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US businesses rejecting the Netherlands due to less competitive business environment
| Published: | 22 May at 6 PM |
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American companies are now shying away from opening up in the Netherlands due to its increasing lack of competitiveness.
For a good while, the country was destination number one for American conglomerates wishing to open European offices, but changes to the Dutch business climate are persuading them to look elsewhere in Europe. France, Ireland, Germany, Switzerland and even the UK are now considered more suitable. Projects involving US investment in the Netherlands stood at 88 in 2016, falling to 75 the following year and totalling just 68 in 2017, according to the American Chamber of Commerce in Amsterdam.
One reason is the tax rate on profits, considered uncompetitive compared with other European business centres, and recently introduced pledges to cut corporate income taxes from 20 and 25 per cent to 16 and 21 per cent aren’t enough to encourage new business from the US. Interestingly, American companies are also siding with expat protest campaigns aimed at forcing the Dutch government to give up on their recent decision to clamp down on the 30 per cent ruling expat tax advantage for established foreigners.
Until very recently, expat professionals were allowed up to 30 per cent of their wages tax-free for a period of seven years, but the government slashed the seven years to five for both expats already working in the country and those arriving in future. Tens of thousands of employed expats who’d based their personal finances on the seven-year agreement are now heavily criticising the new rule in the hope it will be reversed for those already working in the country.
For a good while, the country was destination number one for American conglomerates wishing to open European offices, but changes to the Dutch business climate are persuading them to look elsewhere in Europe. France, Ireland, Germany, Switzerland and even the UK are now considered more suitable. Projects involving US investment in the Netherlands stood at 88 in 2016, falling to 75 the following year and totalling just 68 in 2017, according to the American Chamber of Commerce in Amsterdam.
One reason is the tax rate on profits, considered uncompetitive compared with other European business centres, and recently introduced pledges to cut corporate income taxes from 20 and 25 per cent to 16 and 21 per cent aren’t enough to encourage new business from the US. Interestingly, American companies are also siding with expat protest campaigns aimed at forcing the Dutch government to give up on their recent decision to clamp down on the 30 per cent ruling expat tax advantage for established foreigners.
Until very recently, expat professionals were allowed up to 30 per cent of their wages tax-free for a period of seven years, but the government slashed the seven years to five for both expats already working in the country and those arriving in future. Tens of thousands of employed expats who’d based their personal finances on the seven-year agreement are now heavily criticising the new rule in the hope it will be reversed for those already working in the country.
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