An Introduction to AmCham

Doing Business: NL versus USA

April 19, 2012

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AmCham: What is our mission?

• We are concerned with matters affecting the investment climate in the Netherlands. We actively promote increased US investment in the country.

• We are the voice of US business in matters of trade and investment. When we speak, governments listen – in The Hague, in Brussels and in Washington DC.

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AmCham Netherlands:

• Conceived in June 1961, born in October of the same year and up and running since January 1962

• A non-profit, non-governmental, non-political organization

• AmCham organization consists of a Board of Directors (28 persons), 11 Committees and 4,2 fte staff

• AmCham offices are located at WTC, Schiphol Airport• Member of the European Council of American Chambers

of Commerce - representing 40 Chambers: 17.000 employers and over 20 million workers

• Fully accredited member of the U.S. Chamber of Commerce – our avenue in Washington DC

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Who are our Members?• American companies operating in the Netherlands• Dutch companies exporting to or investing in the USA

(Netherlands is third largest investor in USA)• Professionals and other individuals whose activities are

related to US-Dutch economic and business relations

= Almost 400 companies, represented by about 800 individuals, interested in commercial relations between the USA and the Netherlands

= 45 Patron members

137 Corporate members

185 Contributing members

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What do we do?

Committees:• Human Resources (People Platform), Legal,

Tax, Policy, Pharmaceutical and Diversity• Marketing & Membership, Nominations• Rotterdam Chapter & Brabant Chapter• Young Professionals Group

Publications:• AmCham Membership Directory • AmCham Newsletter and Digital Newsletter• Investors’ Agenda of Priority Points

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What else do we do?

AmCham events focus on current business issues, networking, and social functions

• Seminars, Late Afternoon Briefings, Lunch and Dinner meetings with political and business leaders, biennial Black Tie Dinner, annual Golf Tournament, annual Wine & Cheese Party, Young Professional events

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Champs on Stage• From August 2007, pilot in Rotterdam with 66

students

TO• School year 2010-2011

14 schools 3 cities 1210 students in program More than 430 companies and

organizations participating 375 company mentors involved

• Champs on Stage Foundation per 1 July 2010

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AmCham, Working for a Better Business Climate• Valuable opportunities for networking• Business presentations given by experts• A voice for your opinions and concerns• Better investment and trade conditions• Up to date information via publications and website• A guide for contacts and new trends• Active demonstration of your support for better

transatlantic business

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Priority Points

Investor’s Agenda of Priority Points:

Our advocacy program to improve NL investment climate

In 2012 we will focus on:

• Stimulate labor flexibility and engage in strategic (labor) immigration policy

• Stimulate Innovation - Implement what works!

• Taxation - Consistent, predictable & simple

Tax-related Priority Points – Ensure stability, consistency, predictability and simplicity in tax legislation

• Adopt the proposal of the Chairman Topteam Hoofdkantoren in respect of interest expense relating to the financing of subsidiaries

• Simplify the existing interest deduction limitation rules to increase clarity among the business community

• Have tax losses carried forward indefinitely• Reduce the tax wedge on labor• Conclude tax treaties with important trade partners and

with emerging economies with high growth

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US Investment in the Netherlands

• The first investors in the Netherlands came in the late 19th century. One was Standard Oil. Also at around the same time was Quaker Oats. They’re both still here!

• US total investment stake in NL in 2010 over $520 billion (almost 25% of total EU)

• US FDI in 2010 to NL: $40 billion (= 22% of all investment to EU in 2010)

• US majority-owned companies employed 225,000 persons in NL in 2009

• NOTE: NL is 3rd largest investor in US

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Six Largest Sources of Foreign Investment in NL – the US is still number 1 (there are about 1,700 US companies in NL)

Stock of foreign investment in 2009; billions of euros

Source: De Nederlandsche Bank

0

10

20

30

40

50

60

70

80

90

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OK, but how many mailbox companies are we talking about?

