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Economy and Banking Sector of the Netherlands

Netherlands
Location
Western Europe
Population  (2016)
16 979 120  (0.00%)
EU Status
member since 1952
Currency
EUR (Euro)
Nominal GDP (2016)
697.2 bln EUR  (+0.03%)
Credit Ratings (as of Sep 2016)
AAA/Aaa
Consolidated Banking Assets (2015)
2 527.69 bln EUR  (-0.04%)
Deposit Guarantee
100 000 EUR
Number of Banks
101

The Netherlands is a founding member of the European Union located in Northern Europe.

Economy of the Netherlands is very diversified with the main sectors ranging from a highly mechanised agricultural sector and fishing to metal and engineering products, electronic machinery and equipment, chemicals, petroleum, construction, and microelectronics. Due to the strategic geographic location of the Netherlands, other important parts of the economy are those gaining agvantages from the Netherlands' location: international trade, banking and transport.

The Netherlands has a favourable financial infrastructure with a long tradition in banking, retirement management, pension funds, investments and insurance products. In addition to the major Dutch banks such as ABN AMRO, ING, SNS Bank and Rabobank, the Netherlands houses branches of approximately 50 foreign banks.

List of Banks in Netherlands
Major Banks in the Netherlands

National Currency

Euro (EUR)

Netherlands joined the Euro Area on 1 January 1999.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
697.2 bln EUR  (+0.03%)40 900 EUR  (+0.02%)2.2 %  (2015: 2.0 %)

According to Eurostat, nominal GDP of Netherlands in 2016 was 697.2 bln EUR.

Netherlands outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.1% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.2% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

Real GDP Growth in Netherlands. Chart 1. Real GDP Growth in Netherlands. Source: Eurostat, International Monetary Fund.

In 2016, nominal GDP per capita in Netherlands was 40 900 EUR.

Netherlands has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 36.8% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2022 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Netherlands; European Union = 100. Chart 2. GDP Per Capita at Purchasing Power Parity in Netherlands; European Union = 100.

Inflation Rate

CPI, MoM (Mar 2017)CPI, YoY (Mar 2017)CPI, Year Average (2016)
0.4 %  (Feb 2017: 0.9 %)0.6 %  (Feb 2017: 1.7 %)0.1 %  (2015: 0.2 %)

According to Eurostat, inflation rate in Netherlands in 2016 expressed as annual percentages of average consumer prices was 0.1% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in Netherlands. Chart 3. Inflation Rate in Netherlands. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2016)
6.0 %  (2015: 6.9 %)

Government Bond Yield

Government Bond Yield (Mar 2017)
0.49 % (unchanged)
According to Eurostat, government bond yield in Netherlands in Mar 2017 was 0.49%, compared to 0.49% in Feb 2017.
Government bond yield of Netherlands. Chart 4. Government bond yield of Netherlands. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
AAA (highest credit quality), outlook stable Aaa (prime), outlook stable

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in the Netherlands: 0.0 - 15.0%

Withholding tax rates applied on payments of interest and dividends in Netherlands are shown in Table 1.

Dividends Interest
Natural person, resident 15.0 %0.0 %
Natural person, non-resident 15.0 %0.0 %
Table 1. Withholding tax rates in Netherlands.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of the Netherlands: 96 Signed Agreements

Netherlands signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Albania
 Argentina
 Armenia
 Aruba
 Australia
 Austria
 Azerbaijan
 Bahrain
 Bangladesh
 Barbados
 Belarus
 Belgium
 Bosnia and Herzegovina
 Brazil
 Bulgaria
 Canada
 China
 Croatia
 Curacao
 Czech Republic
 Denmark
 Egypt
 Estonia
 Finland
 France
 Georgia
 Germany
 Ghana
 Greece
 Hong Kong
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Israel
 Italy
 Japan
 Jordan
 Kazakhstan
 Korea, Republic of
 Kuwait
 Kyrgyzstan
 Latvia
 Lithuania
 Luxembourg
 Macedonia
 Malawi
 Malaysia
 Malta
 Mexico
 Moldova, Republic of
 Mongolia
 Montenegro
 Morocco
 New Zealand
 Nigeria
 Norway
 Oman
 Pakistan
 Panama
 Philippines
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation
 Saudi Arabia
 Serbia
 Singapore
 Sint Maarten (Dutch part)
 Slovakia
 Slovenia
 South Africa
 Spain
 Sri Lanka
 Suriname
 Sweden
 Switzerland
 Tajikistan
 Thailand
 Tunisia
 Turkey
 Uganda
 Ukraine
 United Arab Emirates
 United Kingdom
 United States
 Uzbekistan
 Venezuela
 Vietnam
 Zambia
 Zimbabwe

There are also several agreements between Netherlands and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):

 China (May 2013)
 Ethiopia
 Germany

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 29 Signed Agreements

Netherlands signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Andorra
 Anguilla
 Antigua and Barbuda
 Bahamas
 Belize
 Bermuda
 British Virgin Islands (Jul 2013)
 Cayman Islands
 Cook Islands
 Costa Rica
 Dominica
 Gibraltar
 Grenada
 Guernsey
 Isle of Man
 Jersey
 Liberia
 Liechtenstein
 Marshall Islands
 Monaco
 Montserrat
 Saint Kitts and Nevis
 Saint Lucia
 Saint Vincent and The Grenadines
 Samoa
 San Marino
 Seychelles
 Turks and Caicos Islands

There are also several agreements between Netherlands and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

 Uruguay

Automatic Exchange: Starts in September 2017

Netherlands signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in the Netherlands
IGA in effect since 18 December 2013, Model 1

Netherlands has FATCA agreement with the U.S. in effect since 18 December 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Netherlands are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: the Netherlands' financial accounts hold in U.S. financial institutions will be reported to the Netherlands' authorities.

