business-in-NL

Exporting to the Netherlands: the main trade risks and opportunities

AA1

low risk for businesses

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financial risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financial risk

The Netherlands is one of the most competitive economies in the world. Commercial spirit is in the Dutch genes. They are used to doing business across borders. Dutch entrepreneurs are driven, innovative and dare to take risks. Small and medium-sized enterprises (SMEs) are highly developed and form the backbone of the Dutch economy.

Although the Netherlands (like Belgium) is a small country, it has a significant impact on world trade. It is a hub of international trade. Many goods find their way to the European hinterland via the Netherlands as a logistics hub. The port of Rotterdam plays a pivotal role in this. Rotterdam, like Antwerp, is one of the largest ports in the world.

  • Excellent connections via land, water and air

Like Belgium, the Netherlands occupies an attractive strategic location in the centre of Europe, with direct access to important markets such as Germany and France (and of course Belgium, one of its most important trading partners). The high-quality (transport) infrastructure, with excellent connections via land, water and air, makes the Netherlands an excellent location for import and export companies.

  • Innovation

The Netherlands is one of the most innovative countries in the world. This is evident from its high scores in the field of innovation on the World Economic Forum's (WEF) Global Competitiveness Index. The Netherlands has a strong innovative ecosystem with many startups, scale-ups and research institutes. This makes it an attractive environment for companies that want to innovate and collaborate with other parties. Dutch companies are also leaders in developing new products and services. They're also good at implementing new technologies.

International companies often use the Netherlands to introduce new goods and services. It is a small, compact country. Distances are short and, on the digital front, the country has the fastest broadband speeds in Europe (internet penetration rate of more than 95%). Consumers and customers are right at their fingertips. Businesses and consumers also reap the benefits of (innovative) digital services. Furthermore, the Netherlands has a prosperous population with relatively high levels of disposable income. They are educated and critical consumers. This can help companies improve products and services.

  • Sustainability

The Netherlands is a forerunner in the field of sustainable development. The country has set ambitious targets for reducing CO2 emissions and transitioning to a circular economy. Dutch companies are leaders in developing green products and services.

  • Knowledge-intensive economy

The Netherlands has a knowledge-intensive economy with high levels of education and research. This makes the country attractive for high-end business activity.

The Dutch economy, like those of most other EU countries, is going through some difficult years. Business has even stalled with Germany, the Netherlands' most important trading partner. It is therefore no surprise that Dutch exports declined in 2023.

The decrease is mainly due to:

  • The weakening global economy: the global economy grew less rapidly in 2023 than in 2022, which reduced demand for Dutch products and services.
  • Despite decreased inflation, price increases made Dutch products and services more expensive for foreign buyers.
  • The war in Ukraine: The war in Ukraine is disrupting international supply chains. This affects the Netherlands as an export country.

Main countries for imports and exports are:

(% of total, 2022)

Export Position Import
Germany 24.6%
1
13.7% Germany
Belgium 12.9%
2
13.5% China
France 8.8%
3
8.9% Belgium
United Kingdom 4.9%
4
8.4% United States
Italy 4.8%
5
5.4% United Kingdom
  1. Oil and oil-related products 
  2. Pharmaceutical products 
  3. Telecommunications 
  4. Specialist machinery 
  5. Electrical devices
  1. Oil and oil-related products 
  2. Telecommunications 
  3. Electrical devices 
  4. Office equipment and data processing 
  5. Pharmaceutical products
  • Solid economic fundamentals. Despite setbacks, the prospects are good for the Netherlands
  • The Netherlands has a knowledge-intensive economy with high levels of education and research
  • Leader in the field of innovation and sustainability
  • Important trading hub in Europe
  • Well-developed infrastructure
  • Political fragmentation and long negotiations to form coalitions
  • Housing crisis: shortage of affordable rental and owner-occupied homes
  • Labour market shortages
  • Restrictions on nitrogen pollution hinder construction projects
  • Negative impact of tightening European monetary policies on the financial sectors

Economic growth fell sharply in 2023. With three quarters of contraction in a row, there was a technical recession. Allianz Trade does not expect a clear recovery until the second half of 2024. The result is annual GDP growth of +0.6%. If we look at the pre-pandemic level (2019), growth is still +5.8% (EU average +3.0%). The Netherlands displayed a faster recovery immediately after the Corona period, and in 2024 growth will be slower than the EU average.

Although inflationary pressure in the Netherlands is decreasing, it has depressed spending and investments among both consumers and companies. High energy prices are mainly to blame for this. Declining inflation and strong wage growth should give private consumption some breathing room in the near future.

Furthermore, the Netherlands is struggling with a tight labour market. Vacancies are at a record high. There is a major shortage of personnel in various sectors such as ICT, construction, healthcare and education.

The 2023 election resulted in a major victory for the far-right PVV. Political fragmentation makes it difficult to form coalitions. Migration and housing were the main themes of the election campaign. The shortage of affordable rental and owner-occupied homes is a hot topic. Young people in particular find it difficult to find housing. This is at odds with the housing needs of incoming migrants.

In negotiations, the Dutch like to get straight to the point. While in many other cultures it is customary to get to know each other well first. The Dutch are therefore often perceived as direct and blunt. Where many countries are familiar with a clear (strict) hierarchy, the Dutch attach much less importance to it. Entrepreneurship is about getting things done. Any idea (from everyone) is welcome. The Netherlands has a consensus culture in which goals are achieved through consultation.

Trust plays an important role in doing business for Dutch entrepreneurs. They like to see 'what kind of meat they have in the tub'. They want to meet the business partner and be able to look them in the eye. The style of negotiating is clearly different than in many other countries. Negotiations take place very quickly. Make quick decisions, don't waste time, don't delay. Agreements with Dutch people are often strictly time-bound. A few minutes of social talk, after which the bull is grabbed by the horns almost immediately.

If you want to do business in the Netherlands, the country offers plenty of opportunities, although you must take numerous considerations into account when making decisions. What conditions do you apply to the agreements you make? You need thorough insight into markets, customers and local economic developments. And that is exactly where trade credit insurer Allianz Trade can help you.

A reliable partner

With over 100 years of international expertise, we help you (further) develop your business abroad. We specifically focus on companies that do business internationally, including in the Netherlands. We owe our unique knowledge of the local market to our extensive database of financial data and the expertise of our analysts. With our offices and colleagues in the Netherlands we will provide you with the necessary expertise to securely develop your business in the Netherlands.