The country

A European country situated to the north of Belgium, the Netherlands has almost 17 million inhabitants and is a member of the Benelux economic area. The country was a great colonial power and underwent huge growth in the 17th century (the “Golden Age”); nowadays, it is the third most highly developed country, according to the United Nations. The Netherlands is one of the founding members of the European Union and the single currency.

An onshore centre

The Netherlands does not have the lowest tax rates by far – on the contrary, it is one of the 20 richest countries in the world. Located near the great European powers, the country has a network of finely wrought tax agreements which make it an onshore destination for tax optimisation. We advise creating a holding company there.

Useful information

The law does not allow nominee shareholders; on the other hand, a company may be owned wholly by a company in London and thus become limited, with the shares in the British company being held by a nominee. The law does not provide for nominee directors. We can offer you a director with conditions.

The different types of company

Creating a company in the Netherlands requires 5 different procedures and takes 5 days.

Types of company	Capital	Number of partners
Limited liability company (BV)	Minimum of EUR 18 000	No minimum, liability limited to capital
Public limited company (NV)	Minimum of EUR 45 000	No minimum, liability limited to capital
General partnership (VOF)	No capital minimum	Minimum 2 partners, multiple liability
Limited partnership (CV)	No capital minimum	Minimum 2 partners, active or sleeping, unlimited liability for active partners, limited to contributions for sleeping partners
Bijkantoo (branch of a company)	No capital required if branch registered with the Trade Register	Dependent on parent company, which is liable for the branch, apart from its management, which accepts limited, joint and several liability

Link : Trade register

The various tax rates

Corporate tax depends on taxable income: if it is higher than 200,000 euros, the tax is 25%, with 20% for a lower amount. Many items may be deducted from tax payable, such as the investment made for the creation of the company, rents, royalties, capital losses, pension contributions, bonuses paid to employees and donations. Netherlands VAT, called Belasting Toegevoegde Waarde, is 21%. Certain products are taxed at a rate of 6% (food, water, medicines, books, etc.). Income tax is as follows:

Personal income (EUR)	Tax rate
0 to 17 319	33.35%
17 320 to 31 122	41.85%
31 123 to 53 064	42%
53 065 and +	52%

In the Netherlands, there is a tax regime specially designed for persons over 65, who do not have to pay all contributions:

Income of individuals 65 and + (EUR)	Tax rate
0 to 17 579	15.75%
17 580 to 31 589	23.50%

France and the Netherlands are bound by a double taxation agreement signed in 1973.

Links :

Netherlands Ministry of Finance
Double taxation agreement

Accounting essentials

Companies must keep accounts in accordance with International Financial Reporting Standards, with the EU Accounting Regulatory Committee being responsible for supervising their application. Accounts must be published each year and submitted to the trade register. They must contain financial statements, cash flow statements and additional information. An auditor must also carry out an annual audit of the company.

Links:

Accounting Regulatory Committee
Nederlandse Beroepsorganisatie van Accountants

The Jurisdiction in detail

Dependent on international demand and exports, the Netherlands were hit hard by the crisis, with a recession of 4%. The Dutch economy has rebounded weakly, due to minimal domestic consumption. The country is expected to grow by 0.4% in 2013.

Agriculture in the Netherlands accounts for 3% of GDP and 60% of its production is exported. Very intensive, it produces mostly potatoes and cereals, and means the country is the third-largest agricultural exporter in the world. From an industrial perspective (25% of GDP), food, petrochemicals, metallurgy and transport are priority sectors, the Netherlands being one of the largest producers of oil and gas on the planet. Services occupy the major position in the country’s economy, with the most important areas being transport, finance and retail.

The Netherlands are among the most open nations to the rest of the world, with an economy very largely dependent on its exports, a status that is symbolized by the port of Rotterdam, the largest in Europe. The country’s major trading partners are the United States, China and the European Union.

The advantages of investing:

• high-quality infrastructure
• qualified and productive workforce
• good location
• political stability
• well-developed financial sector

The negatives:

• high labour costs
• complex legislation
• relatively small market
• unbalanced road network

Access to and functioning of the market

The Netherlands is a member of the WTO and the OECD, and a signatory of the Kyoto Protocol, the Washington Convention, the Basel Convention, the Montreal Protocol and the International Coffee Agreement of 2001.

Trade with the Netherlands is subject to the standards of the European Union, which advocates global free trade. However, some sectors are closely monitored and subject to strict rules, such as agriculture or textiles. Products containing GMOs must indicate this on their packaging, for example. Regarding customs duties, they are generally low (about 4%) and are avoided for trade between countries of the European Union. Imports from non-EU countries must complete an Entry Summary Declaration under the SAFE standards for secure trade.

The Dutch retail sector sees large retailers side by side with local stores, which are still very popular with consumers. Discount shops are, meanwhile, a growing trend. The main retail groups are Ahold and Laurus (currently being bought out by Casino). Maritime freight transport is heavily focused on the port of Rotterdam, which is one of the largest ports in the world, with freight traffic estimated at 480 million tonnes by the year 2020. The Netherlands has a river network of 5,046 km, and river transport is being promoted by the government. The road network is well developed and maintained but sometimes badly suited to traffic. Government measures have however been implemented to counter these defects.

Links:
Dutch customs
Dutch Supermarkets Association
Netherlands International Trade Agency
Chamber of Commerce

Employment legislation

The legal duration of the working week in the Netherlands is 37 hours, with a minimum monthly gross wage of 1,300 EUR and retirement at 67. Social contributions are paid at 15.9% for the employer and 6.45% for the employee.

28% of Dutch employees are union members, the main organizations being FNV, CNV and De Unie.

Intellectual property

 

Type of rights	Text of Act	Validity of protection	Agreements signed
Patents	1995 patent legislation	10 years, renewable	-Patent Cooperation Treaty - Strasbourg Agreement Concerning International Patent Classification
Brands	Office for Harmonisation in the Internal Market	10 years, renewable	- Trademark Law Treaty - Nice Agreement on the International Classification of Goods and Services - Madrid Agreement Concerning the International Registration of Marks
Design	Office for Harmonisation in the Internal Market	5 years, renewable for a maximum of 25 years
Reproduction rights	Copyright	70 years after the author’s death	- Berne Convention for the Protection of Literary and Artistic Works -Rome Convention for the Protection of Performers -WIPO Performances and Phonograms Treaty
Industrial designs	Industrial property	5 years, renewable for a maximum of 25 years

  Links:
Ministry of Social Affairs and Employment
Industrial Property and Copyright Office

Political data

The Netherlands is a constitutional monarchy where the Queen (Beatrix) fulfills a mainly ceremonial role. Executive power is mainly held by the Prime Minister (Mark Rutte), who holds the position for a term of four years. Legislative power is held by the First and Second Chambers, and both may be dissolved by the Government.

The main political parties are:

• the Christian Democratic Appeal
• The Christian Union
• the Democrats 66
• the Green Left
• the Labour Party
• the Party for Freedom
• the Socialist Party
• the People’s Party for Freedom and Democracy