Foreign Investment

- Around 6,300 foreign companies have established 8,800 operations, including the likes of Coca-Cola, BASF, Cisco Systems, Microsoft, Nike, Sabic, Siemens and Yakult.

- The Netherlands is the eighth -largest recipient of FDI in the world (2010). Foreign companies made inward direct investments worth 590 billion US dollars (445 billion euros). Foreign investors provide 15% of Dutch employment.

- The Netherlands is a stable and vibrant parliamentary democracy, recognized worldwide for its transparency, fairness and effectiveness. According to the World Bank, the Dutch government is the fourth most effective in the world after Denmark, Finland and Sweden. Our political system is characterized by plurality and consensus-building, resulting in coalition governments that truly represent the voice of the people. The Dutch were one of the first countries in the world to give women the right to vote (1922).

- The legal system is fair and transparent and well equipped to deal with business, trade, taxation and patent issues. There are specialized courts for dealing with criminal and administrative issues, as well as with tax law, planning law, environmental law and trade and commerce. There is a rich variety of world-class law firms – both home grown and large international ones – that can provide assistance with tax law, mergers and acquisitions, and European law. The Hague is the seat of the European Patent Office.

- The Dutch tax system has a number of features that may be very beneficial in international tax planning.

·         The relevant factors include a corporate income tax rate of 20 % on the first 200,000 euros, and 25.5 % for taxable profits exceeding 200,000 euros, which is well below the EU national average.

·         Companies can benefit from an effective tax rate of only 5% for R&D income from self-developed patented intangible assets and also from self-developed unpatented intangible assets which qualify for the so-called WBSO.

·         The Dutch ruling practice, which provides clarity and certainty on tax assessments in advance, can be obtained on future transactions, investments or corporate structures.

·         There is also a broad tax treaty network. The Netherlands has signed treaties with more than 80 countries that ensure the avoidance of double taxation on income and capital. This reduces withholding taxes on dividends, interests and royalties (for interest and royalties, in some cases, taxes are reduced to 0 %).

·         There are no withholding taxes on outgoing interest and royalty payments.

·         Dutch tax law also provides the participation exemption, which states that all benefits related to a qualifying shareholding, including cash dividends, dividends-in-kind, bonus shares, hidden profit distributions and capital gains, are exempt from Dutch corporate income tax.

·         Investors can benefit from a 30% tax break for highly qualified foreign employees

- The Netherlands has a well-developed financial system that is largely focused on global financial markets and trends. It is centered largely around Amsterdam, which hosts some of the most notable global banks of Dutch origin, among them ING Group, Rabobank and ABN AMRO, and large international banks. In addition, we host a broad range of private equity investors and venture capital funds, as well as trust fund managers. Amsterdam, the country’s financial center, hosts the Euronext Amsterdam exchange, which is part of NYSE Euronext, as well as Atradius, the world’s largest credit risk management company. ABP is the world’s second-largest pension fund.

- The Netherlands is one of the most wired countries in the world. In 2009 approximately 91% of households own a PC, 90% have internet access, 77% have a broadband connection and 74 % shop online. The Netherlands also hosts one of the most important internet hubs in the world, the Amsterdam Internet Exchange. Hundreds of IT companies have established their headquarters in the Netherlands. Mobile phone penetration is almost complete.

- The Netherlands offers a highly pleasant living environment. It currently ranks tenth worldwide in in IMD's 2011 Quality of Life index. Leisure amenities are within easy reach and Dutch cities have much to offer, such as the centuries-old architecture of Amsterdam, Delft and Leiden as well as cultural activities and worldfamous museums such as the Van Gogh Museum and the Hermitage Amsterdam. Housing is also fairly affordable compared to other countries, according to IMD. In addition to the various international schools in the Netherlands, a large and growing number of schools (133 in 2010) teach in two languages (mostly Dutch and English). Finally, the Dutch healthcare system officially ranks among the world’s best, according to the Commonwealth Fund.

Further information:

• www.nfia.nl