HomeReportsBureau of Economic and Business Affairs2017 Investment Climate Statements...Netherlands

# 					2017 Investment Climate Statements: Netherlands			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

The Netherlands consistently ranks among the world’s most competitive industrialized economies. It offers an attractive business and investment climate and remains a welcoming location for business investment from the United States and elsewhere.

Distinguishing strengths of the Dutch economy include the Netherlands’ stable political and macroeconomic climate, a highly-developed financial sector, strategic location, well-educated and productive labor force, and high-quality physical and communications infrastructures. Investors in the Netherlands take advantage of its highly competitive logistics industry, anchored by the largest seaport and fourth-largest airport in Europe. In telecommunications, the Netherlands has among the highest internet coverage (96%) in the European Union (EU) and hosts the largest data transport hub in the world.

The Netherlands is among the largest recipients and sources of foreign direct investment (FDI) in the world and the largest historical recipient of FDI from the United States. This reflects the Netherlands’ competitive economy, tax climate, and a hub of investment treaties containing strong investor protections that many corporations looking to invest in third countries find favorable. The Dutch economy is characterized by a high degree of foreign investment, in a wide range of sectors including logistics, information technology, and manufacturing.

In the wake of the financial crisis, the Dutch government implemented significant reforms in key policy areas, including the labor market, the housing sector, the energy market, the pension system, and health care. Dutch reform policies were crafted following close consultations with key stakeholders, including business associations, labor unions, and civil society groups.

Following a protracted recession that ended in late 2013, following three years of uneven recovery, the macroeconomic outlook in the Netherlands is much improved. The Dutch economy is currently considered to be experiencing stable growth with government-projected economic growth of 2.1 percent of GDP in 2017 and 1.8 percent in 2018. Projected drivers of growth include increased exports and business investments, as well as invigorated domestic consumption.

The Netherlands is the top destination of U.S. foreign direct investment (FDI) abroad, just over $858 billion out of a total of $5 trillion U.S. FDI worldwide. This amounts to over 17% of U.S. FDI.

Dutch investors contribute $283 billion FDI to the United States. Nine percent of the $3.1 trillion of inward FDI to the United States originates from the Netherlands.

*Table 1*

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Towards Foreign Direct Investment**

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 one of the largest source and recipients 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, has established itself as a platform for third-country investment with some 145 investment agreements in force, and adheres to the Organization for Economic Cooperation and Development (OECD) Codes of Liberalization and OECD Declaration on International Investment, including a National Treatment commitment.

The Netherlands is the recipient of eight percent of all FDI inflow into the EU. Of all EU member states, it is the top recipient of U.S. FDI, at over 17 percent of all U.S. FDI abroad as of 2015. The Netherlands has become a key export platform and pan-regional distribution hub for U.S. firms. Roughly 60 percent of total U.S. foreign-affiliate sales in the Netherlands are exports, with the bulk of them to other EU members.

In 2014, foreign owned companies made inward direct investments worth $15.8 billion (€14.2 billion), just over 30% of the total corporate investment in durable goods in the Netherlands. Foreign investors provide 19% of Dutch employment in the private sector (860,200 jobs). U.S. firms contribute more than any other foreign firms to employment, responsible for 214,000 jobs. In its 2016 investment report, UNCTAD identified the Netherlands as the world’s fifth largest destination of global FDI inflows and the fourth largest source of FDI outflows.

Dutch tax authorities provide a high degree of customer service to foreign investors. Transparent, precise tax guidance lets investors know what to expect regarding long-term tax obligations. Advance Tax Rulings (ATR) and Advance Pricing Agreements (APA) are guarantees given by local tax inspectors regarding long-term tax commitments for a particular acquisition or greenfield investment. More detailed description of Dutch tax policy for foreign investors can be found at http://investinholland.com/incentives-and-taxes/  and http://investinholland.com/incentives-and-taxes/fiscal-climate/ .

Dutch corporations and branches of foreign corporations are subject to a corporate tax rate of 25 percent on taxable profits, which puts the Netherlands in the medium third of the corporate tax bracket in the EU. Profits up to $230,000 (approximately €200,000) are taxed at a rate of 20 percent. Dutch corporate taxation generally allows for exemption of dividends and capital gains derived from a foreign subsidiary. Surveys into the corporate tax structure of EU member states observe that both the corporate tax rate and the effective corporate tax rate in the Netherlands are average. Nevertheless, the Dutch corporate tax structure ranks among the most competitive in Europe given other beneficial tax measures. No local Dutch income taxes are levied on corporations. The Netherlands also has no branch profit tax and does not levy a withholding tax on interest and royalties.

