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Entering the EU Pharmaceutical Industry by branching out in the Netherlands: A Complete Guide



Starting a pharmaceutical company is a big step. It's full of chances and tricky parts in Europe's changing market. The Netherlands is a good place for pharma startups. It's in a great spot, has solid systems in place, and is close to the European Medicines Agency. To do well, you need to know how to start a pharmaceutical company in this good setting. You'll have to deal with rules like the Dutch Medicines Act, get what the pharma market in the Netherlands is about, and follow European rules for controlling medicines.

This guide that House of Companies developed, based on its earlier experiences with non-EU companies entering the pharma industry in NL (since EMA moved to Amsterdam) a light on how companies outside the EU can make their mark in the Dutch drug scene. It covers everything from setting up shop to getting the money stuff and tax perks. You'll learn about getting the right permits making smart choices about drug distribution, and taking advantage of the financial and tax benefits in the Netherlands.

Why Choose the Netherlands for Your Pharmaceutical Company?

The Netherlands stands as a prime location for establishing a pharmaceutical company, offering distinct advantages that cater specifically to the needs of the pharma industry, especially for non-EU companies aiming to penetrate the European market. This section explores the key reasons why the Netherlands should be considered for your pharmaceutical venture.

Market Advantages

The Dutch pharmaceutical market is robust and continuously expanding, driven by a strong demand for innovative healthcare solutions. The presence of the European Medicines Agency in Amsterdam elevates the Netherlands' status in the pharmaceutical landscape, providing companies with direct access to regulatory guidance and faster approval processes. This strategic advantage simplifies the complex regulatory landscape that non-EU companies often face when entering European markets.

Research and Development Excellence

The Netherlands is renowned for its high-quality research infrastructure and a strong network of universities and private research facilities. These institutions collaborate closely with the pharmaceutical industry, fostering innovation and ensuring a steady pipeline of research and development activities. Companies benefit from access to cutting-edge innovations and partnerships that can propel their products forward in a competitive market. Additionally, the government offers substantial R&D tax incentives, reducing the financial burden on companies investing in research.

Connectivity and Infrastructure

Strategically located with access to key European logistics hubs, the Netherlands provides unmatched connectivity to Europe and beyond. Its world-class port facilities, such as the Port of Rotterdam, and advanced transportation infrastructure ensure efficient distribution channels for pharmaceutical products. This logistical advantage is crucial for companies that require timely delivery of sensitive medical products across various markets.

By choosing the Netherlands as the base for your pharmaceutical company, you leverage these unique benefits, positioning your business for success in the international pharmaceutical sector. The combination of a favorable business environment, strategic geographic location, and robust support for research and development makes the Netherlands an ideal choice for companies looking to innovate and expand in the pharmaceutical industry.

Forming Your Company

Steps to Registering a Business

To initiate a pharmaceutical company in the Netherlands, the first essential step is to register the business with the Dutch Trade Register. This includes obtaining a NACE (Nomenclature of Economic Activities) number, which is mandatory and varies based on the specific pharmaceutical activities planned, such as manufacturing or retailing. For instance, pharmaceutical manufacturers fall under Section C; Division 21; Group 21.1 – 21.2; Class 21.10, 21.20.


Choosing the Right Financial Structure

Non-EU companies should consider the advantages of forming a Dutch private company with limited liability (BV) or a public company (NV), depending on their size and operational needs.

The BV is particularly favored for its flexibility and protection of private assets against company liabilities, making it ideal for small to medium-sized enterprises. For larger firms or those considering public listing, an NV might be more appropriate, although it comes with stricter regulations. Both entity types benefit from the Netherlands' competitive corporate tax rates, which are 19% on the first €200,000 of profit and 25.8% on excess profits. This fiscal climate, supported by clear compliance processes and technology, makes the Netherlands an attractive location for pharmaceutical companies.


Legal Requirements and Corporate Law

Upon registering, pharmaceutical companies must comply with several legal requirements, including obtaining the necessary permits and certifications such as the Good Manufacturing Practice (GMP) certification. Companies must also register with Farmatec, a body of the Ministry of Health, Welfare, and Sport, for various activities like manufacturing, wholesale, or distribution of medicines. Specific permits, such as a manufacturer's permit or a wholesale permit, are required and involve submitting detailed application forms along with evidential documents. The costs for these applications and the annual fees must be considered as part of the operational budget.

For pharmaceutical companies, adhering to the Dutch Medicines Act and the European guidelines on Good Distribution Practice (GDP) is mandatory. These regulations ensure that the company operates within the legal frameworks, maintaining high standards of quality and safety in the distribution and handling of pharmaceutical products.

By following these structured steps and understanding the legal and financial frameworks, non-EU companies can effectively establish and operate a pharmaceutical company in the Netherlands, leveraging the country's strategic advantages in the European market.

Acquiring Necessary Permits

Wholesale Permits

To distribute medicines within the Netherlands and across the European Economic Area (EEA), non-EU companies must acquire a wholesale permit. This permit is essential for the legal purchasing and delivery of medications. The application process involves submitting a completed form to Farmatec, along with necessary documents in duplicate. The initial application fee is approximately €1700, with an annual maintenance fee of €1600. Adherence to the European guidelines on Good Distribution Practice (GDP) is mandatory to maintain this permit.

Manufacturing and Broker Licenses

For companies engaged in the preparation or distribution of medicines, a manufacturer's authorization is crucial. This covers activities such as labeling and packing medications imported from outside the EEA. The application for a manufacturer's permit requires a detailed submission to Farmatec, including evidential documents, with a fee of €2600. Once approved, an annual fee of €3200 is applicable.

