Insight
Doing Business in the Netherlands
June 2026
An overview of the Dutch business environment, including key legal, tax and regulatory considerations for international businesses.
Located in Northwestern Europe, the Netherlands is a founding member of the European Union, NATO, the WTO, the OECD, and the eurozone. It’s one of the most open and internationally oriented economies in the world. The country shares borders with Germany and Belgium, and benefits from excellent access to global markets through the Port of Rotterdam (Europe’s largest seaport) and Amsterdam Schiphol Airport (Europe’s third-busiest airport). Dutch is the official language, though English proficiency is exceptionally high, particularly in business environments. The Netherlands has a population of approximately 18 million people, with major economic centres including Amsterdam, Rotterdam, The Hague, Utrecht and Eindhoven.
Economy
The Netherlands is one of the most prosperous EU member states, with a strong, diversified and innovation-driven economy. Historically known as a trading nation, it has developed into a global hub for logistics, finance, technology and professional services. With many Dutch companies being known all over the globe, key sectors include logistics and distribution, chemicals, energy, agri-food, life sciences, fintech, and high-tech manufacturing. The service sector dominates the economy, but
advanced manufacturing and exports remain critical. Thanks to its strategic location and world-class infrastructure, the Netherlands consistently ranks among Europe’s leading exporters.
Personal taxation
Individuals resident in the Netherlands are taxed on their worldwide income. Income tax is levied through a progressive system consisting of two brackets. Employment income is subject to income tax and compulsory social security contributions, which cover pensions, healthcare, unemployment and disability benefits. Social security contributions are partly capped, meaning higher earners pay a lower marginal rate above a certain income threshold. The Netherlands also offers the well-known
30% ruling, which allows qualifying highly skilled foreign employees to receive up to 30% (to be reduced to 27% as of 2027) of their gross salary tax-free for a limited period, significantly reducing employment costs for international employers.
Corporate taxation
Companies resident in the Netherlands are subject to corporate income tax on their worldwide profits. However, profits earned through business operations in other countries, such as branches or permanent establishments, are generally exempt from tax in the Netherlands. Corporate income tax is levied at two rates, with a lower rate (in 2025: 19%) applying to profits up to a specified threshold (in 2025: € 200,000) and a higher rate (in 2025: 25.8%) for profits above the threshold
The Dutch corporate income tax system includes a participation exemption, under which dividends and capital gains from qualifying shareholdings are exempt from corporate income tax. To qualify, a Dutch company must generally hold at least 5% of the shares in another company, and the participation must meet certain anti-abuse conditions. In addition, the Netherlands has an extensive network of double taxation treaties. Due to these favourable regulations, the Netherlands is widely used as a location for operating and holding companies in international group structures. Withholding taxes on dividends apply, though exemptions are available under EU directives and tax treaties. Withholding tax on interest and royalties is limited and primarily targeted at payments to low-tax jurisdictions.
Value added tax (VAT)
Dutch VAT legislation follows EU VAT directives. The standard VAT rate is 21%, applied to most goods and services. A reduced rate of 9% applies to essential goods and services such as food, medicines, books and public transport. Certain transactions, including exports outside the EU and intra-community supplies, are zero-rated.
Workforce
The Dutch workforce is highly educated, multilingual, and internationally oriented. English is widely spoken, and many professionals also speak German or French. The education system places strong emphasis on practical skills, technology, and innovation.
Labour laws provide strong employee protections, including rules on dismissal, working hours and collective agreements. While labour costs are relatively high compared to Central and Eastern Europe, productivity levels are also high, and flexible working arrangements are common.
Investing in the Netherlands
The Netherlands is politically stable, has a strong legal framework, and is known for its transparent and predictable regulatory environment. It consistently ranks highly in global competitiveness and ease-of-doing-business indices.
Its strategic location, excellent infrastructure and access to the EU single market make it particularly attractive for European headquarters, logistics centres and technology-driven businesses. Key investment areas include:
- logistics and supply chain management
- technology and software development
- renewable energy and sustainability
- life sciences and healthcare
- agri-food innovation
Setting up a business in the Netherlands
Dutch businesses can operate under several legal forms. The most common structures are:
- Sole ownership – simple structure with full personal liability
- Partnerships – including general and limited partnerships
- Private limited company (B.V.) – the most popular structure for foreign investors
- Public limited company (N.V.) – typically used by larger or listed companies
A B.V., the most commonly used structure due to its flexibility and limited liability, can be established with a minimum share capital of just €0.01 and may have one or more shareholders. The incorporation process is efficient and can usually be completed within a few days through a Dutch civil-law notary.
Banking and digitalisation
The Netherlands has a highly developed banking system, supported by major international banks and strong domestic institutions. Opening a business bank account generally requires physical identification of directors and shareholders, in line with EU anti-money laundering rules.
The country is a leader in digitalisation. Tax filings, payroll reporting and many regulatory obligations are handled electronically. The Dutch tax authority provides efficient online systems, and advanced accounting and ERP solutions are widely used.
Incentives to invest
The Dutch government offers a range of incentives aimed at encouraging innovation and foreign investment, including:
- Research and Development (R&D) tax credits
- Innovation Box regime offering a reduced tax rate (in 2025: 9%) on qualifying profits
- investment allowances
- subsidies for sustainable and green projects
Foreign investors are treated the same as Dutch nationals, with few restrictions on foreign ownership.
The Netherlands as a business destination
The Netherlands combines economic stability, an open international outlook and a highly skilled workforce with excellent infrastructure and strong legal protections. Its favourable tax environment, extensive treaty network, and ease of doing business make it an attractive gateway to Europe. For companies seeking a reliable, innovation driven, and internationally connected base within the European Union, the Netherlands remains one of the most compelling business destinations.
About the authors
Dennis Zuidersma
Apeldoorn, Netherlands
Dennis is a Director at Boon Accountants Belastingadviseurs BV, Russell Bedford’s firm in Apeldoorn, the Netherlands. He is a tax consultant and primarily advises family-owned small, medium and large enterprises and their shareholders.
Chris Bor
The Hague, Netherlands
Chris is a Senior Consultant at Stolp+KAB, advising clients on restructuring, mergers and acquisitions, contracting, and succession planning. Drawing on his background in tax, legal and finance, he delivers tailored, practical solutions for his clients.