Maintaining an investment-friendly reputation is a high priority for the Dutch government, which provides public information and institutional assistance to prospective investors through the Netherlands Foreign Investment Agency (NFIA) (http://investinholland.com/ ). Additionally, an EU format information gateway (http://www.answersforbusiness.nl ) provides information on regulations, taxes, and investment incentives that apply to foreign investors in the Netherlands.

The NFIA maintains six regional offices in the United States (Washington, DC; Atlanta; Boston; Chicago; New York City; and San Francisco). The American Chamber of Commerce in the Netherlands (http://www.amcham.nl ) also promotes U.S.-Dutch business interests.

**Industrial Promotion**

FDI tends to be concentrated in growth sectors including information and communication technology (ICT), biotechnology, medical technology, electronic components, and machinery and equipment. Investment projects are predominantly in value-added logistics, machinery and equipment, and food.

Since 2010, the government has shifted from traditional industrial support policies to a comprehensive approach to public/private financing agreements in areas where investment is deemed to be of strategic value. Government, academia, and industry work together to determine where co-financed investment in R&D will go. The “Top Sectors” policy identifies nine areas (creative industries, logistics, horticulture, agriculture and food, life sciences, energy, water, chemical industry, and high tech) for the focus of the government’s industrial policy. For more information, see paragraph 5 and https://www.government.nl/topics/enterprise-and-innovation/contents/encouraging-innovation .

**Limits on Foreign Control and Right to Private Ownership and Establishment**

The Netherlands has no formal foreign investment screening mechanisms and no foreign ownership quotas, with the exception of certain limitations in sectors that are deemed of vital national interest (transportation, energy, defense and security, finance, postal services, public broadcasting, and the media). There is no requirement for Dutch nationals to have an equity stake in a Dutch registered company.

With few exceptions, the Netherlands does not discriminate between national and foreign individuals in the establishment and operation of private companies. The government has divested its complete ownership of many public utilities, but in a number of strategic sectors, private investment, including foreign investment, may be subject to limitations or conditions. These include transportation, energy, defense and security, finance, postal services, public broadcasting, and the media.

Air transport is governed by EU regulation and subject to a bilateral agreement between the United States and the EU. U.S. nationals can invest in Dutch/European carriers as long as the airline remains majority-owned by EU governments or nationals from EU member states. Additionally, the EU and its member states reserve the right to limit U.S. investment in the voting equity of an EU airline on a reciprocal basis that is allowed by the United States for foreign nationals in U.S. carriers.

**Other Investment Policy Reviews**

The Netherlands has not recently undergone an investment policy review by the OECD, World Trade Organization (WTO), or United Nations Committee on Trade and Development (UNCTAD).

**Business Facilitation**

The Netherlands ranks 28th out of 190 on the World Bank’s “Doing Business Index”. All companies must register with the Chamber of Commerce business registry (http://www.kvk.nl/english/business-register/ ) and register for a fiscal number with the tax administration, which allows expedited registration for SMEs with fewer than 50 employees. The EU format website www.answersforbusiness.nl  – maintained by the Dutch government –provides clear-cut guidance on establishing a business in the Netherlands: http://www.answersforbusiness.nl/guide/starting-business .

The Dutch American Friendship Treaty (DAFT, 1956) gives U.S. citizens preferential treatment to operate a business in the Netherlands, providing ease of establishment that most other non-EU nationals do not enjoy. U.S. entrepreneurs applying under the DAFT do not need to satisfy a strict, points-based test and do not have to demonstrate innovative and distinguishing entrepreneurial pre-conditions. Instead, U.S. entrepreneurs setting up a sole proprietorship need only register with the Chamber of Commerce and demonstrate a minimum investment of €4,500. A two-year residence permit can then be issued, with the possibility of renewal for five subsequent years.

**Outward Investment**

The Netherlands is responsible for a total of $4.8 billion outbound FDI, with the top five destinations being the United States, the UK, Switzerland, and Germany.

