On May 25, Bain & Company presented the results of the 2021 Investment Climate Study - an annual study commissioned by AmCham - during a webinar for AmCham Members. The report of the study is now available. The study shows that Foreign Direct Investment (FDI) in the Netherlands has increased to 10,9% of the EU total. The Netherlands is outperforming other EU-countries, but vigilance is needed to keep that leading position and some areas need catching up.
FDI in the Netherlands reached the highest level in history at $1,2 trillion. While a global decrease of over 30% in FDI was recorded due to Covid-19, the Netherlands performed well. American companies generate a growing percentage of the Dutch GNP and provide roughly 220,000 direct jobs and another 200,000-250,000 indirect jobs. US companies spend an increasing amount on R&D, currently good for approximately 12% of all private R&D in the Netherlands. It is to be expected that the continuing decline of COVID-19 infections in many parts of the world and the related re-opening of the economy will have a positive impact on the figures for 2021.
In order to remain attractive for FDI in the near future, the study shows that the Netherlands has to work on several areas. First, it should strengthen the innovation and education system: make sure investments in innovation are accelerated, ensure that policies and infrastructure support these investments and keep a close eye on all levels of education. Second, the Netherlands needs to accelerate its sustainability and climate policy: continue the stimulation of eco-friendly practices and build a transparent eco-framework that ensures a level playing field across the EU with consistent policies. Third, the Netherlands needs to work on inclusion by strengthening policies to create equal opportunities and wages for everyone, encourage sharing of good practices and ensure workforce resilience in times of crisis. And finally, move to a smarter tax policy by developing a vision on international tax policy that stimulates business activities with high value add and increases taxation on passive situations. Make investments in innovation, sustainability and inclusive employment deductible in the tax base and actively promote multilateral tax solutions across the EU and the OECD.
For more insights, you can download the report of the 2021 Investment Climate Study here.
