Philips Innovation Award

Wintertaling helpt studenten voor de Philips Innovation Award

De Philips Innovation Award is de grootste studenten-ondernemersprijs van Nederland. Gedurende het jaar zullen er rond de 10 seminars plaatsvinden in heel Nederland, waarin studenten de kans krijgen om deel te nemen en de felbegeerde prijs van 50.000 euro te winnen met hun idee. Wintertaling neemt plaats in de Business Panel en kijkt de businessplannen na op het legal aspect. Zie hier de aftermovie van vorig jaar.

Daarnaast is Wintertaling ook aanwezig tijdens de Philips Innovation Market / halve finale op 20 maart 2019 en de finale op 6 mei 2019.

 

How can Chinese technology innovation change the business model in Europe?—using Alipay & Tencent WeChat Pay as examples

How can Chinese technology innovation change the business model in Europe?—using Alipay & Tencent WeChat Pay as examples

With the new round of technology revolution and industry transformation, e-commerce has gradually become the highlight and new growth all around the world. In China, the pace of development of e-commerce has speeded up much faster for nearly 20 years from the establishment of e-commerce enterprise Alibaba in 1998. In 2016, the transaction volume of e-commerce in China was equivalent to 35% of the GNP and reached as high as 26.1 trillion RMB, while the electronic payment industry, which supports the service industry, has reached as much as 5.5 trillion US dollars. By contrast, the amount in the U.S.A was only 112 billion US dollars, a 50 times difference between the two countries.  In the Netherlands, the e-commerce was worth 20.16 billion euros in 2016.

In China, there are two e-commerce juggernauts taking up at least 90% of the internet payment market: Alipay and Tencent WeChat Pay. Alipay, as a third party payment platform, was founded in 2004. As of the second quarter of 2014, it has become the biggest mobile payment service provider in the world. Alipay’s payment services include online secured transaction, payment, transfer, credit card repayment and mobile phone recharge, as well as providing services for a number of industries such as retail department stores, movie theaters, supermarket chains and taxis. It also provides wealth management services such as Yu’E Bao which is a new money market fund  of Alibaba. Users can save their money in this fund and make some profits.

How could Alipay achieve such a success? The main three reasons are as follows: operation model, profit model and safety model. As a credit guarantee platform, the essence of its operation is based on Alipay being a credit intermediary. Before buyers confirm the receipt of qualified goods online, Alipay is responsible for keeping the payment for both buyers and sellers. In other words, it is a kind of escrow service. This payment model effectively solves the payment and credit bottlenecks in the current development of e-commerce. In the meantime, benefiting from this mechanism, there are deposits of enormous sums of money in the accounts of Alipay. Due to the fact that payment for goods is normally settled in weeks, or even in months, huge interest income is stacked up in Alipay. In addition, as a third-party payment platform, Alipay charges service fees to customers according to the commission rate paid to banks . Also, Alipay earns on-line advertising revenues and charges for value-added financial services, all of which form the source of revenue for Alipay. To ensure security of electronic users and payment, Alipay uses mobile phone dynamic passwords, digital certificates, treasure orders, payment shields, third-party certificates, and even smile-technology with facial recognition of identity authentication.

The second giant is WeChat Pay. Its strategy is using offline payments combining with online payments to seize the mobile payment market. WeChat Pay invented its own special technology to secure account safety: Users only need to tether a bank card with the WeChat app to complete the certification. Once the keywords are entered into the phone, the payment is done. Besides, WeChat Pay also uses QR code technology to provide scan payment meaning users can pay just through scanning the QR Code using their own mobile phone. Moreover, there are other kinds of payment channels including the WeChat public number and WeChat App to make users more convenient to pay. People can also enjoy services like WeChat red envelope, voucher, e-coupon etc.

At the same time, the e-pay industry in Europe seems stagnated. Traditional e-pay dominates the whole market. When people in Europe are doing e-transactions like shopping online, they still need to pay through complicated and tedious steps. Users cannot scan QR codes to complete the payment, which has become part of Chinese people’s daily life. In Europe, people cannot go out without bringing either bank debit and/or credit card or cash, let alone borrowing money, managing money, purchasing movie tickets and even choosing seating, all through one single App. In this respect, the e-pay market in Europe has a huge opportunity for improvement.

In 2015, the European Parliament passed the second Payment Services Directive (EU) 2015/2366 (“PSD II”) which aims at completing the payment system of Europe and providing better experience and protection for consumers. A leading research analyst firm in this industry, Juniper Research has defined that PSD II will be the next beacon in the field of Fintech. This Directive is bound to be revolutionary for the future of payment systems for consumers and change financial business models in Europe.

Furthermore in the Netherlands, there is a payment platform called Adyen which plans to list on the Euronext stock market listing in June 2018. This platform was founded in 2006 and surpassed €100 billion in processed volume in 2017. It has the similar system as Alipay to some extent where it enables merchants to accept payments in a single system, enables revenue growth online, on mobile devices and at the point of sale.[1] Also Adyen has expanded its partnership with Alipay in 2017 in order to make global retailers more easily accept non-cash payments from Chinese customers in stores.[2]

Facing this context of economic transformation and technology revolution, Europe could learn from the evolution China has gone through in e-payment and will continue to refine in the near future.

By Hanren Xiao

Hanren Xiao is an associate with the Wintertaling China Desk.

 

[1] see the official website of Adyen <https://www.adyen.com/about>

[2] more details see the link <https://www.mobilepaymentstoday.com/news/adyen-expands-partnership-with-alipay-for-mobile-payments/>

Startende kandidaat-notaris gezocht!