							2. Bilateral Investment Agreements and Taxation Treaties					

The Netherlands has bilateral investment treaties (BITs) or treaties with investment chapters, containing strong investor protections, with more than 145 countries or regions including: Albania, Algeria, Argentina, Armenia, Bahrain, Bangladesh, Belarus, Belize, Benin, Bolivia, Bosnia-Herzegovina, Brazil, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Chile, China, Costa Rica, Croatia, Cuba, Czech Republic, Dominican Republic, Ecuador, Egypt, El Salvador, Eritrea, Estonia, Ethiopia, Gambia, Georgia, Ghana, Guatemala, Honduras, Hong Kong, Hungary, India, Indonesia, Ivory Coast, Jamaica, Jordan, Kazakhstan, Kenya, Kuwait, Laos, Latvia, Lebanon, Lithuania, Macau, Macedonia (FYROM), Malawi, Malaysia, Mali, Malta, Mexico, Moldova, Mongolia, Montenegro, Morocco, Mozambique, Namibia, Nicaragua, Nigeria, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Romania, Russia, Senegal, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, South Korea, Sri Lanka, Sudan, Surinam, Tajikistan, Tanzania, Thailand, Tunisia, Turkey, Uganda, Ukraine, Uruguay, Uzbekistan, Venezuela, Vietnam, Yemen, Zambia, and Zimbabwe.

For an updated list and the legal status of these agreements, please see https://www.rijksoverheid.nl/binaries/rijksoverheid/documenten/rapporten/2010/02/22/ibo-landenlijst/IBO+overzicht+Nederland+update+jan+2016.pdf .

and http://investmentpolicyhub.unctad.org/IIA/CountryBits/148#iiaInnerMenu 

The Netherlands has a bilateral taxation treaty with the United States; see https://www.irs.gov/businesses/international-businesses/netherlands-tax-treaty-documents 

							3. Legal Regime					

**Transparency of the Regulatory System**

As an EU member and as a Eurozone country, the Netherlands is firmly integrated in the European regulatory system, with national and European institutions exercising authority over specific markets, industries, consumer rights, and competition behavior of individual firms.

Financial markets are regulated in an interconnected EU and national system of prudential and behavioral oversight. The domestic regulators are the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Market (AFM). Their EU counterparts are the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA).

Traditionally, public consultation in the drafting of new laws is achieved by invitation of various civil society bodies, trade associations, and organizations of stakeholders. Also, the SER (which includes representatives from employers’ organizations, employees’ organizations, and academic experts) has a mandate to provide the government with advice. New laws and regulations must be approved by the Second and First Chambers of Parliament.

**International Regulatory Considerations**

As a member of the EU, Dutch regulations are derived from EU directives.

**Legal System and Judicial Independence**

Dutch contract law is based on the principle of party autonomy and full freedom of contract. Signing parties are free to draft an agreement in any form and any language, based on the legal system of their choice.

Dutch corporate law provides for a legal and fiscal framework that is designed to be flexible. This element of the investment climate makes the Netherlands especially attractive to foreign investors.

**Laws and Regulations on Foreign Direct Investment**

Commercial laws and regulations accord with international legal practices and standards, and apply equally to foreign and Dutch companies. The rules on acquisition, mergers, takeovers, and reinvestment are nondiscriminatory. The Social Economic Council (SER), an official advisory body consisting of employers’ representatives, labor representatives, and government appointed independent experts, administers Dutch mergers and acquisitions rules. The SER’s rules are intended to protect the interests of stakeholders and employees. They include requirements for the timely announcement of mergers and acquisitions (M&A) and for discussions with trade unions.

**Competition and Anti-Trust Laws**

Structural and regulatory reforms are an integral part of Dutch economic policy. Market competition is being strengthened through laws aimed at stimulating market forces, liberalization, deregulation, and legislative quality, along with a tightening of competition policy.

As an EU and Eurozone member, the Netherlands is firmly integrated in the European regulatory system with national and European institutions exercising authority over specific markets, industries, consumer rights, and competition behavior of individual firms.

The Authority for Consumers and Markets (ACM) provides regulatory oversight in three key areas: consumer protection, post and telecommunications, and market competition.

**Expropriation and Compensation**

The Netherlands maintains strong protection on all types of property, including private and intellectual property, and the right of citizens to own and use property. Expropriation of corporate assets or the nationalization of industry requires a special act of parliament, as demonstrated in the nationalization of ABN AMRO during the 2008 financial crisis. In the event of expropriation, the Dutch government follows customary international law, providing prompt, adequate, and effective compensation and ample process for legal recourse. The U.S. Mission to the Netherlands is unaware of any recent expropriation claims involving the Dutch government and U.S. or other foreign-owned property.

**Dispute Settlement**

The Netherlands has maintained a Treaty of Friendship, Commerce, and Navigation with the United States since 1957 that provides for national treatment and free entry for foreign investors, with certain exceptions. The Embassy is not aware of any American company raising an investment dispute with the Netherlands over the last 10 years.

