Foreign direct investment and multinationals
Internationalisation and foreign direct investment go hand in hand. Investments ensure the exchange of capital and knowledge between different economies and contribute to the productivity and prosperity of both the investing country and the country of investment. The Netherlands is a major player in direct investment and is among the largest countries in the world in terms of inward and outward direct investment. Foreign-owned multinationals prefer the Netherlands for its central location, excellent infrastructure, highly-educated employees and stable legal system, among other things. Conversely, Dutch-owned multinationals also choose to invest abroad for a variety of reasons. This chapter first discusses inward and outward direct investment into and by the Netherlands. The following sections then zoom in on foreign-owned multinationals operating in the Netherlands and Dutch-owned multinationals abroad.
5.1Key findings
Foreign direct investment (excluding SPEs)
- As in 2021 and 2022, the US and the UK remained the most important partner countries for both Dutch inward FDI and outward FDI in 2023.
- Total inward FDI fell to €3.404bn in 2023, a decrease of 8% compared to 2022. Total outward FDI amounted to €4.245bn at the end of 2023, a decrease of 6% from the previous year. For both incoming and outgoing investments, this is the lowest level in five years.
Multinationals in the Netherlands
- In 2022, 2% of the Dutch business economy – around 26.4 thousand firms – were multinationals. However, at 98%, the majority of the Dutch business economy was still made up of non-multinationals, two-thirds of them operating as self-employed persons.
- Within the Dutch business economy, 19% of total employment in the Dutch business economy were provided by foreign multinationals and 18 percent by Dutch multinationals. Dutch multinationals employed more people, in relative terms.
- Foreign-owned and Dutch-owned multinationals were most likely to be active in the wholesale and retail trade, at 37% and 30% respectively, compared to 20% of the total Dutch business economy.
- A quarter of total employment in the Netherlands was provided by the wholesale and retail trade This picture has not changed compared to previous years. For multinationals, the share of employment in the wholesale and retail trade was even higher at 29%.
- In 2022, about 1 in 5 foreign-owned multinationals in the Netherlands were from the US (3,130 firms). Neighbouring countries also accounted for a significant proportion of foreign multinationals active in the Netherlands. Germany, the UK, Belgium and France together accounted for about 44% of foreign-owned multinationals in the Netherlands.
- In absolute terms, multinationals from Germany, France and the UK topped the list of largest employers. Belgian multinationals provided relatively few jobs in the Netherlands. While US and German multinationals employed an average of 85 and 76 people, respectively, Belgian multinationals employed an average of 38.
- Swiss multinationals in the Netherlands generated the most turnover per employee (FTE). In 2022, it was 1,446 thousand euros per FTE, an increase of 21% compared to the previous year. Chinese multinationals and US multinationals followed in second and third place.
- Multinationals exported goods worth €411.0bn and imported goods worth €482.3bn euros in 2022. In services, the export value was €207.9bn and an import value of €193.5bn. Multinationals thus had a trade deficit in goods in 2022, but a trade surplus in services.
- About two-thirds of multinationals were two-way traders. In addition, a large proportion of multinationals were importers, followed by non-traders. With an average of 10%, only a limited proportion of multinationals were exporters only. The distribution was different among non-multinationals: two-thirds of non-multinationals did not participate in international trade in 2022.
Dutch multinationals abroad
- Germany remained the most popular country for Dutch-owned multinationals to invest in. The number of subsidiaries of Dutch multinationals in Germany increased further to 3,610 in 2022. The US and Belgium followed in second and third place respectively.
- In 2022, the majority of employees working at Dutch subsidiaries were in the US with 420 thousand employees. 69% of this employment was created by subsidiaries in trade.
- At an average of 615 people per firm, Dutch subsidiaries in Ukraine employed the most people in relative terms, driven by firms in mineral extraction and manufacturing. In Belgium, with an average of 43 people per Dutch-owned subsidiary, employed the fewest people in relative terms.
- Subsidiaries of Dutch multinationals in the US had the highest turnover per employee (FTE). This increased from 592.4 thousand euros to 605.5 thousand euros per FTE from 2021 to 2022. Subsidiaries in Germany and France followed with 475.9 thousand euros and 441.7 thousand euros in turnover per FTE, respectively.
