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Netherlands, also known as Holland or Deutschland, is a constituent country of the Kingdom of Netherlands. It is located in the North West of European Continent. Netherlands has its territories in the Caribbean islands. The Netherlands has a very unique ruling set-up; it has a parliamentary democratic constitutional monarchy system. Netherlands shares its border with Belgium in the south and the North Sea flows across the Northern boundaries of the country. To the east of Netherlands is Germany. Netherlands is an important member of the EU (European Union) and it is surrounded by other key players of the European Union. Amsterdam, the capital city of Netherlands is one of the most important cities in the European Union. With an estimated population of more than 16, 490, 000 inhabitants residing in the country, it is the 11th most populous country in the European Continent.
The term Dutch has its roots from Netherland; Dutch refers to the people of the Netherlands, the languages spoken by the locals there and all other things that is related to the country. Netherlands is one of the most developed countries in the European Union.
Today, despite the economic hardship prevailing in the global economy Netherlands is not hit by the current situation, it continues to be a strong economic powerhouse in the European Union. In 2009, despite the economic crisis, according the reports released by the Dutch government, Netherland had a very strong GDP (Gross Domestic Profit) of $715 billion (approx figures), which was one of the largest GDP scores amongst the members of the European Union. The per capita GDP of the Dutch in 2009 was about $36,500 (approx). Business analysts suggest that the GDP and per capita income would continue to grow at about 1.75% over the next few years.
Netherlands is considered to be one of the most strong and rapidly growing economies not only in the European Union but also in the world. It has one of the most politically stable and pro-business governments in the European Union. The financial sector of Netherland is highly sophisticated and its regulatory set-up is simple, transparent and straight forward. The aggressive initiatives of the Dutch government to make Netherland a global economic power house; its FDI policy and tax benefits has given a major boost to foreign investors to invest in the country. The availability of top-class, scientifically and technologically advanced infrastructure facilities have augmented the scope of foreign investment in the country. Besides, the easy availability of high qualified and technically skilled labors make Netherlands a promising destination for foreign investment.
For any foreign investor, earning profit is the primary goal. In Netherlands, foreign investors can be rest assured to earn profits, the corporate tax structure works in helps achieving the foreign investor’s goal. The Federal Government of Netherland grants the following tax benefits to foreign investors investing in Holland.
A network of tax treaties: The Dutch government has signed tax treaties with several nations; it has strong bilateral ties with foreign investors, particularly with the US. As the tax treaties, the foreign nation investing in Netherlands are exempted from paying double tax on income and capital invested.
“Working on Profit” tax: The Dutch government passed the working on profit tax legislation in 2007, as per the act the government levy 25.5% corporate income tax for all foreign investors, the percent is lower than the tax levied on local investors which is 26.9%. For SME’s the tax rates are even lesser. Foreign investors are required to pay only 20% tax for the first € 200,000 of taxable profits earned.
The Participation Tax Exemption: This is a very beneficial tax exemption provided by the Dutch government to the foreign investors investing in the country. As per this tax exemption policy, foreign investors are exempted from paying corporate income tax relating to shareholding such as bonus shares, capitals gains, cash dividends and profit distributions.
Lowered Corporate Tax Rate: In case if a branch of foreign entity, the Dutch government allows the foreign investors to avoid corporate tax if their business activity in the country is of not a permanent kind.
• The laws that guide foreign direct investment, such as health and safety regulation and environmental rules are nonbiased and are equally applicable to both foreign and local investors. The Dutch laws are favourable for foreign investors, it allows immigrants live and work in the country, thus the foreign firms can employ their own personnel. As per the rule laid by the Dutch government foreign personnel working in the country, 30% of their gross employment income is not taxable under the personal income tax laws. The tax benefit is provided for a period of 10 years.
• Netherland is known for its stable and peaceful political environment. A peaceful political condition is vital to attract foreign investor, they feel safe and the firm can proper. The Dutch economy derives its strength from a industrial situation that is fostered by peaceful relationship between the employees and the organization and the government. There are hardly any strikes and all the labour issues are resolved by peaceful means.
• The Dutch government allows 100% private ownership for establishments of business properties or establishments to foreign investors for acquiring property in the country except in few monopoly sectors. Although the procedure for procuring license for business establishments is stringent there is several enterprises in Netherlands are owned 100% by foreign firms.
• The Federal government of Netherland has a very investor friendly laws and regulations that protect the intellectual property rights.
• The patents for foreign investors are provided retroactively to the original date of filing of the rights in the home country, provided the application is made through a local patent lawyer within a period of 1 year. The patents are valid till 20 years.
Foreign investors can invest in various sectors in Netherlands. Some of the best sectors that promise valuable returns on the capital are listed below:
• Water technology
• Sensor Technology
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