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FDI Agencies Q&A
Logistics Hub Investments in Holland
Author: 123jump.com Staff
FDIhub.com
Last Update: Aug 20, 6:30 AM ET
FDIhub.com
Last Update: Aug 20, 6:30 AM ET
 Bas Pulles |
The Netherlands has been accustomed to the forces of globalization for decades, but now increasingly, foreign investors view it again as a gateway to the expanding European Market.
Netherlands Foreign Investment Agency |
''More than half of the European logistics operations of foreign companies are based in the Netherlands.''
Q: What does foreign direct investment mean to the Netherlands?
A: The Netherlands is an open economy in the European Union and is the world’s seventh largest inward receiver of investments. We have about 9,000 foreign-owned companies in our country and over half-a-million people work for those companies, which means that almost 16% of the people are working for a foreign company.
Leading foreign investors in the Netherlands are the United States, Germany, Belgium, United Kingdom, and Japan.
Asia is growing very rapidly in the inward investment portfolio. Traditionally, Japanese and Taiwanese investments have been strong but in the last three years there has been a strong increase from Chinese, Indian, and Korean investments.
Q: How has the Dutch economy changed in recent years?
A: Netherlands is a service-oriented economy, which is moving more and more towards added value and knowledge intensive activities.
More than half of the European logistics operations of foreign companies are based in the Netherlands. Goods come here and enter the European market via the largest harbor of Europe, in Rotterdam, and one of the largest airports, Amsterdam’s Schiphol, to be re-exported to the major economic zones in Central Europe and Germany and in the north of France.
Prior to the current economic crisis, we had a growth of 2% to 3% GNP and a sound government budget with a surplus. That has changed very rapidly over the last nine months and we expect the economy to shrink by 4.5% in 2009 and recover 0.75% in 2010. We predict that the government budget will fall back from a surplus of 1% into a deficit range over the next two years of between 6% and 7%. As an open economy with a large and internationally oriented financial sector and high trade volumes, the Dutch economy has been extra vulnerable for the world wide drop in trade and the problems in the banking sector.
Traditionally, unemployment in the Netherlands over the last few years has been low. We still have the lowest unemployment rate in Europe. It was about 4% last year, but it is expected to double in the next two years -- up to 8% by the end of 2010.
Q: How are the demographics of the Netherlands changing?
A: We have an increasingly aging population of about 16.5 million. That demographic trend will continue until about 2040. Our birthrate growth is just not high enough to compensate for the aging trend. So the general graying of the population will cause problems for our labor market, and put additional strain on our budgets to pay for more pensions and increasing health costs.
The shortages in the labor market were already being felt before the financial crisis started. They were noticed in specific areas such as the high tech sector.
For example, we had problems in placing ICT specialists and software specialists in some of the foreign companies in the Netherlands. We had problems with process operators for the chemical industry. So, specific highly skilled jobs were scarce. As a result, we have improved our Highly Skilled Migrant scheme to get ICT specialists from outside the European Union, namely from India, US and China.
On the other hand, we have a growing immigrant population that dates back from the last century. A lot of people from Turkey and Morocco came to the Netherlands in the sixties for the steel industry and some of the heavy manufacturing industries. Almost a million inhabitants out of the 16.5 million are second- or third-generation immigrants from the North African region who are in lower-skilled jobs. A big emphasis in the Netherlands has been put on integration and education so that we can use that labor force in the higher-skilled jobs of the future.
Q: Why are foreign companies choosing the Netherlands for their inward investments?
A: Most foreign companies coming to the Netherlands are looking at European markets, using this country as a home base for activities that are Pan-European. The educated and English-speaking qualities of the Dutch population, together with the favorable tax climate, are great incentives for companies to establish their European headquarters here. While many companies are particularly interested in using the Netherlands as a hub for logistics, more and more firms are now choosing the Netherlands as a home base for headquarter activities and research and development efforts.
Most of the manufacturing activity that lands in the Netherlands tends to be process-oriented, from the chemicals or energy sector. These are large capital-intensive investments.
The “hottest” area right now is energy – wind and solar energy, as well as power plants and natural gas storage. Very often, these companies are focused on the Dutch market. They focus primarily on delivering energy to the Dutch and Northwest European markets.
Q: What are the key competitive advantages that Netherlands has in logistics compared to other European nations?