Outline
This chapter will consider foreign direct investment (FDI) in and by the Netherlands. Section 5.2 provides a general overview of the direct investment position of the Netherlands, based on macro figures from the Dutch central bank (DNB). Foreign-owned multinationals in the Netherlands are discussed in section 5.3 with CBS figures from the Inward Foreign Affiliates Statistics (IFATS) serving as a starting point. Dutch-owned multinationals abroad are the focus of section 5.4, based on CBS figures from the Outward Foreign Affiliates Statistics (OFATS).
5.2Macro-level view of foreign direct investment
This section discusses the direct investment position of the Netherlands. Mutual foreign direct investment applies when an investor in one country holds a controlling interest of more than 10% in a subsidiary in another country. This means that the investor has a controlling interest and substantial degree of influence on the management of that subsidiary: for example, participation in a merger, takeover, the construction of new facilities, the reinvestment of profits from foreign operations or lending between the enterprise’s divisions. In line with European policy, Dutch macroeconomic statistics are subject to a major revision once every five years. For example, new information sources have been introduced to better describe the Netherlands’ relationships with foreign countries, and estimates were improved. The results of this revision were published in 2024. Figures from the previous years in this section have also been revised (Bijlsma et al., 2024), which is why they deviate from figures in earlier editions of this publication.
The figures and rankings in this section are directional figures. This means that investment by the subsidiary in the parent company is netted against investment by the parent company in the subsidiary.
Foreign direct investment in and by the Netherlands contracted in 2023
In 2023, the total inward foreign direct investment position dropped to €3.404bn, which was a decline of 8% in comparison to 2022. In 2023, the total outward foreign direct investment position stood at €4.245bn, which represented a decline of 6% compared to the year before. This was the lowest level in five years for both inward and outward foreign direct investment.
Dutch direct investment is largely concentrated in three statistical sectors (see Figure 5.2.1). In 2023, holdings, which focus mainly on financial services within their own enterprise group, and non-financial corporations each represent one-third of the inward and outward foreign direct investment position. Special Purpose Entities (SPEs), also referred to as letterbox companies, represented just under 30% of the foreign direct investment position. SPEs are typically set up for specific purposes, sometimes for tax reasons. Only 4% of the outward foreign direct investment position and 2% of the inward foreign direct investment position are accounted for by the remaining sectors, such as banks, other financial service providers, the government and households.
A considerable part of the decline in the foreign direct investment position was attributable to negative direct investment transactions in the fourth quarter of 2023. Negative transactions can occur, for example, through capital withdrawals, such as sales of existing interests, or the repayment of a loan by a subsidiary to the parent company. The majority of these transactions took place at holdings and SPEs. A possible explanation for negative direct investment is the introduction of a worldwide minimum tax of 15% on the profits of multinationals. This tax rule has been introduced by approximately 140 countries since 2024 and may be a reason for multinationals to adjust their international corporate structures (DNB, 2024). An important cause for the drop in the investment position of non-financial corporations are statistical reclassifications, which have shifted enterprises from the non-financial corporations sector to the sector of holdings. The increase in the inward foreign direct investment position at holding companies caused by these reclassifications is more than compensated by the decline mentioned previously.
| Jaar | SPEs | Holdings | Non-financial corporations | Other |
|---|---|---|---|---|
| Inward | . | . | . | . |
| 2023 | 891 | 1251 | 1209 | 54 |
| 2022 | 997 | 1290 | 1377 | 43 |
| 2021 | 972 | 1285 | 1317 | 34 |
| 2020 | 1092 | 1249 | 1123 | 39 |
| 2019 | 1304 | 1369 | 1099 | 37 |
| Outward | . | . | . | . |
| 2023 | 1228 | 1452 | 1417 | 149 |
| 2022 | 1334 | 1414 | 1608 | 142 |
| 2021 | 1315 | 1539 | 1504 | 151 |
| 2020 | 1420 | 1439 | 1395 | 140 |
| 2019 | 1610 | 1642 | 1310 | 144 |
US and UK continue to be key investments partners
The top 5 inward and outward foreign direct investment partners of the Netherlands in terms of the size of the direct investment position remained unchanged in 2023 compared to a year before. The US is invariably the Netherlands’ largest inward direct investment partner. Excluding money flows via Dutch-based SPEs, the UK, Germany, Luxembourg and Belgium make up the rest of the top 5 (see Figure 5.2.2). As at the end of 2022, at the end of 2023, these five countries were responsible for more than 60% of total foreign direct investment in the Netherlands. For the past three years, the ranking of countries in which the Netherlands invests, excluding SPEs, has consistently included the UK, the US, Switzerland, Germany and Luxembourg (see Figure 5.2.3). In 2023, this top 5 accounted for almost 45% of the Netherlands’ outward foreign direct investment position.
