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Table of Contents

General Info Interesting Facts Risk Assessment
Location and Size Economy Business Climate
Government Comparative Indicators Business Protocol
Legal System Credit and Collections Other Sources of Info

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General Information

Official Name: The Kingdom of the Netherlands

National Symbol: Two lions holding a shield. The tulip is the widely accepted unofficial symbol of the Netherlands.

Internet Domain: .nl

International Dialing Code: +31

Location and Size

The Netherlands borders the North Sea on the west and north, Belgium on the south, and Germany on the east. Almost 20% of the total area of the Netherlands is water. Its capital and largest city, Amsterdam, is located in the province of North-Holland, a western province of the Netherlands.

Government

The Netherlands has a constitutional monarchy comprised of 12 provinces.

Branches:

  • Executive: chief of state-King Willem-Alexander (since April 30, 2013); head of government-Prime Minister Mark Rutte (since October 14, 2010); cabinet-Council of Ministers appointed by the monarch
  • Legislative: bicameral - States General or Staten Generaal consists of the First Chamber or Eerste Kamer (75 seats; members indirectly elected by the country's 12 provincial councils to serve four-year terms) and the Second Chamber or Tweede Kamer (150 seats; members elected by popular vote to serve four-year terms - at most)
  • Judicial: highest court: Supreme Court or Hoge Raad (consists of 41 judges: the president, 6 vice-presidents, 31 justices (raadsheren), and 3 justices in exceptional service (buitengewone dienst); the court is divided into criminal, civil, tax, and ombuds chambers

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Legal System

Netherlands' legal system is based on a civil law system incorporating French penal theory. The constitution does not permit judicial review of acts of the States General. There are no commercial courts. Therefore, all matters, including payment disputes, are heard in the civil courts.

The country accepts compulsory International Court of Justice (ICJ) jurisdiction declaration with reservations. It accepts International Criminal Court (ICC) jurisdiction.

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Ten Interesting Facts About the Netherlands

  1. Netherlands produces approximately 9 billion flower bulbs annually.
  2. There are 1,180 windmills in the Netherlands.
  3. The Dutch are the second largest consumers of coffee in the world. The Scandinavians are #1.
  4. There are twice as many bicycles as there are cars in the Netherlands, with more than 9 miles of roads designated for cyclists only.
  5. Netherlands means "low country" in Dutch. Approximately half of its surface area is less than one meter above sea level.
  6. The Netherlands has two capitals: Amsterdam, the official capital by constitution, and The Hague, the seat of government.
  7. Famous artists from the Netherlands include: Rembrandt, Vermeer, and van Gogh.
  8. The Dutch company, Phillips, invented the audio tape, the video tape, the compact disc and the CD-ROM.
  9. Founded in 1919, KLM (Dutch Royal Airlines) is the longest running national airline in the world.
  10. Orange carrots, said to be bred in honor of the House of Orange which led the Dutch revolt against Spain, first appeared in the Netherlands in the 16th century. Prior to that time carrots were white, yellow, black, purple or red.

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Economy

The economy of the Netherlands, which ranks as the sixth-largest in the euro-zone, is open, prosperous and heavily dependent on the international financial sector and international trade.

Although the economic fundamentals remain sound, the country was significantly impacted by the financial crisis. Fiscal austerity, a slowdown in world trade and depressed private consumption drew the country into the recession in 2012. The dismal economic outlook is expected to continue in 2013.

Leading Markets (2012): Germany 26.3%, Belgium 14.1%, France 8.8%, UK 8%, Italy 4.5% 

Leading Exports-commodities: machinery and equipment, chemicals, fuels; foodstuffs

Leading Suppliers (2012): Germany 13.9%, China 12%, Belgium 8.4%, UK 6.7%, Russia 6.4%, US 6.1%

Leading Imports-commodities: machinery and transport equipment, chemicals, fuels, foodstuffs, clothing

Top Industries: agro-industries, metal and engineering products, electrical machinery and equipment, chemicals, petroleum, construction, microelectronics, fishing

Top Agricultural Products: grains, potatoes, sugar beets, fruits, vegetables; livestock

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Comparative Economic Indicators – 2012 (estimated)

