Doing Business in the European Union 2021
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THE NETHERLANDS
Doing Business in the
European Union 2021:
Austria, Belgium and the Netherlands
Comparing Business Regulation for Domestic Firms
in 24 Cities in Austria, Belgium and the Netherlands
with Other European Union Member States
with funding by the European Union
© 2021 International Bank for Reconstruction and Development/The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the staff of The World Bank with external contributions. The sole responsibility of this publication lies with the author. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. All maps in this report were cleared by the Cartography Unit of the World Bank Group. The European Union is not responsible for any use that may be made of the information contained therein. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank. 2021. Doing Business in the European Union 2021: Austria, Belgium and the Netherlands. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. © Photo on page 1: R. de Bruijn_Photography/Shutterstock.com. Used with permission; further permission required for reuse.
i
Contents
Doing Business in the Netherlands................................................................................................. 1
Main findings.........................................................................................................................................................................3
Dutch entrepreneurs operate in a homogeneous regulatory framework, but their experience dealing with business
regulation varies at the local level........................................................................................................................................................3
Subnational differences highlight opportunities for cities to learn from each other....................................................................4
The time to do business varies widely across the country, but the overall quality of regulation is uniform........................5
Good performances exist across the country.........................................................................................................................................6
What’s next?......................................................................................................................................................................... 6
Replicating domestic good practices would improve the Netherlands’ scores for the ease of enforcing contracts
and dealing with construction permits...............................................................................................................................................6
The Netherlands can also look to other EU member states and beyond for good practices....................................................7
Starting a Business .............................................................................................................................................................. 9
The process of starting a business is uniform, but the cost varies across the 10 cities benchmarked..................................9
It is easier and faster to start a business in the Netherlands than the EU average....................................................................10
Entrepreneurs complete five procedures and wait nine days to start a business.......................................................................10
What can be improved?.................................................................................................................................................................. 12
Dealing with Construction Permits.....................................................................................................................................16
Dealing with construction permits is easiest in Middelburg and hardest in Enschede............................................................ 16
On average, Dutch cities lag their EU peers on measures of efficiency and quality in construction permitting.............. 16
Dealing with construction permits in the Netherlands involves 11 common steps................................................................... 16
Despite national legislation, the number of procedures ranges from 13 to 16............................................................................. 17
Construction permitting is fastest in Groningen, Middelburg, and Rotterdam, and slowest in Enschede and The Hague..... 18
Building permit fees represent the largest source of variation in cost across cities.................................................................. 19
What can be improved?................................................................................................................................................................. 20
Getting Electricity............................................................................................................................................................... 24
Obtaining an electricity connection in the Netherlands takes longer but costs significantly less than the EU average..... 24
Entrepreneurs benefit from a standardized process, but variations exist in the time and cost to get an electricity
connection................................................................................................................................................................................................ 25
The Netherlands has a reliable grid, and its robust regulatory framework reflects good practices..................................... 27
What can be improved?................................................................................................................................................................. 28
Registering Property........................................................................................................................................................... 30
The Dutch land registry is a centralized, deed-based system in which notaries and registrars play a key role .............. 30
Registering property in the Netherlands is fast but relatively expensive..................................................................................... 30
Four of the five steps to transfer property are conducted online.................................................................................................... 30
The Netherlands’ streamlined and fast process to register property is the result of a series of reforms............................31
Investments in digital infrastructure has paid off, especially in times of crisis.......................................................................... 32
What can be improved?..................................................................................................................................................................33
Enforcing Contracts............................................................................................................................................................ 35
Court efficiency varies across the country, but all courts lag on the quality of judicial processes....................................... 35
Commercial disputes follow a straightforward and consistent process across the country...................................................... 35
Enforcing contracts is fastest in Eindhoven but cheapest in Middelburg.................................................................................... 37
What can be improved?.................................................................................................................................................................40
City Snapshots and Indicator Details............................................................................................47
Acknowledgments........................................................................................................................68
ii
Doing Business in
THE NETHERLANDS
Groningen
Amsterdam
Enschede
The Hague Utrecht
Arnhem
Rotterdam
Middelburg Eindhoven
Maastricht
Back to Contents2 DOING BUSINESS IN THE EUROPEAN UNION 2021: AUSTRIA, BELGIUM AND THE NETHERLANDS
Doing Business in the Netherlands benchmarks business regulation
applying to small and medium enterprises in 10 cities (Amsterdam,
Arnhem, Eindhoven, Enschede, Groningen, The Hague, Maastricht,
Middelburg, Rotterdam, and Utrecht) across five Doing Business
areas (starting a business, dealing with construction permits, getting
electricity, registering property, and enforcing contracts).
Eindhoven and Middelburg place consistently in the top five across
indicator areas. Maastricht leads in getting electricity, Middelburg
in dealing with construction permits, and Eindhoven in enforcing
contracts. Five cities rank among the top half in at least two indicators
and among the bottom half in at least two others, suggesting that they
have something to teach and something to learn from their neighbors.
Subnational score variations are most significant in the ease of dealing
with construction permits, enforcing contracts, and getting electricity.
These disparities can help policy makers identify which cities have
good practices that other cities can adopt and improve without major
legislative overhaul. Cities perform homogeneously in starting a
business and registering property.
The regulatory framework for the five areas is set at the national
level and applies across all Dutch cities. All locations score the same
on quality components of the Doing Business indicators. They obtain
the highest score globally for the quality of the centralized land
administration framework (registering property).
