The Netherlands compared to other European countries

This article will delve into a comprehensive ranking and comparison of the Netherlands with its fellow European nations, focusing on key business indicators, such as ease of doing business, innovation indices, economic stability, digital infrastructure, and tax regimes. By juxtaposing these factors, we aim to provide a nuanced understanding of where the Netherlands stands in the European business ecosystem and what other countries can learn from this thriving economy. For further reading we recommend our guides on doing business in Europe.

The size of the Dutch market

The population of the Netherlands is the 7th in the EU. Below you can see the total size of the market in GDP corrected by purchasing power parity. This shows that the Netherlands is in fact of the larger markets in Europe with a relatively very high output per person. The GDP figures are adjusted for PPP (Purchasing Power Parity) meaning adjusted for the relative price level of goods and services and inflation.

CountryPopulation estimateGDP - PPP (billion $)GDP - PPP per capita (billion $)
The Netherlands18.000.0001,05560,461
Czech Republic11.000.00046042,956

Looking at the GDP per capita on the map, we can clearly see that together with Luxembourg, Norway and Ireland, the Netherlands has one of the highest output per person of the continent.

GDP per capita PPS EU EEA

Online Business - The Netherlands versus Europe

The Dutch market for online shopping and digital services is one of the largest in Europe. Take a look at the relatively large size of the Dutch search population compared to the other. (Source: Google Ads)

CountryReach (search population)
the Netherlands30.200.000
Czech Republic9.040.000

Online shopping in the Netherlands

The Netherlands has a very mature e-commerce market. The country's population are extremely used to ordering goods, food and services online. Only the Nordic countries and parts of the UK come close to the Netherlands in that respect, as you can see in the figure below.

map of europe with percentage of people per country who order goods and services online

Advantages to obtaining residency or visa in the Netherlands

If you are a EU citizen you can enjoy the four freedoms of the EU: free movement of people, capital, goods and services.

Those who are do not have a EU/EEA passport do not have this right automatically. They will need to apply for a residency permit.

For example an American needs to apply for a residence permit in the particular European country to be able to stay there. Do note that you are normally not required to have a residency permit to register a business in an EU/EEA country. A good example is the Dutch-American-Friendship-Treaty (DAFT) that allows American entrepreneurs to set up their business, work and stay in the Netherlands. The same goes for the Dutch Japanese Trade Treaty.

Quality, availability and flexibility of the workforce

The Dutch population ranks in the top of European countries with populations with highly developed digital skills.

top countries based on digital skills

A similar result can be seen in the EU's DESI Index. This ranking measures the status and progress of European countries' digital performance.

Education level of the Dutch workforce

The Dutch workforce has a relatively high percentage of people with higher education as can be seen in the chart below. This OECD data compares European countries and the percentage of the population between 25 and 64 years old that has completed the highest level of education.

Population with tertiary education europe OECD

Infrastructure quality in the Netherlands

The Netherlands has a highly-developed physical infrastructure. This is reflected in the World Economic Forum's annual country's competitiveness report. The Netherlands comes second, just after Switzerland on the infrastructure category.

wef ranking best quality general infrastructure

Arguably just as relevant for businesses involved in importing and exporting physical goods is the quality of a country's port infrastructure. These countries are ranked based on the quality of their infrastructure, not the amount or value of goods that pass through them.

This is where the Netherlands takes the top spot. The best example is Europe's largest harbour, the Port of Rotterdam.

wef ranking of best port infrastructure

Technology adoption

The NRI Index is a comprehensive ranking that measures among other things a country's digital readiness. In other words: how likely is it that a country, its people, government and businesses makes use of the opportunities that technology hands them. The Netherlands ends up third in Europe.

The ease of starting and running a business

Setting up a business can be a bureaucratic process. This is somewhat different in the Netherlands, where a business can be up an running in a matter of days. See the World Banks figure below to get an idea of the time it takes in other countries. Please note that this table does not take into account all aspects of a setup, such as opening a bank account and obtaining full tax registration.

Taxes in the Netherlands

The Netherlands has a very competitive tax climate for international businesses. First of all, the corporate income tax is relatively low.

Corporate income tax compared

CountryCorporate Income Tax RatePatent Box Regime (R&D rate)
Germany30% on average. Combination of federal and municipal tax.-
United Kingdom25%10%
Italy28% approximately, based on national and regional taxes-
Netherlands19 - 25,8%9%
Lithuania5 - 15%5%

Corporate income tax in the Netherlands

Especially for small and medium-sized businesses will pay very limited corporate tax:

SME tariff19% (up to €200.000)19% (up to €200.000)
Standard tariff25,8% (profits exceeding €200.000)25,8% (profits exceeding €200.000)
Innovation Box9% on profits derived from qualifying innovative activities9% on profits derived from qualifying innovative activities

Personal income tax

This is the tax you will pay over any salary you take from the company. This tax is relatively low if you earn under a certain amount, and comparable with other Western and Northern European countries if you earn a higher salary.

