As a global entrepreneur, choosing the best countries for business is a critical decision. When thinking about European countries to establish a business, the Netherlands and Belgium often come to mind. They both have unique strengths and are known for their business-friendly environments, but overall, the Netherlands is one of the best countries for work-life balance. But which country among these two is the best to start a business for you?
Why you should consider the Netherlands for your business
Considering With one of the lowest corporate tax rates in the European Union, the Netherlands is one of the best countries offering a favorable environment for companies to thrive and grow. The Dutch workforce, notably in Rotterdam and other major cities, is highly educated and proficient in English, simplifying operations for international businesses. The country is known for its innovative and open-minded mentality, making Additionally, with its small size, the Netherlands functions as an excellent gateway to Europe, providing easy access to neighboring countries such as Belgium and Germany, with cities like Antwerp, Dusseldorf, and Amsterdam all just an hour away. This geographical advantage allows for easy expansion and access to a larger market. Overall, the Netherlands provides a business-friendly environment with a highly skilled workforce, low taxes, and strategic location, making it a compelling choice for companies looking to establish or expand their presence in Europe.
The Netherlands has a business-friendly climate
The Netherlands, particularly HouseofCompanies.io's base in Breda, has long been known for its business-friendly climate, making it an attractive destination for savvy entrepreneurs. Schiphol and the Port of Rotterdam, part of the country's strategic location and well-developed infrastructure, along with the highly-educated Dutch workforce all contribute to the Netherlands' appeal for business investment.
The Netherlands also boasts a stable political and economic environment, which provides a sense of security for companies looking to establish a presence in the country. Additionally, the Dutch government has implemented various policies and incentives to support business growth and innovation, including tax breaks for research and development activities, as well as assistance for startups and small businesses.
The Netherlands is one of the best countries thanks to an efficient and transparent legal system, along with strong intellectual property protection, which further enhances the business environment. Moreover, the country's commitment to sustainability and innovation has led to the emergence of thriving industries in areas such as renewable energy, agriculture technology, and creative industries. Overall, the Netherlands provides a conducive environment for business success, with a combination of factors that make it an attractive location for companies looking to expand their operations or establish a presence in Europe.
Many, many tax treaties between the netherlands and countries worldwide to reduce (double) taxation
The Netherlands, being a member of the OECD, has been busy signing tax treaties left and right to help alleviate the burden of double taxation for all you global business moguls out there. We're talking about a whole slew of agreements with countries like the United States, Brazil, and India. And you know what that means? It means less of your hard-earned cash being gobbled up by those pesky withholding taxes on outgoing dividends. It's like a little gift from the tax gods, especially if you're thinking about setting up shop in the Netherlands and need to send some of that sweet, sweet profit back home.
So, hey, if you're the entrepreneurial type with dreams of international expansion, these tax treaties might just be the golden ticket you've been looking for. I mean, who doesn't love a good old-fashioned tax break, am I right? Plus, it's nice to know that countries around the globe are putting in the effort to make the whole international business game a little bit more fair and friendly.
Well connected and international - ideal for global entrepreneurs
The Netherlands is like the popular kid at school who knows everyone and is always throwing the best parties - except in this case, the party is the international business scene, and the Netherlands is the ultimate host. With its well-connected infrastructure and international mindset, this small but mighty country is the ideal playground for global entrepreneurs. It’s like the Amsterdam Airport of business opportunities - constantly bustling with people from all over the world, ready to exchange ideas, strike deals, and make connections. And let’s not forget about the Dutch themselves - they’re known for their openness, directness, and impeccable English skills, making it a breeze to communicate and collaborate with them. Not to mention, the Netherlands has a strong digital infrastructure and is a frontrunner in technology and innovation, so you can rest assured that you’ll have all the tools and resources you need to thrive in the international business arena. So, if you’re ready to take your business to the next level and make your mark on the global stage, pack your bags and head to the Netherlands - the land of endless opportunities and endless stroopwafels.