Replicating local good practices can boost the Netherlands’
competitiveness, especially in dealing with construction permits
and enforcing contracts. In starting a business, getting electricity,
and registering property, the country can also look elsewhere in the
European Union and globally to improve its business regulation.
Time is the main source of variation among the performances of the
Dutch cities benchmarked. Firms in Utrecht spend more productive
hours complying with regulatory requirements than elsewhere in the
country—four months more than their peers in Eindhoven.
Back to ContentsDOING BUSINESS IN THE NETHERLANDS 3
S
mall and medium enterprises Doing Business provides objective mea-
(SMEs) play an important role in sures of business regulations and their MAIN FINDINGS
the Dutch economy, representing enforcement across 191 economies. It is
99.8% of the country’s enterprises and founded on the principle that economic Dutch entrepreneurs operate
employing 63.8% of the workforce. activity benefits from clear rules: rules in a homogeneous regulatory
SMEs in the Netherlands generate EUR that allow voluntary exchanges between framework, but their experience
240 billion annually, or 62.3% of total economic actors, set out strong property dealing with business regulation
value-added, almost 6 percentage points rights, facilitate the resolution of com- varies at the local level
higher than the EU average (56.4%).¹ mercial disputes, and provide contractual The regulatory framework for the five
The Dutch government supports SMEs partners with protections against arbi- areas is set at the national level and
by providing an extensive network of trariness and abuse. Such rules are much applies across all 10 cities. All locations
agencies, including the Netherlands more effective in promoting growth and score the same on quality components.5
Enterprise Agency (Rijksdienst voor development when they are efficient, Processes are homogeneous across the
Ondernemend Nederland, RVO), which transparent, and accessible to those for Netherlands for starting a business and
aims to facilitate entrepreneurship, whom they are intended. Regulations registering property, unsurprising given
access to funding, networking, and must be implemented properly to make the high level of centralization in these
compliance with laws and regulations. it easier for entrepreneurs to do business. areas. More variation exists in dealing with
The Netherlands Chamber of Commerce construction permits, getting electricity,
(Kamer van Koophandel, KVK), which This report highlights divergences in and enforcing contracts, either because
informs and supports entrepreneurs regulatory performance—including in local authorities and agencies can regu-
at the local level through 18 agencies the implementation of the regulatory late further or because national rules are
located across the country, also plays framework at the local level—among 10 implemented inconsistently across cities.
a critical role. The Netherlands offers Dutch cities: Amsterdam, Arnhem, Eind-
regulatory incentives to encourage local hoven, Enschede, Groningen, The Hague, Six of the benchmarked cities top the
and foreign investors to establish and Maastricht, Middelburg, Rotterdam, and ranking in at least one measured area,
operate businesses. For example, the Utrecht.4 It analyzes the regulatory hur- with Eindhoven and Middelburg placing
government abolished the EUR 18,000 dles faced by entrepreneurs and suggests consistently among the top five cities
minimum capital requirement² to sup- ways to make it easier to do business across all five regulatory areas (table
port small business creation. Despite across the five areas benchmarked by 1). Conversely, Utrecht ranks consis-
these efforts, the Netherlands performs providing good practice examples from tently in the bottom half. Five other cit-
below the EU average for the ease of the Netherlands and other EU member ies—Amsterdam, Arnhem, Enschede,
doing business.³ states. Maastricht, and Rotterdam—rank among
TABLE 1 Six benchmarked cities top the rankings in at least one area
Dealing with
Starting a business construction permits Getting electricity Registering property Enforcing contracts
Rank Score Rank Score Rank Score Rank Score Rank Score
City (1–10) (0–100) (1–10) (0–100) (1–10) (0–100) (1–10) (0–100) (1–10) (0–100)
Amsterdam 7 91.50 4 66.92 4 86.63 7 80.01 8 59.94
Arnhem 1 91.70 7 65.85 6 84.24 5 80.06 6 60.46
Eindhoven 5 91.57 2 68.89 2 87.08 1 80.10 1 62.24
Enschede 1 91.70 10 62.75 10 82.73 5 80.06 3 61.62
Groningen 1 91.70 5 66.88 9 82.95 1 80.10 5 61.49
The Hague 7 91.50 9 65.11 5 85.43 7 80.01 7 59.99
Maastricht 5 91.57 6 65.95 1 87.19 1 80.10 10 59.09
Middelburg 1 91.70 1 69.47 3 86.63 1 80.10 2 61.87
Rotterdam 7 91.50 3 68.32 7 84.24 7 80.01 4 61.61
Utrecht 7 91.50 8 65.60 8 83.37 7 80.01 9 59.89
Source: Subnational Doing Business and Doing Business databases.
Note: Data for Amsterdam are not considered official until published in the Doing Business 2021 report. The indicator scores show how far a location is from the best performance
achieved by any economy on each Doing Business indicator set. The scores are normalized to range from 0 to 100 (the higher the score, the better). For more details, see the chapter
“About Doing Business and Doing Business in the European Union 2021: Austria, Belgium and the Netherlands.”