Changes in the ranking are affected by events involving individual enterprises. For example, the UK’s rise in 2021 was mainly attributable to Shell’s relocation from the Netherlands to the UK. Luxembourg owes its position in the top 5 partly to its role as a transit country. This is because the rankings presented here refer to the country from which the investment arrives from or goes to immediately, rather than where it originally came from or its ultimate destination. Like the Netherlands, Luxembourg serves as a transit hub for many multinationals when investing in other countries, making it a major trading partner of the Netherlands.
| US | UK | Germany | Luxembourg | Belgium | |
|---|---|---|---|---|---|
| 2019 | 1 | 3 | 4 | 2 | 7 |
| 2020 | 1 | 3 | 4 | 2 | 5 |
| 2021 | 1 | 2 | 4 | 3 | 5 |
| 2022 | 1 | 2 | 3 | 4 | 5 |
| 2023 | 1 | 2 | 3 | 4 | 5 |
| UK | US | Switzerland | Germany | Luxembourg | |
|---|---|---|---|---|---|
| 2019 | 1 | 3 | 2 | 4 | 5 |
| 2020 | 1 | 2 | 3 | 5 | 6 |
| 2021 | 1 | 2 | 3 | 4 | 5 |
| 2022 | 1 | 2 | 3 | 4 | 5 |
| 2023 | 1 | 2 | 3 | 4 | 5 |
5.3Multinationals in the Netherlands
This section looks specifically at multinationals active in the Netherlands. Multinationals are major players in the Dutch economy. They are internationally active and contribute to prosperity in our country. How many multinationals are active in the Netherlands? In which sectors are they active and how do they contribute to employment? How does this relate to the total Dutch enterprise population and what is the impact of multinationals for the Dutch trade in goods and services? This section also discusses the labour productivity of foreign-owned multinationals in the Netherlands.
What is a multinational?
A multinational is an enterprise that exercises ultimate control over enterprises in two or more countries. A Dutch-owned multinational is an enterprise under ultimate Dutch control with subsidiaries (majority stake) abroad. A foreign-owned multinational is a subsidiary based in the Netherlands that is ultimately controlled from abroad. Enterprises without a parent or subsidiary abroad are referred to as non-multinationals.
The number of multinationals in the Netherlands is growing again
The number of multinationals in the Dutch business economynoot1 is growing steadily year-on-year. From 2021 to 2022, the number of multinationals increased by 4% to 26.4 thousand (see Figure 5.3.1). While the share of Dutch-owned multinationals decreased by 3% from 2021 to 2022, the number of foreign-owned multinationals went up by 7%. However, the majority of the Dutch business economy continues to be represented by non-multinationals, at fully 98%. Two-thirds of this group consisted of self-employed personsnoot2; 32% employed up to nine employees and only 3% had ten or more employees within the group of non-multinationals. The group of non-multinationals also expands every year. In 2022, it experienced growth comparable in relative terms to the growth in foreign-owned multinationals (7%).
The Netherlands has an internationally open and innovative business environment, making it an appealing country for foreign investors. For many years, the Netherlands has been among the top 5 countries in the world in terms of its direct investment position (DNB, 2024). Conversely, foreign-owned enterprises are equally important to the Netherlands. Research by Arnold and Javorcik (2009) shows that foreign-owned multinationals pass on knowledge and contribute to the economy and employment in the country of investment.
| Jaar | Multinationals |
|---|---|
| 2012 | 20.82 |
| 2013 | 21.62 |
| 2014 | 22.16 |
| 2015 | 22.34 |
| 2016 | 22.96 |
| 2017 | 23.67 |
| 2018 | 23.68 |
| 2019 | 24.14 |
| 2020 | 24.93 |
| 2021* | 25.48 |
| 2022* | 26.41 |
Multinationals create one in three jobs in the Dutch business economy.