Netherlands Belgium Denmark France Germany UK
Population (millions)* 16.8 10.4 5.6 66.0 81.1 63.4
Population growth rate (%) * 0.4 0.1 0.2 0.5 -0.2 0.6
Age Structure (%)
(15 to 64 years old)
65.8 65.6 64.8 63.4 66.0 65.4
Age Structure (%)
(65+ years old)
17.1 18.7 18.0 17.9 20.9 17.3
Literacy (%) 99.0 99.0 99.0 99.0 99.0 99.0
Unemployment rate (%) 5.3 7.6 6.0 10.3 5.5 8.0
Inflation (%) 2.8 2.6 2.4 2.2 2.1 2.8
Population below poverty line (%) 10.5 15.2 13.4 7.8 15.5 14.0
GDP** (USD billions) 718.6 427.2 213.6 2,291.0 3,250.0 2,375.0
GDP real growth rate (%) -0.9 -0.2 -0.6 0.0 0.7 0.2
GDP per capita** (USD) 42,900 38,500 38,300 36,100 39,700 37,500
Public debt (% of GDP) 71.1 99.6 46.2 90.2 81.9 90.0
Industrial production growth rate (%) -0.4 -0.8 -1.2 -1.0 -0.5 -2.5
Exports (USD billions) 538.5 315.4 105.1 567.1 1,460.0 474.6
Imports (USD billions) 474.8 322.0 97.0 641.3 1,222.0 642,6
Reserves of foreign exchange and gold (USD billions) 54.8 30.8 89.7 184.5 248.9 205.1
Currency Antillian Gilder
ANG
Euro
EUR
Krone
DKK
Euro
EUR
Euro
EUR
Pound
GBP
Exchange rates (per USD) 07/30/2013 1.8 0.8 5.6 0.8 0.8 0.7
Exchange rates (per EUR) 07/30/2013 2.4 1.0 7.5 1.0 1.0 0.9
Rating in 2012 Corruption Perceptions Index*** 84 75 90 71 79 74
Rating in 2013 Index of Economic Freedom*** 73.5 69.2 76.1 64.1 72.8 74.8

* 2013 estimate
** PPP – Purchasing Power Parity
*** 2012 Corruption Perceptions Index: 80-100=Clean; 0-39=Corrupt
**** 2013 Index of Economic Freedom: 100-80 = Free; 49.9-0 = Repressed

Economic Data from CIA World Factbook

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Credit and Collections

Statutes of Limitations for the Netherlands:

  • Open Account: 5 years with some exceptions
  • Promissory Notes: 6 months from the last day of term presentation
  • Written Contracts: 5 years with some exceptions
  • Oral Agreements: 5 years with some exceptions

Collecting in the Netherlands

According to Jeff Tharnish, ABC-Amega International Department, before you make a phone call or take any other action regarding an outstanding balance due, you must notify the debtor in writing. The initial letter notification should be sent by registered mail to be sure the debtor received it.

Our affiliate attorney in the Netherlands, Jan Hazes of Hakort & Partners, shares the following information.

The Netherlands Chamber of Commerce is the repository of extensive information on Dutch companies. All companies, legal entities, and other local organizations that participate in economic transactions must, by law, register in the Trade Register maintained by the Chamber. If a company is not registered, it is a fraud.

The objectives of the required registration are three-fold:

  1. To foster legal certainty in commercial transactions by maintaining legal information about the company, including it's physical address, registered company name, names of officers, and authorized signatories.
  2. To provide general information about the composition of enterprises and legal entities, including phone, fax, email and web addresses; details about branch locations and number of employees.
  3. To reduce the company's administrative burden by providing one location where this information is provided.

The information in the Trade Register is free except for detailed information requests, such as extracts or a list of addresses. Personal contact information is not available, except in certain cases, for instance, one-person businesses and partnerships where the individual owners are liable for the expenses of the enterprise.

Further information from Mr. Hazes includes:

  • Contingency fee payments to attorneys are forbidden by law in the Netherlands and all other European countries. Lawyers must charge by the hour. Typical rates run from €175 to €300.
  • Court costs in the Netherlands are extremely high even compared with other western European countries. Costs for a claim of €1000 are €473; for claims below €700 court costs are €148. Bailiff costs run between €500 and €700, depending upon the work performed.
  • Default decisions in favor of the creditor are frequent as the debtor is also liable for court and bailiff costs.
  • There are two courts of interest for collection matters: small claims or municipal courts for claims up to €25,000 and district courts for higher claims and filing involuntary bankruptcies or asset seizures.
  • Seizure of the debtor's assets to recover past due accounts is relatively easy in the Netherlands, even before the court has ruled in the collection action. All the creditor's attorney has to do is submit an application to the court stating what the creditor is claiming and the background of the claim. In most cases, the judge approves and the Bailiff can accomplish the seizure within one day.

Dispute Resolution

Apart from an extensive arbitration system, governed by national and international law, there are several possibilities for extra-judicial dispute resolution in the Netherlands. Binding advice (“binding third-party ruling”) and mediation are the most important.

The Netherlands is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Arbitral awards given in the territory of member states can, therefore, be enforced in the Netherlands. 

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Risk Assessment

Coface Country Rating: A3 -- The overall risk is a combination of business-specific factors and factors relating to the country in which the business operates. The analyses use a seven-level ranking. In ascending order of risk, these are: A1, A2, A3, A4, B, C and D.

