Netherlands: Investing
In this page: FDI in Figures | What to consider if you invest in the Netherlands | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information
According to UNCTAD's 2022 World Investment Report, FDI flows to the Netherlands were negative by USD 81 billion in 2021, a trend that continued from the previous year, when net divestment stood at USD 105.3 billion due to large equity divestments following the economic crisis triggered by the Covid-19 pandemic. In 2021, the total stock of FDIs reached USD 2.5 trillion. In the same year outflows from the Netherlands - usually among the largest investing countries in Europe – resumed and reached USD 28 billion. According to data by the Netherlands Foreign Investment Agency (NFIA), the number of companies investing in the country went back to 2019 levels: overall, 423 new projects were registered, with an estimated total investment value of EUR 2.3 billion in the first three years. These projects are expected to create nearly 13,400 direct jobs. Around 65% of direct investment is in Special Purpose Entities (SPEs) and holdings. In 2021 most investment in the Netherlands was made by U.S. enterprises (around 20%), followed by the UK, Germany, Luxembourg and France (CBS). Shell’s relocation from the Netherlands to the UK on 31 December 2021 prompted a rise in inward investment in the country, as the elements of the multinational that are still registered in the Netherlands are now under foreign ownership. The majority of the multinationals in Netherlands are active in the wholesale and retail trade sector (around 37.8%), followed by specialised business services (16.2%), manufacturing (13.9%), and information and communication (12.3% - CBS). According to the latest figures from OECD, FDI inflows to the Netherlands reached a record high of USD 40.8 billion in the first semester of 2022, compared to a negative inflow of USD 16 billion recorded in the same period one year earlier.
The Dutch investment policy is characterized by a strong international orientation and a liberal policy towards foreign investment. Many Dutch companies are multinational by nature and some of these are listed on foreign stock markets. The Netherlands offer a competitive fiscal climate, advanced infrastructures, and a strategic location. On the other hand, the country has a small internal market and is heavily dependent on the economic performance of its partners (especially in the EU). Sector-specific screening regimes are in place for the telecommunication sector, electricity and gas. In 2022, a new FDI screening mechanism has been adopted for investments in undertakings active in vital processes or sensitive technology (including dual-use items and military goods). The country is ranked 4th out of 82 economies in the Business Environment ranking published by The Economist and 6th out of 63 in the Global Competitiveness Ranking.
| Foreign Direct Investment | 2019 | 2020 | 2021 |
|---|---|---|---|
| FDI Inward Flow (million USD) | -14,141 | -105,394 | -81,056 |
| FDI Stock (million USD) | 1,454,740 | 2,719,474 | 2,576,225 |
| Number of Greenfield Investments* | 334 | 288 | 315 |
| Value of Greenfield Investments (million USD) | 11,127 | 6,686 | 8,561 |
Source: UNCTAD, Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Main Investing Countries | 2019, in % |
|---|---|
| USA | 22.6 |
| Luxembourg | 12.4 |
| United Kingdom | 9.2 |
| Germany | 7.0 |
| Switzerland | 5.9 |
| Ireland | 4.8 |
| Belgium | 4.0 |
| France | 3.9 |
| Main Invested Sectors | 2019, in % |
|---|---|
| Financial and insurance activities | 84.9 |
| Manufacturing | 9.3 |
| Wholesale and retail trade | 2.2 |
| Real estate | 1.4 |
| Transportation and storage | 0.7 |
Source: OECD Statistics - Latest available data.
The main assets of the country's economy are :
The main weaknesses of the country for FDI are:
Moreover there are the regional incentives offered by the EU:
The European Regional Development Fund (ERDF). The ERDF is mainly focused on strengthening economic and social cohesion in the EU by correcting imbalances between its regions.
The European Territorial Co-operation (INTERREG). This programme, which is financed by the European Regional Development Fund (ERDF), finances and supports international co-operation within particular European regions.
All government measures can be consulted on the website of the Netherlands Foreign Investment Agency.
| Country Comparison For the Protection of Investors | Netherlands | OECD | United States | Germany |
|---|---|---|---|---|
| Index of Transaction Transparency* | 4.0 | 6.5 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 4.0 | 5.3 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 6.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
In addition, the Netherlands has fully furnished and equipped business support centers available for rent, enabling new companies to hit the ground running with minimal start-up costs. Office space in these centers may be rented by the hour, day, month, year or longer.
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