Foreign direct investment and multinationals
In addition to international trade, foreign direct investment is also a way to build lasting economic relationships abroad. The Netherlands attracts foreign investment, which can lead to more jobs, but also to new knowledge and technologies. Multinationals are the actors behind this foreign direct investment, and it is therefore interesting to study them further.
7.1Key findings
Foreign direct investment (FDI) is a key element of globalisation. International business is obviously more than just international trade. Enterprises can also invest across borders, for example by choosing to set up a business in another country (greenfield FDI) or to take over a local business (brownfield FDI). The Netherlands is one of the top 5 countries in the world for investment, an important factor being the attractive investment climate that prevails in the country. Advantages include the country’s physical and digital infrastructure, the highly educated labour force, the efficient labour market, and investments in innovation and technology (Franssen, 2018).
Through foreign investment, enterprises can, for example, scale up production, take advantage of cheaper local factors of production and save transport costs to foreign markets in order to compete with foreign enterprises. However, enterprises may also be active abroad for tax reasons. Enterprises try to reduce their tax payments by channelling their financial or investment activities through countries with a favourable tax environment. The Netherlands plays a major role in this, since some 63 percentnoot1 of inward foreign investment is channelled directly abroad, without any form of economic activity in the Netherlands. In this process, multinationals make use of administration or trust offices in the Netherlands, where they temporarily place their capital before actually investing in third destinations. By means of such Special Purpose Entities (SPEs), these multinationals can then make use of the advantageous Dutch tax rules, without undertaking any production in the Netherlands (Boonstra, 2018).
The Netherlands plays an important role in the area of capital flows. In 2019, the Netherlands’ international investment position rose to 2,498 billion euros in outward investments, excluding SPEs. This was around 274 billion euros more than the year before. Only the United States had more outward foreign direct investment in 2019. As for inward foreign investment, excluding SPEs, the Netherlands ranked fifth in the world in 2019, with 1,768 billion euros. Despite an increase of 174 billion euros compared to 2018, the Netherlands slipped down one place in favour of China.
Around 14 percent of total inward direct investment in the Netherlands in 2018 came from the United Kingdom, after adjustment for investments via SPEs. This makes the United Kingdom the largest investor in the Netherlands in 2018, while in 2015, some 10 percent of total inward direct investment came from the UK. This made the United Kingdom ‘only’ the fourth largest investor in the Netherlands in 2015. The largest share of outward investments by the Netherlands was in the United States in 2018, as was the case in 2015. These investments, excluding SPEs, represented 15 percent of total Dutch outward direct investment.
In 2017, a total of 24,375 multinationals were active in the Netherlands, of which 56 percent were foreign-owned. The share of foreign-owned multinationals has increased by nearly 10 percentage point since 2010. With some 2.3 million employed persons, Dutch and foreign-owned multinationals represented 39 percent of total employment in the Dutch business economy in 2017. In the Dutch business economy as a whole, the majority of enterprises (including many self-employed workers without employees) are in the specialised business services sector, while the largest number of multinationals are active in the wholesale and retail sector.
In 2018, multinationals accounted for 84 percent of goods exports and 90 percent of exports of services. Both imports and exports of Dutch multinationals grew faster than those of foreign-owned multinationals over the last year.
Multinationals operating within the borders of the Netherlands are often under US control. In 2017, there were around 2,875 US-controlled enterprises in the Netherlands, which represented more than 21 percent of all enterprises under foreign control. With around 203 thousand employed persons, these US-controlled multinationals accounted for 20 percent of total employment in foreign-owned multinationals in the Netherlands.
Dutch multinationals also invest abroad: in 2017, there were a total of 23,205 Dutch subsidiaries abroad, of which 15 thousand were in EU countries and 8,205 in non-EU countries. With 4,221 subsidiaries of Dutch multinationals, Germany was a particularly important country of destination. There were 356 thousand full-time jobs at Dutch subsidiaries in Germany.
7.2Macro-level view of investment flows
The first part of this chapter discusses the investment position of the Netherlands, based on macro-level figures of the Dutch central bank (De Nederlandsche Bank, DNB) for the period 2015–2019. Who are the most important investment partners for the Netherlands? Do we see different patterns when we disregard investments through Special Purpose Entities? How have investment flows developed in recent years?
The Netherlands as a country of investment
In 2019, the Netherlands was among the top 5 largest investment countries worldwide. The Netherlands was actually the second-largest foreign investor in the world, preceded only by the United States (UNCTAD, 2020). As for inward foreign direct investment, the Netherlands ranked 5th worldwide after the United States, the United Kingdom, Hong Kong and China (UNCTAD, 2020). These UNCTAD figures exclude investments through Special Purpose Entities.
