03 INTERNATIONAL TECH HUBS SECOND EDITION | BDO LLP
BDO LLP | INTERNATIONAL TECH HUBS SECOND EDITION
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companies a 32% reduction on the first €350k in wage costs, expenses and other investments, with a 14% reduction for costs over the €350k threshold. Start-ups are offered a 40% initial reduction. The Netherlands’ accounting standards are favourable to businesses from abroad. Accounting records can be made in any country, though the original filing may be required sometimes in the Netherlands. Records can be in the business’ own currency, while annual financial statements can be made in English, German, French or Dutch. In light of COVID-19, the Dutch government has joined forces with a number of development agencies to create a policy for start-ups, scale ups and innovative SMEs to offer bridge loans of up to €2 million.
with commercial service providers; tax, customs and immigration authorities; regional investment agencies; and more. With personalised guidance and advice on tax, government, labour and permit procedures, location options and business solutions, tech companies are able to install themselves and innovate with ease. The Netherlands also has many regional innovation funds that encourage start-ups and scale ups to grow with the aim of attracting foreign investment. For example, the Brabantse Ontwikkelings Maatschappij (BOM) is a regional fund that focuses on the deep-tech region of Noord-Brabant, supporting start-ups
THE INVESTOR ANGLE The success of the Netherlands’ tech ecosystem and its relative ease of entry has sparked much foreign investment interest. The Netherlands is currently the recipient of 8% of all FDI into the European Union, attracting a high level of interest from the United States. The country sees over 400 active venture capital and private equity funds; this type of capital is the largest catalyst for business growth, with over €1 billion raised by Dutch start-ups from national and international parties in 2019. Recent interest of VC is predominantly in the software, technology, healthcare & life sciences fintech, food & agritech, travel and logistics sectors. Support from the Dutch government has led to private-public collaboration, such as the Dutch Growth Co-Investment Program, which invests equity alongside private investors into businesses moving past the start-up stage. Pension funds and insurance companies also form a large part of the fabric of the Dutch investment ecosystem. The Netherlands is currently the second in the European Union in terms of the size of its pension fund market, with around €1,360 billion reported in late 2017. Dutch insurance companies place approximately 40% of their available capacity back into the Netherlands. With all of these investment facets combined, the Netherlands provides a fruitful backdrop of capital for companies in all stages of their lifecycle to gain support and develop further.
THERE ARE SPECIFIC R&D TAX INCENTIVES THAT ENGENDER INNOVATION THROUGHOUT THE ENTIRE BUSINESS LIFECYCLE
and scale ups through knowledge sharing and venture capital. The Netherlands’ accessible and cooperative tax administration minimises impediments for business development, and encourages cooperation and transparency between companies and tax authorities. The investment-friendly tax system already has almost 100 bilateral tax treaties to avoid double taxation and to provide limited or no withholding tax on dividends, interest and royalties. For European headquarters, there is 100% participation exemption, and the efficient fiscal unity regime offers tax consolidation for Dutch activities within a corporate group. In terms of research and development, there are specific R&D tax incentives that engender innovation throughout the entire business lifecycle . For example, the WBSO tax credit offers established
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