The options available for technology companies breaking into Europe via the Netherlands
As a global recruitment company based in the UK we often have technology companies approaching for advice with expanding their sales/business functions abroad. Many companies that we speak to look at expanding into Europe through the Netherlands.
There are lots of reasons why they are choosing the Netherlands but these are the main ones:
Location & resources
While the Netherlands is not the largest country in the EU, it is one of the best connected countries. You can reach 95% of Europe from its two major hubs (Amsterdam and Rotterdam), which means you have access to 170 million consumers within 500km and 244 million consumers within 1000km. This superb location and access to resources have led to it being ranked as #7 in Forbes for ‘Best Countries for Business’.
The Dutch education system is considered one of the best in the world, leading to a highly educated workforce who are often multilingual.
Even so, there are obvious challenges with expanding abroad:
Individuals and companies need to be aware of the cultural differences that may face them. For example, in Holland, politeness is considered highly important, the Dutch workforce also value prompt replies, a consistent level of service and efficient working habits.
The open market in the EU opens doors to businesses however it is also a highly competitive market. As it is easy to do business in the Netherlands, many companies have already opened offices here leading to a high volume of competition in the area.
So, now you’re convinced that the Netherlands is a great location to launch your international business, how do you employ your first team here?
Navigating a new market is always a challenge; to start, you need to think about regulations around contracts, tax, employment law and payroll. There are two main options preferred from a candidate perspective and that we recommend to employers:
Set up a legal entity for your company in Holland
Setting up a legal entity for your company is effectively setting up a new Dutch company. When we are recruiting for a ‘First man on the ground’ role the first question we receive from candidates is ‘Are they/do they have a legal entity?’. It is preferred from an employee perspective as it shows a commitment to international expansion and removes any question marks over how they will be employed. However, this does require a substantial investment of finance and time to set this all up.
Partner with a Professional Employer Organisation
Some companies opt for a PEO company who offer Employer of Record services. These organisations will handle all the legalities and logistics by effectively acting as an employer on behalf of their clients. They manage payroll, pensions, employment law, contracts, tax and other services for you. This is a good option if you’re just taking on your very first employees in the Netherlands and want to research the market before diving in as a legal entity. It also allows you to focus entirely on the management of your new expansion without having to worry about complying with all the regulations that are foreign to your business.
If you’ve decided the angle you’re going down and you’d like support in recruiting into the Netherlands, or other locations, speak to our international recruitment specialists.