Amsterdam woos more Indian firms to set up base there

Holland's corporate tax rate is lower than the European average, and the tax treaty between India and the Netherlands safeguards against a double levy.

Anil Sasi

Recently in Amsterdam

After drawing Indian ICT (information communication and technology) firms in hordes, the Dutch capital is now attempting to hard-sell itself as a gateway to continental Europe for Indian tier-2 and tier-3 firms. The Netherlands, and Amsterdam in particular, is actively calling companies in the life sciences, health, infrastructure, logistics and agro industries to set up base there for their European operations.

The Amsterdam Area has attracted early adaptors such as TCS and Infosys to set up their European and Benelux head offices here. The proximity to Schiphol Airport, the international character of Amsterdam, with the majority of the people speaking English, and the attractive tax environment for companies and expats are the key advantages on offer. Now there are many Tier-2 and -3 companies from Delhi, Bangalore, Hyderabad, Mumbai and Pune who are looking for offices in the Amsterdam Area. They realise that Amsterdam is closer to the European market than London, Ms Jolanda van der Aart Head of the India Desk at Amsterdam inbusiness, the official foreign investment agency for the City of Amsterdam, told Business Line.

Feeling at home

With over 1,900 international companies already in the Amsterdam Area, these firms form an extensive network of service providers who are focused on Europe and can assist companies from India in setting up shop in the Dutch capital, she said. As a regional government body, we have invested enormously in the quality of life for the Indian expats. We have opened an ExpatCentre, organised cricket tournaments and Diwali festivals, helped in setting up the Indian Expat Society and are looking at an Indian Saturday school for children of Indian expats. In addition, our Vice Mayor, who is now the Mayor, Mr Lodewijk Asscher, has been to India, leading an economic mission twice, Ms van der Aart said.

She said the major Indian ICT companies that have a presence in Amsterdam are now its ambassadors in India. We also keep close contact with the 50 Indian companies already present in the Amsterdam Area. We try to listen to their needs and provide support and solutions for them. It is a long-term investment in the Indo-Amsterdam relationship, she added.

Tax appeal

Amsterdam has on offer an attractive tax climate for foreign firms and professionals. The corporate tax rate is lower than the European average, and the tax treaty between India and the Netherlands safeguards against a double levy. Expats benefit from an exemption rule, meaning that 30 per cent of their Dutch income is effectively tax-free. Moreover, they and their families can now also take advantage of a recently introduced fast-track application procedure for residence permits.

TCS, which has been among the flagbearers of the Indian IT industry, has headquartered its European operations in Amsterdam. India's biggest IT firm started out as an IT applications developer, but has gradually evolved into an IT services provider with a full service concept serving the European continental market. Patni Computers, Wipro, Cognizant and Mahindra Satyam are among the other IT firms that have a base in Amsterdam.

Resilient economy

The Netherlands has been among the few major economies in mainland Europe that have shown resilience in riding out the recent downturn. Despite the economic crisis, foreign investments in the Netherlands increased in 2009 with a total investment of Eur 3.1 billion. Foreign companies and international trade accounted for an important part of the economic growth - about 30 per cent of gross national product in the Netherlands.

The potential of the European market is well-known to Indian IT companies. The role of cities such as Amsterdam is pivotal in helping Indian companies expand their footprint across Europe, said Robert Schipper, Executive Director of the Netherlands Foreign Investment Agency.