Y S I S O F T HE I N V E S T M E N T

TH E A N A L
AC T I V I T Y I N N E TH E R L A N D S
U LTAN U
M B R A V A T AT IA N A ,S A C
R S : J U N C U E U G E N IU ,D U
AUTHO ANDREI
F E S S O R : Z O R IN A S IS C AN
PR O
KEY FACTORS
General characteristics of the state interms of
investment / country risk/ investment climate/ SWOT) (
Standard & Poors , Fitch, Index of Economic Freedom,
political factors/ social, economic)
GENERAL CHARACTERISTICS OF THE STATE IN TERMS OF
MAIN REASONS TO INVEST IN NETHERLANDS
Why You Should Choose to Invest in the
Netherlands
Strong Points
The country's strengths are its highly developed communication and transport infrastructures, a skilled,
productive and multilingual labour force, a strategic geographical location which is a gateway towards major
European markets, a stable political and macro-economic environment and a very developed financial sector.

Weak Points
The country's weak points are the high cost of labour, the limited domestic market, relatively complicated
legislation, a cumbersome administrative system and a limited road infrastructure.

Government Measures to Motivate or Restrict FDI

The Dutch economy is amongst the most open in the world. Since January 2007, the Dutch taxation
environment for international companies has become even more attractive. The company taxation rate has
dropped well below the European Union average. These government measures can be referred to in the
Netherlands Foreign Investment Agency website.
 LABOR MARKET

WELL-EDUCATED AND THE DUTCH LABOR MARKET IS COMPRISED OF HIGHLY SKILLED,

MULTILINGUAL, BUSINESS-SAVVY WORKERS READY TO MEET THE

SKILLED WORKFORCE
DEMANDS OF INTERNATIONAL BUSINESS NEEDS.
LABOR RELATIONS
THE DUTCH GOVERNMENTS PRAGMATIC APPROACH TO BUSINESS
AND LABOR RELATIONS FACILITATES GROWTH AND IMPROVED
EFFICIENCIES FOR INTERNATIONAL BUSINESSES.

WAGES
THE NETHERLANDS OFFERS HIGHLY COMPETITIVE LABOR COSTS
WITH A HIGH RETURN FROM ITS SKILLED, PRODUCTIVE AND
FLEXIBLE WORKFORCE.

EDUCATION
RANKED NO. 3 GLOBALLY, THE DUTCH HIGHER EDUCATION
SYSTEM GRADUATES A STEADY STREAM OF HIGHLY SKILLED
WORKERS TO MEET TODAYS BUSINESS NEEDS.
WORK & RESIDENCE PERMITS
THE NETHERLANDS OFFERS A HIGHLY SKILLED MIGRANT VISA
FOR UNIQUELY QUALIFIED INTERNATIONAL TALENT AND OTHER
MEASURES TO FACILITATE THE EMPLOYMENT OF FOREIGN
MIGRANTS.
LABOR RELATIONS AND GOVERNMENT RELATIONS ARE
CONSTRUCTIVE AND PRAGMATIC IN THE NETHERLANDS.
HIGH-QUALITY INFRASTRUCTURE OF NETHERLENDS
The Netherlands has an excellent infrastructure of ports, airports, and roadways. It also has a highly developed telecommunications
system. Since the Netherlands is one of the main points of entry for goods imported into Europe, it is very important for the nation to
maintain its transport system in order to move products into the interior of the continent. In order to improve the infrastructure, the
government plans to launch a range of new projects over the next decade. A minimum of US$35 billion has already been budgeted to
pay for a variety of projects including a high-speed rail link between Amsterdam and Brussels. There are also plans for a special rail
system to connect Rotterdam and areas of Germany. Work is ongoing to improve the existing highway and rail network, and, by 2010,
the government expects to spend an additional US$5.5 billion on these projects. Among these funds are US$2.4 billion to expand
highways and US$500 million for improvements of regional roadways. The new work will concentrate on helping ease traffic
congestion in the heavily urbanized areas of the west, including Amsterdam and Rotterdam. One of the main ongoing infrastructure
projects in the Netherlands is the effort to prevent flooding. Over half of the country's territory is protected from flooding by an
extensive system of dams and dikes.
INVESTMENT RISKS
Dimensions covered The rating evaluates the
investment risk of a country, such as risk of default on
a bond, risk of losing direct investment, risk to global
business relations etc. Qualitative assessments:
political 43%, economic 43%, and structural 14%; The
quantitative score includes access to bank
finance/capital markets; debt indicators; credit
ratings; monetary policy/currency stability;
Institutional risk; regulatory and policy environment
INVESTMENT CLIMATE
THE NETHERLANDS IS THE SIXTEENTH LARGEST ECONOMY IN THE WORLD AND THE FIFTH
LARGEST IN THE EUROPEAN MONETARY UNION (THE EUROZONE), WITH A GROSS DOMESTIC
PRODUCT (GDP) OF NEARLY $800 BILLION (700 BILLION). ACCORDING TO THE INTERNATIONAL
MONETARY FUND (IMF), THE NETHERLANDS IS THE LARGEST SOURCE AND RECIPIENT FOR
FOREIGN DIRECT INVESTMENT (FDI) IN THE WORLD, THOUGH THE NETHERLANDS IS NOT THE
ULTIMATE BENEFICIAL DESTINATION FOR THE MAJORITY OF THIS INVESTMENT.
THE GOVERNMENT OF THE NETHERLANDS MAINTAINS LIBERAL POLICIES TOWARD FDI AND
ADHERES TO THE ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD)
INVESTMENT CODES AND RELEVANT GUIDELINES.
ECONOMIC FREEDOM SNAPSHOT
SWOT ANALYSIS OF IRELAND INVESTMENT POTENTIAL
ECONOMIC INDICATORS
Foreign Direct Investment (FDI) flows record the value
of cross-border transactions related to direct
investment during a given period of time, usually a
Foreign Direct Investment
quarter or a year. Financial flows consist of equity
transactions, reinvestment of earnings, and
intercompany debt transactions. Outward flows
represent transactions that increase the investment that
investors in the reporting economy have in enterprises
in a foreign economy, such as through purchases of
equity or reinvestment of earnings, less any
transactions that decrease the investment that investors
in the reporting economy have in enterprises in a
foreign economy, such as sales of equity or borrowing
by the resident investor from the foreign enterprise.
Inward flows represent transactions that increase the
investment that foreign investors have in enterprises
resident in the reporting economy less transactions that
decrease the investment of foreign investors in resident
enterprises. FDI flows are measured in USD and as a
share of GDP. FDI creates stable and long-lasting links
between economies.
FDI INFLOWS IN NETHERLAND
Foreign Direct Investment in Netherlands increased by 7037 EUR Million in the third quarter of
2016. Foreign Direct Investment in Netherlands averaged 44860.24 EUR Million from 2003 until
2016, reaching an all time high of 189388 EUR Million in the third quarter of 2007 and a record
low of -102671 EUR Million in the fourth quarter of 2015.
Foreign direct investment; net outflows (% of GDP) in
Netherlands was last measured at -5.98 in 2014, according to the World Bank. Foreign direct
investment are the net inflows of investment to acquire a lasting management interest (10
percent or more of voting stock) in an enterprise operating in an economy other than that of the
investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and
short-term capital as shown in the balance of payments. This series shows net outflows of
investment from the reporting economy to the rest of the world and is divided by GDP.This page
has the latest values, historical data, forecasts, charts, statistics, an economic calendar and news
for Foreign direct investment - net outflows (% of GDP) in Netherlands.
INWARD

