Each year, the American Chamber of Commerce in the Netherlands (AmCham) publishes the Investors’ Agenda of Priority Points (Priority Points). AmCham’s Priority Points address the main challenges to the Dutch investment climate and form the basis for AmCham’s dialogue with the Dutch government, employer organizations, legislators and other important stakeholders. The 2017 Priority Points were presented on May 30, 2017.
An Urgent Need to Maintain Our Competitive Advantage
The transatlantic economic relationship is longstanding and strong and has brought growth on both sides of the Atlantic for many decades. AmCham promotes the importance of international trade and supports measures to maintain transatlantic relations with mutual benefits for all. In a fast-changing world, transatlantic ties are more than ever essential to economic growth.
Foreign companies are of crucial importance to the Dutch economy. They are responsible for nearly 40% of the country’s revenue and employ almost 19% of all employees in business in the country - amounting up to 867.000 jobs. US companies account for almost one third of that revenue and 25% of these jobs1.
The Dutch investment climate has generally been considered as strong. Factors contributing to an attractive Dutch investment climate include – among others – a favorable tax regime, a generally skilled and bi-lingual workforce, a good infrastructure and a reliable government. These elements have made the Netherlands a preferred destination for foreign investment. AmCham’s recent study2 on the Dutch investment climate, however, shows that the Netherlands is losing its competitive advantage and needs to be vigilant. Other EU countries are catching up at a strong pace by – for instance – implementing dramatically lower tax rates and their efforts to attract foreign investments by favorable special programs. AmCham appreciates the efforts by the Dutch government to maintain and improve the Dutch investment climate. There is no doubt that new investments in the Netherlands will bring new jobs, whilst a standstill in the development of the Dutch investment climate as compared to other countries, may potentially cause a loss of jobs due to re-location to more competitive countries.
For the 2017 Priority Points, AmCham strives to:
- SECURE and ADVANCE the great elements of the Dutch investment climate;
- DEVELOP and IMPROVE outdated elements of the Dutch investment climate in order to keep up with new (technological) developments and the fierce competition of other countries;
- ATTRACT new (US) investors, talent and business;
- SUPPORT innovation, R&D and entrepreneurship.
Key Points of Attention
- Human Capital: invest in development of the workforce and top talent; ease employment protection; attract international talent
- Tax: competitive profit tax rate indispensable for Dutch investment climate
- Industry: support entrepreneurship and innovation; limit EU regulation costs; avoid national gold-plating
- Economic Footprint: societal value of R&D investments in healthcare and other industries
- Data Privacy: closely monitor developments
Key Findings - Study Investment Climate in the Netherlands
- Foreign Direct Investment (FDI) is an important driver of the Dutch economy. Historically, the Netherlands has been a leading destination for FDI. However, during the financial crisis growth stagnated, and share has been lost to other European countries. The last few years indicate a slow recovery of the Dutch share in EU FDI, encouraging further improvements in the drivers of competitive advantage to keep the momentum.
- The overall impact of FDI is significant, with nearly 40% of Dutch business revenue driven by foreign-owned companies. This revenue has been growing ~3% p.a. the last 6 years, while Dutch companies encountered a decline of -1% in that same period. Employment rates show similar growth; ~2% for foreign-owned companies and -2% for domestic businesses.
- The Netherlands has a strong historical FDI platform, but is losing some of its competitive advantage. The Netherlands should aim to improve key drivers to stay competitive. From an economic and political perspective, the Netherlands should focus on labor regulations, keeping the tax-regime attractive and maintaining stability in policies; from industry specific perspectives (manufacturing and service sector), the Netherlands should ensure it maintains its strong infrastructure and increases its efforts in innovation/education.
Download the full text of the 2017 Priority Points and a Summary of AmCham's Study on the Investment Climate in the Netherlands here.
1 Source: Centraal Bureau voor de Statistiek
2 AmCham Study, March 2017, executed in close conjunction with Bain & Company