million for FDI outbound towards the U.S. and $852,871 million for FDI inbound from the U.S.
|Direct Investment from/in Counterpart Economy Data|
|From Top Five Sources/To Top Five Destinations (US Dollars, Millions)|
|Inward Direct Investment (2018)||Outward Direct Investment (2018)|
|Total Inward||4,722,571||100%||Total Outward||5,765,130||100%|
|United States||756,132||16%||United States||888,649||15%|
|“0” reflects amounts rounded to +/- USD 500,000.|
|Portfolio Investment Assets (December 2017)|
|Top Five Partners (Millions, US Dollars)|
|Total||Equity Securities||Total Debt Securities|
|All Countries||2,017,438||100%||All Countries||1,004,598||100%||All Countries||1,012,840||100%|
|United States||524,980||26%||United States||358,264||36%||Germany||209,473||21%|
|United Kingdom||128,194||6%||Ireland||67,182||7%||United Kingdom||55,062||5%|
14. Contact for More Information
John Adams Park 1
2244 BZ Wassenaar
Telephone: +31 (0)70 310 2276