While non-multinationals made up the largest share of the Dutch business economy at 98%, they accounted for only 64% of total employment in 2022. This is equivalent to 4.264 million jobs (see Figure 5.3.2). Whereas there were almost twice as many foreign-owned multinationals as Dutch-owned multinationals operating in the Netherlands, their contribution to employment of 19% and 18%, respectively, were actually similar. Dutch-owned multinationals thus provided work for more people, in relative terms. Employment at non-multinationals experienced slightly stronger growth than employment at multinationals, at 5% and 3% respectively. The relatively low number of employment opportunities at non-multinationals was mainly due to the large, ever-increasing group of sole proprietorships.
| Jaar | Multinationals | Non-multinational firms |
|---|---|---|
| 2012 | 2054 | 3554 |
| 2013 | 2036 | 3492 |
| 2014 | 2047 | 3497 |
| 2015 | 2063 | 3610 |
| 2016 | 2154 | 3684 |
| 2017 | 2243 | 3783 |
| 2018 | 2385 | 4046 |
| 2019 | 2337 | 4035 |
| 2020 | 2295 | 3972 |
| 2021* | 2352 | 4052 |
| 2022* | 2423 | 4264 |
Majority of multinationals active in wholesale and retail trade
Figure 5.3.3 shows the distribution of foreign-owned and Dutch-owned multinationals by sector in relation to the Dutch business economy as a whole, including non-multinationals. Foreign-owned and Dutch-owned multinationals were most frequently active in wholesale and retail trade. At 37% and 30% respectively, a considerable share of multinationals operated in this sector in comparison with the total Dutch business economy (20%). Most enterprises represented the specialised business services sector in the total Dutch business economy (29%). This includes enterprises operating as employment agencies, security companies, human resource management companies, cleaning companies. This sector ranked second among multinationals. While Dutch-owned multinationals are relatively often present in the manufacturing sector (16%), foreign-owned multinationals ranked the manufacturing sector and the information and communication sector at a shared third place (both 13%). The distribution of enterprises by sector has remained relatively stable over the years.
| Type bedrijf | Manufacturing | Wholesale and retail trade | Transportation and storage | Information and communication | Specialised business services | Renting/leasing and other business services | Other sectors |
|---|---|---|---|---|---|---|---|
| Foreign-owned multinationals | 13 | 37 | 7 | 13 | 17 | 5 | 9 |
| Dutch-owned multinationals | 16 | 30 | 6 | 10 | 18 | 6 | 12 |
| Total Dutch business economy | 6 | 20 | 4 | 8 | 29 | 7 | 25 |
Most persons on the payroll of Dutch-owned multinationals on average
In 2022, Dutch-owned multinationals had an average of 128 people on their payroll. Dutch-owned multinationals thus provided the most employment in relative terms (see Figure 5.3.4). The renting/leasing and other business services sector is the largest employer among the Dutch-owned multinationals with an average of 440 employees on the payroll. The relatively high number of employees in leasing/renting and other business services stems from employment agencies operating within this sector. While foreign-owned multinationals had an average of 73 persons on the payroll, non-multinationals only employed an average of three. The leasing/renting and other business services sector also topped the list among foreign-owned multinationals with an average of 210 employees per payroll. Relative to 2021, average employment had increased slightly among multinationals; non-multinationals actually had one less person on the payroll. The low number of employees on the payroll of non-multinationals was mainly driven by the large proportion of self-employed persons within this group.
Foreign-owned multinationals create relatively good jobs for employees in a country. In general, multinationals pay higher wages and, on average, they are more likely to offer training. On top of that, foreign-owned multinationals benefit countries by being productive and by investing relatively heavily in R&D, thereby ensuring knowledge development (Javorcik, 2015).
| Jaar | Foreign-owned multinationals | Dutch-owned multinationals | Non-multinational firms |
|---|---|---|---|
| 2022* | 73 | 128 | 3 |
| 2021* | 71 | 123 | 3 |
Wholesale and retail trade continues to be largest employer
A quarter of employment in the Netherlands is provided by wholesale and retail trade (see Figure 5.3.5). This picture has not changed relative to previous years. For multinationals, the share of employment in wholesale and retail trade was even higher at 29%. Leasing/renting and other business services ranked second in the Dutch business economy. This sector also ranked second among Dutch-owned multinationals, accounting for 22% of employment. With a 20% share, the manufacturing sector ranked second among foreign-owned multinationals in terms of employment. This was more than 1.5 times the employment provided by the manufacturing sector within the Netherlands’ business economy as a whole.