*ICSID Convention and New York Convention*

As a member of the International Center for the Settlement of Investment Disputes (ICSID), the Netherlands accepts binding arbitration between foreign investors and the state. The Netherlands is one of the initial signatories of the New York Convention (UNCITRAL) and permits local enforcement of arbitration judgments decided in other signatory countries.

*Investor-State Dispute Settlement*

The Dutch civil court system has a chamber dedicated to business disputes called the Enterprise Chamber. This facility is unique among EU member states and has received positive reviews from institutional and private investors. The Enterprise Chamber includes judges who are experts in various commercial fields as well as the legal profession. They resolve a wide range of corporate disputes, including conflicts regarding corporate control.

The Enterprise Chambers’ stated aim is to be able to provide a judgment within six to eight weeks after legal arguments have concluded. In its 2015 annual report, the Enterprise Chamber reported that an entire case from submission to final verdict takes an average of three to 12 months, depending on the type of dispute being handled by the court.

*International Commercial Arbitration and Foreign Courts*

The Hague is the seat of the Permanent Court of Arbitration (PCA), an intergovernmental organization that is not a court, but like ICSID is a facilitator of independent arbitral tribunals to resolve conflicts between PCA member states, including the United States.

Bankruptcy Regulations

Dutch bankruptcy law is governed by the Dutch Bankruptcy Code, which applies both to individuals and companies. The code covers three separate legal proceedings: bankruptcy, which has a goal of liquidating the company’s assets; receivership, aimed at reaching an agreement between the creditors and the company; and debt restructuring, which is only available to individuals.

The World Bank’s Doing Business Index ranks the Netherlands 11th in resolving insolvency. The Netherlands ranks better than the OECD average on time, cost, and recovery rate on bankruptcies.

							4. Industrial Policies					

**Investment Incentives**

General requirements to qualify for investment subsidy schemes apply equally to domestic and foreign investors. Industry-specific, targeted investment incentives have long been a tool of Dutch economic policy to facilitate economic restructuring and to promote economic priorities. Such subsidies and incentives are spelled out in detailed regulations. Subsidies are in the form of tax credits that are disbursed through corporate tax rebates or direct cash payments if there is no tax liability. For an overview of government subsidies and investment programs, see: http://english.rvo.nl/subsidies-programmes .

*Research and Development*

The Dutch government pursues a program designed to stimulate research and development investment in nine targeted sectors. The program’s goals are to improve the Dutch knowledge-intensive industries, to reach a top-five ranking among global knowledge-based economies by 2020, to increase the percentage of R&D efforts to 2.5 percent of GDP by 2020, and to establish sector-specific innovation consortia in which both public and private sectors participate. In a joint effort with academia and the private sector, the government has instituted a preferential policy that releases over $1 billion of additional funding for R&D and product innovation in the top sectors.

Nearly a quarter of all firms in the Netherlands are active in one of the top sectors, which generate 21 percent of overall employment and account for 27 percent of value added. These sectors account for 40 percent of Dutch export of goods and over 95 percent of R&D expenditures on proprietary research within the Netherlands. In 2016, the Dutch government provided $7.4 billion (€6.7 billion) for R&D activities, often in cooperation with academia and public research institutions.

Although much coordination of investment support is executed at the Ministry and NFIA level, several regional development agencies also advise both business and local authorities on the best use of regional development funds.

**Foreign Trade Zones/Free Ports/Trade Facilitation**

The Netherlands has no free trade zones (FTZs) or free ports where commodities can be processed or reprocessed tax-free. However, FTZs exist for bonded storage, cargo consolidation, and reconfiguration of non-EU goods. This reflects the key role that transport, transit, logistics, and distribution play in the Dutch economy. Dutch customs authorities oversee a large number of customs warehouses, free warehouses, and free zones along many of the Netherlands trade routes and entry points.

Schiphol Airport handles over 1.7 million tons of goods for distribution. Specific premises in the Schiphol area are designated customs-free zones. The Port of Rotterdam is Europe’s largest seaport by volume, handling over 37 percent of all cargo shipping on Europe’s Le Havre – Hamburg coastline and processing nearly 461 million tons of goods in 2016. Many agents operate customs warehouses under varying customs regimes on the premises of the Port of Rotterdam.

**Performance and Data Localization Requirements**

*Performance Requirements*

The Netherlands is a member of the WTO and does not maintain any performance requirements or other measures that are inconsistent with obligations under Trade Related Investment Measures (TRIMs). In addition, general requirements to qualify for investment subsidy schemes apply equally to domestic and foreign investors. There are no requirements for employment of local capital or managerial personnel.

