How to launch your business in The Netherlands
For our latest business trip feature where we look at the UK’s most interesting export markets, Business Leader gives you an in-depth look into everything you need to know about doing business in The Netherlands.
As the sixth largest economy within the European Union and the continent’s leading transportation hub, The Netherlands has built a strong reputation for international business.
The country is the world’s eighth largest export/import nation, with international trade last year totalling £780bn (£380bn export; £400bn import); and with over 90% of Dutch nationals able to speak English, the country is considered a key player in international trade.
Britain is The Netherland’s third biggest import market, after Germany (£74.1bn) and Belgium-Luxembourg (£53.2bn), with a total of £38.7bn worth of business.
With over 17 million inhabitants, The Netherlands is smaller than a lot of the UK’s major European trading partners. However, due to the two respective nation’s extensive global reach over the last few centuries, they have naturally been both economic and political rivals and partners at different points throughout history.
Phil Smith, Managing Director of Business West comments: “Historically, the business relationship between the UK and Holland has been strong. The Dutch view the UK as one of its closest trading partners. Apart from its neighbours Belgium and Luxembourg, the UK and Holland are remarkably similar in terms of business culture and geography.
“Historically, the Dutch and the Brits have been economic rivals, although the formation of Royal Dutch Shell was something of a watershed moment in that regard. In more recent times, Holland has been a key ally of Britain in Europe, particularly on economic issues.
“Like the UK, Holland is economically liberal, meaning that it favours low taxation and seeks to minimise red tape. The fact that London Heathrow and Amsterdam Schipol are the two busiest airports in Europe demonstrates their kindred ‘open for business’ world view.”
This outlook is in contrast to the more protectionist policies of the French and Southern European nations.
As a result, the UK and Holland are part of a more liberal economic pact, which has sought to gain influence over the remaining EU member states.
It is the liberal likeness that has led to many UK companies making the move onto the continent through The Netherlands – many of whom are making their first foray into international trading.
Michael Nord, Client Relations Director at change management and communications firm, Fifth Business, believes that their business has benefitted greatly from the relationship between the two countries.
He said: “With the majority of Dutch business people having a good working knowledge of the English language and of British culture, doing business in Holland is relatively easy. The two countries have a similar mentality and the many daily flights, trains and ferries make it easy for Dutch business people to connect with colleagues and partners in the UK.”
Another company that benefits from the close business bond between the countries is finance broker, Funding Options. CEO Conrad Ford comments: “One of the reasons we chose the Netherlands as our first international market is the strong similarities with the UK.
“The culture and economy have proved remarkably similar in practice, and of course the Netherlands is easy to get to. Where else in Europe could you present in English at a local conference, and know that everyone will understand you? Not even Scandinavia!”
Key sectors and opportunities
The Dutch government has identified nine ‘top sectors’ which show strong performance with regards to export and R&D investments. These are agriculture & food, energy, life sciences & health, chemicals, tech & manufacturing, horticulture, creative industry, logistics and water & maritime.
However, many other sectors have become increasingly prevalent in recent years, especially in financial services, oil & gas, energy and transport.
Juliette Kuiken, Senior Trade Advisor for The Netherlands at the Department of International Trade (DIT) commented: “With low employment, a stable housing market and an affluent population of 17 million people, the country is an attractive place for UK products and services. In the last financial year, UK exports to The Netherlands totalled £44.2bn while UK imports from TheNetherlands were £51.4bn.”
In recent years, one of the emerging partnerships between the nations has been in the tech sector, and more specifically around the growing issue of global cybersecurity.
One of the UK’s leading companies in this field is Hexegic, who have a strong working relationship with The Netherlands.
Director George Patterson comments: “There is a huge level of support in The Netherlands for UK companies looking to expand into the country. Our experience in The Hague has been an overwhelmingly positive experience. The UK Embassy hosted our launch and the start-up ecosystem is very generous and welcoming. Shared values have made our interaction with Dutch partners very productive.
“Both nations possess world-class institutions addressing the increasing cyber threat – there are National Cyber Security Centres in both countries and Hexegic works closely with them. We are certified by the UK NCSC to conduct cyber risk assessments and are working closely with Dutch companies to counter the threat.”
All of this demonstrates that there are a wide range of opportunities for business of all sizes and sectors. Also, due to the cultural and business administration similarities, there is very little time wasted on procedural and logistical issues.
Lesley Batchelor OBE, Director General of The Institute of Export and International Trade commented: “The Dutch help facilitate a lot of trade for the UK, and in turn they also sell a lot of items into the UK, including flowers, food and many other items. A lot of companies in Europe go through Holland to get into the UK market, almost as a gateway to ship to and from the UK. One of their greatest strengths is their logistics and organisational prestige – they are known for it across the continent.
“The Dutch view the UK as a very lucrative market, and there is a mutual feeling that it is easy to work together – the two countries have a very similar culture and English is universally spoken. It is like doing business in our home market. They have a lot of cross over with our key sectors like engineering, tech, manufacturing, as well as their historic trade of flowers, food and financial services.”
Has Brexit impacted the relationship?
There have been aftershocks from the Brexit epicentre, with the Dutch, like many other EU nations, wondering where their trade future with Britain will stand after the October 31st deadline.
Many commentators on both sides of the debate have had their say, but as it is with politics, no one can be certain until the deal is signed and all parties know what they are really dealing with.
Despite this, businesses and trade bodies are remaining especially positive for the future of the trade relationship.
Batchelor explains: “There have always been opportunities between the UK and Holland, and Europe as a whole – it has always been that way, and always will be. Holland and the Benelux region as a whole have always historically been one of the UK’s strongest trade partners, and that will always continue to be the way forward.
“We will have to put any political issues and Brexit aside and accept that businesses wants to do business – and that both countries just want to get on with it. It is hard to say if Brexit has had an impact on the relationship – I think both countries are a little confused about the situation we are currently in, and what to do and how to manage it, but on the whole I don’t see any issues arising from it. Both sides know that Europe is not the UK’s only market, and so getting on with business and continuing the strong relationship is important for both countries.”
It isn’t just the fact that businesses want to do business – but both countries want to increase their successful collaboration together.
Nord comments: “The Dutch have always been anchored in the European community, and as co-founders of the Coal and Steel Union which became the European Union, they know their biggest markets, Germany, Belgium and France, are important. They have also been the bridge builder to the British, and have welcomed them into the EU, which of course has made trade relations easier.”
It is this issue that will be the big debate over the next few years. Companies like Panasonic and Sony have recently moved their European HQ out of London and into The Netherlands – along with 250 more, according to the Dutch government.
Smith concludes: “Amsterdam has been proactive in trying to attract firms disaffected with the political situation in the UK. This won’t have gone down too well in Westminster, given that the likes of the Discovery Channel, Sony and Bloomberg have all upped sticks. The global trend towards protectionism is a concern. As far as business goes, we enjoy an incredibly healthy trading relationship and long may that continue.”