Back to Contents4 DOING BUSINESS IN THE EUROPEAN UNION 2021: AUSTRIA, BELGIUM AND THE NETHERLANDS
the top half in at least two indicators and In the three other areas measured, the location. Variations in the number of
among the bottom half in at least two however, significant disparities in regula- required procedures stem from locally
indicators, suggesting that they have tory performance can help policy makers determined water and sewage con-
something to teach and something to identify opportunities to improve admin- nection processes and the local-level
learn from their neighbors. Getting elec- istrative processes and building local application of the Bibob law to combat
tricity is easiest in Maastricht, the place institutional capacity. The regulatory money laundering.7 In nine cities, water
where contract enforcement is the most performance gap is widest for dealing and sewage connections require separate
difficult. Enschede is among the top- with construction permits, unsurprising applications; the municipality arranges
performing cities for enforcing contracts, considering the central role played by sewage connections and private sector
but the city scores poorly for dealing local authorities in this area (figure 1). companies arrange water connections.
with construction permits and getting Amsterdam is the exception. There, a pri-
electricity. By contrast, Amsterdam ranks In the Netherlands, dealing with con- vate company, Waternet, performs both
high in the latter two indicator sets, but it struction permits requires between 13 water and sewage connections. The cit-
lags in contract enforcement. and 16 procedures, which can be com- ies where the municipality is responsible
pleted in 168 to 233 days, depending on for sewage connections have notably
With remarkable consistency, Eindhoven
ranks at the top for contract enforcement,
co-leads for property registration, and is FIGURE 1 The regulatory performance gap is wide in three areas
the runner-up for dealing with construc-
Doing Business score (0–100)
tion permits and getting electricity.
Starting a Dealing with Getting Registering Enforcing
Similarly, Middelburg leads on construc- business construction electricity property contracts
permits
tion permitting, with the second-fastest 100
time and one of the least expensive EU best EU best
(Greece) (Germany) EU best
processes. The city also shares the top (Lithuania)
position for starting a business and regis- All 10 Dutch cities
EU best
tering property. Rotterdam is among the 90 (Denmark)
EU average Maastricht
most efficient locations for dealing with
construction permits.
All 10 Dutch cities EU best
Enschede (Lithuania)
Subnational differences highlight 80
opportunities for cities to learn
from each other
Dutch cities show homogeneous results in
Middelburg
two regulatory areas where they outper- 70
form the EU average: starting a business
and registering property. The process of Eindhoven
transferring property, which is fast but Enschede
60
relatively costly, is uniform nationwide and
Maastricht
relies heavily on notaries. All Dutch cities
obtain the highest scores globally for the
quality of the centralized land administra-
50
tion framework.6 It is easier and faster to
start a business in the Netherlands than
in the EU on average. The prevalence
of centralized online systems—like the 0
online platform hosted by the Netherlands Highest score in country Lowest score in country Country average
Chamber of Commerce—ensures that
the business registration process is also
Source: Subnational Doing Business and Doing Business databases.
uniform across the 10 benchmarked cities. Note: Data for Amsterdam, EU averages, and EU best performances are not considered official until published in the
In both regulatory areas, marginal differ- Doing Business 2021 report. The score indicates how far a location is from the best performance achieved by any
economy on each Doing Business indicator. The score is normalized to range from 0 to 100 (the higher the score, the
ences stem from variations in the fees better). Averages for the Netherlands are based on data for the 10 cities benchmarked. Averages for the European
charged by private notaries to register a Union are based on economy-level data for the 27 EU member states. Other EU member states are represented by their
capital city, as measured by global Doing Business. For more details, see the chapter “About Doing Business and Doing
company or transfer property. Business in the European Union 2021: Austria, Belgium and the Netherlands.”
Back to ContentsDOING BUSINESS IN THE NETHERLANDS 5
different approaches and involvement connection fees charged by the four subnational variations in the area of
levels, resulting in varying processing regional distribution utilities operating in enforcing contracts. The trial time can
times. For example, in Arnhem, develop- the benchmarked cities (each utility serves vary from 396 days at the district court
ers need only notify the municipality of between one and four of the measured in Eindhoven to 475 days in Maastricht.
the connection works, which are carried cities). However, several factors drive varia- In Eindhoven, the courts’ use of an elec-
out by a private sector contractor. In tions in the time to get electricity, including tronic calendar system (verhinderdata)
Maastricht, the same procedure takes application and staff availability. Obtaining reduces the waiting period for the first
1.5 months. First, the developer requests a connection takes at least a month longer hearing to just 3–6 months by streamlin-
a permit to assess connection feasibility in Utrecht, Groningen, and Enschede ing scheduling. In Groningen—where the
and estimate the cost; then, the munici- than in Maastricht and Eindhoven (where trial phase lasts 442 days on average—a
pality performs an onsite pre-connection it takes 97 and 98 days, respectively). case registered in August 2020 would
inspection. Similarly, the process for Enschede is one of the cities where the con- be first heard in February 2021 and, if the
applying anti-money laundering screen- nection process is delayed by a shortage of case is adjourned or requires a second
ing varies by location. Dutch municipali- technical staff and the utility’s transition hearing, the next available date would be
ties determine which industries are most to renewable energy sources. The time for in August of 2021.
at risk and whether a project requires the utility to obtain a municipal permit for
the basic Bibob screening or an in-depth works crossing a public road also varies The time to do business varies
evaluation.8 Five of the 10 benchmarked by municipality. Getting this permit takes widely across the country, but
cities apply Bibob screening to all three days in Utrecht but eight weeks in the overall quality of regulation
construction projects above a certain Groningen, where the municipality requires is uniform
monetary threshold.9 a thorough archeological assessment to Time is the dimension that varies the
issue the permit. most across the indicators measured.
