The Netherlands is fertile ground for Chinese companies wishing to grow in Europe
by Jeroen Nijland, Commissioner Netherlands Foreign Investment Agency；Photo by Netherlands Foreign Investment Agency
● Pioneering Trader
● Logistical Excellence
● Networks: Physical and Digital
● Strengths & Stability
In the Netherlands, we have a long history of global trade and business. Back in the 17th Century, often referred to by the Dutch as the ‘Golden Century’, the Netherlands was the leading global trading nation, and the Netherlands was considered the first truly modern economy.
A technological revolution in shipbuilding led to a competitive advantage in shipping that helped the Dutch to become the dominant trade power by the mid-17th century. Fleets of merchant ships brought back exotic spices and luxury goods from far-flung outposts in Asia and the Americas, and Amsterdam became the hub of global trade. The concept of shares in a company is a Dutch invention, having been pioneered at the Amsterdam Stock Exchange or ‘Beurs’ by the VOC or East India Trading Company. So, you could say that trade and international business are deeply ingrained in the Dutch DNA.
This continues today, as the Netherlands is still a key trading partner for many countries with 50% of GDP being earned internationally. Much of this ongoing success is due to our strategic location in Europe. The respected business title, Forbes magazine, placed the Netherlands 3rd in its ‘Best Countries for Business’ rankings, and DHL ranked the Netherlands No.1 on its Global Connectedness Index. With a location at the heart of Europe, the Netherlands is a perfect base from which to address the European market, with 95% of Europe’s most lucrative consumer markets within a mere 24 hours from Rotterdam or Amsterdam. This makes the Netherlands the ideal springboard from which to launch business initiatives aimed at the European and broader global markets.
Any business that operates nationally and internationally depends on logistics: a combination of expertise and knowledge regarding products, markets, transportation, insurance, infrastructure, and Customs procedures. It is a complex cocktail of processes, both physical and digital, that keeps goods moving across borders and through markets. The Dutch know a thing or two about logistics as the small country is the world’s fifth-largest exporter of goods and eighth-largest importer. The Netherlands is a strategic transportation hub with an advanced infrastructure and an innovation climate that both rank among the best in the world. A staggering 40% of all exports from China are routed via the Netherlands and Dutch expertise in fresh chain logistics is second-to-none. The Port of Rotterdam is the No.1 Chinese port in Europe, with 25% of all containers handled there being Chinese – hardly surprising when Rotterdam accounts for close to 40% of container between China and Europe.
A world-class logistics infrastructure, with highly-efficient sea, air, rail, road, and inland shipping networks reaching deep into the European continent (the Netherlands is one of the leading road transport nations in Europe and the largest inland shipper) and three deep-water ports connecting to the rest of the world, makes the Netherlands unbeatable as a European and global business destination. The 15,000 foreign-owned companies – from global giants to fast-growing innovators – that have already decided to locate here, bear this out.
Networks: Physical and Digital
In the low-lying delta of the Netherlands, networking is second-nature. In our centuries-long struggle with the sea and rivers, it is only through communicating, working together for common goals and creating an efficient infrastructure that we have managed to secure our environment and thrive. Fast-forward to the 21st Century and the same is true. Matching our impressive physical infrastructure is a leading-edge digital infrastructure. The Amsterdam Internet Exchange (AMS-IX) is the world’s leading data traffic hub, both by number of members and total traffic. Roughly one-third of all European data centers are located in the Amsterdam area and take advantage of AMS-IX.
The Netherlands provides a logical base for eCommerce businesses via its dynamic and thriving digital community. The World Economic Forum ranks the Netherlands in 6th place worldwide in terms of ICT infrastructure and, on average, the country has the fastest internet speeds in Europe and 2nd-highest broadband quality. Some 60% of all Forbes 2000 Companies active in the IT industry have already established operations in the Netherlands. This includes global IT companies such as Microsoft, Cisco, Oracle, Interxion, Infosys, Huawei, Oracle, Intel, IBM, Verizon, and Google, all of whom tap into the unparalleled IT infrastructure, competitive tax climate and a tech-savvy, English-speaking workforce. The majority of these companies were assisted by the NFIA and its Invest in Holland network.
Our human networks are still just as active and relevant today as they have ever been and for companies looking to expand their businesses or set up operations in Europe, The Invest in Holland network provides a continuum of free, confidential services and support. The Netherlands Foreign Investment Agency (NFIA) joined forces with the various regional economic development agencies and several major cities under the Invest in Holland label in 2015.
The services and support that the Invest in Holland network can offer foreign organizations include:
• Fast and confidential provision of up-to-date information on the Netherlands, Dutch legislation and regulations, and possible incentives from the Dutch government
• Personal guidance with, e.g., finding and visiting potential investment locations
• Bringing foreign organizations in contact with relevant business partners and government bodies
• Concrete solutions that simplify and optimize location in the Netherlands
• Contribution to the maintenance and improvement of the investment climate
An operational unit of the Dutch Ministry of Economic Affairs and Climate Policy, the NFIA is your first port of call. The NFIA, however, does not operate in isolation. Under the label Invest in Holland, we connect you with an extensive array of business partners, regional economic development organizations and government institutions to facilitate your international expansion. The Invest in Holland network is a highly-motivated and enthusiastic team consisting of the NFIA, regional economic development agencies, and several major cities.