Coface Business Climate Rating: A1 -- Evaluating the business environment involves measuring the quality of a country’s private sector governance – in other words businesses’ financial transparency and the effectiveness of the courts in settling debts. Evaluations use a seven-level ranking. In ascending order of risk these are: A1, A2, A3, A4, B, C and D.

Ducroire Delcredere Political Risk Rating:1-- low risk
Ducroire Delcredere Commercial Risk Rating: B -- moderate risk

The Belgian Export Credit Agency (ONDD): Risks on Export Transactions

  • Political Risk - Short Term <2 years: 1 -- low risk
  • Political Risk - Medium-Long Term >2 years: 1 -- low risk
  • Commercial Risk: B -- moderate risk

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Business Climate

An important European transportation hub, the Netherlands' economy is marked by stable industrial relations, moderate unemployment and inflation.

The country complies with European Union reciprocity provisions in banking and investment services. Provisions related to government incentives, national rules of incorporation, and access to the capital market are all administered on a non-discriminatory basis. Business laws and regulations are in accordance with international legal practices and standards, and apply equally to foreign and Dutch companies.

The Netherlands trade and investment policy is among the most open in the world. 

Despite predominantly favorable business and investment conditions, relatively high wage costs, heavy administrative burdens, infrastructure issues and a relatively inflexible labor market are potential bottlenecks in attracting foreign direct investment to the Netherlands.

The Dutch government maintains an informative website for foreign companies containing information on doing business in the Netherlands: www.answersforbusiness.nl

Economic Freedom: According to the 2013 Index of Economic Freedom, The Netherlands’ economic freedom score is 73.5, making its economy the 17th freest in the 2013 Index. The Netherlands is ranked 8th out of 43 countries in the Europe region.

Market Access: The Netherlands maintains no preferential or discriminatory export or import policies, with the exception of those that result from its membership in the European Union. It also abides by all internationally agreed strategic trade controls. Domestic restrictions on foreign investment are minimal.

Regulatory System: Laws and regulations that affect direct investment, such as environmental rules, and health and safety regulations, are non-discriminatory and apply equally to foreign and domestic firms.

Intellectual Property Rights: The Netherlands has a generally strong set of laws and regulations that protect intellectual property rights (IPR). However, the enforcement of anti-piracy laws remains a concern to producers of software and digital media. The Netherlands belongs to the World Intellectual Property Organization (WIPO), is a signatory to the Paris Convention for the Protection of Industrial Property, and conforms to accepted international practice for the protection of technology and trademarks.

Exchange Control: Dutch financial markets are fully developed and operate at market rates, facilitating the free flow of financial resources. The Netherlands is an international financial center for the foreign exchange market and for Eurobonds and bullion trade. The flexibility that foreign companies enjoy in conducting business in the Netherlands extends into the area of currency and foreign exchange. There are no restrictions on foreign investors' access to sources of local finance.

Corruption: The Netherlands signed and ratified the UN Convention against Corruption and is party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Anti-bribery legislation makes corruption by Dutch businessmen in landing foreign contracts a penal offense, and bribes are no longer deductible for corporate tax purposes.

For more detailed information on these topics, visit the 2013 Investment Climate Statement - Netherlands, U.S. Department of State.

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Business Protocol in Country

  • Business dress is usually dark and conservative with white shirts or blouses. Avoid colorful, busy ties and scarves.
  • Business cards and other materials can be printed in English and normally don't need to be translated into Dutch.
  • The Dutch take a long-term perspective when looking at business, so be clear as to what your company's intentions are. 
  • The Dutch value their personal time. If you want to foster a good working relationship, do not expect them to work late or over a weekend.
  • Communication is direct. They do not use hyperbole and expect to be told yes or no clearly.
  • Punctuality for meetings is taken extremely seriously. If you expect to be delayed, telephone immediately and offer an explanation. Cancelling a meeting at the last minute could jeopardize your business relationship.
  • Decision-making is consensus driven. Anyone who might be affected is consulted, which can greatly increase the time involved in reaching a final decision.

More information on Business Protocol: Kwintessential

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Sources for further information on doing business in the Netherlands

American Chamber of Commerce - Netherlands

Dutch American Chamber of Commerce

Embassy of the United States, The Hague, Netherlands

Guide to Doing Business in the Netherlands, Houthuff and Buruma (PDF)

The Netherlands Embassy in Washinton, DC

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This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including the Netherlands. For further information, contact info@abc-amega.com.

This report represents a compilation of information from a wide variety of reputable sources.

Comparative Economic Indicators: CIA World Factbook

Risk Assessment information: Coface Country Rating, Ducroire/Delcredere and Political Risk Insurance Center.

Exchange Rates: OANDA.com The Currency Site.