DNB records and publishes macro-level figures on the bilateral investments of the Netherlands. In 2018, there was a small dip in the total value of foreign investment in the Netherlands compared to 2017 (Figure 7.2.1). This was related to a divestment in 2018 due to the closure of a Special Purpose Entity based in the Netherlands (DNB, 2018a). In 2019, the Netherlands' international investment position comprised 4,709 billion euros in inward investments and 5,788 billion euros in outward investments. The previous year, these totals were 4,664 billion euros (inward investments) and 5,636 billion euros (outward investments).
| Type | Jaar | Excluding SPEs | SPEs |
|---|---|---|---|
| Inward | 2015, Inward | 1420 | 2827 |
| Inward | 2016, Inward | 1485 | 3062 |
| Inward | 2017, Inward | 1523 | 3223 |
| Inward | 2018, Inward | 1594 | 3070 |
| Inward | 2019, Inward | 1768 | 2941 |
| Outward | 2015, Outward | 2005 | 3156 |
| Outward | 2016, Outward | 2247 | 3279 |
| Outward | 2017, Outward | 2247 | 3449 |
| Outward | 2018, Outward | 2224 | 3412 |
| Outward | 2019, Outward | 2498 | 3290 |
| Source: DNB | |||
The Netherlands as a transit country
A substantial share of the foreign direct investment that enters the Netherlands does not end up in the Dutch economy, but is channelled from one country to another through Dutch Special Purpose Entities. The low Dutch withholding tax, the participation exemption, tax rulings, the accessibility of the Dutch Tax and Customs Administration, the expertise and experience of the Dutch trust sector, and the bilateral treaties that the Netherlands has concluded with many countries are major reasons for SPEs to redirect their investments through the Netherlands (Lejour & van ’t Riet, 2013; Franssen, 2018).
Around 15 thousand Special Purpose Entities were based in the Netherlands in 2018 (DNB, 2018b). With a balance sheet total of 3,609 billion euros at the end of 2017, SPEs were the largest Dutch financial sector, larger than the banking sector, which had a balance sheet total of 2,281 billion euros (DNB, 2018b). DNB figures show that in the period 2013–2016 about 180 billion euros per year of income relevant for tax purposes (dividends, interest and royalties) flowed through the Netherlands via SPEs (DNB, 2018b).
Figure 7.2.1 shows the share of investments of Special Purpose Entities. In addition to the 3,290 billion euros of investments of SPEs abroad, there were also 2,498 billion euros of investments from the Netherlands that were not made through SPEs. This brings the total of outward direct investment in 2019 to 5,788 billion euros. If the investments through SPEs are excluded, the position of Dutch outward investment has remained stable since 2016.
Around 63 percent of total foreign investment in the Netherlands is directly channelled to other destinations. The remaining 37 percent is actually invested in the Netherlands. This is the type of investment that can lead to more work, jobs and tax revenues within the Netherlands. If investment through SPEs is again excluded, inward FDI has even risen slightly since 2015.
Most direct investment (excluding SPEs) from UK and Luxembourg
The Netherlands’ most important investment partners are the United Statesnoot2, Luxembourg, the United Kingdom, Switzerland, Ireland and Germany.noot3 The largest share of investment in the Netherlands is in US hands, followed by Luxembourg and the United Kingdom. If SPEs are excluded, some shifts can be seen in the 6 largest investment partners. Most investment in the Netherlands is then in UK hands (excluding SPEs), followed by Luxembourg, the United States and Switzerland.
In 2018, the United Kingdom invested some 213 billion euros (excluding SPEs) in the Netherlands (Figure 7.2.2). Compared to 2015, investment from the United Kingdom has increased and the country has moved up from 4th place to 1st place in the top 6 investment partners. The larger UK investments in the Netherlands may be the result of the uncertainty associated with Brexit. UK enterprises find it important to be present in an EU country in order to be part of the single market even after the UK has left the EU (Algemeen Dagblad, 2019; RTL Nieuws, 2019).
In 2018, the Netherlands had substantial amounts of investments in the United States in particular, totalling nearly 775 billion euros. Figure 7.2.2 shows that if investments channelled through Special Purpose Entities are not considered, the United States is still the main destination for Dutch investment, followed by Switzerland, the United Kingdom and Germany. In 2018, some 15 percent (310 billion euros) of outward direct investment went from the Netherlands to the United States, after correction for investment through SPEs. The United States was already the Netherlands’ most important destination for investment in 2015.
