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Dutch Legislation related to Foreign Investments

Updated on Wednesday 25th May 2016

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Dutch_legislation_related_to_foreign_investments.jpgForeign investments are welcomed in the Netherlands and the Dutch legislation is very permissive with foreign companies. Netherlands’ foreign direct investments policy and tax benefits attract foreign investors. Domestic and foreign companies are treated equally under Dutch law.
 
The Netherlands has an open investment policy and also one that encourages trade activities. The country’s Government observes the European foreign investment policies and also those set forth by the OECD. The country is an important recipient of foreign direct investments and these types of activities are not only encouraged by a favorable policy but also by a good geographical location in Europe.
 

Benefits for foreign investors

 
The laws for foreign direct investments are unbiased. Health, safety regulations and environmental rules apply to both local and foreign investors. Immigrants are allowed to live and work in the country.
The corporate income tax rate is 20% on the first 200,000 Euros and 15% on profits that exceed 200,000 Euros.

The Netherlands have signed treaties with over 90 countries in order to avoid double taxation on income and capital. Withholding taxes on dividends, interest and royalties are thus reduced. In some cases, taxes are reduced to 0% for interest and royalties. Moreover, there are no withholding taxes on interest and royalty payments.

The Dutch tax law stipulates that the following are exempt from Dutch corporate income tax:

- cash dividends;

- dividends-in-kind;

- bonus shares;

- capital gains.

Investors can also benefit from a 30% tax reduction for highly qualified foreign employees.
 
Some of the most attractive investment sectors for foreign investors in the Netherlands include trade, imports and/or exports, communications, transport and distribution, real estate, computer software and hardware services and others.
 
Entrepreneurs are allowed to purchase and/or rent office space, buildings, and homes just like any Dutch national. New businesses can benefit from investment aid in the form of investment incentives.
 
Find out details about the laws governing foreign investments in the Netherlands from this video: 
 

Sectors restricted for foreign investment 

 
Foreign investment is not allowed in publicly owned and controlled sectors. Public monopolies exist in the following sectors:

- national high-voltage electricity grid (but electricity production and distribution are open to foreign investments);

- water grids;

- railway passenger services;

- the national airport;

- the Netherlands Central Bank.

With some exceptions, postal services and public transportation can be open for foreign investments. Business sectors like defense and security, public media and broadcasting are subject to more limitations or conditions for foreign investments.
 
The Netherlands welcome and encourage foreign investments. The country’s political stability, rapidly growing economy and pro-business policies make it very attractive for foreign investors. Moreover, its geographical position and excellent infrastructure make Holland an attractive country for investors.
 
If you are looking to establish your business operations in Holland, our company formation agents can help you open a company in the Netherlands.
 

 

Comments

  • Sudeep Jain 2015-06-02

    I am interested in opening a Company in Amsterdam for Offshore trading for e.g. buying from Malaysia and selling to india. Is there any tax implication for the same in Netherlands. Only the banking transaction will be done in Netherlands and the Purchase and Sales Documents will be done through the Netherland Company.

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