*Data Storage*

The Dutch government does not follow a “forced localization” policy, and does not require foreign IT providers to turn over source code or to provide access to surveillance. The Dutch Data Protection Authority (DPA) monitors and enforces Dutch legislation on the protection of personal data (https://autoriteitpersoonsgegevens.nl/en ). The Dutch DPA is active in the EU’s Article 29 Working Party, the collective of EU national DPAs. The primary law on protection of personal data in the Netherlands is the Dutch law implementing EU directive 95/46/EC. The new European General Data Protection Regulation, which is directly applicable in member states, will enter into force May 25, 2018, as part of the EU’s comprehensive reform on data protection.

The Dutch DPA recognized U.S. firms that registered and self-certified with the U.S.-EU Safe Harbor program for transfer of personal data between the European Union and the United States (https://privacyshield.gov/welcome ). The Dutch government strongly supports the EU-U.S. Privacy Shield, the successor agreement to the Safe Harbor program (https://www.commerce.gov/privacyshield ), although the DPA joined other EU data protection bodies in requesting resolution of concerns and further clarifications before implementation.

							5. Protection of Property Rights					

**Real Property**

The Netherlands fully complies with international standards on protection of real property. The World Bank’s 2016 Doing Business Report ranked the Netherlands 29th in “registering property.” The number of procedures is at the OECD average, while the processing time of 2.5 days is nearly ten times faster than the OECD average.

The Netherlands’ Cadaster, Land Registry, and Mapping Agency (Cadaster) was established in 1832 and collects and registers administrative and spatial data on real property. The Cadaster is publicly available and can be accessed online (https://www.kadaster.nl/ ).

**Intellectual Property Rights**

IPR: With the implementation of EU Directive 2004/48 on the enforcement of intellectual property rights, IPR holders have several instruments at their disposal to enforce their rights in civil court.

The Netherlands is a member of the World Intellectual Property Organization (WIPO), a signatory to the Paris Convention for the Protection of Industrial Property, and generally conforms to accepted international practice for the protection of technology and trademarks.

Despite its participation in the negotiations on the Anti-Counterfeiting Trade Agreement (ACTA) treaty, the Netherlands, like other EU member states, has stated it will not sign the treaty in its current form. The EU has requested the European Court of Justice to advise on the compatibility of ACTA with existing European treaties, in particular with the EU Charter of Fundamental Rights.

The Netherlands is not listed in United States Trade Representative’s (USTR’s) Special 301 Report, but it is listed as hosting infringing websites in USTR’s Notorious Markets list: http://eb.e.state.sbu/sites/tpp/IPE/Pages/Special301NotoriousMarkets.aspx .

Copyright: The Netherlands has implemented the European directive 98/44/EC in 2006, bringing domestic legislation in line with the WIPO 1996 Copyright Treaty (WCT) and the WIPO Performance and Phonogram Treaty (WPPT). Policy makers agree on the need to raise public awareness of IPR rules and regulations and to strengthen enforcement.

Patents: The Netherlands is a signatory to the European Patent Convention, which provides for a centralized Europe-wide patent protection system. The Netherlands has been a staunch supporter of the forthcoming single, harmonized European patent procedure that will allow for easier application in just three languages.

Patents for foreign investors are granted retroactively to the date of the original filing in the home country, provided the application is made through a Dutch patent lawyer within one year of the original filing date. Dutch patents are valid for 20 years. Legal procedures exist for compulsory licensing if the patent is inadequately used after a period of three years, but these procedures have rarely been invoked.

Because the Netherlands and the United States are both parties to the Patent Cooperation Treaty (PCT) of 1970, patent rights in the Netherlands may be obtained if a PCT application is used. In addition to possible civil remedies, all IPR laws contain penal bylaws and reference to the Criminal Code. In 2012, parliament passed legislation that strengthened the oversight and coordination of seven different collective institutions that concern themselves with the control, administration, and remuneration of commercial use of works under IPR holdership.

The Dutch government has recognized the need to protect IPR, and law enforcement personnel have worked with industry associations to find and seize pirated software. Dutch IPR legislation currently in place explicitly includes computer software as intellectual property under copyright statutes.