The regulatory gap between Dutch cities Contract enforcement takes 19 months
for getting electricity is also noteworthy. Delays in securing hearing dates in the in Maastricht, three months longer than
Cost variations stem from the different trial and judgment phase cause the main in Eindhoven. Dealing with construction
FIGURE 2 Eindhoven has the fastest turnaround time overall
Netherlands average EU average
(845 days) (964 days)
Eindhoven
Rotterdam
Middelburg
Amsterdam
Groningen
Maastricht
The Hague
Arnhem
Enschede
Utrecht
0 100 200 300 400 500 600 700 800 900 1,000
Time (days)
Time to start a business Time to obtain construction permits Time to obtain electricity
Time to register property Time to resolve a commercial dispute
Source: Subnational Doing Business and Doing Business databases.
Note: Data for Amsterdam and EU averages, which use economy-level data for 27 member states of the European Union, are not considered official until published in the Doing
Business 2021 report.
Back to Contents6 DOING BUSINESS IN THE EUROPEAN UNION 2021: AUSTRIA, BELGIUM AND THE NETHERLANDS
permits varies from 5.6 months in procedures, requires 13). Instead, the main in the Netherlands points to possible
Groningen to almost eight months in cause is the time needed for municipal improvements (table 3). Some improve-
The Hague. Getting electricity takes 97 consultations and the water and sewer ments could be achieved by replicating
days in Maastricht, 41 days less than in connection. It takes 22 days to obtain the EU or global good practices, and others
Enschede. The time for property registra- utility connection in Groningen, the fastest by looking to subnational examples.
tion and for starting a business is uniform in the Netherlands and one-quarter of the
across the country. time needed in Arnhem, Enschede, and Replicating domestic good practices
Utrecht (85 days). would improve the Netherlands’
Overall, it takes entrepreneurs in Utrecht scores for the ease of enforcing
almost four months longer than their Three of the four good practices contracts and dealing with
peers in Eindhoven to comply with the recorded for Maastricht relate to cost. construction permits
bureaucratic requirements associated Entrepreneurs in Maastricht pay the low- Minor administrative improvements can
with the measured Doing Business areas est costs in the Netherlands to connect make a significant difference to small
(figure 2). Nevertheless, even in Utrecht, a warehouse to the electricity grid, go firms, which do not have access to the
the total time is two months faster than through the construction permitting pro- resources and tools available to larger
the EU average. cess, and transfer property. Dealing with businesses to extract better and faster
construction permits costs just 1.5% of the service from bureaucracies. An effective
Good performances exist across warehouse value in Maastricht compared way forward is to promote the exchange
the country to 4.0% in Amsterdam, mainly due to of information and experience among
Most Dutch cities have lessons to offer lower permit fees. In Maastricht, the cost cities, enabling underperforming ones to
their peers. Even cities that do not perform of the warehouse construction permit learn from those with higher rankings.
at the top on any indicator lead one indi- application (EUR 21,133) is one-quarter of Replicating more efficient processes
cator category (table 2). With four each, that in Amsterdam (EUR 82,106). developed by other cities within the
Eindhoven, Maastricht and Groningen Netherlands could produce efficiency
are the cities with the highest number of gains without significant legislative
good practices. Dealing with construction WHAT IS NEXT? changes. Nevertheless, various factors
permits is fastest in Groningen, where it such as local economic priorities or
takes 5.5 months compared to more than Streamlining regulatory procedures can budget availability may dictate whether
7.5 months in The Hague. However, this reduce the cost of doing business for replicating a good practice is desirable.
variation is not caused by the number of local firms, enhancing their efficiency and
regulatory steps (Groningen requires 15 ability to compete abroad. This report’s The two areas where improvements
while The Hague, the city with the fewest review of the regulatory environment would be the most impactful are dealing
TABLE 2 Most cities lead in at least one indicator category
Starting a Dealing with Getting Registering Enforcing
Number of top
performances
business construction permits electricity property contracts
Least Fewest Shortest Least Shortest Least Least Shortest Least
expensive procedures time expensive time expensive expensive time expensive
Eindhoven 4 ü ü ü ü
Groningen 4 ü ü ü ü
Maastricht 4 ü ü ü ü
Middelburg 3 ü ü ü
Arnhem 2 ü ü
Enschede 2 ü ü
Amsterdam 1 ü
The Hague 1 ü
Utrecht 1 ü
Rotterdam 0
Source: Subnational Doing Business and Doing Business databases.
Note: The table does not show indicator categories in which all or most cities register an equal result: procedures, time and paid-in minimum capital required to start a business; the
building quality control; procedures to obtain electricity and the reliability of supply and transparency of tariffs; the procedures and time to register a property as well as the reliability
of infrastructure.