Personal Income Tax (IB)20232024
Bracket 136,93% up to €73.03136,97% up to €75.518
Bracket 249,50% from €73.03149,50% from €75.518

Dividend tax

Any dividend can be paid out at one of Europe's lowest dividend taxes:

Box 2: Substantial Interest202220232024
Up to €67.00026,9 %26,9 %24,5 %
Over €67.00026,9 %26,9 %33 %

Tax advantages

The Netherlands offers all sorts of tax benefits, for example a reduced corporate tax for highly innovative businesses. Read all about tax advantages for Dutch businesses here.

A fair comparison

What you end up paying in tax depends on all sorts of variables. If you want to make a fair comparison, you should look at least at:

  • Tax on your company's profits
  • Tax on whatever you take out of the company, capital gains and dividends
  • Taxes on your employee's wages and social security costs for employees
  • Personal taxes (personal income tax, wealth tax)
  • VAT
  • Any industry-specific taxes and levies

The Netherlands and its tax treaties

Holland has a large amount of tax treaties, as can be seen on the map below. We have written a blog post where the use of these tax treaties is described in more detail.

tax treaties per country ranking europe

The cost and standard of living

The Netherlands has one of the world's highest living standards. This is demonstrated in the OECD's Better Life Index below:

OECD Better Life Index rankingCountry
7The Netherlands
10United States
12New Zealand
14United Kingdom

The Netherlands also scores high on another very influential ranking: the UN's Human Development Index (HDI). The HDI compare populations based on lifespan, education and purchasing power.

human development index 2020

Healthcare system in the Netherlands

Nothing is quite as important as your health. The Netherlands is structurally in the top of countries with the best healthcare system in the world. And it is affordable too!

Corruption (or the lack of it) in the Netherlands

To have a stabile and predictable business environment it is crucial to leave no room for corruption. That is Transparency International's Corruption Perception Index is a relevant indicator. This index ranks countries from lowest to highest on public sector corruption as perceived by business people.

Corruption Perception Index

Dutch entrepreneurial spirit

The Netherlands has a very entrepreneurial spirit. A relatively large part of the population is self-employed.

Self employed percentage of workforce EU

While this does not say everything, a more relevant indicator is the percentage of high-growth enterprises. The map below shows the percentage of businesses per country with at least 10 employees with employment growth of 10 percent or more over a 3 year period. The Netherlands performs in the top tier.

density of high growth enterprises in EU map

You can find a lot more information, including factsheets per country, on this page.

International reputation

The Netherlands is in the top 10 of country's with the best reputation according to Knoema.

Ranking of countries with the best reputation

European organizations

The Netherlands is part of basically every relevant European and international organization.

The Netherlands is part of the EU.

Map of Europe with EU member states

The Netherlands is a member of the Euro currency, which makes for seamless payments across large parts of Europe, see below:

Map of Eurozone countries

Proficiency in English

The Dutch are very proficient in English. They even top the English Proficiency Index.

ranking of European countries based on proficiency in English

Access to financing in the Netherlands

The European Investment Fund (EIF) publishes an annual ranking of access to capital for small and medium-sized businesses. The Netherlands performs considerably well given its size. There is a relatively well developed VC market and banks are eager to lend out money. In addition to those, there are many state-run subsidy and regional funding projects.

For more information on access to funding in the Netherlands, please read this in-depth article.

the number and stage of VC-backed companies after the year 2000,
Regional distribution of VC investments across different stages of financing

Best type of businesses to start in the Netherlands

One of the most popular businesses to start up in the Netherlands is a consulting firm. From very small and specialized to large strategy consulting firms: hardly any other type of business is growing faster than consulting. As a real knowledge economy, it makes sense that consultants thrive in the Dutch business landscape.

Read our advice on how to start a consulting business in the Netherlands.

E-commerce and retail

The Netherlands has one of the best developed infrastructures of Europe for e-commerce and retail business. A perfect and dense road network, a large amount of transport companies that can bring your goods anywhere in the country within hours and anywhere in Europe within a few days. You are both close to the mainports of Rotterdam and Schiphol and to the large markets of Germany, France and the UK. Not in the least, the Dutch market itself is well adapted to online shopping.

Read a thorough analysis on how to setup a e-commerce business in the Netherlands.

Technology and highly-innovative businesses

The Netherlands is a highly innovative country, always reinventing itself through innovation and new technology. There is a large pool of skilled workers. In addition to that there are various visa programs that make moving talent to the Netherlands relatively easy. There is also great public-private collaboration, for example in the pharmaceutical industry.

Headquarters and holding companies

The Netherlands is a perfect base for a holding company owning subsidiaries in the Netherlands or abroad.  This can be a useful way to structure several entities and centralize profits (and for example protect intellectual property).

You can read more about this on our page about the Dutch Holding BV structure.

Overview of the relevant contracts for a BV holding structure

Logistics / transport company

The most important reasons why the Netherlands is an attractive destination for your transport or logistics business are the availability of staff, a good infrastructure, affordable energy prices and easy access to entire Europe.

Read more on setting up a transport business in the Netherlands.

Get a free quote for starting a business in the Netherlands

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