Compared to the 2015 situation, the United Kingdom dropped one place in the top 6 investment destinations for the Netherlands in 2018, moving from 2nd place down to 3rd place. Due to Brexit, the United Kingdom may become a less attractive destination for foreign investment. Firstly, Brexit may mean the UK losing access to the EU internal market. Secondly, the UK’s role in global value chains will be made more difficult by possible trade barriers between the UK and the EU (DNB, 2019). Data from the UK Department for International Trade show that since the Brexit referendum, the number of greenfield FDIs and the number of mergers and acquisitions by foreign enterprises in the UK have fallen by 14 percent, reaching their lowest levels in six years (Romei, 2019). According to Financial Times calculations, the number of jobs created in the UK as a result of greenfield FDI has fallen by 19 percent compared to the same period before the referendum (Romei, 2019).
| Type | Investeringspartner | Total value of foreign investments excluding SPEs |
|---|---|---|
| Inward | United Kingdom, Inward | 213 |
| Inward | Luxembourg, Inward | 209 |
| Inward | United States, Inward | 174 |
| Inward | Switzerland, Inward | 122 |
| Inward | Germany, Inward | 116 |
| Inward | France, Inward | 89 |
| Outward | United States, Outward | 310 |
| Outward | Switzerland, Outward | 231 |
| Outward | United Kingdom, Outward | 217 |
| Outward | Germany, Outward | 113 |
| Outward | Luxembourg, Outward | 102 |
| Outward | France, Outward | 95 |
| Source: DNB | ||
The figures shown in Figure 7.2.2 refer to the country from which the investment directly originates. However, due to different constructions (e.g. channelling investment), there can be a difference between the location where the investment has directly come from and where it originally came from. A recent article by Hagendoorn (2020) compares the figures for investments according to the direct and the original ownernoot4 and finds striking differences among the top 6 countries that invest the most in the Netherlands.
For example, figures on direct investment by original owner show that the United States was the most important investor in the Netherlands in 2017. The United States ultimately invested some 551 billion euros (excluding SPEs) in the Netherlands, which represents nearly 40 percent of the total Dutch position in inward investment. According to traditional figures on investment by direct owner, the total was less than half, at 206 billion euros (excluding SPEs). This is ‘only’ 15 percent of the total position in inward investment.
Luxembourg, for example, is a country that had a high score in the 2017 figures for investment by direct owner, but did not play a significant role when the original owner was considered. The country therefore acts as an important ‘intermediary’ between the original owner and the Dutch enterprise in which an investment is made (Hagendoorn, 2020). The United Kingdom also often acts as an ‘intermediary’ for investments from the United States, for example, and even for Dutch investments that return to the Netherlands via foreign group enterprises by means of loans or participating interests (Hagendoorn, 2020).
7.3Multinationals in the Netherlands
This section looks specifically at the enterprises that invest: the multinationals. CBS figures on the Inward and Outward Foreign Affiliates Statistics were used to examine multinationals in the Netherlands by nationality, for the period 2013–2017. How many multinationals are there in the Dutch business economy? Which sectors are they active in and how much employment do they provide? Which countries control the foreign multinationals? How much international trade and what proportion of employment in the Dutch business economy do multinational enterprises account for?
A multinational is an enterprise that exercises ultimate control over other enterprises in two or more countries. CBS can make a distinction between Dutch and foreign-owned multinationals. A Dutch multinational is an enterprise under Dutch control with subsidiaries (majority interests) abroad. A foreign-owned multinational is a subsidiary based in the Netherlands that is ultimately controlled from abroad. The number of multinationals is increasing, as new multinationals establish themselves in the Netherlands and/or Dutch enterprises are taken over by foreign enterprises. In addition, Dutch enterprises are also increasingly crossing the country’s borders.
More foreign-owned multinationals in the Netherlands
In 2017, the most recent year for which data are available, 24,375 multinationals were active in the Dutch business economy, representing 2.1 percent of the total business population. More than half of the multinationals were under foreign control. Figure 7.3.1 shows that the share of foreign-owned multinationals has grown since 2010.