Back to ContentsDOING BUSINESS IN THE NETHERLANDS 7
TABLE 3 Opportunities for regulatory improvement in Dutch cities
Relevant ministries and agencies*
Regulatory
area Good practices National level Local/regional level
Starting a Introduce an automated name verification system • Ministry of Economic Affairs
business Make third-party involvement optional, standardize incorporation forms, and and Climate Policy
provide public access to the business registration system • Netherlands Chamber of
Commerce
Make starting a business a fully electronic process
• Ministry of Finance
Accelerate and streamline the VAT registration process • Dutch Tax and Customs
Administration
• Ministry of Social Affairs and
Employment
• Employee Insurance Agency
• Royal Dutch Association of
Civil-law Notaries
Dealing with Increase efficiency by improving coordination and consolidating procedures • Ministry of the Interior and • Municipalities
construction Continue expanding the digital platform to consolidate the construction permitting Kingdom Relations • Fire departments
permits process further • Ministry of Infrastructure and • Regional
Water Management environmental
Introduce mandatory liability insurance requirements to cover developers and
architects in the event of structural defects • Ministry of Justice and Security services
• Association of Netherlands
Review the building permit cost structure Municipalities
Improve regulatory expertise together with the private sector • Royal Institute of Engineers
• Office of Architects Registry
Getting Streamline the process for obtaining external connection works and excavation permits • Netherlands Authority for • Electricity
electricity Increase transparency by making data on legal time compliance publicly available Consumers and Markets (ACM) distribution utilities
• Association of Netherlands • Electricity suppliers
Allow entrepreneurs to request a new connection, supply contract, and meter Municipalities
installation via a single window • Municipalities
• Royal Institute of Engineers
Allow the option to pay connection fees in installments and assess the possibility of
lowering the cost of getting an electricity connection
Registering Assess the possibility of reducing the cost of transferring property in the Netherlands • Ministry of Interior and
property Explore the possibility of gradually reducing the role of notaries in property transfers Kingdom Relations
or make their use optional • Ministry of Justice and Security
Increase the transparency of the land administration system by collecting and
compiling statistics on land disputes
Enforcing Consider making measures allowing virtual hearings permanent • Ministry of Justice and Security • Local courts
contracts Consider expanding e-features in courts for commercial litigation and small claims • The Council for the Judiciary
Consider creating specialized commercial courts or divisions
Note: All good practices are detailed at the end of the respective indicator section.
*The list includes the main ministries and agencies relevant to each regulatory area but is not exhaustive.
with construction permits and enforcing process as efficient as Eindhoven’s would sewage connections are requested jointly
contracts (figure 3). If Amsterdam were also increase the Netherlands’ score on in Amsterdam to a private sector company.
to reduce the cost of construction per- the ease of getting electricity.
mits to levels in Maastricht (1.5% of the The Netherlands can also look to
warehouse value) and the time to that in The potential for meaningful improvement other EU member states and beyond
Groningen (168 days), the Netherlands’ extends beyond Amsterdam. Most Dutch for good practices
score would improve from 66.92 to cities could look to Amsterdam to learn Even if the Netherlands were to adopt the
71.54, just behind Switzerland but ahead how to process building permit applications good practices found within its borders,
of Spain. Similarly, if Amsterdam could more efficiently. Dutch cities could consider the country would still lag the perfor-
reduce the time to enforce contracts by consolidating procedures and reducing the mance of most other EU member states,
43 days (to the time in Eindhoven) and the time developers spend on separate water particularly in dealing with construction
cost by 5 percentage points (to the cost and sewage applications or preliminary permits and enforcing contracts. Looking
in Middelburg), the Netherlands' score consultations. Unlike the other nine cit- to good practices in other EU member
would increase by 3.1 points. Making ies—where water and sewage connections states is another way to boost competi-
Amsterdam’s electricity connection require separate applications—water and tiveness in these indicators.
Back to Contents8 DOING BUSINESS IN THE EUROPEAN UNION 2021: AUSTRIA, BELGIUM AND THE NETHERLANDS
form and submit the memorandum one distributor, UK Power Networks,
FIGURE 3 If Amsterdam adopted each
city’s best practices, the Netherlands’ and articles of association online.11 In implemented a new software system,
ease of enforcing contracts and dealing Portugal, entrepreneurs can establish an the Design Fast Track and Approved
with construction permits would increase LLC through an online registration service Designer Scheme, that allows for direct
significantly (‘Empresa Online’). They can access this contact with subcontractors and tracks
service through the Business Portal by their progress. The utility also introduced
Doing Business score
(0–100) using a digital mobile key, a citizen card, common requirements for the design
100 or a digital certificate.12 and planning of the works and material
specifications for subcontractors to carry
Dealing with construction permits in out external works. As a result of these
80
the Netherlands takes longer and is initiatives, UK Power Networks reduced
more expensive than the EU average. the time to provide a new electricity con-
70 71.54 Building permit fees across Dutch cities nection by a month. Currently, it takes 46
66.92 are high, accounting for more than 80% days to complete the connection works,
62.99 of the total cost to complete construc- which is more than twice as fast as the
60
59.94 tion permitting. In economies that have Dutch average.
adopted good practices in this area,
50 building permit fees are generally set to The cost of transferring property in the
Dealing with Enforcing
construction permits contracts recover the cost of providing services Netherlands is significantly higher than
Amsterdam
rather than to generate tax revenue. New the EU average (4.6% of the property
Best of the Netherlands Zealand charges permit fees at a level value), mainly because of the 6% prop-
that covers the costs associated with erty transfer tax. The cost of registering
the review of plans, any inspections, and property is lower than the Netherlands
Source: Subnational Doing Business and Doing Business
databases. overhead costs. When setting the fees, in 19 EU member states. Denmark,
Note: Data for Amsterdam are not considered official the Auckland Council considers factors Estonia, Lithuania, Poland, and the Slovak
until published in the Doing Business 2021 report.
including the cost implications of infra- Republic have very low property transfer
structure funding decisions on develop- taxes (less than 1%) or have abolished
The Netherlands could streamline its ment and the challenges developers face them altogether.
