Market Entry in the Netherlands

>> Barriers to entry: Netherlands

Although the barriers for foreign companies to enter the Netherlands are relatively low, there are a number of challenges that companies must take into account. The Dutch market is very open, and therefore highly competitive. Companies should be well prepared to meet the competition from both domestic and international companies.

Culture

The Netherlands is known for its ‘direct’ business environment where personal relationships are most important.

A complex business culture exits in the Netherlands where companies, trade unions, government bodies, and industry associations engage in constant and close consultation. The emphasis is on achieving consensus and avoiding conflict in a small and densely-populated country.

The Dutch appreciate plain speaking and it is recommended to avoid diplomacy and subtle remarks. There is a much more equal corporate structure, and the manager may include the collective company to come to a decision. In some aspects, the Netherlands is quite a conservative society and change is accepted and embraced after much deliberation.

Procedures for Starting a Business

Starting a business in The Netherlands is relatively easy, although there are various steps and procedures that must be followed. A preferred for is the so-called B.V. This stands for”besloten vennootschap met beperkte aansprakelijkheid”. The equivalent of a Private Limited Company. Since 2012 several stringent regulations determining the establishement of a B.V. were changed to ensure an easier an less bureacratic process. This included also dropping the compulsory start capital sum of 18 000€ investment. Thus making it much easier for entrepreneuers and foreign companies to establish a business. Furthermore the company name must be checked for availability and validity, a deed of incorporation must be drawn up and the company must be registered at the local Chamber of Commerce. Registration with local tax authorities is also required in the initial formation of the business.

Regulations and bureaucratic procedures

Businesses that are interested in expanding to Netherlands must determine precisely which Dutch and EU standards and regulations apply to their products and/or services and that they obtain timely testing and certification which is often required before trading any products or offering services.

Tax and Legal Procedures

Albeit that starting a business in the Netherlands is relatively uncomplicated, it is important to get legal and tax advice before setting up a business. Local partners are the ideal choice to guide you through red tape and ensure you follow local requirements and understand obligations.

The Holiday periods

July and August are the holiday period in the Netherlands, and many people will be away (3 weeks holiday is normal) and people won’t be answering their e-mails and mobile phones!

Consumption habits

The Dutch tend to favour high-quality products and are willing to invest in expensive products when they perceive that the product’s value is equal to its quality. Good advertising campaigns are popular with the Dutch consumer and are highly effective for foreign companies to establish their brand.

The Dutch consumer is relatively wealthy, but they tend to have quite modest consumption habits. The traditional Dutch consumer prefers familiar brands. Recently the publicity on environmental awareness has encouraged the Dutch consumer to buy products that are environmentally friendly.

Access to capital

The Netherlands has a strong tradition of entrepreneurship but the transition to startup culture has been slow. Access to capital via financial institutions is limited and you will be faced with a conservative culture.

In contrast, the capital city of Amsterdam is packed with angel investors, business accelerators and venture capitalists. It is easier to find funding but it will require a viable plan or unique idea to find a funding partner.


Latest version updated 6th December 2017

Country Breakdown

17.02

Million

Population

Euro

Currency

$ 770.8

Billion

GDP

41,543

km2