A booming startup scene in the Netherlands
The startup scene in the Netherlands has been experiencing a remarkable surge in recent years, with an array of organizations and initiatives facilitating the growth of innovative and entrepreneurial endeavors. The Next Web (TNW), a renowned tech media company, has played a pivotal role in fostering the startup ecosystem through its various events, such as The Next Web Summit, which brings together industry leaders and budding entrepreneurs from across the globe. Additionally, Techleap, an independent non-profit organization, has been instrumental in offering support and guidance to promising startups, particularly through initiatives like the Startup Facilitation Status by the IND, which streamlines the process of obtaining Startup visas for non-EU entrepreneurs. Furthermore, the presence of numerous incubators and accelerators in the region has provided startups with invaluable resources, mentorship, and networking opportunities, facilitating their growth and success. Prince Constantijn, as the Special Envoy at Techleap, has also been actively involved in promoting and championing the interests of startups in the Netherlands. Furthermore, the country has made it easier for startups to access funding, whether through crowdfunding platforms or fundraising events, thereby ensuring that promising business ideas have the financial support they need to flourish. Overall, the combination of these various factors has contributed to a thriving and dynamic startup landscape in the Netherlands, making it an attractive destination for budding entrepreneurs and a hotbed for innovation and technological advancement.
Doing business in Belgium: Advantages and risks
Doing business in Belgium presents both advantages and risks. On one hand, Belgium has relatively high corporate taxes, which can be seen as a disadvantage for businesses looking to maximize profits. Additionally, the formation procedure and other corporate requirements in Belgium are relatively bureaucratic, which can lead to delays and increased administrative burden for business owners.
However, Belgium also offers advantages for new entrepreneurs, such as the Ondernemingsloket, which is a one-stop shop for business registration, thereby streamlining the process and reducing administrative obstacles for new business owners. Furthermore, Belgium's social security on salary payments is relatively high, providing a safety net for employees, but also increasing costs for employers. It is worth noting that the abolition of the 30% tax ruling in the Netherlands has also made Belgium a more attractive option for businesses and employees. In conclusion, while there are certain drawbacks to doing business in Belgium, such as high corporate taxes and bureaucratic procedures, there are also advantages, such as simplified business registration and the security provided by the social security system. It is important for businesses to carefully weigh the advantages and risks of operating in Belgium before making any decisions.
Strategic location of Belgium
Belgium is well-regarded as a hub of international accessibility and economic activity thanks to its highly strategic geographical location. Located at the heart of the European Union and bordering notable nations such as Germany, the Netherlands, and France, Belgium steeply benefits from being a central juncture point for diverse cultures, languages and economies. Bordered by the affluent sea, Belgium is home to the port city of Antwerp, whose harbor is one of the largest in the world. Named the second biggest port in all of Europe, Antwerp Harbor not only stimulates Belgium's national economy but also provides a significant gateway for international trade.Unquestionably, Belgium's locational advantage extends further to its robust and diverse transportation networks. Brussels, the capital city of the country, stands as a stellar example of this. Being Belgium's largest metropolis and the administrative epicenter of the European Union, Brussels is served by multiple airports, including Brussels Airport and Brussels South Charleroi Airport. Further enriching Belgium's extensive connectivity is its advanced railway system. Belgium boasts an incredibly dense railway network that allows frequent direct trains to neighboring countries like The Netherlands, France, Luxembourg, Germany, and even to the United Kingdom via the Eurostar service.
This not only cultivates travel, tourism, and connectivity within Europe but also significantly bolsters Belgium's role as an international hub, inviting business prospects and fostering economic growth on a global scale. Evidently, Belgium's geographical blessings – epitomized by the prominence of cities like Antwerp and Brussels and accentuated by harbors, airports, and an excellent rail network contribute greatly towards making it a strategic location within the international sphere. No doubt, every aspect from political significance to transport infrastructure is leveraged to enhance Belgium's strategic importance, making it a vital player in global dynamics.
Introduction and advantages of the Diversified economy of Belgium
Belgium, one of the geographical heartlands of Europe, is positioned as a key player in the global economic arena partially due to its significantly diversified economic structure. Its strategic geographical location, coupled with an advanced transportation network, makes it an ideal hub for international commerce and trade, serving as a compelling testament to the dynamism and robustness of its diversified economy.