| Type bedrijf | Manufacturing | Wholesale and retail trade | Transportation and storage | Information and communication | Specialised business services | Renting/leasing and other business services | Other sectors |
|---|---|---|---|---|---|---|---|
| Foreign-owned multinationals | 20 | 29 | 11 | 9 | 8 | 15 | 8 |
| Dutch-owned multinationals | 16 | 29 | 9 | 6 | 9 | 22 | 9 |
| Total Dutch business economy | 12 | 25 | 7 | 6 | 13 | 17 | 19 |
Most foreign-owned multinationals in the Netherlands continue to be under US control
In 2022, with 3,130 enterprises, approximately one in five foreign-owned multinationals in the Netherlands were under US control (see Figure 5.3.6). The number of multinationals under US control expanded from 2021 to 2022 by 4%, meaning the US continued to rank first in terms of the number of foreign-owned multinationals operating in the Netherlands. Not surprisingly, US-owned multinationals were also the largest foreign employer. In 2022, 265 thousand people worked for US-owned multinationals in the Netherlands.
Countries located closer to the Netherlands also made up a significant proportion of foreign-owned multinationals in the Netherlands. Together, Germany, the UK, Belgium and France accounted for approximately 44% of foreign-owned multinationals in the Netherlands. These countries therefore successively took the lead, after the US, in the list of foreign-owned multinationals in the Netherlands. In absolute terms, Germany, France and the UK topped the list of countries providing the most employment opportunities. Belgian-owned multinationals created relatively little employment in the Netherlands. While US-owned or German-owned multinationals employed an average of 85 and 76 persons per multinational respectively, a Belgian-owned multinational only had 38 persons on its payroll.
By contrast, French-owned multinationals employed 174 people on average, thus providing relatively ample employment opportunities. Multinationals under a (significant share of) French control operating in the Netherlands were active in the transportation sector, amongst others, including multinationals such as Air France KLM and Renault. Also, the French energy sector was well represented in the Netherlands with multinationals such as Engie, Total and Air Liquide (French Embassy in The Hague, 2022). French-owned multinationals also operated in other sectors. Consider waste management company SUEZ and French utility company Veolia, which focuses on a circular economy. As a last example, there is French-owned Danone, a division in the agri-food sector (the French Embassy in The Hague, 2022).
Swiss-owned multinationals in the Netherlands on the rise
Following the US and the aforementioned relatively nearby countries, Japan has been ranking sixth for years in terms of the number of foreign multinationals operating in the Netherlands. However, in 2022, Japan had to share its position with Swiss-owned multinationals: both accounted for 600 enterprises (also see Figure 5.3.7). The number of Swiss-owned multinationals active in the Netherlands increased considerably from 2021 to 2022. While Swiss-owned multinationals hardly increased in numbers from 2020 to 2021, their numbers rose by a staggering 9% from 2021 to 2022. However, Japanese-owned multinationals created substantially more employment in the Netherlands. In 2022, they had 83 thousand employed persons working for them and ranked fifth as such, ahead of Belgium. With 46 thousand employees, Swiss-owned multinationals accounted for almost half of the jobs created by Japanese-owned multinationals. This was also visible in relative terms. Where a Japanese-owned multinational employed an average of 138 persons, a Swiss-owned multinational provided work for 77 employed persons.
Switzerland is an attractive country for multinationals. The country has 26 cantons, each of which can set its own tax rate (Federal Department of Finance, 2024). Given the competition between cantons, tax rates remain relatively low. On average, the corporate tax rate in Switzerland, consisting of federal, cantonal and community taxes, is between 11.9% and 21.0% (PwC, 2024a). Not surprisingly, many multinationals choose to locate their (European) headquarters in, or relocate to Switzerland. Arguably, advantageous tax rates, among a variety of other reasons, could well account for an upsurge of multinationals in Switzerland. Still, even though Switzerland provides for a favourable tax rate for enterprises, the dividend tax of 35% for investors behind the enterprises is higher than in the Netherlands (PwC, 2024b).
| Herkomst | 2022* |
|---|---|
| US | 3130 |
| Germany | 2495 |
| UK | 2035 |
| Belgium | 1930 |
| France | 1050 |
| Japan/ Switzerland |
600 |
| Sweden | 555 |
| China | 475 |
| Denmark/ Italy |
360 |
| Ireland | 275 |
In 2022, Swiss-owned multinationals in the Netherlands generated the most turnover per FTE
Figure 5.3.8 shows a measure of labour productivitynoot3 in terms of the number of foreign-owned multinationals operating in the Netherlands, expressed as average turnover per full-time equivalent (FTE) (Haga et al., 2022; PwC, 2022). Swiss-owned multinationals in the Netherlands have the highest labour productivity measured in turnover per FTE. In 2022, they generated an average of approximately €1.446 million per FTE, an increase of 21% over the previous year. Chinese-owned multinationals and multinationals from the US in the Netherlands closely followed the Swiss-owned multinationals in 2022 with approximately €1.4 million turnover per FTE and €1.143 million per FTE respectively. Swiss-owned multinationals in the Netherlands recorded the most substantial increase in turnover per FTE from 2021 to 2022.
