Overseas business risk: The Netherlands
Published 7 June 2023
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1. General overview
The Netherlands is a densely populated country with a population of 17.8 million people. It has a progressive business climate, notably high levels of government transparency and low levels of corruption. It is also the UK’s 3rd largest trading partner, accounting for a total 7% of total UK trade.
The Netherlands is a founding member of the European Union, and houses offices of various international organisations, including the European Medicines Agency (EMA), the European Police Office (EUROPOL), the Organisation for the Prohibition of Chemical Weapons (OPCW) and the International Criminal Court (ICC).
2. Politics
The Netherlands is made up of 12 provinces and 342 municipalities. There are also 6 overseas entities. Aruba, Curaçao, and Sint Maarten are constituent countries within the Kingdom of the Netherlands. Bonaire, Sint Eustatius and Saba have the status of special municipalities of the Netherlands.
The Netherlands is a constitutional monarchy. Since 1848 the ministers, rather than the monarch, are responsible for acts of government. The country has a bicameral system and a large number of parties and political movements are represented in the Dutch parliament. The Second Chamber has 150 seats and the First Chamber has 75 members. The former are elected directly using proportional representation, while the latter are elected indirectly through provincial assemblies. The seats in the provincial and municipal councils are all elected positions using a system of proportional representation.
3. Economics
The Dutch GDP in 2020 was over US$ 1.01 trillion. In 2021, Dutch imports and exports of goods increased, with the value of exports of goods reaching close to €587 billion, an increase of 13.8% on 2019. Imports of goods amounted to almost €527 billion in 2021 which was 14.5% more than in 2019.
After the US, the Netherlands is the biggest exporter of agricultural produce in the world. The annual value of agricultural exports totals €65 billion which makes up 17.5% of all Dutch exports. Together, the agricultural and horticultural sectors count for 10% of the Dutch economy and employment, and therefore play an important role.
The Netherlands also has a large distillation capacity which enables refining and re-export of oil products, as well as pipelines that run from the port of Rotterdam to other EU countries. The Netherlands is a major player in the energy and chemical sectors.
4. Business and human rights
The business climate in the Netherlands is progressive, with honesty and reliability being highly valued. The IT-infrastructure, the supportive corporate task structure and its good connection to ports means it is a great location for businesses wanting to settle and gain access to the European market. Many international companies are choosing the Netherlands to set up offices.
National minimum wage in the Netherlands as of 1 July 2023 is €1,995 for those in full time employment (roughly € 12.79 based on a 36 hour week). This figure is adjusted twice a year, once in January and once in July, in line with changes in average collectively agreed wages in in the Netherlands. Income tax is paid on your income and on your financial interests in a company, as well as on your savings and investments. The corporate income tax rate depends on the taxable amount. If the taxable amount is €395,000 or less, the corporate income tax rate is 15%. If the taxable amount is more than €395,000 then the corporate income tax rate is €59,250 plus 25.8% for the taxable amount exceeding €395,000. However, there is a reduced rate of 9% which applies to activities that are covered by the innovation box. This tax break is to encourage innovative research, and all profits earned from innovative activities are taxed at 9%.
5. Human rights
The Netherlands is one of the six founding members of the European Union and of the Council of Europe. It is therefore a signatory to the European Convention of Human Rights. The Hague is home to the International Criminal Court (ICC) and the International Court of Justice (ICJ), as well as to various tribunals and courts including the International Criminal Tribunal for the Former Yugoslavia (ICTY) and the Kosovo Specialist Chambers.
The European Institute for Gender Equality’s 2022 Gender Equality Index ranks the Netherlands 3rd in the EU. The Netherlands was one of the first European countries to introduce legal protection against discrimination on various grounds, and this means that Dutch gender equality legislation tends to be more comprehensive than that of the EU. The principle of equality and non-discrimination was set out in the Constitution for the Kingdom of the Netherlands in 1983.
6. Bribery and corruption
According to Transparency International’s 2022 Corruption Perceptions Index (CPI), the Netherlands ranks 8th out of 180 countries, with the UK coming in 18th. Its notable high levels of government transparency and low levels of corruption make it a favourable environment for businesses.
7. Terrorism threat
Refer to the terrorism section of the FCDO Travel Advice for the Netherlands.
8. Protective security advice
Prior to the Covid-19 pandemic, British nationals made over 2 million visits to the Netherlands every year, with over half of these visits being to Amsterdam. Most of these visits are trouble free, however everyone should be aware of the possibility of street crime, particularly in larger cities.
If you do run into problems, the number for the emergency services is 112.
For more information, refer to the FCDO Travel Advice for the Netherlands.
9. Cyber security
In 2020, the Netherlands ranked 16th in the Global Cyber Security Index, with the UK ranking 2nd. The National Cyber Security Centre (NCSC) is responsible for the overseeing digital security in the Netherlands.
Furthermore, the Global Forum on Cyber Expertise was founded in 2015 at the Global Conference on Cyber Space in The Hague. It was launched by the Dutch government along with 41 ministers and high-level representatives from both businesses and international organisations.
10. Intellectual property
There are different types of Intellectual Property (IP) rights, for example patents, design rights, copyright, and trade name rights, among others. It is important to note that IP rights are territorial, meaning they only protect in the countries where they are granted. Click here for more information on protecting your IP rights in the Netherlands.
11. UK export finance
The government can provide finance or credit insurance specifically to support UK exports through UK Export Finance – the UK’s export credit agency. For up-to-date country specific information on available support see UK Export Finance’s country cover policy and indicators.
12. Contact
Visit the Department for Business and Trade’s Netherlands pages for more information and to contact the DBT team in the Netherlands for more information on opportunities for doing business in the Netherlands.
13. Useful links
Netherlands trade and export guide