The Netherlands has resisted criminalizing online copyright infringement for personal use, instead placing a surcharge on the sales of blank media such as CDs, DVDs, and USB storage devices to remunerate rights holders. However, a ruling by the Court of Justice of the European Union in April 2014 requires the government to change this policy and ban online infringement. The Dutch government has affirmed it will comply with the ruling, but has yet to provide details on how it will proceed to do so.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

*Resources for Rights Holders*

Contact at American Embassy the Hague:Keith KrauseEconomic OfficerTelephone: +31 (0)70 310 2274E-mail: KrauseKR@state.gov

Country-Specific Resource:BREIN Foundationhttp://www.anti-piracy.nl/english.php P.O. Box 1332130 AC HoofddorpThe NetherlandsTelephone: +31 (0)23 799 7870

American Chamber of Commerce in the Netherlands:P.O. Box 157831001 NG AmsterdamTel: +31 (0)20 7951840Email: office@amcham.nl

Local lawyers list: https://nl.usembassy.gov/u-s-citizen-services/attorneys/

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

The Netherlands is home to the world’s oldest stock exchange – established four centuries ago – and to Europe’s first options exchange, both located in Amsterdam. The Amsterdam financial exchanges are part of the Euronext group that operates stock exchanges and derivatives markets in Amsterdam, Brussels, Lisbon, and Paris.

Dutch financial markets are fully developed and operate at market rates, facilitating the free flow of financial resources. The Netherlands is an international financial center for the foreign exchange market and for Eurobonds and bullion trade.

The flexibility that foreign companies enjoy in conducting business in the Netherlands extends into the area of currency and foreign exchange. There are no restrictions on foreign investors’ access to sources of local finance.

**Money and Banking System**

The Dutch banking sector is firmly embedded in the European System of Central Banks, of which the DNB is the national prudential banking supervisor. AFM, the Dutch securities and exchange supervisor, supervises financial institutions and the proper functioning of financial markets and falls under the EU-wide European Securities and Markets Authority (ESMA).

With the onset of the European Single Supervisory Mechanism, the seven “systemically important” banks in the Netherlands were submitted to the European Banking Authority’s Comprehensive Assessment. The seven Dutch banks that were examined – ING Bank, Rabobank, ABN Amro, SNS Bank (now “Volksbank”), BNG Bank, NWB Bank, and RBS N.V. – passed the stringent Asset Quality Reviews and the stress tests and were deemed to be well-capitalized.

The Dutch banking sector is approximately four times as large as the rest of the Dutch economy, making it one of Europe’s largest. The Dutch sector has a high degree of concentration in the four main banks (ING, ABN AMRO, Rabobank, and Volksbank) which hold over 80% of total assets. The largest bank, ING, has a balance of $938 billion (€845 billion).

Publicly-traded corporations can protect themselves from hostile takeovers by establishing a separate foundation for the preservation of the business. Such a foundation has the possibility to activate a ‘golden share’ that allows the foundation a majority vote in shareholders’ meetings.

**Foreign Exchange and Remittances**

*Foreign Exchange*

The Netherlands is a founding member of the EU and one of the initial participants in the Eurozone. Monetary policy is under the supervision of the European Central Bank, and the president of the Dutch Central Bank (DNB) sits on the European Central Bank’s Governing Council.

There are no restrictions on the conversion or repatriation of capital and earnings (including branch profits, dividends, interest, royalties), or management and technical service fees, with the exception of the nominal exchange-license requirement for nonresident firms.

*Remittance Policies*

The Netherlands does not limit foreign exchange for remittances with waiting periods or other measures. Similarly, there are no limitations on the inflow or outflow of funds for remittances of profits or revenue. The Netherlands, as a Eurozone member, does not engage in currency manipulation tactics.

The Netherlands has been a member of the FATF since 1990 and – because of the membership of its Caribbean territories with the Caribbean FATF (C-FATF) – is also one of the cooperating and supporting nations of the C-FATF.

With the promulgation of additional, preventative anti-money laundering and counterfeiting legislation, the Netherlands has remedied many deficiencies that were revealed in a 2011 Mutual Evaluation Report. As a result, FATF removed the Netherlands from its “regular follow-up process” in February 2014. The Bureau of International Narcotics and Law Enforcement’s 2016 International Narcotics Control Strategy Report (INCSR) lists the Netherlands as a “country of primary concern,” largely because the country is a major global financial center and consequently an attractive venue for laundering funds generated by illicit activities. More information can be found at https://www.state.gov/j/inl/rls/nrcrpt/2016/vol2/253421.htm.

**Sovereign Wealth Funds**

The Netherlands has no sovereign wealth funds.

							7. State-Owned Enterprises					

The Dutch government maintains an equity stake in a small number of enterprises and some ownership in companies that play an important role in strategic sectors. In particular, government-controlled entities retain dominant positions in gas and electricity distribution, rail transport, and the water sector. The Netherlands has an extensive public broadcasting network, which generates its own income through advertising revenues but also receives government subsidies. For a complete list of all 34 government owned entities, please see https://www.rijksoverheid.nl/onderwerpen/staatsdeelnemingen/vraag-en-antwoord/in-welke-ondernemingen-heeft-de-overheid-aandelen .

