(Last updated: 23 Mar 2011)

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

Business etiquette

Business tips

English is widely spoken and almost all company executives have excellent business English, however, it is always worth checking before attending a meeting. The business culture is similar to elsewhere in Europe – slightly formal with a preference for open dialogue.

Most business people in traditional industries will wear business suits and ties. Many Dutch companies are very entrepreneurial, but will rarely agree to a ‘cold’ meeting. Expect to introduce your company and proposition at least three to four weeks before the planned meeting date. Make an introductory telephone call and follow-up with information by post or fax.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

The Netherlands is part of the harmonised trade system of the European Union (EU). All products must comply with Dutch and EU regulations. All labels and instructions must be in Dutch, and must include a contact address within the EU. Before shipping any goods to Europe, you should obtain a written customs duty ruling from the customs service in the destination country. Once goods have been cleared through customs in one EU country, you won’t have to pay duty if you ship the goods into another member country. There are different levels of sales tax in each country, and this will have to be paid every time the goods change hands.

Taxation

As per 1 January 2008 the maximum rate of corporate tax is 25.5 per cent. Below taxable profits of €200,000 rates of 20 per cent (first bracket up to €40,000) respectively 23 per cent (second bracket up to €200,000) apply.

In the case of a branch of a foreign entity, corporate income tax may be avoided if the activities in the Netherlands do not constitute a permanent establishment or a permanent representative as defined in the tax treaty concluded between the Netherlands and the state of residence of the foreign corporation.

Based upon its special position as a distribution country in the EU, the Netherlands has implemented a so-called deferment system, which gives a complete deferment until the periodic VAT return.

This system leads to a situation in which the VAT due at import is not paid at that moment but is deferred until filing of the periodic VAT return. On the VAT return, the VAT has to be declared but it can be deducted on the same form. Therefore, it is added and subtracted on the same form easing cash-flow complications.

To use this deferment system, a company has to be registered for VAT in the Netherlands. If a foreign entrepreneur has no permanent establishment in the Netherlands, the company could choose to operate through a fiscal representative for VAT in the Netherlands.

Banking and finance

Outward investments

The Netherlands are increasingly proactive in seeking to attract foreign direct investments. An important part of these investments should come from foreign companies setting up a logistics hub in the Netherlands (either foreign owned or rented capacity from local third party). Various Dutch (semi-)government agencies work closely together to achieve this: Netherlands Foreign Investment Agency (NFIA), Holland Financial Centre (HFC) and the Holland International Distribution Council (HIDC).

In their efforts of establishing a physical presence in the EU Australian exporters of goods increasingly notice that it pays off to have a foothold in continental Europe. The Netherlands appear to be a choice that makes good sense in terms of infrastructure (port of Rotterdam, Schiphol airport, inland waterways and high capacity rail into the European hinterland) as well as the supporting services industries (road transport, banking and insurance). Also, approximately 170 million people live within a 300- mile radius of the Netherlands. Given this context it is not surprising that the Netherlands make money on imports; around half the quantity of goods that is imported into the Netherlands is being re-exported after adding value in the process (handling, assembly, warehousing, transfer, etc).

With this background the Netherlands has a strong reputation in logistics and distribution around the world. Competition around these skills is fierce throughout Europe however. The favourable tax climate of the Netherlands is being copied by other EU countries. Price is a driving factor in selecting the ideal location and country for any international company’s future distribution centre (DC). And the oil price heavily influences the price of fuel. This is reason to believe that large exporters servicing the whole of Europe are likely to do this out of a limited number of regional DC’s if the oil price returns to a high level. Other cost factors vary from labour and warehousing (where Netherlands is not most cost effective) to cargo handling and customs clearance (where Dutch culture and language skills have a huge positive influence on the efficiency of cargo operations).

In addition to the above and from a direct investment point of view there is a distinct opportunity to invest in Dutch infrastructure. Large foreign investors (including Australians) have started to expand their portfolio to include Dutch infrastructure along the lines of power plants, railways, ports and energy parks. Given the recent development in the international financial markets there is a lot to be said for investments into assets that show a moderate yet steady yield while gaining in value over time.

Netherlands – a logistics hub

The Netherlands is often considered to be the logistics gateway to the European market. Many international companies have opened sales and marketing offices, R&D centres, and distribution centres here to serve their customers in Europe, the Middle East, Africa, and beyond. The features that make the Netherlands ideal for European supply chain activities include its central location within the European market, excellent seaport and airport facilities, extensive infrastructure with fast connections, tax and customs advantages, international business community, and flexible, productive, and highly educated labour force. Understandably, therefore, the logistics services industry is highly sophisticated, and most international logistics services providers have major distribution facilities in the Netherlands.

Many companies from commonwealth countries (such as Australia) that set up operations in Europe open their first office in the UK to then discover that the UK is not the same as Europe.

Market dynamics:

• Ports: Rotterdam leading in containers and Amsterdam growing importance in bulk.
• Railways: 2,797 km, of which more than two-thirds is electrified.
• Airfreight: 70+ air freight companies serving Europe and the world.
• Waterways: 6,211 km, of which over 75 per cent are canals.
• 9,000 distribution centres, 2,000 of which are centralised, which means as a percentage Netherlands has 51 per cent of all European distribution centres.
• Approximately 170 million people live within a 300- mile radius of the Netherlands.