According to the International Labour Organization (ILO; 2024), the Netherlands ranked fifth in the world on labour productivity as measured by GDP per hour worked in 2023. It has been shown that foreign direct investment also contributes to the economy of the host country (Boghean & State, 2015). On the one hand, it contributes to technological and economic progress, but on the other hand, foreign-owned multinationals’ demand for qualified staff also results in an increase in the quality of workers in a country. Conversely, this means that foreign-owned multinationals also contribute to the Netherlands’ high labour productivity.
| Herkomst | 2022 | 2021 |
|---|---|---|
| US | 1142.5 | 990.2 |
| Germany | 771.1 | 680.8 |
| UK | 932.1 | 772.0 |
| Belgium | 384.5 | 345.4 |
| France | 491.9 | 436.6 |
| Japan | 828.8 | 669.5 |
| Switzerland | 1446.1 | 1193.2 |
| Sweden | 792.5 | 583.5 |
| China | 1399.8 | 1102.6 |
| Denmark | 579.1 | 517.2 |
| Italiy | 445.0 | 362.3 |
| Ireland | 577.6 | 505.1 |
Multinationals have a trade deficit in goods, and a surplus in services
Foreign-owned multinationals accounted for the largest import and export flows measured in value, both in goods trade and trade in services (see Figure 5.3.8). 63% of the import of goods into the Netherlands by value was due to foreign-owned multinationals.noot4 This value totalled €356.8bn. Foreign-owned multinationals also accounted for a similar share of the export value of Dutch goods. Dutch-owned multinationals in turn represented 22% of the total Dutch import value of goods and 17% of the total Dutch export value of goods. Non-multinationals exported relatively many goods with a total of €87.6bn, even more than Dutch-owned multinationals, which totalled €86.1bn.
Each year the value of the total trade in services is significantly lower than the value of the total goods trade, and this was also the case in 2022. Once again, foreign-owned multinationals accounted for the largest share in the import and export value of services. In 2022, exports by foreign-owned multinationals amounted to €160.3bn. At €158.9bn, the import value topped out not much lower. Whereas Dutch-owned multinationals imported nearly 1.5 times as many goods as they exported, the situation is completely different with respect to the trade in services. Multinationals had a trade deficit in goods in 2022, but a surplus in the trade in services. In 2022, non-multinationals had a surplus for both trade flows, meaning they exported more than they imported.
| Handelsstroom | Foreign-owned multinationals | Dutch-owned multinationals | Non-multinational firms |
|---|---|---|---|
| Goods | . | . | . |
| Imports | 356.8 | 125.4 | 82.3 |
| Exports | 324.9 | 86.1 | 87.6 |
| Services | . | . | . |
| Imports | 158.9 | 34.7 | 17.5 |
| Exports | 160.3 | 47.6 | 20.2 |
Two-thirds of multinationals are two-way traders
In 2022, 65% of foreign-owned multinationals were two-way traders, meaning these multinationals traded both in imports and exports. For Dutch-owned multinationals, that percentage was slightly higher, at 73%. Additionally, a large proportion of multinationals were importers, followed by non-traders. Only a limited number of multinationals – 10% on average – operate exclusively as exporters. The figures are different among non-multinationals. Two-thirds of non-multinationals did not participate in international trade in 2022. About a quarter of non-multinationals operate exclusively as importers. Only a small share of non-multinationals were two-way traders or operated exclusively as exporters. The large share of non-multinationals is typical not only of the Netherlands. A large proportion of non-multinationals comprise small and medium-sized enterprises. Research shows that internationalisation, and the associated costs, is often reserved for a select group of larger, more productive enterprises with sufficient financial means (Chaney, 2005; Melitz, 2003).
| Handelsstatus | Importer only | Exporter only | Two-way trader | Non-trader |
|---|---|---|---|---|
| Foreign-owned multinationals | 3330 | 665 | 11195 | 1985 |
| Dutch-owned multinationals | 1455 | 320 | 6700 | 755 |
| Non-multinational firms | 358895 | 42305 | 98650 | 1003415 |
5.4Activity of Dutch-owned multinationals abroad
This section describes the subsidiaries of Dutch-owned multinationals abroad and provides answers to the following questions. In which countries do Dutch-owned multinationals operate? And how many jobs do they create abroad? It also looks at the labour productivity of Dutch-owned multinationals in foreign countries. Between 2020 and 2021, a trend reversal took place in response to the FRIBS Regulation, as a result of which the figures from this section cannot be compared with figures from previous editions.noot5
Better to invest in a good neighbour or a far-away friend?