company registration process. Digital in getting their products built, noting “if
tools for company registration are already development costs are too high this may Dutch courts lag in terms of automation
available to notaries, but entrepreneurs act as a barrier to development and slow and case management systems. The
cannot complete the process online by down growth.”13 Netherlands’ judiciary would benefit
themselves. Incorporating technology from adopting additional features such as
would allow entrepreneurs to use a digi- To make getting electricity easier, the electronic service of process or e-filing of
tal identity, eliminating the need for an Netherlands could reduce the time it the claim, two tools that could streamline
in-person visit to the notary. Several EU takes to connect a warehouse to the elec- and accelerate the process of commenc-
member states employ virtual interfaces tricity grid. On average, getting electric- ing a lawsuit. Estonia and Germany have
for business incorporation. These econo- ity in the Netherlands takes almost one made enforcing contracts easier by
mies require no in-person interaction month longer than the EU average. Dutch introducing electronic filing of both the
with the authorities, third-party partici- authorities and utilities could take inspi- initial complaint and electronic service
pation, or hard-copy submission of docu- ration from the United Kingdom. In 2017, of process without the need for paper
ments to start a company, reducing the the UK regulator, Ofgem, approved the documents.
administrative burden. Estonia’s online Incentive on Connections Engagement
company registration portal allows entre- (ICE) initiative to encourage distribution
preneurs to check the company name, network operators to complete the exter-
submit the registration application, and nal connection works faster. According
pay the share capital electronically in a to the ICE guidance, the utilities must
single interaction.10 The Danish Business provide data demonstrating that they
Authority provides LLCs with a one-stop, have responded to their customers on
centralized online platform for business time and according to their customer
and tax registration, which entrepreneurs service engagement. Distribution system
access using their NemID digital signa- operators can be penalized if they fail
ture. Companies complete a registration to meet these requirements. Moreover,
Back to ContentsDOING BUSINESS IN THE NETHERLANDS 9
Starting a Business
The process of starting a business
FIGURE 4 It takes five procedures in nine days, at an average cost of 3.1% of income
is uniform, but the cost varies per capita, to start a business in the Netherlands
across the 10 cities benchmarked
Time Cost (% of
Across the Netherlands, starting a private (days) income per capita)
limited liability company (LLC) (besloten 9 Time 9 days 4
vennootschap, bv) requires entrepreneurs 8
to complete the same five procedures,
7 Cost
taking the same amount of time. The 3.1% 3
Dutch Civil Code14 sets the requirements 6
for operating a bv at the national level, 5
making the process uniform nationwide. 2
4
The centralized organizational structure
of the startup process and the prevalence 3
of online platforms—such as that of the 2
1
Netherlands Chamber of Commerce
1
(Kamer van Koophandel, KVK)—ensure
procedural uniformity. The Chamber of 0 0
Verify Draft and Register Register Register as
Commerce, an official and independent company sign notarial UBOs company and employer
administrative body, manages the Dutch name deed obtain VAT-id
Commercial Register (Handelsregister) and Procedures
the ultimate beneficial owner (UBO) regis- Less than one day (online procedure)
ter,15 and provides information, advice, and
Source: Subnational Doing Business and Doing Business databases.
support to Dutch businesses. Registering a
Note: In the Netherlands, entrepreneurs complete VAT registration as part of the general company registration process.
company with the Chamber of Commerce It takes a total of six days to complete company and VAT registration. The Chamber of Commerce issues the KVK, or
is a centralized process, with applications Chamber of Commerce registration number, and the RSIN number (Rechtspersonen en Samenwerkingsverbanden
Informatienummer), an identification number for legal entities and associations, within several hours. However, the due
handled electronically in the order received. diligence required to activate the VAT number takes five days.
Nearly all requirements can be completed
TABLE 4 Costs vary across Dutch cities, but procedures and time are uniform
quickly, within a day or less each (figure 4).
The exception is the time to obtain the value Paid-in minimum
Cost capital requirement
added tax (VAT) identification number. All Score Procedures Time (% of income (% of income per
applications are processed centrally, and City Rank (0–100) (number) (days) per capita) capita)
the Dutch Tax and Customs Administration Arnhem 1 91.70 5 9 2.2 0
(Belastingdienst or Tax Authority) conducts Enschede 1 91.70 5 9 2.2 0
a risk assessment process. For a low-risk Groningen 1 91.70 5 9 2.2 0
business activity—like that of the Doing Middelburg 1 91.70 5 9 2.2 0
Business case study company—where all
Eindhoven 5 91.57 5 9 3.3 0
information is provided upfront, the VAT
Maastricht 5 91.57 5 9 3.3 0
number is issued in five days.
Amsterdam 7 91.50 5 9 3.8 0
The procedures and time are uniform, The Hague 7 91.50 5 9 3.8 0
but the cost to start a business ranges Rotterdam 7 91.50 5 9 3.8 0
from 2.2% of income per capita (EUR Utrecht 7 91.50 5 9 3.8 0
1,050) in Arnhem, Enschede, Groningen, Source: Subnational Doing Business and Doing Business databases.
and Middelburg to 3.8% (EUR 1,800) in Note: Data for Amsterdam are not considered official until published in the Doing Business 2021 report. Rankings are
based on the average scores for the procedures, time, cost, as well as the paid-in minimum capital associated with
Amsterdam, The Hague, Rotterdam, and starting a business. The score is normalized to range from 0 to 100 (the higher the score, the better). For more details,
see the chapter “About Doing Business and Doing Business in the European Union 2021: Austria, Belgium and the
Utrecht (table 4). Although the Chamber Netherlands.”