Strengths & Stability
Is should perhaps come as no surprise to learn that the Netherlands is one of the six original founders of the European Community, thus playing a key strategic role in its development. The Netherlands’ liberal and cooperative culture is also evident in its dealings within the EU; building bridges and forming partnerships on focused topics, and always geared towards pragmatic solutions – very much a defining characteristic of Dutch culture.
Taxes & Incentives.With an investment-friendly corporate income tax system, accessible and transparent tax authorities, attractive innovation and R&D incentives and an extensive treaty network, the Netherlands provides one of the best business climates in Europe for international companies to establish their operations. The Dutch tax ruling practice has a track record of 30+ years of being fully in line with OECD standards. Furthermore, thanks to the Netherlands’ stable government and highly accessible and cooperative tax administration, companies can feel confident that any adjustments will be implemented in such a way that maintains attractiveness for foreign investors, minimizes impediments for business and guarantees cooperation and transparency from tax authorities.
A reverse-charge mechanism on imports delivers certain cash-flow advantages for exporters. Due to its special position as a distribution country within the EU, the Netherlands has implemented the so-called ‘reverse-charge mechanism’ on imports, which provides a complete deferment of import VAT to the periodical VAT filing. Pursuant to the application of this reverse-charge mechanism, import VAT is declared on the periodic return and reclaimed in the same form. As a result, the VAT at point of import is generally deferred.
Dutch Customs Authorities: a practical and pro-active approach.Goods that are brought into the European Union (EU) are, from the time of their entry, subject to customs supervision and are required to meet the stipulations specified in EU customs legislation. The Customs Inspector understands the importance of a reliable government partner for business enterprises. Where the import and export of goods is concerned, he is open to consultation in order to find the most suitable customs arrangements for your company. The Dutch Customs authorities are renowned for their practical and pro-active approach towards facilitating international trade and optimizing customs procedures.
Supportive R&D Incentives.Nearly 14.3 billion euros was spent on Research & Development (R&D) in 2016 by the enterprises, institutions and the higher education sector, the highest expenditure on R&D ever recorded in the Netherlands. The country has the third-highest number of patent applications per million habitants in Europe and actively promotes engaging in research and development activities in the country through a favorable corporate tax system and specific R&D tax incentives that support innovation throughout the entire R&D life cycle. The following measures may significantly lower a company’s R&D cost and taxable base:
• R&D Tax Credit (WBSO)
Companies performing particular R&D activities may benefit from a 32% reduction (up to 40% for startups) of the first €350,000 in R&D wage costs and other R&D expenses and investments, and 14% for those costs exceeding €350,000.
• Innovation Box
Companies may benefit from an effective tax rate of only 7% for income from intangible assets— including technological innovations—created by the Dutch taxpayer and for which an R&D tax credit was received.
Centers of Excellence.The compact physical size of the Netherlands, combined with outstanding, world-class research and education institutes, results in thriving industry clusters with a strong focus on knowledge-sharing and collaboration.
With over 2,900 innovative life sciences and health organizations, the Netherlands boasts one of the most concentrated life sciences regions in the world with exports totaling 5.7 million euros annually. As one of the most connected countries in Europe, the Netherlands is also a leading hotspot for IT and communications companies. It is home to the most advanced cyber security cluster and one of the most advanced markets of data centers in Europe.
Presence in China
The Netherlands Foreign Investment Agency has been operating in China for more than 13 years. To date, Chinese companies have established more than 600 direct investment enterprises in the Netherlands, creating nearly 15,000 local jobs. During Dutch Prime Minister, Mark Rutte’s recent visit to China, in April, the 40th anniversary of the establishment of the Netherlands Foreign Investment Agency (NFIA) was celebrated in Hangzhou, Shanghai, Beijing, and Guangzhou.
During the visit, it was my great pleasure to present the “Invest in Holland” Outstanding Contribution Award to 16 Chinese companies, in recognition of creating employment opportunities in the Netherlands through direct investment. The 16 companies are: Opple, ZPMC, Hikvision, Genscript, Donghua Chain, Perfect World, Hanergy, Navinfo, HEAD Aerospace, Ninebot, Nuctech, Huawei Technologies, Ausnutria, CIMC, BYD and HKC. The direct investment of Chinese enterprises in the Netherlands has contributed significantly to the development of the local economy and has played an important role in the Sino-Dutch bilateral economic and trade. I look forward to watching these European-located Chinese enterprises prosper and grow and extend a hand of welcome and an open invitation to other Chinese companies looking to set up in Europe and invest in the Netherlands.
40 years of Excellence
For 40 years, the Netherlands Foreign Investment Agency, an operational unit of the Dutch Ministry of Economic Affairs and Climate Policy, has assisted more than 4,000 companies from some 50 countries to orientate, settle and thrive in the Netherlands. By providing customized advice, relevant to each specific company and sector, the NFIA, together with the Invest in Holland network, assists every step of the way, paving the way for companies to allow them to get up and running as rapidly and seamlessly as possible.
文|倪景润(Jeroen Nijland)荷兰外商投资局局长 翻译|王晓波 供图|荷兰外商投资局