Brokering medicines within the EEA also demands registration. Companies must register with Farmatec to obtain a broker business license, ensuring compliance with regulations that permit brokering only between manufacturers and consumers within the EEA who have market authorization.

Other Specialized Permits

Certain specialized activities in the pharmaceutical industry require additional permits:

  • APIs and Veterinary Medicine: In order to ensure compliance with regulations, companies involved in the production and distribution of Active Pharmaceutical Ingredients (APIs), particularly those used in veterinary medicine, are required to register with the relevant authorities. These authorities, such as Farmatec and the Veterinary Medicinal Products Unit of the CBG, play a crucial role in overseeing the safety and efficacy of veterinary pharmaceuticals. The registration process serves as a necessary step towards meeting the requirements of the European EudraGMDP database, which serves as a comprehensive platform for monitoring and regulating the pharmaceutical industry in Europe. By registering with these authorities, companies demonstrate their commitment to upholding the highest standards in the production and distribution of APIs for veterinary medicine. This ensures that the medications used in veterinary practice are safe, effective, and in compliance with regulatory standards.

    Starting a pharmaceutical company in the Netherlands requires careful consideration of the regulatory landscape and adherence to the necessary permits and licenses. However, with the right guidance and support, it is possible to navigate the complexities of the market and establish a successful business. House of Companies offers a range of services to assist in the (branch) registration process, trademark acquisition, virtual office setup, and legal advice, ensuring a smooth start in the European pharmaceutical industry. By leveraging these resources and developing a solid business plan, your pharmaceutical company can thrive in the Netherlands and contribute to the dynamic European healthcare sector.

  • Blood and Organ Products: If dealing with blood products or intermediate products, either importing from outside the EEA or exporting to non-EEA countries, a blood products permit is necessary. Similarly, operations involving tissue or organ banks or donor testing laboratories require specific licenses or approvals to ensure compliance with health and safety standards.

By securing these permits, non-EU companies can ensure compliance with Dutch and European regulations, facilitating a smooth entry into the pharmaceutical market in the Netherlands. This practical guide aids in navigating the complex permit acquisition process, essential for companies planning to distribute medicines in the European market.

Financial and Tax Benefits

The Netherlands offers a range of financial and tax benefits that make it an attractive destination for non-EU companies looking to start a pharmaceutical company. These incentives are designed to support innovation, reduce financial burdens, and promote economic growth within the pharmaceutical sector.

Tax Incentives for Innovative Companies

The Dutch government provides several tax incentives aimed specifically at fostering innovation within the pharmaceutical industry. Companies can benefit from the Innovation Box, which offers a reduced effective tax rate of 5% on income derived from patented and certain qualifying non-patented intangible assets. Additionally, the R&D allowance (WBSO) supports companies by compensating for labor costs associated with research and development activities. This incentive includes a reduction in wage tax and social security contributions for employees engaged in R&D. Another notable benefit is the R&D tax allowance (RDA), which allows companies to deduct a percentage of their R&D investments from their corporate income tax.

For startups and companies focusing on sustainability and green technology, the Innovative SME Program offers a tax rate of just 9% instead of the standard corporate tax rate. Furthermore, companies investing in environmentally friendly technologies can benefit from the MIA and Vamil regimes, which provide significant tax deductions and accelerated depreciation on qualifying investments.

Funding Options

Securing adequate funding is crucial for the growth and success of any pharmaceutical company. The Netherlands offers various funding options tailored to the needs of the pharmaceutical industry. Venture capital is a popular choice, providing not only funding but also strategic mentorship to help companies scale. For early-stage companies, biotech grants and non-dilutive funding options such as the Advance Biotech Grant Program are available. This program awards emerging biotech startups with products, services, and consultation to help advance production and commercialization.

Angel investors and crowdfunding platforms also present viable funding opportunities, offering more flexible investment terms and the potential to raise capital from a broad audience. Additionally, the Innovation Credit supports the development of technically new products or services, including medical products requiring clinical studies, with funding covering a substantial portion of project costs.

To wrap up

We hope this guide info helps business owners make smart choices and use the Netherlands' special spot in Europe's drug market. It's not just about following rules - it's about using what the Dutch market offers to grow your business. Remember, there's more to learn, but this guide gives you a good start. In the end, starting a drug company in the Netherlands can be tricky, but it's doable with the right know-how.

As you get ready to start this promising business, keep in mind that making a successful pharmaceutical company in this tough market depends on careful planning and following rules, but also on picking the right helpers to show you how to enter the market and grow your business. House of Companies can help you register your branch, get your trademark, set up a virtual office, and give you legal advice to launch your pharma company in the Netherlands making sure you have a smooth start in the pharmaceutical industry. With good plans and support, your pharmaceutical company can do well in the Netherlands adding to the lively and innovative European healthcare scene.

FAQs

Q: How long does it take to register a branch in the Netherlands? A: Setting up a Dutch limited liability company (BV) takes 1-5 work days if you file the incorporation papers in person. The registration of a branch can be done with Same Day service! You (may) also need to sign up with the local Dutch tax office and social security administration.

Q: What are the main steps to start a pharmaceutical company from scratch? A: To get a pharma startup going first get to know the industry. Then, take care of the needed paperwork and licenses, build your brand, and make a solid business plan. It's also key to do research and development and to look at other successful startups in the pharma world.

Q: How much money do you need to start a business in the Netherlands?

A: Starting a business in the Netherlands can cost different amounts. It depends on what kind of business you want to open and what rules apply to it. It's a good idea to ask local experts or officials for exact details on how much money you'll need.

Q: Which country is best for running a drug company?

A: The USA is seen as the top country for making medicines. They make drugs worth about $516.66 billion. Other big countries in the drug business are China, Germany, Japan, Ireland, Switzerland, France, Italy, India, and Belgium.


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