Back to Contents10 DOING BUSINESS IN THE EUROPEAN UNION 2021: AUSTRIA, BELGIUM AND THE NETHERLANDS
of Commerce’s business registration fee It is easier and faster to start a Kingdom,19 Dutch entrepreneurs are not
is set nationally at EUR 50,16 individual business in the Netherlands than required to deposit cash as paid-in capital
notaries set their own fees, making these the EU average before incorporation.20
the main driver of cost variation for start- Entrepreneurs in the Netherlands must
ing a business across the 10 locations. comply with five procedures to start Entrepreneurs complete five
a business, slightly fewer than the EU procedures and wait nine days to
Almost the entire cost of starting a busi- average (5.7 procedures) (figure 6). start a business
ness in the Netherlands (97%) is attribut- Only eight EU member states allow Starting a business anywhere in the
able to notary charges and fees (figure 5). entrepreneurs to start a business in fewer Netherlands requires the same five
Notary rates, which became negotiable in procedures.18 The entire process takes procedures across the Netherlands.
the Netherlands in 1999, can be billed at nine days in the Netherlands—three days Although notaries assist with the first
an hourly rate or as a fixed fee; notary fees faster than the EU average but more than four procedural steps to start a business,
can vary within the same city. Among the twice as long as the European Union’s the entrepreneur or someone on behalf
variables that determine the price of notar- best performers, France and Greece, of the entrepreneur like an accountant
ial services for starting a business are the where it takes just four days. Dutch must complete the fifth—registering the
corporate structure of the company, the entrepreneurs pay the equivalent of 3.1% company as an employer with the Tax
number of founders, whether the articles of income per capita on average to start Authority (figure 7).
of association require special provisions, a business, on par with the EU average
the qualifications of those involved in the but significantly higher than the 12 top As a first step to register a bv, the entre-
assignment’s execution, the notary office’s performers in the European Union for preneur or notary verifies the availability
overhead costs, the size and status of the cost (where entrepreneurs pay just 0.5% of the proposed company name using the
office, and local competition. Although it of income per capita on average). Among Chamber of Commerce’s online tool.21
is possible that entrepreneurs in different the top performers globally, there is no Although the entrepreneur can complete
locations would pay the same amount in cost to start an LLC in Slovenia; in Ireland, this step independently, most seek advice
fees to establish a bv,17 the median price Denmark, and the United Kingdom, the from notaries on the company name to
is lower in Arnhem, Enschede, Groningen cost of starting a business is less than ensure that it complies with the Trade
and Middelburg—cities where demand for 0.3% of income per capita. Like five Name Act.22
incorporation services per notary is lower. other EU member states and the United
In the Netherlands, a bv must be incorpo-
rated by a notarial deed executed in the
FIGURE 5 Notary services account for 97% of startup costs in the Netherlands physical presence of a notary either by
the entrepreneur or the person granted
Amsterdam power of attorney to act on their behalf.
Entrepreneurs send the required informa-
The Hague
tion and documentation23 to the notary
3% Rotterdam by post, in person, or electronically (by
email or through online software systems
Utrecht
such as ‘Online Dossier’) for the notary to
Eindhoven draw up the deed of incorporation. Most
entrepreneurs submit the documentation
Maastricht
97% by email. Before the COVID-19 pandemic,
Arnhem all shareholders of the bv were required to
Netherlands appear in person with a valid identifica-
Enschede average
(EUR 1,448)
tion document for the notary to execute
Groningen the deed or legalize a power of attorney.
However, the Royal Dutch Association of
Middelburg
Civil-law Notaries (Koninklijke Notariële
0 500 1,000 1,500 2,000
Beroepsorganisatie, KNB) enacted tem-
Cost (EUR) porary policy rules during the pandemic
allowing notaries to verify the identities
Notary charges and fees Business registration fee
of entrepreneurs remotely (using audio-
visual communications technology) and
Source: Subnational Doing Business and Doing Business databases.
Note: Data for Amsterdam are not considered official until published in the Doing Business 2021 report.
suspending the need for the in-person
Back to ContentsDOING BUSINESS IN THE NETHERLANDS 11
FIGURE 6 Dutch cities outperform the EU average for number of procedures and time and are on par for cost
Procedures Time Cost
(number) (days) (% of income per capita)
1 1 Slovenia (EU best) 0
United Kingdom
Denmark
2 France 1
France, Greece (EU best)
4 member states* United Kingdom 5
2 Arnhem, Enschede,
(EU best) 3 Denmark
Belgium Groningen, Middelburg
Dutch average, EU average 3
United Kingdom 4 All 10 Dutch cities Eindhoven, Maastricht
10 Amsterdam, The Hague,
4 Rotterdam, Utrecht
EU average
Denmark, France 5 All 10 Dutch cities
Germany
Belgium 5
EU average 15
6
6
Germany
7
7
35
Belgium 8 Poland 13
Austria, Czech
Republic, Germany 9 40 Italy 14
Source: Subnational Doing Business and Doing Business databases.
Note: Data for Amsterdam, comparator economies, and EU averages are not considered official until published in the Doing Business 2021 report. EU average uses economy-level data
for the 27 member states of the European Union. Data for individual economies are for their capital city as measured by Doing Business.