| Jaar | Foreign multinationals | Dutch multinationals |
|---|---|---|
| 2010 | 8565 | 9655 |
| 2011 | 10455 | 9530 |
| 2012 | 10850 | 9305 |
| 2013 | 11970 | 9195 |
| 2014 | 12340 | 9780 |
| 2015 | 12620 | 9925 |
| 2016 | 13130 | 10265 |
| 2017 | 13690 | 10685 |
| Jaar | Foreign multinationals | Dutch multinationals |
|---|---|---|
| 2010 | 818 | 993 |
| 2011 | 855 | 960 |
| 2012 | 858 | 1048 |
| 2013 | 870 | 1049 |
| 2014 | 867 | 1103 |
| 2015 | 916 | 1151 |
| 2016 | 967 | 1204 |
| 2017 | 1017 | 1252 |
Altogether, multinationals employed nearly 2.3 million people in the Netherlands in 2017, accounting for 39 percent of total employment in the country. This is a net figure of 98 thousand full-time jobs (FTEs) more than the previous year (+4.5 percent). An increase in employment at multinationals may arise because the enterprise grows and creates new jobs, but it may also be due to shifts in control. For example, Dutch enterprises, and therefore jobs, can be taken over by foreign-owned multinationals, or an existing Dutch enterprise that is not yet a multinational can make an investment abroad, as a result of which the employment it provides is also counted among the multinationals. Throughout the Dutch business economy – including the non-multinationals – the number of employed persons grew by 3.5 percent. There are fewer Dutch multinationals than foreign-owned multinationals, but Dutch multinationals lead the way in terms of employment. In 2017, all Dutch multinationals together employed around 235 thousand more people than did foreign-owned multinationals (Figure 7.3.2).
Over 21 percent of foreign-owned multinationals are American enterprises
Most foreign-owned multinationals in the Dutch business economy are under US, German, UK, Belgian or French control (Figure 7.3.3). Together, these five countries make up more than 63 percent of all foreign-owned enterprises in the Netherlands. Just as in the total outward investment position (excluding SPEs), the United States is also our largest investment partner with respect to the number of multinationals active in the Netherlands. In 2017, there were 2,875 US-controlled enterprises in the Netherlands, which represented more than 21 percent of all enterprises under foreign control. There was a strong increase (+315) in this number between 2013 and 2017. Nearly 2,200 foreign-owned multinationals were under German control in 2017, representing around 16 percent of all enterprises under foreign control. This means that enterprises under German control form the second-largest group in the Dutch business economy after US-controlled enterprises.
| Land | 2013 | 2016 | 2017 |
|---|---|---|---|
| United States | 2560 | 2820 | 2875 |
| Germany | 2070 | 2150 | 2190 |
| United Kingdom | 1260 | 1310 | 1355 |
| Belgium | 1025 | 1255 | 1290 |
| France | 695 | 765 | 815 |
| Japan | 535 | 555 | 560 |
| China | 315 | 465 | 470 |
| Switzerland | 440 | 455 | 460 |
| Sweden | 365 | 365 | 375 |
| Italy | 260 | 280 | 285 |
The number of enterprises controlled by non-EU multinationals grew more strongly between 2013 and 2017 than the number of multinationals controlled by the EU. From 2013, the group of multinationals under non-EU control grew by 15 percent, compared to 9 percent for multinationals under EU control.
For all countries in the top 10, we see that the number of enterprises under their control rose compared to 2016. Specifically, the number of enterprises under Chinese controlnoot5 rose sharply over the last five years (+49 percent), which was considerably more than for all foreign-owned multinationals (+12 percent). Outside the top 10 foreign-owned multinationals, Canadian, Turkish, Australian and Russian multinationals have been on the rise since 2013. For example, the number of multinationals under Canadian control increased by 24 percent over the five years to 2017, to reach 180 enterprises.
The number of enterprises controlled by an ASEAN-5 countrynoot6 rose to 150 in 2017 from 145 in 2016. The extra 5 enterprises were controlled by Singapore. In 2017, around 2 thousand people were employed in the Netherlands by enterprises under Singaporean control. The number of Dutch enterprises controlled by countries in the Gulf regionnoot7 has grown since 2013, although in 2017, the number remained the same as in 2016, at 85 enterprises. Nearly all enterprises controlled by North African countries were under Egyptian or Moroccan control in 2017.
EU-controlled multinationals employ 577 thousand people
Figure 7.3.4 shows that in 2017, some 203 thousand people were employed in the Netherlands by enterprises controlled by the United States. This makes US enterprises – ahead of German, French, UK, Japanese and Belgian multinationals – the largest foreign employer in the Netherlands, providing jobs to around 20 percent of the employed persons who work for foreign-owned multinationals. Enterprises in the Netherlands under Japanese control saw a sharp increase in employment from 2013 to 2017, with the number of employed persons rising by 55 thousand to 88 thousand.
