Get The Visibility Your Company Needs
Reduce compliance risks and mobility costs while managing individual and project-related travel with ImmiSMART: the solution that unifies your travel and mobility programs.
Going Global: Expand Your Business to The Netherlands
May 17, 2018
There are currently 195 countries in the world in which companies may choose to do business. Successful companies looking to “go global” proactively seek out the most attractive opportunities. In making the decision of where to expand internationally, companies must consider business objectives as well as the business and legal environment of potential locations.
Follow Newland Chase’s continuing Going Global series where we take a look at a different country each month – ranking countries in tiers from 1 to 5 (with 1 being most attractive for international expansion) based on its current business climate and corporate immigration system. In this edition, we take a look at the country of The Netherlands.
Business Climate
Despite its small geographical size – at just one-sixth the area of the United Kingdom or twice the size of the U.S.’s state of New Jersey – The Netherlands has always played a role in the economics of Europe and the world which belies its size. As far back as the 1500s, technological advancements and its seaports positioned the country as a major player in global trade. The port of Rotterdam remains the third busiest port to this day.
Today, The Netherlands has the world’s 18st largest economy and the sixth largest among European Union member states, with a persistently high trade surplus. Its industry focuses on food processing, chemicals, petroleum refining, and electrical machinery. It’s highly efficient agricultural sector makes it the world’s second largest agricultural exporter. Highly involved in international finance, the large and concentrated Dutch banking sector controls funds more than four times the Dutch GDP.
Looking at economic indices, since 2014, The Netherlands' GDP has maintained positive growth with economists’ projections for annual growth of 2+ percent for at least the next two years. Unemployment over that same period fell from a high of almost 8 percent to below 4 percent in the first quarter of 2018, with inflation hovering just over 1 percent. The Netherlands' GDP per capita (roughly USD $48,860) makes it one of the wealthiest countries in the world. The corporate income tax rate is slightly higher than some of its European neighbours at a standard rate of 25 percent. However, there are currently serious proposals and support in government to gradually bring that rate down to 21 percent by 2021.
The World Economic Forum’s 2018 Global Competiveness Report lauds the Netherlands as being “in an excellent position to shape the unfolding Fourth Industrial Revolution”, ranking it #4 of 137 nations measured and ranked for attractiveness to business. The WEF gives The Netherlands high marks in most metrics, particularly in its technological readiness, innovation, and business sophistication.
Looking specifically at the labour market, The Netherlands ranks 13th overall in the WEF’s report for labour market efficiency. Due to its excellent education system, the local labour force is highly educated and well trained. The country is ranked in the top 10 by the WEF in both its capacity to attract and retain talent. The primary drawback in labour efficiency is the somewhat restrictive local labour regulations, a common aspect of the labour law environment in many European countries. Foreign nationals living and working in The Netherlands place it in the top 5 for overall career and life satisfaction in numerous polls of expats.
Corporate Immigration
The corporate immigration system in The Netherlands is robust and well-administered. The most-often used skilled employment-based immigration option is the Knowledge Migrant stream. It presents one of the most attractive employment-based immigration options in Europe, with processing times of just one to three months and no labour market testing requirements. A combined work and residence authorization, permits issued under the Knowledge Migrant program carries an initial five-year validity with an option to renew for up to a total of ten years. There is, however, a minimum salary requirement to qualify for Knowledge Migration permits: currently EUR €4,324 per month (approximately USD $5,345), with a slightly lesser amount for applicants under age 30.
In a recent trend, the Dutch Immigration and Naturalisation Service (IN) has indicated that it will be stepping-up enforcement of sponsoring employer obligations under the Knowledge Migrant program in 2018 with increased frequency of random worksite audits. While companies should be prepared for the increased potential for audits, this activity presents no additional issues for those already compliant with document and workplace requirements.
The Netherlands has adopted the EU Intra-Corporate Transfer (ICT) Permit. While The Netherlands already had in place a scheme for ICT permits, the EU-form ICT permit includes intra-EU mobility in the benefits of Dutch ICT permits – allowing companies to transfer employees more easily for short-term assignments among other EU company sites without additional formal work authorization. Unlike most EU member states adopting the EU ICT permit, the Netherlands is also currently working to establish a process by which employees initially entering the country on a Dutch ICT permit may also apply for and obtain a Knowledge Migrant permit without needing to exit the country. For more on information on the process and requirements for transferring employees among EU locations, join us for our live webinar Uncover the Hidden Risks of Intra-EU Employee Mobility on June 5. Register here.
The Netherlands also introduced two innovative changes to its employment-based immigration schemes in 2017. The Dutch Ministry of Social Affairs and Employment (MSAE) implemented the International Commercial Trade Regulations (ICTR) program, allowing eligible companies to bring non-EU foreign workers in to work on approved large-scale construction projects without needing to first obtain work permits. Also, the IN adopted a new policy that allows highly-skilled foreign nationals already in-country on work permits to engage in self-employment and start their own businesses in their free time alongside their primary work.
Summary and “Going Global” Tier Ranking
The Netherlands presents one of the top choices for “going global” in the European region. The economy is solid on all indices, and the infrastructure and work force present attractive opportunities for business, particularly in sophisticated and technology-enabled sectors. While the corporate tax rate is slightly higher than that of some other potential destinations in Europe, there is a significant possibility of that rate gradually coming down in line with neighbouring countries over the next several years.
The Knowledge Migrant program offers one of the most attractive corporate immigration options in Europe, with comparatively fast processing times and longer permit validity terms. Any recent and ongoing changes in the immigration system present no significant issues for companies utilizing foreign talent. Companies will find it relatively easy to attract and retain foreign talent in the Dutch market.
Newland Chase places The Netherlands solidly in Tier 1 on our Going Global Ranking. Companies looking for continental Europe locations are wise to give significant consideration to The Netherlands, particularly those considering alternative locations post-Brexit.
For more information on corporate immigration in the Netherlands, readers are invited to contact one of the eight fulltime Netherlands immigration specialists in Newland Chase’s Amsterdam office who have collectively processed more than 2500 corporate immigration cases since opening in 2016. Located in the same building as the Dutch Immigration and Naturalisation Service, our professionals work closely with immigration authorities on a daily basis to provide multinational corporations with fast, best-in-class immigration support. They can be reached at:
Newland Chase
World Trade Center
Zuidplein 36, 4th Floor
1077 XV Amsterdam, The Netherlands
+31 (0)20-799 7656
This blog post was prepared by Newland Chase. It is informational only and is not intended as a substitute for legal advice based on the specific circumstances of a matter. Readers are reminded that immigration laws are fluid and can change at a moment’s notice without warning or notice. Please reach out to your Newland Chase contact should you require any additional clarification or guidance. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content published or provided by Newland Chase that extend beyond fair use or other statutory exemptions. Responsibility for the determination of the copyright status and securing any permissions rests with those persons wishing to reuse this blog post or any of its content.