The Netherlands, the New Tax Shelter Hot Spot(Headline in The New York Times of February 4, 2007)

Just over 39% of US investment abroad is in foreign affilliates classified as holding companies. For the Netherlands this figure is 73% - i.e. some $380 billion.

That still leaves some $140 billion of hard business investment – almost as much as in Germany and France combined, or almost twice that in all the Scandinavian countries combined.

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Top 7 Destinations for US Direct Investment in Europe – 2010 (historical-cost basis)

Billions of DollarsSource: US Dept. of Commerce

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Europe still most important destination for US Direct Investment Abroad – over 55% of total in 2010

US Direct Investment Abroad - Historical cost basis 2010Billions of dollarsSource: US Dept. of Commerce

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US Investment in NL compared with other countries – almost as much (ex. holdings) in NL as in BRIC

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Total US Foreign Direct Investment 1990 – 2008

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US Direct Investment – NL punching above its weight class(excluding holding co’s; billions of US dollars rounded to nearest whole billion; percentage indicated is portion of total US investment in Europe)

1990 2003 2005 2010

NL $19 9% $73 12% $84 11% $140 12%

UK $73 34% $210 36% $279 36% $371 32%

D $28 13% $56 10% $63 8% $79 7%

CH $25 12% $30 5% $44 6% $73 6%

B $10 4.4% $24 4% $46 6% $67 6%

Europe $215 $585 $766 $1,175

Last Minute! Developments in 2011

• US FDI to Europe in 2011 topped $200 billion for only the second time on record. Investment flows reached $215 billion – a 23% jump from 2010.

• In first 9 months of 2011 US FDI flows rose by 35% to NL• US investment fell 52% in Italy, 50% in Belgium and 26% in

UK. • Worldwide corporate US foreign assets totaled $20 trillion

in 2010. 58% located in Europe. Largest share: UK (22%, $4.4 trillion); second largest share: NL ($1.6 trillion)

• US affiliates in 2010 earned 4 times more in NL alone ($54 billion) than they did in China and India combined ($13.5 billion)

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Added Value of Foreign Investment

• Foreign investors are catalysts for productivity and growth in the Dutch economy. They are:

▪ Are more successful▪ Create more employment▪ Hire more skilled workers▪ Outsource more locally

than their Dutch counterparts.

Source: Min. of Economic Affairs - Buitenlandse Investeerders zijn Groeiversnellers voor de Nederlandse Economie (July 2007)

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The same study notes that more of these catalysts can be attracted by:

• Continually improving the investment climate

The challenge for government is similar to that of companies in a competitive environment: a systematic, sustained effort is needed to continually upgrade all the parameters that make a nation competitive.

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AmCham in a decade from now?

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Where is AmCham in 10 years time?

Several reasons for membership decline may be discerned.

• The comparatively (among western economies) very good investment climate in the Netherlands as a whole for US and other foreign companies.

• Many initial advocacy aims formulated in the early 1960s have been largely achieved leaving less need for an advocacy platform.

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Where is AmCham in 10 years time?

• The rise of the global company who does not see itself having a nationality at all.

Many American companies do not want to be seen as being US in origin, but as being international. Some companies even have a general policy that forbids membership in organizations such as AmCham.

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Other Associations also in state of flux

• One can also see a parallel development in employer and labor organizations in the Netherlands (and elsewhere for that matter).

• Protestant, catholic and secular employer associations and trade unions have lost their distinctive characters and have either disappeared or have merged.

• Many foreign employer associations in the Netherlands similar to AmCham have disappeared or adopted a more social than a business advocacy function.

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Where is AmCham in 10 years time?

• The challenge to secure AmCham's future may lie in distinguishing a role for itself within employers' organizations in the Netherlands as the coordinating voice for all foreign investors.

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Working for a Better Business Climate

advocacy - information - networking

www.amcham.nl