Investment Destination Series: Amsterdam

The Netherlands is one of the world’s top investment destinations, providing companies and individual investors with considerable stability and resilience paired with exceptional growth prospects and access to EU markets. In the wake of the United Kingdom’s exit from the European Union, Amsterdam has emerged as one of the most appealing FDI destinations, in the region, owing to its strategic location as a ‘Gateway to Europe’, its exceptionally business friendly regulatory environment, and perhaps most importantly, the vigorous growth potential that its domestic investment landscape holds.

 

  • A leading hub to access Europe and the world

 

The Netherlands consistently tops global rankings for technology, innovation, sustainability, start-ups and quality of life. The country’s highly educated,  English speaking workforce, highly equipped with digital skill sets, provides a depth of talent that drives the competitiveness of its professional services sector. Amsterdam is a vibrant business hub and thriving ecosystem for the technology, fintech, life sciences industries. Owing to its strategically located ports, the Netherlands is also one of Europe’s leading logistics hubs.

 

  • Tech

 

Amsterdam’s extensively developed network infrastructure has nurtured a strong culture of digital innovation over the years. The Dutch capital has been ranked among the world’s most AI equipped cities under the Global Cities’ AI readiness index, based on extensive public-private sector collaboration and an active network of  technology enterprises, academic labs, (such as the Qualcomm-QUVA lab) universities, and government initiatives. Amsterdam is one of the world’s major hubs for internet data, with the AMS-IX platform, and over 450 multinational enterprises, including Netflix and Tesla, base their European operations in the city. 

 

  • Fintech

 

Amsterdam’s technology ecosystem and access to European markets have also helped the city establish itself as a leading fintech hub. The Netherlands’ financial services sector has developed over the years, nurtured over the years by a rich heritage of innovation in finance- the world’s first central bank, the Bank of Amsterdam, and the oldest stock exchange were established in the Dutch capital during the 17th century. Today, Amsterdam is home to the European Investment Bank in addition to several other major financial institutions, as well as the offices of international financial services firms.

 

The city is home to major fintech enterprises, including the payment processing service Adyen, which began as a local startup. Companies and institutions across Amsterdam are implementing new blockchain and AI business applications, and the city is also an important hub for ESG and sustainable investments, consistently earning top rankings in the global green finance index.

 

  • Life Sciences

 

Amsterdam’s reputation as a leading finance, technology and sustainability hub is also derived from its thriving life sciences, food-tech and agri-tech and sustainable manufacturing sectors. The Netherlands is a major manufacturer of medical technology, with a thriving ecosystem for innovative AI health sciences applications. Amsterdam-based food and agricultural technology enterprises make a global impact with innovative sustainable farming solutions implemented throughout the world, including year-round Strawberry cultivation in the UK and smart irrigation systems in Ghana. The Dutch food-technology sector also creates consumer products that will define the food and beverage industry’s future.

 

  • Logistics

 

The Netherlands’ exceptional advantage in international finance, innovation and manufacturing is made possible by its robust logistics sector: DHL ranks the country in first place on its list of the most connected nations in the world. The port of Rotterdam is the largest in the world, while Amsterdam’s port provides specialized biomass transhipment facilities. Schiphol airport provides specialized services for pharmaceutical logistics, enabling seamless business, research and supply chain integration. The Netherlands offers an unparalleled extent of streamlined integration that links infrastructure, industries, businesses, and people.

 

  • Crisis resilient economy

 

Interconnected systems have helped the Netherlands develop an exceptionally efficient and innovative private sector. The Dutch government has enabled the consistent development of the country’s competitive advantage over the years, and during the pandemic, the policy response enabled that the domestic economy could weather a crisis with relatively little disruption. The government provided carefully calibrated support for businesses and citizens affected by the pandemic, limiting bankruptcies and unemployment. The country’s GDP dropped by 3.7% in 2020, but recovered strongly in 2021 with 5% growth. The OECD forecasts a growth rate of 2.9% for 2022, adjusted in light of the global economic slowdown.

 

With an exceptionally supportive policy environment and a depth of expertise and skill in the private sector and working population, the Netherlands has proven to have a crisis resilient economy that sets it apart from other investment destinations.

 

  • Tax Benefits

 

The country also offers an attractive Income Tax Rate of 15% on income up to € 395,000 and 25.8% on income over  € 395,000. The Tax and Customs Administration has also set a special ‘Innovation Box Tax Rate’ of 9% on profits from ‘self developed intangible assets’ if the income is reported with a Research and Development declaration and approved. The special tax rate greatly incentivizes investment in the country’s technology ecosystem. The Netherlands also has tax treaties with over 100 jurisdictions, largely eliminating double taxation and often reducing or removing withholding tax on dividends, interest and royalties. Expatriate employees are entitled to enjoy 30% of their salaries free of income tax.  

 

  • Investment Destinations: Amsterdam and beyond

 

With comprehensive connectivity, solid resilience, exceptional innovation and stable growth, Amsterdam is one of the world’s most appealing investment destinations. There are several other emerging financial hubs that are attractive investment destinations this year.

 

 We are committed to helping our clients navigate a fast-changing global economy, and with this in mind, our Investment Destination series highlights exceptional markets and jurisdictions in which to invest funds, or set up a company.

 

Should you have any enquiries about investing in Europe, starting a new business or refining your financial strategy, we are always available for a free initial consultation.

 

 

 

 

About the Author:

 

Mr. Philip Yu

Managing Partner

 

Mr. Yu holds a Bachelor of Commerce (Hon.) from the University of Toronto and L.L.B. (Hon.) from the University of London, and is a member of the American Institute of Certified Public Accountants, Certified Public Accountants of Australia and the Hong Kong Institute of Certified Public Accountants. Philip is experienced in handling cross border taxation issues, corporate restructuring and other cross border business solutions. He undertakes additional posts as Company Secretary, Authorized Representative and Independent Non-Executive Director for several listed companies on the Hong Kong Stock Exchange. He joined our firm in 2001 and currently the Managing Partner of the firm.

 

 

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