* Estonia, Finland, Greece, Slovenia.
signing of powers of attorney with the numbers to the company: the Chamber can search online for the company’s
notary (box 1). of Commerce registration number information using the Commercial Reg-
(KVK-nummer) and the legal identities ister’s database27 or the extract from the
Once the deed is signed, the notary sub- and associations identification number Chamber of Commerce.
mits the required information electroni- (Rechtspersonen en Samenwerkings-
cally24 to the Chamber of Commerce to verbanden Informatienummer, RSIN- VAT registration is initiated with com-
register the bv online through an online nummer) used for data exchange with pany registration at the Chamber of
platform (Online Registreren Notarissen, government entities. Entrepreneurs Commerce. The Chamber automati-
ORN) and its UBOs through the NAU receive a letter from the Chamber of cally forwards the company’s registration
platform (Notaris Applicatie UBO).25 Commerce informing them of the suc- information to the Tax Authority, which
Only a notary can complete this process cess of the company’s registration in the in turn assigns the company’s VAT
electronically. Entrepreneurs wishing to Commercial Register. While awaiting this identification number and delivers it by
register the company and UBOs them- letter, the notary can check the company’s post to the entrepreneur. Entrepreneurs
selves can visit a Chamber of Commerce registration status online using the ORN can access company tax information,
office in person. Most entrepreneurs opt application. Alternatively, entrepreneurs including the VAT identification number,
for a notary to complete the process
electronically, citing time efficiency.26
Upon approval of UBO registration, the FIGURE 7 How does the business registration process work in the Netherlands?
Chamber of Commerce sends a confir-
mation letter by post to the company and 1. Verify 2. Draft 3. Register 4. Register 5. Register
company and sign Ultimate
its UBOs. The NAU platform automati- company as employer
name notarial deed Benefial Owners
cally notifies the notary whether UBO
registration was approved or not. 4. Obtain VAT-id
(requested
automatically)
Once registrations are complete—for
the company, directors, and UBOs—the
Chamber of Commerce assigns two Source: Subnational Doing Business and Doing Business databases.
Back to Contents12 DOING BUSINESS IN THE EUROPEAN UNION 2021: AUSTRIA, BELGIUM AND THE NETHERLANDS
BOX 1 Starting a business during COVID-19
In the Netherlands, entrepreneurs appear in person before a civil-law notary to execute the notarial deed—either to sign the
deed of incorporation or to be identified for the purpose of legalizing a private power of attorney. In April 2020, amid the
COVID-19 pandemic, the authorities enacted a temporary law allowing the digital approval of deeds in special emergency situ-
ations. However, for the process of incorporating a bv, the entrepreneur or their authorized representative still signs the notarial
deed in person.
The KNB responded to the pandemic by amending some common practice policy rules to allow the digital authorization of
signatures.a Because some entrepreneurs wished to avoid face-to-face meetings, the KNB allowed notaries to verify the identity
and signature of entrepreneurs granting a power of attorney using an audiovisual connection. Consequently, some notaries
reported an increase in the use of private powers of attorney during the pandemic.
Notaries were free to determine whether to allow in-person appointments with clients during the pandemic. Most notary offices
remained open during the lockdown, offering services in accordance with pandemic guidelines for social distancing. Telephone
and videoconference meetings to provide advice and guidance on the establishment of a bv increased sharply. These safety
measures, coupled with the KNB’s policy response, helped the Netherlands to maintain a smooth business startup process dur-
ing the COVID-19 pandemic.
Despite the increased use of electronic communication tools, this solution remains temporary and partial— entrepreneurs or
their authorized representative still physically attend the signing of the notarial deed. Beyond this, however, no further in-person
interactions are required to complete the remaining procedures to start a business in the Netherlands.
The remaining steps are executed either electronically (checking the company name, registering the company and UBOs) or by
post (registering as an employer).
a. For more information on the KNB’s response to COVID-19, see the website at https://www.knb.nl/actueel/coronavirus.
and file various tax returns electronically name.33 Most entrepreneurs seek the
(payroll, corporate, VAT) using the Tax WHAT CAN BE IMPROVED? assistance of a notary to ensure that the
Authority’s portal for entrepreneurs.28 proposed company name complies with
Private limited companies located in Introduce an automated name the Trade Name Act. Entrepreneurs and
the Netherlands with a turnover not verification system their notaries can also check the Benelux
exceeding EUR 20,000 per calendar The entrepreneur has the legal respon- Office for Intellectual Property34 for brand
year can receive a VAT exemption by sibility to check the availability of the names and the Internet Domain Name
opting for the small business scheme company name in the Netherlands.32 The Registration Foundation (SIDN)35 for
(Kleineondernemersregeling, KOR).29 name must meet certain requirements, domain names.
such as not using another company’s
Finally, a company hiring employees for brand name and avoiding confusion with By simplifying the rules and offering an
the first time must register as an employ- existing company names. The Chamber automated name verification system at
er with the Tax Authority. Firms register of Commerce’s website offers instruc- the time of company registration, the
as an employer by completing and sign- tions on how to check the company name authorities would allow entrepreneurs to
ing a PDF form (available online from the before registration and provides an online verify for themselves that the proposed
Tax Authority’s website30); they mail the tool for entrepreneurs to verify whether company name complies with the legal
form by post to the Tax Authority office in their proposed company name is already requirements for company registration.
Heerlen.31 Within six weeks of complet- listed in the Commercial Register. This
ing registration, the company receives a tool cannot check for phonetics, special Various economies have redesigned
payroll tax number, a payroll tax return punctuation marks, or other distinguish- the registration process to allow entre-
letter—listing the tax return filing periods ing factors between names that could preneurs to automatically verify the
for the current year—and information on confuse the public or be disallowed proposed company name at the time
the contributions due to the employee under the Trade Name Act. Therefore, of application for business registra-
social security insurance scheme. the Chamber of Commerce recommends tion. Australia, Canada, and the United
that entrepreneurs seek the assistance States introduced clear rules in the early
of a notary to evaluate the company 2000s to determine whether proposed
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