Further Information

Financial Market Development

Financial Market Development
4.5 (max 7.0), 37th out of 138 countries
Banks' Soundness
5.3 (max 7.0), 51st out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Netherlands is scored 4.5 out of maximum 7.0 and ranked 37th out of 138 analysed economies. Soundness of banks is scored 5.3 bringing Netherlands into the 51st place, trustworthiness and confidence of financial market is scored 4.5 (48th place).

Financial Market Development in Netherlands. Chart 5. Financial Market Development in Netherlands. Source: WEF.

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Netherlands are summarised in Table 2.

Scheme Participantsall credit institutions operating in Netherlands, branches of non-EEA banks, branches of the Netherlands' banks abroad
Scheme Exemptionsbranches of EEA-banks (covered by their home countries)
Eligible Depositorsprivate individuals, small companies
Covered Accountsnearly every payment or savings account, current account or term deposit is covered
Maximum Protected Amount100 000 EUR
Paid In CurrencyEUR

Table 2. Deposit guarantee scheme in Netherlands.

EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Euro) Foreign Currency
Aaa (prime) Aaa (prime)

Local currency (Euro) deposit ceiling for Netherlands is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).

Deposit Rates

Average Deposit Rate (Feb 2017, EUR)
1.27 %  (Jan 2017: 1.28 %)
In Feb 2017, an agreed annualised deposit rate in local currency (Euro) of new contracts with agreed maturity up to 1 year between credit institutions and households was 1.27% which was above the Euro Area average (0.43%).
Deposit Rates in Netherlands. Chart 6. Deposit Rates in Netherlands. Source: ECB.

Further Information

Banking Sector Structure

Number of Banks
101
Consolidated Assets (2015)
2 527.69 bln EUR  (-0.04%)
Recent Changes (2016)
new banks: 4, closed banks: 111

Currently there are 101 credit institutions operating in Netherlands.

In 2015 consolidated banking assets in the Netherlands were 2 527.69 bln EUR. The consolidated banking assets' evolution is shown at Chart 7 below.

Consolidated banking assets in Netherlands. Chart 7. Consolidated banking assets in Netherlands.

Recent structural changes (2013 - 2016) of the banking sector of Netherlands are summarised in Table 3.

2013201420152016
Number of Opened Banks4774
Number of Closed Banks103817111

Table 3. Recent structural changes in the banking sector of Netherlands.

The list of the most recently opened banks in Netherlands is provided in Table 4.

NameStart Date
 UBS Europe SE, Netherlands Branch (new)December 2016
 J.P. Morgan Europe Limited (new)October 2016
 Credit Suisse (Luxembourg) S.A., Netherlands Branch (new)May 2016
 Intesa Sanpaolo Bank Luxembourg Amsterdam Branch (new)April 2016
 Bank Degroof Petercam SA (new)December 2015
 Bank of America Merrill Lynch International Limited (new)October 2015
 Citibank Europe Plc (new)October 2015
 Credit Suisse International (new)October 2015
 Maple Bank GmbH (closed)August 2015
 China Construction Bank (Europe) S.A. (new)April 2015
 

Table 4. The most recently opened banks in Netherlands.

All the credit institutions operating in Netherlands can be classified into several categories. Table 5 summarises the number of banks in each category.

CategoryNumber of Banks
Banks50
Branches of foreign banks50
Central banks1

Table 5. Number of banks by category in Netherlands.

There are 51 branches of foreign banks from 12 different countries in Netherlands. Table 6 shows 10 countries having the biggest number of branches in Netherlands.

Country of OriginNumber of Branches
 United Kingdom15
 France8
 Germany8
 Luxembourg7
 Belgium5
 Sweden2
 Denmark1
 Ireland1
 Netherlands1
 United States1

Table 6. Number of branches of foreign banks in Netherlands grouped by country of origin.

Current Accounts

Minimal Annual Costs
0.00 EUR
Maximum Annual Costs
180.00 EUR
10 offers from 7 banks

Savings Accounts

Minimal Interest Rate
0.20 %
Maximum Interest Rate
0.95 %
65 offers from 10 banks

Time Deposit Accounts

Minimal Interest Rate
0.25 %
Maximum Interest Rate
3.50 %
96 offers from 9 banks

Credit Cards

Minimal Annual Costs
20.00 EUR
Maximum Annual Costs
204.00 EUR
6 offers from 1 banks

Consumer Loans

Minimal Effective Rate
5.80 %
Maximum Effective Rate
7.90 %
40 offers from 5 banks

Mortgage Loans

Minimal Borrowing Rate
3.00 %
Maximum Borrowing Rate
6.00 %
71 offers from 9 banks

Car Loans

Minimal Effective Rate
5.80 %
Maximum Effective Rate
9.20 %
63 offers from 6 banks

Trading Accounts

Minimal Annual Costs
156.00 EUR
Mamimum Annual Costs
200.40 EUR
108 offers from 3 banks