| Jaar | United States | Germany | United Kingdom | Belgium | France | Japan |
|---|---|---|---|---|---|---|
| 2013 | 205 | 132 | 107 | 28 | 121 | 33 |
| 2016 | 201 | 149 | 114 | 32 | 138 | 80 |
| 2017 | 203 | 155 | 127 | 37 | 137 | 88 |
Foreign-owned multinationals mainly active in trade
Figure 7.3.5 shows that the distribution of multinationals by sector differs significantly from the distribution of the Dutch business economy as a whole. Approximately a third of all Dutch enterprises are represented in the specialised business services sector. This sector is noticeably less popular with multinationals. Multinationals in the Netherlands were mainly active in the wholesale and retail sector in 2017, with 40.1 percent of foreign-owned multinationals and 29 percent of multinationals under Dutch control. Although the majority of multinationals – both Dutch and foreign-owned – are active in the wholesale and retail trade, this sector is not dominated by multinationals. Multinationals accounted for 3.6 percent of the more than 240 thousand enterprises in this sector in 2017. In 2017, as in the previous year, the largest share of multinationals was in the mining and quarrying sector. In that year, 33.3 percent of all the enterprises in the mining and quarrying sector were multinationals.
Differences can also be seen between foreign-owned and Dutch multinationals. For example, in 2017 a larger share of Dutch multinationals than foreign-owned multinationals were active in the specialised business services sector and in other sectors, such as construction, accommodation and food services, and real estate.
| Type | Wholesale and retail trade | Manufacturing | Transportation and storage | Specialised business services | Information and communication | Rental and other business services | Other sectors |
|---|---|---|---|---|---|---|---|
| Foreign-owned multinationals | 5490 | 1925 | 905 | 2165 | 1505 | 685 | 1015 |
| Dutch multinationals | 3100 | 1655 | 710 | 2215 | 955 | 720 | 1330 |
| Dutch business economy | 240780 | 63200 | 42925 | 348980 | 93135 | 74155 | 273015 |
Dutch multinationals in real estate, renting and business activities attract a relatively large number of employees
Altogether, the 1.2 million enterprises in the Dutch business economy employed nearly 5.8 million people in the Netherlands in 2017. In the total Dutch business economy, the wholesale and retail trade; real estate, renting and business activities; and manufacturing sectors are the largest employers (Figure 7.3.6). These three sectors also provide the most employment in Dutch and foreign-owned multinationals, although the ranking of these top 3 differs between the Dutch and foreign employers. Dutch multinationals active in real estate, renting and business activities are major employers. Nearly a third of all employed persons at Dutch multinationals were active in this sector. Among foreign-owned multinationals, the most important sector in terms of employment is the wholesale and retail trade, followed by manufacturing and then real estate, renting and business activities.
Regarding employment in the Netherlands created by multinationals, there are differences between foreign-owned and Dutch multinationals. In terms of the average number of people employed, the average foreign-owned multinational in the wholesale and retail trade; real estate, renting and business activities; specialised business services; and construction sectors is smaller than the average Dutch multinational in the same sectors. The reverse is true of the manufacturing; accommodation and food services; and communication sectors. In these sectors, foreign-owned multinationals are relatively larger employers than Dutch multinationals.
| Type | Wholesale and retail trade | Rental and other business services | Manufacturing | Specialised business services | Accommodation and food services | Construction | Transportation and storage | Information and communication | Other sectors |
|---|---|---|---|---|---|---|---|---|---|
| Foreign-owned multinationals | 315 | 144 | 217 | 50 | 47 | 28 | 107 | 85 | 24 |
| Dutch multinationals | 336 | 403 | 175 | 81 | 27 | 56 | 107 | 49 | 19 |
| Dutch business economy | 1524 | 1103 | 698 | 673 | 467 | 450 | 408 | 310 | 159 |
Multinationals are major employers in transportation and storage
Not only are employed persons at Dutch multinationals often active in the transportation and storage sector, they also make up a significant share of total employment in this sector. Of the 408 thousand people employed in this sector, more than a quarter are on the payroll of a Dutch multinational. A quarter work for a foreign-owned multinational (Figure 7.3.7). The wholesale and retail sector provided the most employment in the Netherlands in 2017. Of the 1.5 million people who work in this industry, 43 percent are employed by a multinational.