A: The Netherlands is a gateway to Europe, not only for goods but also for passengers and information. Because of our superior digital infrastructure, we are also a gateway for bits and bytes. We sometimes call it the Portal to Europe. We are very well wired and connected with the highest penetration of broadband glass fiber connections to the home and industry of any European country. Europe’s largest Internet exchange is in Amsterdam.
A: The Netherlands is an open economy in the European Union and is the world’s seventh largest inward receiver of investments. We have about 9,000 foreign-owned companies in our country and over half-a-million people work for those companies, which means that almost 16% of the people are working for a foreign company.
Leading foreign investors in the Netherlands are the United States, Germany, Belgium, United Kingdom, and Japan.
Asia is growing very rapidly in the inward investment portfolio. Traditionally, Japanese and Taiwanese investments have been strong but in the last three years there has been a strong increase from Chinese, Indian, and Korean investments.
Q: How has the Dutch economy changed in recent years?
A: Netherlands is a service-oriented economy, which is moving more and more towards added value and knowledge intensive activities.
More than half of the European logistics operations of foreign companies are based in the Netherlands. Goods come here and enter the European market via the largest harbor of Europe, in Rotterdam, and one of the largest airports, Amsterdam’s Schiphol, to be re-exported to the major economic zones in Central Europe and Germany and in the north of France.
Prior to the current economic crisis, we had a growth of 2% to 3% GNP and a sound government budget with a surplus. That has changed very rapidly over the last nine months and we expect the economy to shrink by 4.5% in 2009 and recover 0.75% in 2010. We predict that the government budget will fall back from a surplus of 1% into a deficit range over the next two years of between 6% and 7%. As an open economy with a large and internationally oriented financial sector and high trade volumes, the Dutch economy has been extra vulnerable for the world wide drop in trade and the problems in the banking sector.
Traditionally, unemployment in the Netherlands over the last few years has been low. We still have the lowest unemployment rate in Europe. It was about 4% last year, but it is expected to double in the next two years -- up to 8% by the end of 2010.
Q: How are the demographics of the Netherlands changing?
A: We have an increasingly aging population of about 16.5 million. That demographic trend will continue until about 2040. Our birthrate growth is just not high enough to compensate for the aging trend. So the general graying of the population will cause problems for our labor market, and put additional strain on our budgets to pay for more pensions and increasing health costs.
The shortages in the labor market were already being felt before the financial crisis started. They were noticed in specific areas such as the high tech sector.
For example, we had problems in placing ICT specialists and software specialists in some of the foreign companies in the Netherlands. We had problems with process operators for the chemical industry. So, specific highly skilled jobs were scarce. As a result, we have improved our Highly Skilled Migrant scheme to get ICT specialists from outside the European Union, namely from India, US and China.
On the other hand, we have a growing immigrant population that dates back from the last century. A lot of people from Turkey and Morocco came to the Netherlands in the sixties for the steel industry and some of the heavy manufacturing industries. Almost a million inhabitants out of the 16.5 million are second- or third-generation immigrants from the North African region who are in lower-skilled jobs. A big emphasis in the Netherlands has been put on integration and education so that we can use that labor force in the higher-skilled jobs of the future.
Q: Why are foreign companies choosing the Netherlands for their inward investments?
A: Most foreign companies coming to the Netherlands are looking at European markets, using this country as a home base for activities that are Pan-European. The educated and English-speaking qualities of the Dutch population, together with the favorable tax climate, are great incentives for companies to establish their European headquarters here. While many companies are particularly interested in using the Netherlands as a hub for logistics, more and more firms are now choosing the Netherlands as a home base for headquarter activities and research and development efforts.
Most of the manufacturing activity that lands in the Netherlands tends to be process-oriented, from the chemicals or energy sector. These are large capital-intensive investments.
The “hottest” area right now is energy – wind and solar energy, as well as power plants and natural gas storage. Very often, these companies are focused on the Dutch market. They focus primarily on delivering energy to the Dutch and Northwest European markets.
Q: What are the key competitive advantages that Netherlands has in logistics compared to other European nations?
A: The Netherlands is a gateway to Europe, not only for goods but also for passengers and information. Because of our superior digital infrastructure, we are also a gateway for bits and bytes. We sometimes call it the Portal to Europe. We are very well wired and connected with the highest penetration of broadband glass fiber connections to the home and industry of any European country. Europe’s largest Internet exchange is in Amsterdam.
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