The Netherlands: In the center of Europe’s economyDecember 20, 2010
Companies continue to be drawn to the Netherlands as a location for their corporate headquarters, thanks to its robust economic, tax, regulatory and infrastructure environment.
A recent study by Ernst & Young cited four dominant factors behind companies’ decisions to locate their headquarters in the Netherlands:
- proximity to markets/customers
- transport and accessibility
- quality and availability of labor
On all four factors, the Netherlands scores high marks. Located in the center of the three largest economies in Europe — Germany, France and the UK — the country boasts a high-quality transportation infrastructure. The expansion of European Union (EU) membership to Central and Eastern European nations in 2004 and 2007 contributed further to the attractiveness of the Netherlands as a location for implementing and developing pan-European strategies.
The World Bank’s Doing Business report ranks the Netherlands 30th in the world in terms of ease of doing business. It scores highly for the ease of trading across borders – it is ranked 13th in the world. On the tax front, the Netherlands has a 25.5% base corporate income tax and a lower 20% for smaller companies, which are below the equivalent rates in many of its EU partners.
Dividends from subsidiaries will be generally excluded from the basis for taxation. This Dutch participation exemption system for avoidance of double taxation has over the past few years found followers in many of the governments around the globe, with the United States being one exception. Yet for the many companies that choose the Netherlands as their headquarters location, it is the country’s highly skilled, multilingual and well educated labor force in a population of 16.5m that holds particular appeal.
Not only does an estimated 87% of the Dutch workforce speak English, they also speak many of the European languages of core markets in the region, including French and German. The country’s long history of international trade and commerce permeates the Dutch culture, making any transition or move to the Netherlands an easy one for most executives.
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