Multinationals provide the least employment in the repair of consumer goods; the real estate sector and the accommodation and food services sector. They account for the largest share of employment in the mining and quarrying, and energy sectors. However, it should be stressed that these are small sectors with regard to employment. In 2017, some 9 thousand people worked in mining and quarrying, while the energy sector employed 27 thousand people. Together, these make up only 0.6 percent of total employment in the Dutch business economy.
| Branche | Foreign multinationals | Dutch multinationals | Non-multinationals |
|---|---|---|---|
| Mining and quarrying |
4 | 2 | 3 |
| Manufacturing | 217 | 175 | 307 |
| Energy | 7 | 9 | 11 |
| Water and waste management |
8 | 5 | 22 |
| Construction | 28 | 56 | 366 |
| Wholesale and retail trade |
315 | 336 | 873 |
| Transportation and storage |
107 | 107 | 193 |
| Accommodation and food services |
47 | 27 | 393 |
| Information and communication |
85 | 49 | 176 |
| Real estate | 4 | 2 | 69 |
| Specialised business services |
50 | 81 | 541 |
| Rental and other business services |
144 | 403 | 556 |
| Repairs | 1 | 1 | 13 |
Five percent rise in exports of goods by multinationals
While multinationals make up ‘only’ 2.1 percent of the total Dutch business population, they accounted for 39 percent of total employment in the Dutch business economy in 2018. In addition to the relatively large role multinationals play in employment in the Netherlands, they also account for a large proportion of international trade in goods and services. In 2018, multinationals in the Netherlands were responsible for 84 percent of the export value of goods (Figure 7.3.8). In the international trade in services, multinationals accounted for a total of 90 percent of the export value in 2018. Exports of goods by multinationals increased by 13.2 billion euros in 2018 to 284.4 billion euros – nearly 5 percent more than in the previous year. In 2018, foreign-owned multinationals accounted for the largest share of this export value. They were responsible for 52 percent of total goods exports, compared to a 32 percent share for Dutch multinationals. For both foreign-owned and Dutch multinationals, total goods exports increased compared to 2017. The export value for foreign-owned multinationals rose by 6.2 billion euros (+3.7 percent) and for Dutch multinationals, the export value grew by 7 billion euros (+7 percent). For exports of services, it was mainly foreign-owned multinationals that reported growth in the trade value, with a rise of nearly 13 percent (10.3 billion euros) in 2018 compared to the previous year.
Multinationals imported 15 billion euros more in goods
In 2018, multinationals in the Netherlands were responsible for 83 percent of the import value of goods (Figure 7.3.8). This pattern is even more pronounced in the international trade in services, as multinationals accounted for 92 percent of the total import value of services in 2018. Imports of goods by multinationals increased by 15 billion euros to 268.7 billion euros in 2018, a rise of nearly 6 percent from the previous year. In 2018, foreign-owned multinationals accounted for the largest share of the import value. They were responsible for 54 percent of total goods imports, compared to 29 percent for Dutch multinationals. For both foreign-owned and Dutch multinationals, the total import value of goods increased compared to 2017. Foreign-owned multinationals imported some 4.1 billion euros more in goods in 2017 (+2.4 percent) and for Dutch multinationals, the import value rose by 10.9 billion euros (+13.2 percent). Multinationals also imported around 9 percent more services in 2018 compared to 2017. The import value of services increased by 9.5 percent (8.9 billion euros) for foreign-owned multinationals and by 6.2 percent (1.5 billion euros) for Dutch multinationals.
| Type | Jaar | Foreign-owned multinationals | Dutch multinationals | Independent SMEs (non-multinationals) |
Large enterprises (non-multinationals) |
|---|---|---|---|---|---|
| Imports | 2015, Imports | 152.9 | 73.0 | 47.1 | 2.7 |
| Imports | 2016, Imports | 157.8 | 71.7 | 48.7 | 2.3 |
| Imports | 2017, Imports | 171.0 | 82.7 | 49.4 | 2.3 |
| Imports | 2018, Imports | 175.1 | 93.6 | 52.9 | 2.5 |
| Exports | 2015, Exports | 151.2 | 93.3 | 46.7 | 3.1 |
| Exports | 2016, Exports | 156.1 | 92.6 | 48.0 | 2.7 |
| Exports | 2017, Exports | 170.8 | 100.3 | 49.0 | 2.8 |
| Exports | 2018, Exports | 177.1 | 107.3 | 50.9 | 3.4 |
7.4Dutch multinationals abroad
This section looks at the countries in which Dutch enterprises are active, what activities they develop there and how much employment is created in those countries as a result. CBS and Eurostat figures for the period 2013–2017 are used for this purpose. It is obviously not possible to cover all countries and regions in detail. More information and figures on this topic can be found in the set of tables accompanying Chapter 7 on the home page of this publication.
