Ease of Doing Business Rank: 42
The Netherlands is a country located in northwestern Europe. The North Sea lies to the north and west, Belgium lies to the south and Germany lies to the east.
The official language of the Netherlands is Dutch, spoken by 98% of inhabitants. Minority languages include Indonesian (2%), varieties of Arabic (1.5%), Turkish (1.5%), Berber languages (1%) and Polish (1%).
English is the most widely-spoken foreign language (89%), followed by German (71%), French (29%) and Spanish (5%).
The 2019 population estimate is 17.09 million.
Metropolitan Amsterdam is the most populous (2.43 million), followed by Metropolitan Rotterdam (1.18 million), and The Hague (1.05 million). All other cities have populations less than 500,000.
The top industries in the Netherlands are agrifood, energy, information & technology, metal working, high-tech systems, chemicals and health research.
The Times Higher Education World Rankings includes 7 Dutch universities in the top 100 in the world. A further 6 rank within the top 500.
The Legatum Prosperity Index ranks the Netherlands’s education system 5th out of 149.
The most common type of business entities in the Netherlands are sole proprietor, private limited liability company, Dutch public company and private or public partnership.
The overwhelming majority of businesses are in the form of a private limited liability company.
The Netherlands offers many incentives to entice foreign investment. These include a 30% tax reduction for highly qualified foreign employees.
The corporate income tax rate is 19% on the first EUR 200,000 and 25% on profits in excess of EUR 200,000. The country also has tax treaties with over 90 countries to avoid double taxation.
The country also offers tax incentives for qualifying new energy-efficient or environment improving assets. Certain R&D technologies on applied new technology may qualify for a reduced employee wage tax.
In 2019, the first EUR 375,000 of R&D costs may qualify for a 35% reduction. Excess salary and other expenses may qualify for a 15% reduction. Alternatively, taxpayers can opt for a fixed hourly amount of EUR 10 per hour, to a maximum of 1,800 hours. Excess hours are calculated at a lower rate of EUR 4 per hour.
The top cities for business are Amsterdam, Rotterdam, The Hague, Utrecht, and Eindhoven.
Amsterdam is the largest financial center, ranked 41st in the world. Rotterdam is Europe’s largest and busiest shipping port.
The Hague includes a large safety and security cluster, due to the high concentration of international organizations and embassies. Utrecht is the country’s science center and Eindhoven is an academic and R&D hub.
The Netherlands is a relatively small country, but includes 10 UNESCO World Heritage sites. This includes the historic canal district of Amsterdam built at the end of the 16th and beginning of the 17th centuries.
When you think of the Netherlands, tulips also come to mind. Keukenhof outside of Lisse is the largest public garden in the world. It is home to over 700 tulip varieties planted on more than 70 acres.
Windmills and dikes are also associated with the Netherlands. The 19 Kinderdijk windmills, built between 1722 and 1761, are the largest surviving concentration of windmills in the Netherlands and another UNESCO World Heritage site.
Zeeland in the southwest of the country features the high-tech Delta Works; a network of dams, sluices, locks, dikes, and storm-surge barriers that prevent keep the country from being swallowed up by the sea.
The Netherlands is also teeming with art and culture. The Rijksmuseum in Amsterdam features seven million works of art, including masterpieces by Rembrandt, Van Gogh, and Vermeer.
Van Gogh also has a museum solely dedicated to his work, visited by 1.5 million visitors annually. The Anne Frank Museum retells the chilling details of what a World War II Jewish refugee family endured.
The country also boasts one of the world’s most diverse national park programs. The largest park is Hoge Veluwe National Park which spans 13,800 acres. The topography includes dunes, woodland, and moraines. Amidst the park lies Rijksmuseum Kröller-Müller which features more Van Gogh as well as works by Cézanne, Manet, Monet, Renoir, and Rodin.
Early inhabitants of the area were Celtic and German tribes due to its well-protected location.
By the 1st century BC, Romans invaded southern areas and established military posts. They controlled the region for almost three hundred years and the area prospered.
During the Middle Ages, the Roman Empire weakened and Germanic tribes invaded. The most powerful of them, the Christian Franks, eventually occupied the area in the 5th century.
By 800 AD, the region was part of the Frankish Empire, led by Charlemagne. When Charlemagne died in 814 AD, the empire was divided into smaller states. Economic development in the region made it one of the richest in Europe.
Agriculture, crafts, commerce and trade linked the region to distant trading partners, including Asia and North Africa. Unlike other European regions, the power of feudal lords was limited and traders were granted safe passage.
During the Renaissance, the Dukes of Burgundy tried to overtake the area. In 1477, Mary of Burgundy married Archduke Maximilian Habsburg. The Habsburgs ruled the region and instituted taxation.
In 1555, the ruler of the Habsburg dynasty granted the Netherlands to his Catholic son who was the king of Spain. Protestant Dutch resisted the oppressive methods of the new administration and the new tax. This led to an eighty year war and nationalist sentiments grew.
In 1581 the Dutch Republic proclaimed independence from Spain, but this led to more battles. Finally, in 1648 Spain recognized the sovereignty of the Republic.
The Dutch continued to explore abroad and by the mid-17th century, they were the largest maritime power in Europe. They grappled with the English for sea domination of the sea and with the French for mainland territory.
At the start of the 18th century, the Dutch Republic was in decline. Powerful French, Austrian, Russian, Prussian, and British forces took their toll on the small republic.
By the end of the century, the Dutch rejected their current leaders and chose a more liberal stance. This led to the creation of the Kingdom of the Netherlands. After Napoleon fell, their kingdom included Belgium and Luxemburg. In 1830, Belgium broke away. By 1890, Luxemburg also left the kingdom.
During the latter half of the 19th century, the kingdom experienced constant, slow economic growth and constitutional reforms. The state remained neutral in World War I, but the Germans occupied the country in World War II. The country was liberated by Allied Forces in 1945.
A process of decolonization followed in the post-war period. Today, it has the sixth-largest economy in the European Union with a parliamentary representative democracy and a constitutional monarchy leading their nation.
Most inhabitants identify as Dutch (79.3%). The remaining populations include other Europeans (6.3%), Indo (4.9%), Turkish (2.4%), Moroccan (2.2%), Surinamese (2.1%), Caribbean (0.9%), Chinese (0.3%) and Iraqi (0.3%).
According to 2015 estimates, Roman Catholics make up 23.7% of all religions, followed closely by Protestants (23.5%), Islam (4.9%) and others (5.7%). Over half the population does not claim a religious affiliation.
According to Forbes’ 2019 Best Countries for Business, the Netherlands is the 4th best country in the world for conducting business.
The 2019 Index of Economic Freedom rates the Netherlands 13th globally and states, “The Netherlands’ economy flourishes through openness to global trade and investment and an independent judicial system that provides strong protection of property rights and fosters the rule of law.”
World Bank’s “Doing Business” rankings rate the Netherlands 36th for ease of doing business in the world.