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Netherlands is India’s top FDI destination
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The Netherlands has attracted most of the outward foreign direct investments from India. With Indian corporations increasingly looking at expanding their global footprint by investing overseas, a recent study by Care Ratings showed that a share of 28.8 per cent out of the total Indian foreign investments of $2.9 billion went to or via the Netherlands.
The location as gateway to Europe, the business-friendly climate and the size of the Dutch economy (7th largest economy of the European Union) are the main reasons for Indian companies to establish themselves in the Netherlands. Additionally, the country has an extensive network of almost 100 bilateral tax treaties that avoids double taxation and reduces withholding taxes on dividends. That is why internationally operating companies (including many Indian) have established holdings in the Netherlands.
After establishing holdings, Indian companies often see possibilities for broadening their activities in the Netherlands. The business-friendly climate makes it attractive for foreign companies to open up e.g. sales and marketing offices, customer services centres or research centres. Examples of Indian companies which opened an office in The Netherlands or expanded their Dutch presence last year are Wipro (opened customer service centres), Apollo (opened a global R&D centre) and the acquisition of a Dutch life science company by Dr. Reddy’s.
The Netherlands receives the largest share of Indian exports to Europe. Part of this is meant for transit to the European hinterland, which indicates that India has recognized the Dutch seaports and airports as the “Gateway to Europe”.
Not just Indian FDI, but foreign investments in general have been rising in the Netherlands: a recent survey amongst foreign investors in the Netherlands showed an increase in their appreciation of the Dutch investment climate. Additionally, foreign investments in 2013 rose more than 60% compared to 2012.
More than half of foreign companies in the Netherlands rate the Dutch business climate as good to excellent. This was confirmed by a recent survey carried out by the Netherlands Foreign Investment Agency (NFIA) amongst more than 600 foreign companies. Moreover, rating of virtually all location factors has risen.
Dutch Minister of Economic Affairs, Mr. Henk Kamp said: ‘Global competition for FDI and employment is substantial and growing continuously. The Dutch point of departure is good. But standstill is not an option. In the years to come, the Dutch government will continue to dedicate itself to maintain a business climate that remains ahead of the competition. We do this by investing in decisive location factors for foreign companies such as a well-educated labour force, an excellent physical and digital infrastructure, good amenities and further steps cutting red tape.’
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March 2014
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