Increase in number of Dutch subsidiaries in Germany
International investments are made by enterprises that decide to set up or acquire a new subsidiary in another country. Figure 7.4.1 shows that enterprises under Dutch control are mainly located in Germany. In 2017, for example, around 4,221 subsidiaries of Dutch multinationals were operating in Germany. This makes Germany the most important destination for Dutch multinationals, ahead of the United States, the United Kingdom and France. Germany, the United States and the United Kingdom, in particular, further increased their lead in 2017 compared to the previous year, with Germany gaining 415 new subsidiaries, the US 130 and the UK 53. The sharp decline in the number of Dutch subsidiaries in France can be explained by a trend break in the Eurostat figures.
| Land | 2016 | 2017 |
|---|---|---|
| Germany | 3806 | 4221 |
| United States | 1700 | 1830 |
| United Kingdom | 1287 | 1340 |
| France* | 1853 | 1107 |
| China | 695 | 650 |
| Italy | 499 | 503 |
| Poland* | 511 | 503 |
| Australia | 235 | 260 |
| Brazil | 275 | 250 |
| Canada | 250 | 245 |
| * For France, there is a trend break for the 2017 figures. For Poland, a different definition was used in 2017. | ||
| Source: CBS, Eurostat | ||
Slight decline in number of Dutch multinationals in ASEAN-5 region
According to Franssen & Jaarsma (2019), in the ASEAN-5 region, Dutch multinationals invested chiefly in subsidiaries in Singapore, followed at a considerable distance by Malaysia and Indonesia. The number of Dutch enterprises in the ASEAN-5 region grew in the period 2010–2016, mainly due to Singapore. However, Figure 7.4.2 shows that the number of Dutch subsidiaries in the ASEAN-5 region declined slightly in 2017 compared to a year earlier. A small decline can also be seen for the Gulf region in 2017, although there was an increase for the United Arab Emirates, where the number of Dutch subsidiaries rose by 5 enterprises to 200. The United Arab Emirates is dominant in attracting Dutch activity in the Gulf region. The number of Dutch subsidiaries in North Africa has remained more or less stable since 2010. The top 3 African countries with the largest numbers of Dutch subsidiaries in 2017 were South Africa (215 enterprises), Kenya (55) and Nigeria (45).
| Jaar | ASEAN-5 | Gulf region | North Africa |
|---|---|---|---|
| 2010 | 670 | 150 | 95 |
| 2011 | 635 | 160 | 90 |
| 2012 | 665 | 150 | 85 |
| 2013 | 725 | 170 | 110 |
| 2014 | 715 | 235 | 95 |
| 2015 | 765 | 255 | 95 |
| 2016 | 810 | 280 | 95 |
| 2017 | 790 | 265 | 90 |
| Source: CBS, Eurostat | |||
Dutch subsidiaries employ 356 thousand people in Germany
In 2017, there were a total of 23,205 Dutch subsidiaries abroad, of which 15 thousand were in EU countries and 8,205 in non-EU countries. With a total of around 2.3 million employed persons, Dutch subsidiaries abroad employed some 179 thousand more people in 2017 than in the previous year. As in 2016, the largest number of people – 356 thousand – worked at subsidiaries based in Germany in 2017. Table 7.4.3 shows that Dutch subsidiaries also provide a lot of employment in the United States, France and the United Kingdom. In 2017, employment at Dutch subsidiaries in France, with 200 thousand employed persons, was lower than employment at Dutch subsidiaries in the United States, which totalled 291 thousand.
7.4.3Top 10 employment with foreign subsidiaries under Dutch control
| Number of employed persons 2017 | Number of employed persons 2016 | Percentage change 2017 compared to 2016 | |
|---|---|---|---|
| x 1,000 | x 1,000 | % | |
| Germany | 356 | 331 | 7.7 |
| United States | 291 | 266 | 9.4 |
| France | 200 | . | . |
| United Kingdom | 163 | 182 | −10.6 |
| Poland | 140 | 135 | 4.3 |
| Belgium | 84 | 84 | −0.3 |
| Italy | 81 | 68 | 18.7 |
| China | 74 | 82 | −9.8 |
| Brazil | 45 | 41 | 9.8 |
| Mexico | 35 | 33 | 6.1 |
Source:CBS, Eurostat
For six of the top 10 countries for providing jobs, it can be seen that employment grew in 2017 compared to 2016. Only the United Kingdom, Belgium and China saw a fall in employment. The largest absolute increase was for Germany (+26 thousand employed persons), followed by the United States (+25 thousand employed persons). In relative terms, Italy saw the largest increase, as employment at subsidiaries in Italy grew by 18.7 percent in 2017 compared to 2016. The subsidiaries of Dutch enterprises in the United Kingdom employed 19 thousand fewer people in 2017 than in 2016. For China, the number of employed persons declined by 8 thousand. Another development that stands out is the relative decline in Malaysia (–45 percent). This is striking, because employment at Dutch subsidiaries in Malaysia had been on the rise since 2010, but in 2017 it reached its lowest level since 2010. In 2010, there were 16 thousand employed persons and employment reached its peak in 2016 at 22 thousand employed persons.
