In 1602, the Dutch East India Company was the first company in the world to go public. This means the Amsterdam Stock Exchange (today NYSE Euronext) is the oldest in the world, making the Netherlands the cradle of global equity trading, from the US railroad and industrial companies of the 19th and 20th centuries to the private equity funds, hedge funds and special purpose vehicles of today.
The Netherlands has become a world-class player in financial services, one that is eager to benefit from the growing trend of globalisation of the financial sector. This globalisation is likely to result in an increased clustering of knowledge and expertise of sub-sectors in the financial industry. The Netherlands is well positioned to play a pivotal role in some of these rapidly growing sub-sectors, including retirement management, financial logistics and financial sustainability services.
Innovation and international orientation, combined with Dutch companies’ ability to negotiate their way across borders without stumbling over conflicting tax laws and legislation or cultural contrasts, is what sets the Netherlands apart from other financial centres. Attracted by these and other unique characteristics, more and more globally oriented professional and financial service providers are choosing to set up business in the country. Together they form a unique and richly diverse cluster, which is adding value at all levels, more so than in most other European financial centres.
A Competitive Climate
The best breeding ground for a sector that is sensitive to the vagaries of the economic cycle is a competitive and politically stable business climate. In the most recent list of top countries worldwide for business establishment, drawn up by the Economist Intelligence Unit each year, the Netherlands is in the top five. An international outlook and openness to foreign investment is firmly engrained in the Dutch culture. Researchers particularly praise the high level of transparency and the reliability of the political and economic system.
The Dutch government is responsive to business needs and is creating business-friendly access to the government specifically for the financial sector through the Financial Markets Office. The office provides a rapid and effective response to questions about legislation, tax, policy and general information relating to financial markets in the Netherlands.
Moreover, the Netherlands Foreign Investment Agency (NFIA) has been set up to help and advise those foreign companies who wish to take advantage of the Dutch business environment. It provides information and practical assistance free of charge and on a confidential basis. The NFIA has set up offices and websites with customised information for companies in different parts of the world.
Being an open culture, one of the characteristics of the Dutch economy and society is its ability to develop and maintain highly effective international networks. Amsterdam alone has more than 400 headquarters and 1400 offices of international companies using the Netherlands above all as a financial knowledge centre and tax hub.
Its role as a co-ordination centre, in particular for group financing and the management of major assets, has continued to grow during the past few years. More and more international companies and institutions seeking a first-class hub for their pan-European activities are therefore moving to the Netherlands.
The Dutch tax system includes an extensive network of tax and legal treaties and a 30% tax break for highly qualified foreign employees. In addition, in the Netherlands a company can obtain swift advanced tax rulings with regard to its tax position, for example on transfer pricing.
Key Connectivity
Amsterdam Schiphol Airport is one of Europe’s main hubs, offering easy access to all the important European markets. In addition, there are the major seaports of Rotterdam and Amsterdam, and the airports of Rotterdam, Eindhoven and Maastricht, and high-speed trains connecting easily to places in Belgium, France, Germany, the UK and further throughout Europe.
The Netherlands is the most densely cabled country in Europe – the second most densely cabled country in the world – and is far ahead in the field of data transport and information distribution. Owing to the high penetration of fibre-optic connections, unlimited volumes of data can be sent and received real-time. Amsterdam also hosts the largest internet hub worldwide, AMS-IX.
Financial cluster
The financial cluster accounts for 7.2% of the Netherlands’ gross domestic product and provides work for 286,000 highly qualified employees.
Besides the top international banks of Dutch origin, Amsterdam is home to almost 60 branches of foreign banks. The Netherlands is also host to more than 100 national and international insurance companies, and hundreds of companies active in the world of pensions and payment services. In addition, the Netherlands has a number of financial service providers specialising in the field of sustainability and the global sustainability desks of international companies.
Encompassing this core is a layer of diverse professional service providers, each offering complementary knowledge, expertise and global networks. Practically all leading international accountancy and law firms, management consultancies and information and communications technology companies have offices in the Netherlands, as does an extremely powerful network of creative businesses such as advertising and marketing agencies, architects and media firms.
The financial sector in the Netherlands excels particularly in the specialist fields of retirement, management, financial logistics and sustainability services.
Considering the costs of an ageing Europe, and apportioned schemes that have to be transformed into capital-covered schemes with room for individual choices and responsibilities, the European Commission introduced the Pensions Directive to open the European pensions market.
The Netherlands has the most mature pensions industry in the EU and ranks highly globally with regard to investments in absolute and relative terms. This leads to an unrivalled knowledge in the areas of pensions, asset/liability management, fiduciary management, asset pooling and other areas relating to an aging population. For the Dutch pension fund industry, which is accustomed to both well-funded pension schemes and readily available premium schemes, an exciting European market awaits.
