The Netherlands is a modern and highly industrialized country located in Western Europe. It is bordered by Belgium, Germany and the North Sea. The Netherlands was one of the founding countries of both the EU and NATO, showing that it is a nation of progressive and forward-thinking people. With a total area of 41,543 sq. km, the country is just slightly less than twice the size of the U.S. state of New Jersey. The Netherlands is the seventh largest economy in the EU.
Manufacturing in the Netherlands
Typical manufacturing products from the Netherlands include food processing, chemicals, oil and petroleum refining, construction, electrical machinery and metal processing and fabrication. The country is the second largest agricultural exporter in the world, thanks to its highly-efficient mechanized agricultural industry.
Industry makes up just under 18% of the GDP. Industry grew at an estimated 3.3% in 2017.
Other Important Industries
Because of its strategic location and strong infrastructure, the Netherlands plays a key role in the global logistics industry. Healthcare is also a leading sector for the Netherlands, as are creative industries such as design, gaming, fashion and architecture.
Agriculture in the Netherlands employs slightly over 1% of the workforce yet produces enough surplus to export large quantities of food and other agricultural products. Key agricultural commodities include dairy products, animal feed, flowers, vegetables and processed tobacco.
Supply Chain Infrastructure for Manufacturing
The Netherlands is a logistical center for Europe, and the entire world, because of its advantageous location and proximity to the sea, making it one of the easiest countries in the world for moving manufactured goods and raw materials. The Dutch reputation for precision and innovation helps to ensure that materials flow smoothly.
The Netherlands has a total of 29 airports, five of which are considered major airports, and two of which have paved runways capable of handling cargo planes. In 2015, registered air carriers moved more than 5 billion kmt of air freight. The robust air infrastructure ensures that manufactured goods and raw materials move quickly to or from anywhere in the world.
Transportation of goods inside the country is also smooth and easy. Railways, roadways and inland waterways abound. In addition to major seaports at Delfzijl, IJmuiden and Vlissingen, the country has a container port and an LNG port at the largest of them all, Rotterdam, as well as multiple river ports.
At 7.969 million people, the Dutch labor force enjoys a low unemployment rate of 3.4%, down from 6% in 2016. The workforce is also highly educated. A mere 1.2% of the workforce is engaged in agriculture, 17.2% in industry and more than 81% in service occupations.
After the last election in 2017, it took an additional 225 days for the new government to reach a consensus on programs and policies with the four major political parties. The resulting coalition introduced a new fiscal policy that includes more spending on government and public investment, which will increase household consumption and investment. The increased demand for goods and services should further reduce the unemployment rate.
The Kingdom of the Netherlands government is a parliamentary constitutional monarchy that rules the Netherlands, which consists of 12 provinces, and the countries of Aruba, Curacao and Sint Maarten. Bonaire, Sint Eustatius and Saba are special municipalities of the Netherlands. The European Central Bank controls the monetary policies for the Netherlands.
In 2017, the country exported about $556 billion. Primary trading partners included Germany, Belgium, the U.K., France and Italy. Export commodities include machinery and transportation equipment, other manufactured goods, chemicals, mineral fuels, food and livestock.
The Netherlands imported around $453.8 billion in 2017. The primary commodities included machinery and transport equipment, chemicals, fuels, food and clothing. Primary import partners include China, Germany, Belgium, the U.S., the U.K. and Russia.
The Netherlands was a founding member of both the EU and NATO, but traditionally it tries to take a neutral stance in international politics. It does belong to many international organizations, Civil laws are based on the French system, and the country accepts International Court of Justice (ICJ) jurisdiction on international conflicts. The International Court of Justice is based in The Hague.
The Netherlands total tax and contribution rate is 25% of profit. On average, it takes a company about 119 hours per year to fill out tax forms and file taxes.
Starting a business is fairly simple, with minimal legal hurdles. It is less easy to set up electricity and other utilities since those require multiple forms and a wait that can equal up to 110 days in some cases. Construction permits can also be complex.
Getting Down to Business
Doing business in the Netherlands has its own set of advantages and challenges, chief among them the superior logistics and communications infrastructure. This makes the country ideal for global manufacturing and distribution. QAD Internationalization can help simplify VAT rules and other complexities of International business.
How would you describe the state of Manufacturing in the Netherlands? Learn more about manufacturing and doing business in other great countries around the world.