Interested in investing in the Netherlands? Find out everything you need to know about Dutch savings, pensions, stocks and even investing in real estate and businesses.
you emigrate to the Netherlands, investing is a great way to grow your money and prepare for the future, but it comes with risks. With this in mind, it is important to understand the main types of investment in the Netherlands and how the rules differ from your home country. This guide to investing in the Netherlands contains the following advice:
Investing in the Netherlands
The Netherlands offers a wide variety of investment options. expatriate, regardless of country of origin. These include mundane options such as depositing money in a savings account, to riskier and rewarding options such as investing in the stock market.
The Netherlands, with its economy recovering well from the effects of the financial crisis, is a stable place to invest your money. COVID-19 Pandemic. Netherlands ranked 8th in the world in the 2022 Economic Freedom Index. It scored highly on property rights, judicial effectiveness, and government integrity. Most notably for investors, the Netherlands has consistently scored her 90 out of 100 for investment freedom since 2000.
Investment advice in the Netherlands
It is important to seek advice before making any risky investments in the Netherlands. This is especially true if you are new to the country or unfamiliar with its rules and regulations.many Dutch bank Financial institutions have their own investment advisors with whom you can make appointments.
has an independent scope Dutch financial advisor, can provide guidance on investing in stocks and equities.specialist mortgage When tax Advisors are also helpful if you are thinking of investing your money. Dutch property.
As a starting point, you can search for: Expatica Directory For financial services and advisors. You can also get advice from the Dutch National Chamber of Commerce. British Chamber of Commerce in the Netherlands or American Chamber of Commerce in the Netherlands.
Investing in a Dutch Savings Account
A variety of savings accounts are available in the Netherlands. These range from instant access accounts (where you can withdraw your money at any time) to long-term savings accounts (where your money is locked for a set number of years). In theory, the longer you keep your money, the higher the interest rate you should get. We also have special accounts for children’s future and retirement savings.
However, it has significant drawbacks.the interest rate of Dutch bank I’m in historic low, so in the current situation it may be difficult to actually recover the money. In June 2022, ING will become the first major Dutch bank to Abolition of negative interest rates For customers with the highest savings.
Dutch savings Dutch Deposit GuaranteeThis protects deposits of up to €100,000 per person per bank if the financial institution goes bankrupt.
of largest bank In the Netherlands they are ING, Rabobank, ABN Amro, BNG Bank and NWB Bank.
Dutch pension investment
of Dutch pension system There are three pillars: public pensions, workplace pensions and private pensions. Dutch retirees One of the best pension schemes in the world with excellent public pension coverage and about 90% of employers offer occupational pension schemes.
Investing in a private pension is a way to help increase your retirement income. Especially if it’s not fully covered in your career plan. Private pensions in the Netherlands are most commonly used by the self-employed and those working in industries without collective pension schemes. Contributions to private pensions are generally tax deductible.
Individual private pensions are usually provided by banks or large corporations. insurance enterprise. Investors are free to set their contributions according to their investment objectives and expected number of years until retirement.
Dutch real estate investment
No restrictions for foreigners buying property in the netherlandsbut before you rush into it, you should familiarize yourself with the various rules and fees.
Property prices in the Netherlands have risen in recent years. This is partly due to the lack of housing in cities such as Amsterdam, Rotterdam and The Hague. Dutch Statistics Office data shows that prices have increased by 15.6% in 2021, reaching an average of €387,000. However, Amsterdam had the highest price, up 11.5%, with an average price he reached €570,000.
Central bank interest rates were so low that borrowers could benefit from lower interest rates mortgage rate. The average mortgage rate is just 1.65% in December 2021, down from his 1.84% the year before. The prospect of rising interest rates in the second half of 2022 could make mortgages more expensive.
If you are looking to invest in Dutch real estate, you may come across limited options in the most popular cities. Rents are rising, but at a slower pace than house prices.Rental site data Pararius found that rents rose nearly 7% in the first quarter of 2021. Amsterdam achieved her nearly 9% growth.
people buying property in the netherlands A fee of 5-7% of the property price is required. If you sell the property, you will also have to pay taxes on the rental income.
Business investment in the Netherlands
Holland is nice start a business, EU citizens can set up a company without needing a work permit. Non-EU citizens are usually residence permit Also work permitHowever, the Startup Visa is available for entrepreneurs to start a new business.
The process of starting a business and the taxes you need to pay vary depending on the type of business you establish, but all businesses must be registered in the United States. Dutch Chamber of CommerceFor more information, please refer to the following guides: doing business in the netherlands When Dutch business culture.