7.5References
References
Algemeen Dagblad (2019, 9 September). Britten investeren meer in Nederland, andersom juist niet. Consulted on 26 June 2020.
Boonstra, W. (2018, 7 August). Informatiegehalte internationale investeringsstatistieken neemt af. RaboResearch – Economisch onderzoek. Consulted on 4 June 2020.
Creemers, S., Jaarsma, M., Notten, T. & Rooyakkers, J. (2020). De handels- en investeringsrelatie tussen Nederland en China. In: S. Creemers, M. Jaarsma & R. Voncken (Red.), Internationaliseringsmonitor 2020, tweede kwartaal: China. Statistics Netherlands: The Hague/Heerlen/Bonaire.
DNB (2018a, 21 September). SNB: Overschot lopende rekening tweede kwartaal hoger dan een jaar geleden. Consulted on 2 June 2020.
DNB (2018b, 25 October). DNBulletin: Bijzondere financiële instellingen van beperkt belang voor Nederlandse economie. Consulted on 2 June 2020.
DNB (2019, 2 May). DNBulletin: Buitenlandse investeringen van en naar het VK duiken in de min. Consulted on 26 June 2020.
Franssen, L. (2018). Geldstromen van Bfi’s in Nederland; welke rol spelen bilaterale verdragen? In: M. Jaarsma & S. Vos (Red.), Internationaliseringsmonitor 2018, vierde kwartaal: Financiële globalisering. Statistics Netherlands: The Hague/Heerlen/Bonaire.
Franssen, L. & Jaarsma, M. (2019). Buitenlandse investeringen en multinationals. In: M. Jaarsma & A. Lammertsma (Red.), Nederland Handelsland 2019: Export, investeringen en werkgelegenheid. Statistics Netherlands: The Hague/Heerlen/Bonaire.
Franssen, L. & Lammertsma, A. (2019). Bestemming en herkomst van Amerikaanse directe investeringen. In: M. Jaarsma & S. Vos (Red.), Internationaliseringsmonitor 2019, eerste kwartaal: Verenigde Staten. Statistics Netherlands: The Hague/Heerlen/Bonaire.
Hagendoorn, E. (2020). VS nog belangrijker dan gedacht voor directe investeringen in Nederland. Economische Statistische Berichten, 105(4786).
Jaarsma, M., Loog, B. & Hoekema, L. (2020). Bilaterale investeringen, multinationals, oprichtingen en overnames. In: S. Creemers, M. Jaarsma & A. Lammertsma (Red.), Internationaliseringsmonitor 2020, eerste kwartaal: Duitsland. Statistics Netherlands: The Hague/Heerlen/Bonaire.
Lejour, A. & van ’t Riet, M. (2013). Nederland belastingparadijs? Nederland doorsluisland! Bilaterale belastingverdragen en buitenlandse investeringen. CPB Netherlands Bureau for Economic Policy Analysis.
Romei, V. (2019, 21 August). Brexit has chilling effect on UK inward investment. Financial Times. Consulted on 6 July 2020.
RTL Nieuws (2019, 9 September). Britten investeren door brexit veel meer in Nederland. Consulted on 26 June 2020.
UNCTAD (2020). World Investment Report 2020. Consulted on 18 June 2020.
Noten
This share differs from the share in Franssen (2018), due to the way in which SPEs have been handled which also have some real economic activities (called mixed forms).
See Chapter 2 of the Internationalisation Monitor Q1 2019 (Franssen & Lammertsma, 2019) for a comprehensive analysis of the bilateral investment relationship between the United States and the Netherlands.
See Chapter 4 of the Internationalisation Monitor Q1 2020 (Jaarsma et al., 2020) for a comprehensive analysis of the bilateral investment relationship between Germany and the Netherlands.
The enterprise at the top of the multinational corporate structure, where management decisions are also made. This entity ultimately controls the shares of the Dutch enterprise in which it invests (Hagendoorn, 2020).
See Chapter 2 of the Internationalisation Monitor Q2 2020 (Creemers et al., 2020) for a comprehensive analysis of the bilateral investment relationship between China and the Netherlands.
The ASEAN-5 countries are Indonesia, Malaysia, Singapore, Thailand and Vietnam.
The Gulf Region comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.