One of the salient advantages of Belgium's diversified economy is its resilience against various shocks, and its ability to consistently maintain stability. The diversity of the sectors within its economy, ranging from manufacturing and services to ICT and pharmaceuticals, provide multi-dimensional leverage in combating cyclical economic downturns.
This broad spectrum of economic activity diminishes reliance on any single industry, thereby protecting the economy from sector-specific fluctuations and offering a robust distribution of risks.Furthermore, Belgium's diversified economy is largely driven by its strong export performance. Its prominent sectors like the automotive industry, chemical production, textiles, and pharmaceuticals not only contribute substantially to its Gross Domestic Product (GDP), but also significantly bolster its overall trading activities. As a high-income nation, Belgium enjoys a competitive edge in innovative and high-value industries, underpinned by a highly-skilled and multilingual workforce that further amplifies its economic attractiveness to international investors.In addition, considering the role of knowledge-intensive services, ICT sector, and green technology in shaping the future of global economy, Belgium is embracing economic diversification to drive sustainable growth. The Belgian government continues to create an environment conducive to entrepreneurship and innovation, focusing on research and development through ambitious initiative programs, further enhancing its appeal on the global stage.In conclusion, it is explicit that Belgium's diversified economy offers several advantages and opportunities. It paves the way for balanced growth, economic resilience, and increased competitiveness on both regional and global scales.
Brussels, a global city ideal for global entrepeneurs planning to start a business in Europe
Belgium's capital, Brussels, has cultivated a reputation as a global city, ideally suited to global entrepreneurs who may be contemplating the establishment of a business in Europe. Located at the heart of the European Union, it serves not just as a symbol of the EU's political power, but also as an attractive, strategic commercial hub boasting advanced infrastructure, a robust economy and a proactive government that supports entrepreneurship. Replete with governmental and financial institutions, Brussels exudes an environment of stability and reliability, characteristics much sought after by entrepreneurs seeking to plant entrepreneurial roots. Its favourable geographic location, at the crossroads of Europe’s major commercial corridors, makes it a nexus of international trade and commerce, providing unprecedented access to a market of 500 million consumers in Europe. This access is enhanced by a multitude of extremely efficient transport links such as an extensive railway network, major highways and the Brussels Airport, one of Europe's busiest.Additionally, Brussels is renowned as a cosmopolitan city, offering an entire world in a single location. Its cultural diversity, rich history and the penchant for the arts make it an enticing destination not only for businesses but also for skilled professionals from around the globe. This international talent pool and the city’s bilingual nature – with French and Dutch as the official languages supplemented by an ever-growing English proficiency – offer a competitive advantage for any global entrepreneur.In no uncertain terms, Brussels radiates an enticing allure for businesses globally, making it a superb proposition for entrepreneurs planning to leverage its benefits for their business expansion or inception in Europe. It harmonizes political stability, cultural diversity, convenient geography and supportive governmental policies – fostering an entrepreneurial ecosystem teeming with potential.
Disadvantages and risks of doing business in Belgium
While Belgium boasts a strategic location in the heart of Europe, offering significant opportunities for global business operations, there exist considerable risks and disadvantages accompanying any investments in this jurisdiction. The principal economic challenges include a high tax burden, labor market rigidity, and legislative volatility. Belgium is widely recognized as having one of the highest tax burdens globally, particularly concerning corporate tax. The effective corporate tax rate can reach nearly 34%, significantly higher than the European Union's average. It serves as an impediment to entrepreneurial ventures, potentially discouraging investment.Further, Belgium's labor market is inflexible due to stringent employment laws, making it difficult for businesses to reduce their workforce or make structural adjustments in response to changing market conditions. High wages, strong labor unions, and a complex social security system additionally contribute to the cost of doing business. It often results in elevated operational costs, thereby putting a strain on businesses that are already grappling with a high tax burden.Also, legislative volatility is another area of concern in the Belgian business environment. Rapid and often unpredictable changes in regulations can engender an uncertain and challenging landscape for companies. These constant changes can result in increased compliance costs and require companies to remain vigilant and adaptive to maintain profitability and legal compliance.Furthermore, Belgium's multiple language requirement poses a unique challenge for international businesses. Navigating through the country's complex linguistic landscape, where business and official transactions require fluency in multiple languages like French, Dutch, and German, can be daunting and can escalate operational costs for companies that are required to employ multilingual staff.