Figure 5.4.1 shows the number of foreign subsidiaries under Dutch control. Germany continues to be the preferred country for Dutch-owned multinationals to invest in. The number of subsidiaries of Dutch-owned multinationals in Germany grew further from 3,320 to 3,610 subsidiaries between 2021 and 2022, which represents an increase of 9%. Germany is an appealing country due to its central location, excellent infrastructural and success in innovation (DNHK, 2024). North Rhine-Westphalia is the most important federal state from an economic point of view, for both the Netherlands and Germany (DNHK, 2024), and features a high share of service sectors and the manufacturing sector. Research by the Duits-Nederlandse Handelskamer (German-Dutch Chamber of Commerce, DNHK) shows that more than 2,000 Dutch subsidiaries have established a presence in North Rhine-Westphalia (DNHK, 2024).
The US was the second main destination for subsidiaries of Dutch-owned multinationals. The US also saw a rise in this number from 2,115 in 2021 to 2,270 in 2022. Despite the fact that the number of Dutch-controlled subsidiaries in Belgium dropped by 2% from 2021 to 2022, the country still ranked third with 2,205 subsidiaries. Poland may have ranked fifth, but it also had the sharpest increase in the number of subsidiaries, at 27%. Its relatively highly educated population and low wages in the country make Poland attractive to Dutch-owned multinationals. Dutch-owned multinationals invest in Poland for a variety of reasons, including the set-up of shared service centres, transport companies, IT companies or production facilities (Government of the Netherlands, 2022). Figure 5.4.1 also gives an overview of the number of subsidiaries in three areas embroiled in conflict. On 24 February 2022, Russia invaded neighbouring country Ukraine, which could account for the decline in the number of Dutch subsidiaries in Russia. While there were still 200 Dutch subsidiaries in Russia in 2021, this number dropped to 155 in 2022. Even though Ukraine was also a high-risk area for Dutch enterprises due to the war, the number of subsidiaries actually rose from 115 in 2021 to 130 in 2022. Israel was also included in Figure 5.4.1 due to the Israeli-Palestinian conflict. The situation in the region escalated on 7 October 2023, but the conflict in Gaza has been ongoing for years (Government of the Netherlands 2024). This also poses risks for investors in the country. Before the conflict escalated in 2023, the number of subsidiaries in Israel had fallen in 2022 by a quarter to 30 subsidiaries compared to 2021.
| Bestemmingen | 2022* | 2021 |
|---|---|---|
| Top 10 countries | . | . |
| Germany | 3610 | 3320 |
| US | 2270 | 2115 |
| Belgium | 2205 | 2250 |
| UK | 1490 | 1375 |
| Poland | 955 | 695 |
| France | 925 | 855 |
| Spain | 910 | 775 |
| China | 690 | 680 |
| Italy | 490 | 390 |
| Sweden | 375 | 295 |
| Investment countries conflict areas |
. | . |
| Russia | 155 | 200 |
| Ukraine | 130 | 115 |
| Israel | 30 | 40 |
Highest share of employed persons at Dutch subsidiaries in the US
With 420 thousand employees in absolute numbers, the majority of employees working for Dutch subsidiaries worked in the US in 2022. That number remained constant compared to the previous year. Although the US is not a uniform market and there are also marked cultural differences between the US and the Netherlands, the US is an attractive country for Dutch-owned multinationals owing to the largest technical ecosystem in the world (RVO, 2023). Dutch subsidiaries operating in trade in the US accounted for 69% of all employment at Dutch-owned multinationals in that country.
Both Germany and Italy experienced an increase in the number of employed persons from 2021 to 2022, of 3% and 17% respectively. Most employees of Dutch subsidiaries in Germany worked in the manufacturing sector, followed by the trade sector. Dutch subsidiaries in Italy also generated the most employment in the trade sector. The sharpest decline in terms of absolute employment was seen in the UK, where the number of employed persons declined from 120 thousand in 2021 to 100 thousand in 2022.
