With the largest port in Europe, excellent freight links, and high standards of living, the Netherlands has plenty to offer any company looking to expand its operations into the European Union (EU) single market. What’s more, following the UK’s exit from the EU, the Netherlands is undoubtedly the premier English-speaking gateway to Europe for US organizations – offering easy access to important markets such as Belgium, France, and Germany.
From mutual tax treaties and an excellent infrastructure to an international outlook and a highly developed innovation culture, it’s no wonder the Netherlands is a preferred destination for investing in future growth. With its strategic location, a stable economic and tax climate with relevant tax benefits, the Netherlands could be your ideal springboard for broader European expansion.
So, what should international businesses keep in mind about operating in the Netherlands?
Who’s afraid of VAT?
Value-added tax (VAT) can seem confusing if you’re used to the US sales tax – but there’s no reason to let it deter your European ambitions. Simply put, VAT is imposed on the sale of goods and services across the EU: a single taxation system that’s great news for compliance when it comes to expanding your business across different markets. For instance, if you’re exporting goods from the Netherlands to another EU Member State, VAT is usually only levied in the destination country.
If you’re a manufacturing business, VAT is charged at every stage of production, with quarterly (or sometimes monthly) reporting required across most sectors. However, it’s important to note that medical services, educational services, most banking services, insurance transactions, property rentals, and services performed by sports organizations are generally not subject to VAT.
Tax breaks? Yes, please!
As a foreign company operating in the Netherlands, you’ll also benefit from a highly competitive system of tax rates on profits. In most cases, the profits the Dutch parent company receives from foreign subsidiaries are exempt from tax in the Netherlands. This is known as the ‘participation exemption’. There are also numerous government-backed schemes for companies conducting innovative research, such as the Innovatiebox and the WBSO subsidy.
However, it’s also wise to consider the various tax obligations you may be subject to, including environmental taxes (water, fuel, energy, and waste), corporate income tax (charged on any entity incorporated in the Netherlands, whether B.V. or N.V.), and payroll tax. Non-resident companies are also subject to corporate income tax in the Netherlands on income that comes from Dutch sources.
Secure your star talent
If you’re deciding whether to relocate foreign employees to the Netherlands or hire local staff, keep in mind one major incentive for bringing in employees from abroad: the 30% tax ruling. Under this attractive benefit, employers in the Netherlands can pay expat workers 30% of their salary tax-free for five years. Plus, eligible employees’ savings and investments held in the Netherlands are also tax-free during this time.
Looking to hire locally? There’s a deep pool of highly qualified candidates waiting for you, particularly in the fields of technology, agri-food innovation, and life sciences. Our Waalre office is situated in the Eindhoven Brainport area, AKA Europe’s most innovative technology region, which boasts a wealth of homegrown tech and R&D talent thanks to the Netherlands’ excellent range of innovation-focused universities.
Best of all, whichever route you choose, the Dutch government’s advanced social security program ensures your employees benefit from some of the highest quality-of-life scores in Europe.
Whether you’re a start-up or a multinational, the Netherlands is an excellent destination for expanding your business in Europe – and we’re experts in all it has to offer international entrepreneurs. From tax compliance to audit to corporate financing, we help you make the most of the many advantages of doing business here, even down to sorting out your transfer-pricing structure and staying one step ahead of EU directives.
Our support lets you focus on doing what you do best – so you can make your business ambitions in the Netherlands a reality!
Questions about the services we can offer? We’re always happy to show you why so many have chosen us as their trusted business partner in the Netherlands.