Annette Wijering is manager of International Enterprise at the Netherlands Enterprise Agency. The agency implements tools which support entrepreneurs in their international activities. One of those tools is the Dutch Trade and Investment Fund.
What does the Netherlands Enterprise Agency stand for?
The philosophy of the Netherlands Enterprise Agency is to support entrepreneurs who want to invest in or export to foreign countries by providing advice, networks and finance.
How does the Netherlands Enterprise Agency assist entrepreneurs?
At first, it is all about knowledge and information. Besides our helpdesk, website, coaches and events, the Netherlands has a worldwide network of embassies and consul generals who provide local inside information.
Once entrepreneurs have a better idea which country provides opportunities, we have specialised coaches who liaise with our worldwide economic departments in the Netherlands Embassy network. They match Dutch capabilities to overseas opportunities. Together we help businesses overcome obstacles and find the right contacts, for example, through trade missions and fairs. This improves their international competitive position.
The Dutch Trade and Investment Fund (DTIF) steps in when entrepreneurs have difficulty getting a loan or export finance and insurance from the market. For instance a lumber company proposes to start operations in Ukraine with production in the Netherlands. We support these kinds of activities because, among other things, it provides work for other Dutch businesses and brings in more tax revenue.
What motivates the Dutch government to provide
programmes such as the DTIF?
As a relatively small country with an open economy, exports are vital. They generate over a third of the Netherlands’ income and 2.2 million jobs. Overseas investments create another million jobs. The Netherlands is the 4th most competitive economy, but a lot needs to be done to consolidate its position. That’s why we help in the ways that are described above. On the financial side, according to EU reports, there is a market failure in the Netherlands. We also provide investment and export finance through DTIF in addition to the market, thus creating a level playing field for Dutch businesses operating abroad. Even though a reputable company had been trading in China for years, it turned to DTIF to relocate its operations. This resulted in more jobs in the Netherlands and China and increased the growth in turnover for Dutch enterprises.
DTIF was launched a year ago for many reasons. One, is that the further away the countries are, the more complicated it is for banks to estimate the risks. Secondly, banks do not count assets in other foreign countries, so a business with premises in Romania wanting to start operations in Hungary, starts afresh. Also, banks have less experience with the local market conditions, making them more inclined to avoid risks. Thirdly, the costs of assessing local risks is relatively high, while the interest you can ask of SMEs and mid-corporate companies for smaller investment and export finance needs is low. Finally, some countries are sensitive, such as Cuba and Iran, where there is a risk of sanctions.
The first company to receive funding from DTIF wanted to set up a rental company for heavy construction equipment in Cuba, a relatively risky project for a commercial bank to finance due to the target country. Thanks to DTIF the project developed an industrial terrain and created 60 new jobs. It also boosted Cuba’s building sector, whilst the Dutch company was able to expand its business.
What conditions are the companies expected to meet?
DTIF is available when the commercial financial market is not able or willing to provide finance, despite a sound business plan for investment or export. Recipients must be healthy companies with a track record in the Netherlands and dominant control in their foreign operations. The programme adheres to international corporate social responsibility criteria and focuses on developed countries. We also have the Dutch Good Growth Fund for developing countries like Vietnam or Colombia. Together the two programmes cover the whole world.
Recently the largest ever Dutch trade mission took place in Hong Kong and China. How important is this market to the Dutch
The Asian market is a growth market in which Hong Kong plays a key role as a hub to the rest of Asia. The mission is part of an annual programme. When the national and regional delegates return, we follow up with a Chinese Business Week, a trade fair and regional missions. Eventually we will develop a multi-year programme.
If you are a Dutch entrepreneur interested in investing in or exporting to a foreign country, read more about the Dutch Trade and Investment Fund, or contact us directly at +31 70 379 80 00.
This article was first published in The Hong Kong Dutch Chamber of Commerce magazine DuchtchamHK magazine (May/June 2018)