Brexit and Belgium and The Netherlands
The implications of the United Kingdom's departure from the European Union, colloquially known as Brexit, have far-reaching and profound impacts not only on the UK itself, but also on the broader European community, specifically countries such as Belgium and The Netherlands. Both Belgium and The Netherlands are strategically situated in relation to the UK, which makes them proximately vulnerable to the after-effects of Brexit. Sharing maritime boundaries with the UK, these two nations have been at the heart of historical trade relations across the North Sea. Therefore, the complexity of navigating Brexit’s economic and political landscape is particularly resonant for these countries.
A considerable number of nationals from these two countries work and live in the UK, and the new immigration system imposed after Brexit has undoubtedly complicated the status quo, creating uncertainties around their rights and status.In the realm of political dynamics as well, Brexit brings about a shift in the EU's power balance, which could impact Belgium and The Netherlands, given their considerable influence in the bloc. As both nations continue to navigate their relationship with post-Brexit Britain, they will be pivotal in defining the future direction of the European Union.
High salaries compared between Belgium and the Netherlands
In exploring the labor markets of Belgium and the Netherlands, the monetary aspects hence, the salary structures and income tax brackets in these nations, become the prime subject of analysis. Salary taxes in Belgium consist of progressive tax rates, which can range from 25% to a staggering 50% for the highest income earners, excluding social security contributions. This tax system operates under the notion that those with higher incomes have a larger taxable capacity. Contrarily, the salary taxes in the Netherlands consist of a more benevolent structure with a considerably lower, progressive income tax that varies from 19.45% to 49.5%.An interesting comparison between these two countries further extends to the corporate domain - it is relatively straightforward to become an employer in either Belgium or the Netherlands, even for non-EU corporations. Both countries have favorable investment climates promoting cross-border business undertakings, characterized by encouraging fiscal measures, and supportive regulatory frameworks. Notwithstanding, the potential employers need to be fully apprised of the requisite procedures, compliance requirements, and taxation schemes of the respective country.Although both countries have their unique perks, in the context of salary taxation, the Netherlands provides a more attractive proposition for both employees and employers with its lower tax rates. The differences in the taxation systems suggest that employees in the Netherlands tend to keep a more substantial portion of their income post-taxation relative to their Belgian counterparts. Consequently, this makes the Netherlands an appealing destination for both local and international workers and also influences corporations, mainly non-EU companies, to establish operations or extend their current ones. The aforementioned comparison elucidates an essential fiscal differential between Belgium and the Netherlands, thereby providing useful insights for prospective employees and employers.
Corporate Taxes in the Netherlands and Belgium
Corporate Taxes
One of the primary considerations for any startup is the corporate tax scenario. In the Netherlands, the corporate tax rate is tiered, with SMEs taxed at 15% for profits up to €395,000 and at 25.8% for profits exceeding this limit in 2022. The Netherlands also offers a reduced corporate tax of 9% for highly innovative businesses.
In contrast, Belgium has a flat corporate tax rate of 25%. However, it's worth noting that Belgium's tax system is skewed towards labor income, which could impact growth and employment.
Personal Income Taxes
As for personal income tax, Netherlands has a bracketed system, with rates of 37.1% up to €68,508, and 49.5% for income exceeding that in 20221. Belgium, on the other hand, has a progressive tax rate with brackets ranging from 25% to 50%.
Dividend Taxes
When it comes to dividend taxes, the Netherlands offers one of Europe's lowest rates. The tax rate in 2022 is 26.9% for dividends up to €67,000 and remains the same for dividends exceeding this amount1. Belgium does not offer similar specific information in the reference articles.
VAT
Both countries follow the EU's Value Added Tax (VAT) system. In the Netherlands, the standard VAT rate is 21%, with reduced rates of 9% and 0% for certain goods and services1. Belgium also operates a similar VAT system, with standard, reduced, and zero rates2.