OUTWARD

INVESTMENT
FDI repartition by sector and country of origi
Taxation Policy of Netherlands for foreign investors:
For any foreign investor, earning profit is the primary goal. In Netherlands, foreign investors can be
rest assured to earn profits, the corporate tax structure works in helps achieving the foreign investors
goal. The Federal Government of Netherland grants the following tax benefits to foreign investors
investing in Holland.
A network of tax treaties:The Dutch government has signed tax treaties with several nations; it has
strong bilateral ties with foreign investors, particularly with the US. As the tax treaties, the foreign
nation investing in Netherlands are exempted from paying double tax on income and capital invested.
Working on Profit tax:The Dutch government passed the working on profit tax legislation in 2007,
as per the act the government levy 25.5% corporate income tax for all foreign investors, the percent
is lower than the tax levied on local investors which is 26.9%. For SMEs the tax rates are even lesser.
Foreign investors are required to pay only 20% tax for the first 200,000 of taxable profits earned.
The Participation Tax Exemption:This is a very beneficial tax exemption provided by the Dutch
government to the foreign investors investing in the country. As per this tax exemption policy, foreign
investors are exempted from paying corporate income tax relating to shareholding such as bonus
shares, capitals gains, cash dividends and profit distributions.
Lowered Corporate Tax Rate:In case if a branch of foreign entity, the Dutch government allows the
foreign investors to avoid corporate tax if their business activity in the country is of not a permanent
kind.
FDI REPARTITION BY SECTOR
 NETHERLANDS FOREIGN INVESTMENT AGENCY
In 2014 the NFIA has been actively involved in the realisation of 187 projects in total. These projects will lead to an
investment amount of 3.2 billion and 6,304 jobs, of which 868 are related to retention of employment. The NFIA books
an investment project as a result when it receives a confirmation letter from the foreign investor. The company
indicates therein what investment amount and how many direct jobs it expects to realize within three years,
completed with information on employment retention.
CONCLUSION
COUNTRY FOCUSED ON FDI ATTRACTION
KEY-SECTORS OF INTEREST ARE ADVANCED MANUFACTURE AND SERVICES
LUCRATIVE ENVIRONMENT FOR BUSINESS ACTIVITY
ONE OF BEST PERFORMING EU COUNTRY IN TERMS OF INVESTMENT
STRONG ORIENTATION UPON EFFICIENCY AND EFFECTIVENESS
BIBLIOGRAPHY

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