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 2018 Priority Points were presented during AmCham's Annual General Meeting on May 14.
Priority Points 2018: fierce competition requires unwavering commitment
The transatlantic economic relationship is longstanding and strong and has brought growth on both sides of the Atlantic for many decades. Despite transatlantic political turbulence, the US and Europe remain each other’s most important markets. No other commercial artery in the world is as integrated.[1] 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 still key to economic growth and it is essential to handle them with care.
Foreign companies are of crucial importance to the Dutch economy. They are responsible for nearly 38% of the country’s revenue and employ almost 17% of all employees in business in the country - amounting up to 916.000 jobs. US companies account for over a third of that revenue and 24% of these jobs[2]. Within Europe, the Netherlands is still a top destination for US investment[3] but AmCham’s study[4] on the Dutch investment climate shows that competition within the EU is fierce. Several countries have implemented dramatically lower tax rates and increased their efforts to attract foreign investments by favorable special programs. To maintain its top position as a destination for foreign direct investment, AmCham promotes that the Netherlands stays alert and keeps investing in its strengths and improves areas in which the country risks to lag behind.
The strong digital and physical infrastructure, a generally well-educated workforce, a good economic environment and a reliable government are all considered strengths of the Dutch investment climate. At the same time, executives express their concern about the Dutch tendency to gold-plate EU regulation in many areas – e.g. tax, energy, IP, financial sector – which disrupts the level playing field within Europe and places the Netherlands in a disadvantageous position. AmCham appreciates the efforts by the Dutch government to maintain and improve the Dutch investment climate but is also wary of the fierce European competition. 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 2018 Priority Points, AmCham strives to:
- FURTHER DEVELOP the great elements of the Dutch investment climate;
- IMPROVE outdated elements of the Dutch investment climate in order to keep up with new (technological) developments and stay a frontrunner;
- ATTRACT new (US) investors, talent and business;
- SUPPORT innovation and R&D.
Key Points of Attention
- HUMAN CAPITAL: Invest in the availability and development of (top) talent; ease employment protection to increase labor mobility; attract international talent.
- TAX: A competitive profit tax rate is vital for the Dutch investment climate.
- INDUSTRY: Support a responsible energy transition for industry, avoid national gold-plating and limit EU regulation costs.
- ECONOMIC FOOTPRINT: Acknowledge the societal value of R&D investments in healthcare and other industries.
- INTELLECTUAL PROPERTY: Protect investments in innovation and R&D.
Key Findings - Study Investment Climate in the Netherlands
- Foreign Direct Investment (FDI) is an important driver of the Dutch economy, and in 2016 global inward FDI stock was at its highest level since 1990. This increase was driven by economic growth and strong performance of the global stock market. Looking forward, Brexit, tax reforms in the US and the Netherlands and Automation will likely impact global FDI.
- Most important factors in a company’s decision to establish or extend business abroad are workforce qualification and availability, overall economic environment including a good tax climate and infrastructure quality. The Netherlands is an attractive destination given its technological / digital readiness, workforce quality and overall economic environment. That said, many other countries vie for FDI, and the Netherlands has areas to improve – in particular labor regulations, innovation and infrastructure require continued attention.
- The government can influence the attractiveness of the Netherlands through business reforms. Lowering corporate tax and repealing tax on dividends are positive policy changes, as well as additional investment in infrastructure and the liberalization of labor regulations.
Download the full text of the 2018 Priority Points and a Summary of AmCham's Study on the Investment Climate in the Netherlands here.
[1] Source: The Transatlantic Economy 2017, Daniel S. Hamilton and Joseph P. Quinlan
[2] Figures 2015. Source: Centraal Bureau voor de Statistiek
[3] Source: The Transatlantic Economy 2017, Daniel S. Hamilton and Joseph P. Quinlan
[4] AmCham Study, March 2018, executed in close conjunction with Bain & Company