Western Europe

Why Life Sciences Organizations
Expand into the Netherlands

By July 8, 2019 July 10th, 2019 No Comments

There are a number of important factors to consider when narrowing down the list of potential destinations for European expansion. First and most is the cost of doing business. Next, one needs to consider the availability of local talent in specific industries; it doesn’t make sense to expand operations into a new market where your business won’t have access to the people it needs to function.

A (growing) number of notable life sciences organizations have turned their attention towards the Netherlands during their own global expansion journeys. There are a number of key reasons why these companies expand into the Netherlands—and it’s not just its business-friendly reputation.

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Life Sciences in the Netherlands

For the purposes of this post, “life sciences” are defined as organizations that are operating in fields like biotechnology, biomedical, life systems, and even pharmaceuticals. Other examples would include food processing and environmental businesses.

The Netherlands is quickly earning the reputation from both industry experts and businesses as Europe’s primary destination for life sciences and health businesses. The Netherlands has always had an excellent reputation when it comes to medicine, as its own biopharma sector has been leading the charge in terms of new vaccines, synthetic embryos, and other types of innovations worldwide.

Much of this comes down to the series of highly specialized, highly talented workforce communities that are not only functioning well on their own, but also often collaborate closely with one another for the benefit of all. Indeed, this ample supply of top talent (and, in many cases, world-class talent) is one of the major reasons why so many life sciences organizations are looking to the Netherlands in the first place.

To put all this into perspective, the Netherlands alone is currently home to nearly 3,000 medical and biotechnology companies, all of which employ a combined 34,000 people. From that perspective, it’s one of the most concentrated life sciences regions on the planet.

Tax Considerations for Your Netherlands Expansion

Another major reason why the country has earned so much focus in such a short amount of time has to do with the various tax incentives that companies of all shapes and sizes can take advantage of. The country has one of the most competitive corporate income tax rates in all of Europe. Rates are 19% on the first $200,000 and a further 25% for taxable profits that exceed $200,000 in the future. This alone is reason enough for most people to consider the Netherlands, as the country has communicated loud and clear that it wants to stimulate both foreign investment and entrepreneurship.

The Netherlands also offers a wide range of tax credits that promote and empower specific research and development initiatives. Companies that perform R&D activities and meet certain requirements can benefit from a 32% tax credit, for example, that increases to 40% for startups. This credit extends to the first $350,000 in research and development-related wage costs and other expenses.

Depending on the situation, companies may also benefit from an effective income tax rate of just 7% on certain qualifying intangible assets. These include technology innovations, too. The only stipulation is that those intangible assets must have been A) created by the Dutch tax payer, and B) must have been a result of the R&D tax credit that was previously received. There are other PPS allowances for public and private partnerships in research and development, too, that many companies find notable.

Expand into the Netherlands with an Experienced Expansion Partner

While the life sciences are a major draw for companies looking to expand into the Netherlands, the country offers many opportunities in a variety of sectors. In fact, the Netherlands is the most-promising global expansion destination for tech firms looking to take operations global.

If you’d like to learn more about expanding into the Netherlands, or one of the 185+ countries in which we have capabilities, reach out to Velocity Global today. Our International PEO (Professional Employer Organization) solution enables companies to hire virtually anywhere—without the cost and time commitments required for establishing an entity.

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