Business Opportunities in Netherlands

Europe : Being Upfront

In spite of the unsettling news this year, from refugee crisis and Brexit to terrorism, Europe remains an economic giant and at the forefront of many of the world's most important technological and social developments. Companies from Indonesia that operate internationally should seriously look at an establishment in Europe, in order to be close to markets and to sources of innovation.

1.    Economic Size and Growth in Europe

Europe remains the world's second largest economy. Until 2020, it will also grow in absolute terms by 2.3 trillion

US-dollars. In the coming four years the European Union will add the same size to its economy as the current size of India.

Economic growth in most EU countries is forecast to be between 1 and 2%. These figures may seem tepid compared to emerging markets, but they are fairly stable and not uncommon for mature economies. The factors that are in the way of higher growth, such as Europe's relatively generous social security systems, also provide it with economic stabilizers. Most of the troubled economies in the south of Europe and Ireland have recovered.

Table 1: Economic growth selected European countries (%) and forecasts


2014

2015

2016

2017

2018

2019

2020

France

0.2

1.1

1.1

1.3

1.5

1.7

1.8

Germany

1.6

1.5

1.5

1.6

1.4

1.3

1.3

Greece

0.7

-0.2

-0.6

2.7

3.1

2.8

2.4

Ireland

5.2

7.8

5

3.6

3.2

2.8

2.7

Italy

-0.3

0.8

1

1.1

1

1.1

1

Netherlands

1

1.9

1.8

1.9

1.9

1.9

2

Spain

1.4

3.2

2.6

2.3

2

1.9

1.8

United Kingdom

2.9

2.5

1.9

2.2

2.2

2.1

2.1

Source : IMF

2.   Innovation and the potential for Indonesia

Europe maintains a leading position in technology, innovation and design. This is its main source of global competitiveness. The Global Innovation Index shows that eight of the ten most innovative economies in the world are in Europe.

Table 2 : Global Innovation Index 2016

No Economy
1 Switzerland
2 Sweden
3 United Kingdom
4 USA
5 Finland
6 Singapore
7  Ireland
8 Denmark
9 Netherlands
10 Germany

Companies from Indonesia and other South East Asian countries that have engaged in Europe, have benefited from reaching a large and integrated market, and from new technologies and trends that are subsequently used in other markets.

A sector that offers a particular potential for Indonesian companies, is the market for agriculture and food products. The Netherlands in particular is leading in technological innovation for agriculture and food production, such as new and higher yielding varieties of vegetables. It is also the gateway to the European market for agricultural and food products from outside the EU. The Food Valley in the centre of the Netherlands is Europe's strongest cluster of companies, technology institutions and service providers in the food sector.

Indonesia has a vast array of agricultural and food products on offer. What is more, Indonesia has an untapped market potential for new products based on its unique variety of vegetables, flowers, agricultural commodities, natural oils, and wood. With new technologies, but in many cases also simply with new ways of packaging and marketing, products can be developed that will find a keen demand in Europe's trendy market, at much higher margins.

Indonesian business has meanwhile developed sufficiently to take more control of the production chain and the marketing of these products. The times of mostly selling the raw materials to traders should now be over. Indonesian companies should progress into the downstream of these products. They should also move into their target markets, including Europe, to be close to the developments that are important for them. Some large palm oil producers have already set up processing facilities in the Netherlands. But also medium-sized Indonesian companies are looking into setting up their own presence in Europe.

3.   The Netherlands as Starting Point

The Netherlands is in many cases the natural starting point. Much of Indonesia's products to the Europe are already channeled through the port of Rotterdam and Schiphol airport. But the Netherlands has also made setting up a presence for non-EU companies very easy. A BV, a limited liability company that is the equivalent of a PT, requires no paid up capital and can be fully owned by a foreign shareholder. There are no investment or personnel requirements, and it still gives the company all the legal possibilities to do business in Europe. The establishment process usually takes less than four weeks. Once a company has a BV in the Netherlands, it tends to grow, because companies that have their own presence in Europe will find a big difference in understanding the European market and in seizing the opportunities.

The Netherlands has an unparalleled distribution network in Europe. A simple look at the map of road, rail, river, air and sea connections makes it clear that no country is better to connected to the rest of Europe. This means that all European countries can be served at the lowest cost and the highest flexibility.

The Netherlands has made it its top priority to ensure that it offers the best conditions for companies from outside Europe to start their presence in Europe. My mission, having worked in Indonesia for more than 18 years, is to make sure that this offer also gets across to Indonesia.

Netherlands Prime Minister Mark Rutte is expected to visit Indonesia in November. It will be his second visit to Indonesia in three years. It shows that the Netherlands regard Indonesia as a close family member. After the huge investments made by many Dutch companies in Indonesia over the past decades, it would be great if Indonesian companies come to the Netherlands in growing numbers too.


Written by: Elmar Bouma

Netherlands Foreign Investment Agency - Southeast Asia bouma@nfia-singapore.com







Senin, 05 September 2016 |