Although the number of Dutch subsidiaries in Ukraine increased in 2022, unlike the number of Dutch subsidiaries in Russia, the numbers of employed persons dropped for both countries from 2021 to 2022. On average, most people per enterprise worked for Dutch subsidiaries in Ukraine. In 2022, this was an average of 615 persons per enterprise. The relatively high average number of persons working for Dutch subsidiaries in Ukraine was mainly due to enterprises active in the mining and quarrying sector and the manufacturing sector. On average, the fewest people per Dutch subsidiary worked in Belgium, which was 43. Big differences in the average number of employees per enterprise between countries are mainly the result of differences in (labour-intensive) sectors in which the subsidiaries operate.
| Bestemmingen | 2022* | 2021 |
|---|---|---|
| Top 10 countries |
. | . |
| Germany | 170 | 165 |
| US | 420 | 420 |
| Belgium | 95 | 100 |
| UK | 100 | 120 |
| Poland | 90 | 100 |
| France | 60 | 60 |
| Spain | 40 | 40 |
| China | 80 | 80 |
| Italy | 35 | 30 |
| Sweden | 30 | 30 |
| Investment countries conflict areas |
. | . |
| Russia | 20 | 25 |
| Ukraine | 80 | 90 |
| Israel | 5 | 5 |
Most turnover per FTE at Dutch-owned multinationals in the US
Figure 5.4.3 shows the turnover per full-time equivalent (FTE) of Dutch-owned multinationals abroad. Subsidiaries of Dutch-owned multinationals in the US have the highest turnover per FTE. This turnover increased from 2021 to 2022 from €592 thousand to only €605 thousand per FTE. Germany and France topped the list of highest turnover per FTE in 2022 with €475.9 thousand and €441.7 thousand turnover per FTE respectively. Subsidiaries of Dutch-owned multinationals in Ukraine had the lowest turnover per FTE in 2022 with €63.7 thousand, followed by Israel with €162 thousand per FTE and Poland with €176.1 thousand per FTE.
While, from 2021 to 2022, Poland and Belgium recorded the strongest increase in turnover per FTE with 19% and 14% respectively, the steepest declines were seen in areas where conflicts are occurring. The turnover per FTE in Ukraine fell by the most, at 34% from 2021 to 2022, followed by Israel with a 26% drop and Russia with a decline of 24%. The decrease in the turnover per FTE in conflict areas is not entirely surprising and has many explanations. In the short term, issues such as the destruction of buildings and power infrastructure, internet disruptions and labour shortages play a role, caused by factors such as the movement of civilians into the military or to other countries, and material shortages. All of this may result in lower productivity at subsidiaries in those regions (Égert & Maisonneuve, 2023; Gorodnichenko et al., 2022). However, there is also the risks of a long-term decline in labour productivity, for example, due to a decline in the levels of education and skills of potential or current employees caused by interruptions to training programmes.
| Bestemmingen | 2022* | 2021 |
|---|---|---|
| Top 10 countries |
. | . |
| Germany | 475.9 | 498.5 |
| US | 605.5 | 592.4 |
| Belgium | 429.5 | 375.8 |
| UK | 425.1 | 511.8 |
| Poland | 176.1 | 148.4 |
| France | 441.7 | 439.7 |
| Spain | 416.6 | 396.5 |
| China | 312.5 | 351.7 |
| Italy | 437.9 | 511.3 |
| Sweden | 305.4 | 284.0 |
| Investment countries conflict areas |
. | . |
| Russia | 261.4 | 345.2 |
| Ukraine | 63.7 | 97.1 |
| Israel | 162.0 | 218.8 |
5.5References
References
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Noten
The total (non-financial) business economy comprises sections B up to and including N, excluding K and including S95 of the SBI 2008.
Self-employed persons are defined as all enterprises without employees whose legal form is sole proprietorship, in which the self-employed person is not considered to be an employee.
Figures of Dutch-owned multinationals abroad from section 5.4 are based on the OFATS statistics, in which only the turnover per foreign subsidiary is known. For comparative purposes, the choice was thus made to proceed from a labour productivity measure based on turnover per FTE for the entire chapter as opposed to value added per FTE.
The values of goods in this chapter refer to import and export values including re-exports and excluding transit trade.
FRIBS (Framework Regulation Integrating Business Statistics) is a new mandatory framework for European business statistics, which means that the OFATS figures in this section do not refer to the regular business economy, but to the standard business classification, sectors B-S, excl. O.