By Carlie Bonavia | TMF Group
Most procedures for establishing a new entity in the Netherlands are quite straightforward, but in some areas, complexity levels for foreign companies can skyrocket.
When it comes to the best countries in the world for business, the Netherlands is in an enviable 3rd position. However, it’s ranked among the 20 most complex jurisdictions in the world when examined specifically for its level of corporate compliance complexity.
This is according to TMF Group’s Compliance Complexity Index 2018, which assessed 84 jurisdictions based on how difficult it is for companies to adhere to local business regulations and associated issues. Specific factors include the time taken to set up, and comply with reporting requirements. The Netherlands came in at 17, while the UAE at number 1 is considered most complex, followed by Qatar and China. At the other end of the spectrum, Ireland at 84 is the simplest jurisdiction in which to meet corporate compliance requirements.
Priscilla Schraal, corporate secretarial services team leader at TMF Netherlands, isn’t surprised at the juxtaposition. “When it comes to establishing a new entity, most procedures in the Netherlands are quite straightforward. However, complexity levels for foreign companies skyrocket when it comes to official processes, which require paperwork to be in Dutch. It can be extremely hard and very time consuming for businesses to understand what is being requested of them, and why.” Ms Schraal added: “There are also the numerous requirements that must be adhered to when an entity becomes operational; for example country-specific VAT rules, submitting benchmark reports to the Dutch Central Bank, mandatory questionnaires from Statistics Netherlands and deadlines for certain filings, which carry possible consequences for non-compliance.”
Regulatory compliance obligations are increasing for companies around the world, and in the Netherlands it’s no different. Managing director of TMF Netherlands Andre Nagelmaker explained; “The country is following the global trend for more transparency from multi-nationals with regard to financial data, economical and decision-making ownership of businesses. All of these factors increase complexity, and make it ever more essential for growing companies to ensure they have a consistent – and scalable – compliance framework in place.”
For international firms currently assessing how best to tackle these issues and incorporate them into their strategy, Mr Nagelmaker suggests complexity mapping through audits and entity health checks as a great place to start.
Meet the team at Compliance Week Europe, 12-13 November 2018 in Amsterdam.
Compliments of TMF Group, a member of the EACCNY