The Dutch banking industry has a long tradition of efficient transaction processing. The majority of global e-commerce transactions are processed by institutions based in the Netherlands. The pricing for payments is the lowest in Europe. The use of debit cards, credit transfers and direct debits are among the highest in Europe.
As the Netherlands is the leading country in terms of consumers using internet banking, the Dutch banking industry is a frontrunner in financial logistics and has a wealth of experience in areas such as e-payments. For example, iDEAL, the Dutch online payment system, allows consumers to make online purchases in a familiar, secure and simple way. The transaction is completed swiftly and simply in the familiar online banking environment. With the Single European Payments Area, financial logistics becomes an even more international affair and the Netherlands is well equipped to benefit from the expected growth in this sub-sector.
Scarcity of natural resources, growth of the world’s population and other aspects of the long-term trend towards increasing awareness for sustainability and corporate social responsibility are well recognised in the Netherlands. The Dutch investment approach aims for long-term results, having made the Dutch pension funds natural early- adopters and leaders in the area of sustainable investments.
The large Dutch banks have developed extensive sustainability expertise, driving global initiatives, such as the Equator Principles and developing business practices that, in many cases, are regarded as the international standard. Overall, the Dutch financial sector is developing a leading role in financial sustainability services.
Quality of life and workforce
International financial centres’ success factors are not only to be found in hard business and economic data. Quality of life and workforce skills are also key elements. The Netherlands prides itself on being a highly attractive region with a unique and extremely high quality of life for visitors, professionals, expatriates and their families. For instance, the cultural scene is rich and diverse and there are all kinds of restaurants to suit all tastes. Moreover, the average cost of living is relatively low compared to other capital cities, which is why people of many nationalities have made the Netherlands their home.
The country features a highly educated, flexible and motivated workforce. Dutch professionals are among the most multilingual in the world, enabling them to successfully operate in companies in any industry serving customers throughout the continent.
Educational excellence
The Dutch universities maintain close working relationships with each other and their international network, making it a true breeding ground for highly qualified graduates. The Duisenberg School of Finance is a good example. A public-private partnership of the Dutch financial sector and Dutch universities, aimed at promoting top-notch teaching programmes in cutting-edge areas of finance, the school attracts talented students who seek to achieve superior expertise in advanced financial knowledge. It will start the first master programmes in September.
Providing a local scale with a strong international connection, the Netherlands offers a unique and broad variation of financial products and services. Furthermore, the country is uniquely positioned to leverage its geographical and political position, knowledge base and social and economic structure into a global centre of expertise for retirement management, financial logistics and financial sustainability services. International financial professionals acknowledge the Netherlands as a good place to work and a good place to live – making it an obvious choice when it comes to finding the best place to locate pan-European and international businesses.
THE NETHERLANDSTHE FACTS
- The Amsterdam Stock Exchange was the first in the world and founded the first European option exchange
- The Netherlands is frequently voted one of the most attractive locations for headquarters in Europe
- Globally, the highest number of different nationalities in one country can be found in the Netherlands
- The Netherlands is home to one of the most highly educated, flexible and motivated workforces in Europe
- Its regulatory framework is stable and reliable
- Amsterdam hosts the largest internet hub worldwide
- Financial supervision is professional and business oriented
- The Netherlands has a favourable tax regime for both employers and employees and ranks second in the KPMG Total Tax Index
THE FINANCIAL SECTOR IN THE NETHELANDS:Retirement management
- The world’s first pension fund was founded in 1881 in the Netherlands
- The Netherlands has a long-term, stable and solid pension environment
- The total pension capital in The Netherlands is €746 bn (ranked second in absolute terms in Europe)
- One of the world’s largest pension funds is Dutch
Financial logistics
- In the Netherlands, more than 60% of consumers use internet banking, ranking number one globally
- Pricing for cash payments is the lowest in Europe
- The major part of global e-commerce transactions is processed by institutions based in the Netherlands
- The Dutch e-payment system is the best and safest of all currently known systems
Sustainable financing and investing
- Dutch banks lead in sustainable financing and were among the first global banks which developed the Equator Principles
- The largest carbon transaction service provider in the world is located in the Netherlands
- The Dutch pension funds are early adopters and leaders in the area of sustainable (environmental, social and governance-based) investments
GOVERNMENT AND INDUSTRY COMMITMENT
Joining forces in the strategic development of the sector and the economy, the Dutch government and the financial services industry based in the Netherlands founded Holland Financial Centre in 2007.
The main purpose of the Holland Financial Centre is to develop initiatives to help ensure that the Dutch financial sector remains strong, open and able to compete internationally.
To this end, government and industry are in constant dialogue and working to:
- Optimise the business climate.
- Improve the quality of legislation and supervision.
- Continuously develop education and research.
- Encourage innovation and entrepreneurship.
- Further strengthen the specific fields of expertise, including retirement management, financial logistics and financial sustainability services.