Private enterprises are allowed to compete with public enterprises with respect to market access, credits, and other business operations such as licenses and supplies. Government-appointed supervisory boards oversee state-owned enterprises (SOEs). In some instances, SOEs must consult with the cabinet ministry that oversees them on large investment decisions. As with any other firm in the Netherlands, SOEs must publish annual reports, and their financial accounts must be audited.

**Privatization Program**

There are no ongoing privatization programs in the Netherlands. Government-controlled entities maintain dominant positions in gas and electricity distribution, rail transport, and the water sector. The government nationalized ABN AMRO Bank and ASR insurance company in 2008 due to the global financial crisis. In February 2013, it nationalized the bank and insurance company SNS Reaal (since re-named Volksbank) due to the bank’s steep losses in its real estate portfolio. In November 2015, ABN AMRO regained its status as a publicly-traded company.

							8. Responsible Business Conduct					

The Netherlands is a global leader on corporate social responsibility (CSR). Principles of CSR are promoted and prescribed through a range of corporate, governmental, and international guidelines. In general, companies carefully guard their CSR reputation and consumers are increasingly opting for products and services that are produced in an ethical and sustainable manner.

As the Netherlands adheres to the OECD Guidelines for Multinational Enterprises, the Dutch Ministry of Economic Affairs houses the National Contact Point (NCP) that promotes the Guidelines and helps mediate any concerns that persons, non-governmental organizations (NGOs), and enterprises may have regarding implementation by a specific company. For more information, visit http://www.oecdguidelines.nl .

The Dutch government strongly encourages foreign and local enterprises to follow the UN Guiding Principles on Business and Human Rights, which states that businesses have a social responsibility to respect the same human rights norms in other countries as they do in the Netherlands. For more information, please see http://www.businesshumanrights.org/Links/Repository/1024964 .

The Netherlands has strong standards for corporate governance. Publicly-listed companies are required to publish audited financial reports. As of 2017, the EU requires these companies to include a chapter on Responsible Business Conduct.

The Ministry of Economic Affairs established in 2004 an independent networking organization on Corporate Social Responsibility, MVONederland. MVONederland currently has over 2050 members, including SMEs, multinational corporations, NGOs, and local and national administrative bodies. See also: http://www.csreurope.org/mvo-nederland .

The government also encourages companies to engage in CSR through incentive programs and by setting high standards. Examples include:

- The government reviews the CSR activities of more than 500 corporations annually, and presents an award to the company with the highest score on the transparency benchmark.
- The government boosts the development of sustainable products through its own sustainable procurement policy.
- Dutch companies can only join government trade missions if they have endorsed the OECD Guidelines for Multinational Enterprises.
- Companies that observe the OECD Guidelines are eligible for financial support for their international trade and investment activities.
- The government supports the Sustainable Trade Initiative (IDH), which helps companies make their international production chains more sustainable.
- The government conducts sector-risk analyses to identify where problems are most likely to occur and target improvements.

The government has completed four of 13 sector-wide agreements it intends to make with the private sector in the area of International Corporate Social Responsibility. The four agreements cover textiles, banking and insurance, promotion of vegetable proteins, and sustainable forestry.

							9. Corruption					

The Netherlands fully complies with international standards on combating corruption. Transparency International ranked the Netherlands eighth on its 2016 Corruption Perception Index.

Anti-bribery legislation to implement the 1997 OECD Anti-Bribery Convention (ABC) entered into effect in 2001. The anti-bribery law reconciles the language of the ABC with the EU Fraud Directive and the Council of Europe Convention on Fraud. It makes corruption by Dutch businessmen in landing foreign contracts a criminal offense.

At a national level, the Ministry of the Interior and Kingdom Relations, and the Ministry of Security and Justice have taken steps to enhance regulations to combat bribery in public procurement and in the issuance of permits and subsidies. Most companies have internal controls and/or codes of conduct that prohibit bribery.

Several agencies combat corruption. The National Integrity Office serves as a knowledge center, develops new instruments for tracking problems, and identifies trends on matters of integrity.

The Independent Commission for Integrity in Government is an appeals board for whistleblowers in government and law enforcement agencies.