Dutch investment fund
range of investment trust Available in the Netherlands. When you put money into an investment fund, it is pooled with money from other investors. Funds are overseen by a fund manager who invests funds based on a set financial strategy. For example, tracking financial markets or outperforming a particular index. You can invest in the Fund through your bank or professional investment broker.
Brokers typically include investment platforms that offer different “baskets” of funds based on risk appetite, as well as more basic app-based “robo” advisors. Some banks also offer their own range of investment funds.
Funds can be public (such as mutual funds) or private (such as hedge funds). Some of the main types are:
- Exchange Traded Funds (ETFs) – A type of investment trust linked to stock exchanges. ETFs can contain a wide variety of assets, are low cost and easy to trade. Also called a tracker fund.
- stock fund – Another type of mutual fund that invests in stocks and equities. A fund that aims for long-term growth through capital gains. Also called a stock fund.
- bond fund – Invest in bonds and other debt instruments. Pay periodic dividends such as interest payments. Also called a debt fund.
- mixed funds – A fund that invests in a mix of stocks and bonds.
- Hedge fund – Private investment funds available to a limited number of investors. They can offer higher returns, but they are more expensive, less regulated and involve greater risk.
Fees and expected returns vary by fund purpose and provider. That’s why we recommend doing some research to find the best option for you. If you have no experience with investment funds, we recommend that you consult a financial professional before deciding how to invest.
Investing in Dutch Stocks and Shares
In addition to investing in stocks and shares via investment funds, you can also buy and sell directly through the Dutch stock market. The major stock exchanges in the Netherlands are Euronext Amsterdamyou can find information here current stock price For Dutch companies. Dutch stock market Dutch Financial Market Authority (AFM)The Dutch Stock Market Index (NL25) is Trading Economics website.
You can buy and sell stocks in the Netherlands by setting up an online account with a provider such as a bank or investment platform. Please check with your provider as costs associated with trading stocks and stocks may include transaction fees, monthly account fees and taxes. Investing in individual stocks gives you more freedom, but if you buy and sell frequently, these fees can quickly erode your profits.
the Netherlands is Offshore banking options For foreigners and companies. Offshore banks offer flexible money arrangements, tax benefits, and services not available at domestic banks. However, they generally require a larger investment than regular banks and tend to be more expensive. See Expatica’s guide. offshore investment for more information.
Ethical and sustainable investment in the Netherlands
Like the rest of Europe, ethical investing is gaining popularity in the Netherlands. Banks and investment providers are increasingly seeking to offer products that comply with ESG (environmental, social and governance) standards.
Some large Dutch banks offer green savings accounts that comply with certain standards.For example, ABN Amuro’s green savings account (Groen Spaar Deposit) has committed to investing at least 70% of its savings in green projects.The Dutch government has also launched its own service green bond.
Various ‘green’ investment funds are also available in the Netherlands, but the exact parameters can be complicated.of Dutch Investor Association for Sustainable Development (VBDO) provides guidance on different types of green investments.
Taxes on investments in the Netherlands
People residing in the Netherlands must pay taxes on their income, wealth and assetsThe tax rate you pay depends on which “box” your income falls into.
Savings, investments, and income from property all fall into Box 3. The Box 3 tax regime is complex and subject to change following court rulings. Some taxpayers were overcharged December 2021.
Simply put, the tax rate in Box 3 is assessed against the hypothetical yield rather than the actual income. The Dutch tax authorities expect the yield on assets to be between 1.82% and 5.53% (depending on the total value of assets). Once this is determined, your recognized income will be taxed at the 31% rate. The first €50,650 of assets is tax-free.you can find our details Guidance from PWC (See “Dividend Income” section).
How to invest smartly in the Netherlands
- Diversify your investment – You need to balance your investment portfolio to avoid taking on too much risk in individual sectors. Putting all your eggs in the same basket may be more manageable, but it will lead to more volatility.
- Understand your time horizon and risk profile – Check what your goals and timeframes are before investing. Consider how you would react if your investment failed and how it would affect you, and set a risk profile that fits your goals and personality.
- don’t believe the hype – Always do your research before making an investment decision. If something seems too good to be true, it probably is.
- don’t borrow for investment – Investing should be about using additional funds to grow your money, not increasing your debt and gambling.
https://www.expatica.com/nl/finance/money-management/investing-in-the-netherlands-232820/ How to invest in the Netherlands