In October 2018, at the UK-Netherlands Innovation Showcase event, her Majesty’s Trade Commissioner for Europe, Andrew Mitchell said: “The UK and Netherlands enjoy a rich history of trade spanning four centuries, but our two innovative economies are embracing the technologies that will ensure we share a bright trading future too.”
The event gave an assurance to those trading with the Netherlands that despite the uncertainty looming over right now in regard to Brexit, the cooperation between the two countries on trade and innovation will continue.
Which sectors offer opportunities?
According to UK Trade and Investment, currently, UK exports to the Netherlands are primarily in the following areas:
• Petroleum and gas products and services.
• Pharmaceutical and medical goods
However, there is growing potential for business in the following sectors:
- Food and drink
- Offshore wind
- Security and defence
Why do business with the Netherlands?
There are several factors attracting UK companies to do business with the Netherlands. With over 90% of the population knowing English and it being an official language of the city of Amsterdam, the country can easily be termed Anglophone (over 75% of the population speak English). Also, with similar culture and friendly relationship with the UK, the Netherlands is Anglophile too.
Having an open economy and staying ahead in the field of technology and innovation makes the Netherlands a lucrative market for UK businesses. Also, the legal framework is simple and transparent while the financial services system is highly sophisticated. The geographical proximity and excellent transport connections further strengthen the case for trade between the two countries.
Are there any key legal requirements?
EU nationals (including British nationals) do not require a visa to travel to Netherlands. However, if you are staying more than 90 days at a stretch in a span of 180 days, then you will be required to get a residence permit.
For UK businesses, it is easy to get Customs licenses in the Netherlands because the process is very systematic and digitized.
To set up a legal entity in the Netherlands, there are three options available to UK companies:
- Set up a permanent business
- Establish a temporary business
- Go for personnel working with no establishment
The country is undergoing structural reforms, including open-ended contracts and tax cuts for low income groups to increase labour participation.
Currently, the Corporate Tax rate is set at 20% on the taxable amount of up to €200,000 and 25% on excess, globally. This may be come down to 17.5% and 22.5% respectively.
The tax system in the Netherlands has several benefits to offer such as:
• Costs of qualifying R&D wages get R&D tax credit
• Sustainable energy investments (EIA) get tax relief
• In order to promote investments in new and innovative technologies, under the Innovation Box (IB) regime, companies owe 7% corporate tax on qualifying profits, rather than the usual 20-5%.
• If you are an environment friendly company, you may be eligible for some tax relief
What are the challenges?
Because of its open economy, the Dutch market is very competitive and to ensure your business succeeds amongst domestic and international players, you need to ensure you penetrate the market effectively. Having your website and marketing collateral available in Dutch can help you reach the local consumer more effectively. Take help from a professional translation company to ensure your messages don’t lose context when translated from English to Dutch.
It also helps to have the initial discussions in English and then getting your legal documents, including contracts, localised to build trust and strengthen business relationships.
International trade in these difficult times
With the rapid spread of coronavirus (COVID-19) globally and most countries, including Netherlands, experiencing a sharp fall in business activities, it might be worthwhile to work on an export plan based on economic forecasts, rather than past trends. Also, seek support and advice from reliable bodies such as the Department of International Trade (DIT) to minimise the detrimental impact of the virus.
If you are thinking about exporting to Netherlands and want to stand tall amongst the competition, call 01252 730014 or email email@example.com to discuss how you can target the Dutch market in Dutch language!