Formation Requirements in the Netherlands and Belgium
Netherlands
In the Netherlands, setting up a business can be swift, with a new venture up and running in a matter of days. The most common legal structure for foreign entrepreneurs is the BV, a private limited company.
Belgium
In Belgium, it takes approximately one week to complete the incorporation process, provided all documents and translations are in order2. The most common legal structures are public limited company, private limited company, and Belgian Branch Office2.
Accounting Requirements in both Netherlands and Belgium
Regardless of the country, understanding the local accounting and tax system is crucial. Both the Netherlands and Belgium have their own accounting standards that businesses must follow. The Netherlands has a well-structured tax system with a variety of tax benefits for businesses1. In contrast, Belgium's tax system is skewed towards labor income, which could impact growth and employment.
Employing Staff in the Netherlands and Belgium
Netherlands
The Netherlands boasts a highly-skilled, efficient workforce with excellent digital skills1. The country also ranks high in terms of the percentage of the population with a higher level of education.
Belgium
Belgium also offers a highly skilled workforce, but it's worth noting that the country's salaries are among the highest in the EU. Unemployment is also an issue, with concerns that job losses could rise due to Brexit.
Residency Schemes for Entrepreneurs
If you're an entrepreneur from outside the EU, both the Netherlands and Belgium offer residency schemes. In the Netherlands, American entrepreneurs can use the Dutch-American-Friendship-Treaty (DAFT) to set up a business and stay in the country. Belgium also offers residency permits for non-EU entrepreneurs.
Register a Branch at Kamer van Koophandel (Netherlands) or Ondernemingsloket (Belgium)
To officially start doing business, companies need to register a branch at the Kamer van Koophandel (Chamber of Commerce) in the Netherlands or the Ondernemingsloket (Enterprise Counter) in Belgium. This process must be completed before the company can start trading. During this registration process, the business owners must provide certain pieces of information, such as the company's name, the nature of the business, the names of the company officers, and the company's address. The company's corporate structure (such as whether it is a sole proprietorship, a partnership, a branch registration, a corporation, etc.) will also need to be established. In some cases, the company may also need to provide a business plan.Once the necessary information has been provided and the registration fees have been paid, the company will receive a KvK number (in the Netherlands) or an enterprise number (in Belgium). This number is unique to the company and will be used in all official correspondences and transactions.After the registration process is complete, the company will be legally recognized as a business entity in the Netherlands or Belgium, and can begin conducting business operations.It's important to note that these steps and requirements might vary slightly depending on the specific type of business and the rules and regulations in the respective countries. Therefore, it's recommended to consult with a business advisor or legal professional to ensure that the registration process is done correctly.
Relocate Staff to the Netherlands or Belgium
Both countries offer excellent living conditions, making them attractive options for staff relocation. The Netherlands has one of the world's highest living standards, while Belgium offers a high standard of living and excellent education system. For entrepreneurs looking to relocate to the Netherlands, the Dutch-American Friendship Treaty and Dutch-Japanese Trade Treaty are additional options which grant residency for the purpose of starting a business.In Belgium, the process of obtaining residency can be slightly more complicated. Entrepreneurs might face challenges obtaining a residency permit via self-employment, a Professional card or a Single Work Permit. The country has strict guidelines and regulations regarding these permits. For instance, the Professional card requires proof of substantial investment in a Belgian business, while the Single Work Permit requires a job offer from a Belgian employer.In terms of accessing social benefits, both countries offer comprehensive social security systems that cover healthcare, unemployment, and pensions amongst others. However, eligibility and access to these benefits can be subject to meeting certain conditions and requirements in both countries. It is therefore highly advisable to obtain proper legal advice before planning a staff relocation to either country. In summary, while both countries offer high living standards and comprehensive social benefits, the process for obtaining residency may be easier in the Netherlands due to the multiple options available, particularly for highly skilled workers, than in Belgium where the process can be more stringent and complex.
Conclusion
Both the Netherlands and Belgium offer attractive business environments for global entrepreneurs. The right choice will depend on your specific business needs and objectives. House of Companies can assist you in registering a branch or starting a local entity in either country, making the process smooth and straightforward.