The Netherlands signed and ratified the UN Anticorruption Convention and is a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

*Resources to Report Corruption*

Government Agency responsible for combating corruption:

National Integrity OfficeLange Voorhout 132514 EA The HagueThe NetherlandsTelephone: +31-(0)70-376-5937E-mail address: info@integriteitoverheid.nl

Watchdog organization:

Transparency International NederlandBenoordenhoutseweg 232596 BA The HagueThe NetherlandsE-mail address: communicatie@transparency.nl

							10. Political and Security Environment					

Although political violence rarely occurs in the highly stable and consensus-oriented Dutch society, public debate on issues such as immigration and integration policy has been contentious. While rare, there have been politically- and religiously-inspired acts of violence, including the 2004 killing of controversial filmmaker Theo van Gogh and the 2002 assassination of the populist politician Pim Fortuyn.

The Dutch economy derives much of its strength from a stable business climate fostered by partnerships among unions, business organizations, and the government. Industrial action is rarely regarded as the primary means to settle labor disputes. Strikes are unusual.

							11. Labor Policies and Practices					

The Netherlands has a strongly-regulated labor market (nearly 85 percent of labor contracts fall under some form of collective labor agreement), comprised of a well-educated and multilingual workforce. Labor/management relations in both the public and private sectors are generally good in a system that emphasizes the concept of social partnership between industry and labor. Although wage bargaining in the Netherlands is increasingly decentralized, there still exists a central bargaining apparatus where labor contract guidelines are established.

The terms of collective labor agreements apply to all employees in a sector, not only union members. To avoid surprises, potential investors are advised prior to making an investment decision to consult with local trade unions to determine which, if any, labor contracts apply to workers in their business sector. Collective bargaining agreements negotiated in the past few years have, by and large, been accepted without much protest.

Each company in the Netherlands with at least 50 workers is required by law to institute a Works Council (“ondernemingsraad”), with which management must consult on a range of issues including investment decisions. The Dutch government has introduced legislation governing employee participation in European companies (companies operating in at least two EU member states). Under this legislation, company management and workers must conclude an agreement on employee participation. Trade unions and management are generally receptive to foreign investment, especially where this leads to improved employment possibilities and related benefits.

The annual unemployment rate is forecast to be 4.9% in 2017, well below the EU average. The working population consists of 8.9 million persons. Workers may be found through government-operated labor exchanges, private employment firms, or through direct hiring. Since 2002, the Netherlands has had the highest part-time work rate in the OECD. An increase in the participation of women in the workforce led to a 37% increase in the share of part-time workers in the total working population. Two-thirds of women and one quarter of men work less than a 36-hour week. Labor market participation, especially by older workers, is gradually growing. The number of independent contractors is rapidly increasing, creating a more flexible workforce.

Increased labor market participation is regarded as critical to ensuring continued economic growth and addressing the impact of an aging population. The age to qualify for a state pension (AOW) is scheduled to gradually increase from 65 to 67 years by 2023. Government labor market policies are targeted at increasing the productivity of the labor force, including by expanding working hours.

Effective January 1, 2017, the minimum wage for employees older than 23 years is €1,552 ($1,668) per month.

							12. OPIC and Other Investment Insurance Programs					

The Overseas Private Insurance Corporation (OPIC) does not operate in the Netherlands. However, OPIC insurance and funding is available for U.S. companies partnering with Dutch companies in third markets where OPIC operates. The Netherlands is a member of the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA).

Dutch-registered companies investing abroad can insure their investments against noncommercial risks through the privately-owned Atradius Dutch State Business, N.V., which issues export credit insurance policies and guarantees to businesses on behalf of the Dutch government. The legal basis for investment insurance is contained in the Framework Act for Financial Provisions. Insurance covers assets and cash, as well as loans related to an investment. Both new and (under certain circumstances) existing investments are eligible.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

*Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy*

*Table 3: Sources and Destination of FDI*

IMF data on inward and outward direct investment for the Netherlands is consistent with DNB reporting on FDI.

*Table 4: Sources of Portfolio Investment*

IMF data on portfolio investments for the Netherlands is consistent with DNB reporting on FDI.

							14. Contact for More Information					

Gilles EvertsEconomic SpecialistU.S. Embassy The HagueLange Voorhout 1022614 EJ The Hague+31-(0)70-310-2276EvertsGE@state.gov

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### On This Page

                    -  Executive Summary 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment   
                    -  2. Bilateral Investment Agreements and Taxation Treaties   
                    -  3. Legal Regime   
                    -  4. Industrial Policies   
                    -  5. Protection of Property Rights   
                    -  6. Financial Sector   
                    -  7. State-Owned Enterprises   
                    -  8. Responsible Business Conduct   
                    -  9. Corruption   
                    -  10. Political and Security Environment   
                    -  11. Labor Policies and Practices   
                    -  12. OPIC and Other Investment Insurance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

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