Dutch Legal Environment
Jurisdiction of Choice
The Dutch trade and investment policies are among the most open in the world. Not surprisingly this is contributed to a large extent by the Dutch legal environment providing for liberal policies towards foreign investments and non-discriminatory treatment of foreign investors. Furthermore, The Netherlands has signed bilateral trade- and investment agreements and maintains an extensive network of (tax) treaties with a large number of countries.
Although the advantages of Dutch business law largely depend on business specifics, there are some general favourable aspects in Dutch law. These are summarised below.
Competitive trade and investment regulation
Provisions related to government incentives, national rules of incorporation, and access to the capital market are administered on a non-discriminatory basis. Business laws and regulations conform to international legal practices and standards, and apply equally to foreign and Dutch companies.
There are no formal foreign investment screening mechanisms, and full ownership is permitted in those sectors open to foreign investment. The rules on acquisition, mergers, takeovers and reinvestment are on a non-discriminatory basis. Furthermore, there are no restrictions on the conversion or repatriation of capital and earnings (including branch profits, dividends, interest, royalties), or management and technical service fees.
The Netherlands is party to a vast number of international agreements relating to tax, trade, investment, harmonisation and mutual recognition. Legal reforms are conducted regularly to implement international agreements and generally accepted codes in national law.
Liberal and practical contract law
Dutch contract law operates upon the principle of freedom of contract. In principle parties are free to conclude their agreement in any form, in any language and under any law or set of rules.
Protection of property
There are full rights of private ownership and establishment of business enterprises in the Netherlands, except for the gaming industry, which is regulated by the Dutch state.
The Netherlands maintains strong protection on all types of property, including intellectual property, and the usage rights on property. Expropriation may only take place in the public interest and with adequate compensation.
Efficient judiciary - specialised court for corporate proceedings
The Dutch Enterprise Chamber is a specialised business court, which is unique within the EU. Since its establishment in the early 1970s, the Enterprise Chamber has successfully resolved numerous business disputes while also actively contributing to the Dutch corporate governance practice in general. The judges of this Enterprise Chamber consist of experts in commercial fields as well as the legal profession. They have proven their ability to act swiftly and decisively in a wide range of corporate disputes, including conflicts regarding corporate control. This unique feature is well appreciated by institutional investors as well as other businesses, companies and investors around the world.
Flexible company law
Dutch company law can be characterised as flexible. This flexibility has made The Netherlands the jurisdiction of choice for the domicile of many globally operating companies such as IKEA, NYSE Euronext, EADS and STMicroelectronics, but e.g. also for the Rolling Stones. Currently further liberalisation of Dutch company law is pending which will expectedly be implemented in the near future resulting in even more flexibility in terms of legal forms, shareholder friendly corporate governance and group control.