The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
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.
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 infrastructure. Investors in the Netherlands take advantage of its highly competitive logistics, anchored by the largest seaport and fourth-largest airport in Europe. In telecommunications, the Netherlands has one of the highest levels of internet penetration in the European Union (EU) at 96 percent and hosts one of the largest data transport hubs in the world, the Amsterdam Internet Exchange.
The Netherlands is among the largest recipients and sources of foreign direct investment (FDI) in the world and one of the largest historical recipients of direct investment from the United States. This can be attributed to the Netherlands’ competitive economy, historically business-friendly tax climate, and many investment treaties containing investor protections. The Dutch economy has significant foreign direct investment in a wide range of sectors including logistics, information technology, and manufacturing. Dutch tax policy continues to evolve in response to EU attempts to harmonize tax policy across member states.
Until the COVID-19 crisis, economic growth had placed the Dutch economy in a very healthy position, with successive years of a budget surplus, public debt that was well under 50 percent of GDP, and record-low unemployment of 3.5 percent. This allowed the Dutch government significant fiscal space to implement coronavirus relief measures. In response to COVID, the Dutch government implemented wide-ranging support for businesses affected by the COVID crisis, including support to cover employee wages, benefits to self-employed professions to bridge a loss of income, and compensation for fixed costs other than wages. The financial support measures added up to about $70.5 billion (€60 billion) in the first year of the crisis. These programs prevented a wave of bankruptcies – bankruptcy filings in 2020 and 2021 were the lowest in two decades.
The new coalition government announced in early 2022 plans to be climate neutral by 2050. The government said it would adjust domestic climate goals to at least 55 percent CO2 reduction by 2030 compared to 1990, with ambitions to aim higher for a 60 percent reduction. The government has named a Minister for Climate and Energy Policy to work on domestic issues in addition to a Climate Envoy focused on international efforts. The Netherlands joined the U.S.-EU Global Methane Pledge and promised to end all investment in new coal power generation domestically and internationally. In April 2022, the government joined the AIM for Climate initiative.
The 2019 National Climate Agreement contains policy and measures to achieve climate goals through agreements with various economic sectors on specific actions. The participating sectors include electricity, industry, “built environment,” traffic and transport, and agriculture.
The Netherlands business community suffered a two-pronged loss in the planned departure of two of its major national corporate champions. Energy leader Shell and food and household products conglomerate Unilever announced in 2021 a relocation of their corporate headquarters from The Hague and Rotterdam, respectively, to London. The companies cited concerns with Dutch tax law relative to dividend taxation and need for consolidated management structure. (Note: Both companies previously split their corporate governance between the Netherlands and the UK. End Note.)
In March 2022, the Dutch Central Planning Bureau (CPB) published its 2022 economic projections. Due to the Russian invasion of Ukraine, the outlook was marked by uncertainty and flagged “even higher” energy prices as the most important economic consequence. Because of increased energy prices and high inflation from the COVID pandemic, CPB estimates a 5.2% inflation rate for 2022 with a range of 6.0% and 3.0% depending on how long energy prices remain high. CPB estimated economic growth of 3.6% in 2022 and 1.7% in 2023. CPB predicted unemployment at 4 percent in 2022, down from 4.2% in 2021. The low unemployment rate reflects a similar challenge also faced by the United States – businesses are finding it difficult to recruit qualified staff. Government debt is expected to rise to 61 percent of GDP by 2025 due to increased spending under the new coalition government, including on defense, outlays to support an aging population, and support to low-income families to offset inflation in energy and food prices.
According to the U.S. Bureau of Economic Analysis (BEA), when measured by country of foreign parent, the Netherlands is the second largest destination for U.S. FDI abroad in 2020 after the UK, holding $844 billion out of a total of $6.1 trillion total outbound U.S. investment – about 14 percent. Investment from the Netherlands contributed $484 billion FDI to the United States, making it the fourth largest investor at the end of 2020 of about $4.6 trillion total inbound FDI to the United States– about 10.5 percent. Measured by ultimate beneficial owner (UBO), the Netherlands was the seventh largest investor at $236 billion. For the Netherlands, outbound FDI to the United States represented 14 percent of all direct investment abroad.
To access the ICS, visit the U.S. Department of State Investment Climate Statements website.
I am a seasoned expert in international business and investment, well-versed in analyzing economic climates and investment landscapes. My expertise extends to the U.S. Department of State’s Investment Climate Statements, a valuable resource that sheds light on the business environments of over 170 economies. These statements are meticulously prepared by economic officers stationed globally, providing insights into markets that could potentially benefit U.S. businesses.
The Investment Climate Statements cover an array of crucial topics, including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption. These comprehensive reports serve as essential references for engaging with partner governments to foster business-friendly environments that not only promote economic stability but also address critical issues such as labor, human rights, responsible business conduct, and anti-corruption measures.
Now, delving into the specific information related to the Netherlands, a standout among the world's competitive industrialized economies, the country boasts an enticing business and investment climate. The Dutch economy's strengths lie in its stable political and macroeconomic climate, a well-developed financial sector, strategic location, highly educated and productive labor force, and top-notch infrastructure.
Investors in the Netherlands benefit from competitive logistics, anchored by the largest seaport and fourth-largest airport in Europe. The country excels in telecommunications, with one of the highest levels of internet penetration in the EU and hosting one of the world's largest data transport hubs, the Amsterdam Internet Exchange.
The Netherlands stands out as a significant recipient and source of foreign direct investment (FDI) globally, attributed to its competitive economy, historically business-friendly tax climate, and robust investment treaties. The Dutch economy attracts FDI across various sectors, including logistics, information technology, and manufacturing. Dutch tax policy evolves in response to EU efforts to harmonize tax policies across member states.
Before the COVID-19 crisis, the Dutch economy experienced robust growth, with successive years of budget surplus, low public debt, and record-low unemployment. The government's fiscal strength allowed for substantial support measures during the pandemic, preventing a wave of bankruptcies.
The recent coalition government in 2022 announced ambitious climate goals, aiming to be climate neutral by 2050. This includes a commitment to at least a 55 percent reduction in CO2 emissions by 2030 and joining international initiatives like the U.S.-EU Global Methane Pledge and the AIM for Climate initiative.
However, challenges persist, as evidenced by the relocation of major corporations such as Shell and Unilever to London in 2021, citing concerns with Dutch tax law and the need for a consolidated management structure.
In March 2022, the Dutch Central Planning Bureau projected economic uncertainties due to the Russian invasion of Ukraine, with potential consequences including higher energy prices. The economic outlook includes an estimated 5.2% inflation rate in 2022, 3.6% economic growth, and 4% unemployment.
According to the U.S. Bureau of Economic Analysis, the Netherlands holds a significant position in U.S. foreign direct investment, ranking as the second-largest destination for U.S. FDI abroad in 2020. The Netherlands contributed substantially to both outbound and inbound FDI between the U.S. and the Netherlands, showcasing the robust economic ties between the two nations.
For further details and to access the Investment Climate Statements, one can visit the U.S. Department of State Investment Climate Statements website.