Vacature startende kandidaat-notaris

Wintertaling is een in Amsterdam gevestigd onafhankelijk advocaten- en notarissen kantoor. Het kantoor bestaat uit meer dan 25 advocaten en (kandidaat-)notarissen die gespecialiseerd zijn op het gebied van Corporate| M&A, Vastgoed en vermogende particulieren. De samenwerking tussen advocatuur en notariaat maakt ons kantoor interessant.

Wij zijn opzoek naar een startende kandidaat-notaris voor onze sectie Ondernemingsrecht.

Als startende kandidaat-notaris werk je samen met ervaren (kandidaat)-notarissen aan dossiers. Je gaat mee naar cliëntbesprekingen en je stelt akten, stukken en adviezen op. Naast alle ervaring die je in de praktijk opdoet volg je ook de door de Koninklijke Beroepsorganisatie verzorgde Beroepsopleiding voor het Notariaat.

Profiel

–        je hebt een afgeronde WO opleiding notarieel recht;

–        je hebt een scriptie geschreven op het gebied van ondernemingsrecht;

–        je beschikt over een uitstekende beheersing van de Engelse taal;

–        je bent analytisch sterk;

–        je hebt een commerciële en dienstverlenende instelling;

–        je beschikt over goede sociale en communicatieve vaardigheden.

Binnen Wintertaling bieden wij een inspirerende, plezierige werkomgeving waar een gedegen opleiding wordt geboden. Er is ruimschoots mogelijkheid voor het nemen van initiatief. Daarnaast zijn wij een hecht kantoor met een informele en open werksfeer. Het kantoor is gevestigd bij de Zuidas en is makkelijk bereikbaar.

Ben jij die enthousiaste (bijna) afgestudeerde student notarieel recht die wij zoeken? Stuur dan je CV, cijferlijst, eventuele stage beoordeling en motivatie. Voor vragen kan je contact opnemen met Tara Hassani (t.hassani@wintertaling.nl of 020 – 330 59 58).

Legal and economic aspects of Chinese “One Belt One Road” investments into Europe via The Netherlands

IPBA – legal update

Bart Kasteleijn wrote an article for the The Inter-Pacific Bar Association. See here the article

Introduction

President Xi JinPing has in his opening speech at the 19th Congress of the Communistic Party of China in October 2017 highlighted the ambitious plans of the Peoples Republic of China (“PRC” or “China”) to expand its new Silk Road to Europe also named as One Belt One Road, abbreviated to “OBOR”.

Command of competition law and harmonization law of the European Union (“EEC” law) is vital for attorneys advising Chinese investors in regard to their European inbound investments in capital markets, private companies and real estate. EEC law is extensive and detailed, even for lawyers specialized in this domain. This article describes the macro-economic and legal backdrop against which Chinese investments should be perceived, from a Dutch/EU perspective.

 

Economic data

To start with, the economic parameters of the trade and investment flows between the PRC and the EU, as reported by the EU Statistical bureau Eurostat https://ec.europa.eu/eurostat  for the calendar year 2015, as reported on 12 June 2016, are summed up as follows:

Imports from the PRC to EU totaled € 350,5 billion, and the breakdown of this figure is as follows: primary goods € 8,1 billion (of which food/drink 4,8, raw materials 2,9 and energy 0,4), manufactured goods € 341 billion (chemicals 12, machinery & vehicles 176, other manufactures 149) and Others € 1,3 billion.

Exports from the EU to PRC totaled € 170 billion, resulting in an overall trade deficit (for the EU) of € 180,5, or approximately 50%.

The ranking of EU countries for China (“CN”) imports into Europe is: Germany € 69 billion, The Netherlands (“NL”) € 66 billion (primarily due to its trans-shipment function towards  the European hinterland), UK € 55 billion, France € 28 billion and Italy € 27 billion.

The Chinese Ministry of Commerce for the period January to September 2016 (www.countryreport.mofcom.gov.cn) reports a combined export and import volume NL/CN totaling $ 57.7 billion, a decrease of 4,6% compared to 2015. Export NL to CN during this period was: $ 8,33 billion, with an increase of 12%. Import CN to NL was $49,35 billion, a decrease of 6,9%. The trade deficit is $41,01 billion, a decrease of 10%.

Goods exported to China are mainly: electronics, food, drink, tobacco and watches. Imports into EU from China consist of a wide range of manufactured and raw materials.

The major competitors in Europe of China are Germany, US and Japan. China stays competitive in labor-intensive sectors, like furniture, toys and textile.

Many leading and midsized Chinese corporations have located their European headquarters, marketing and sales forces, customer care centers, and assembly & repair activities centers in NL due to its geographical, logistical and organizational gateway function to the heart of Europe. Rotterdam is the largest container seaport in the EU and Schiphol airport ranks number 3 in EU (2016).

Sectors such as electronics, automotive and aviation are heavily represented by Chinese investments. In the Dutch high tech industry, outbound investment from NL to PRC focuses on environmental technique, food processing and agriculture technique. The main motivating factor behind such investments is “technology transfer” sought by Chinese companies, rather than market expansion.

NL ranks number 3 (2015) on the European index of National Gross Product, the most prominent indicator of prosperity and wealth.

The Dutch Government, within the parameters of EU legislation actively promotes and encourages research & development through expansive subsidies and tax credits.

 

Market access of investment

There is no EU agency that generally supervises, let alone approves foreign direct investment (“FDI”) from outside the EU, but each EU member state is allowed to operate an approval system as long as it does not distort the intra-EU community free flow of capital. The Dutch typically scrutinize FDI in the domains of national security, sea and airport infrastructure, nuclear energy, military equipment and IT/telecom and also in all domains all goods originating from United Nations and OECD blacklisted countries.

NL pursues a completely non-discriminative treatment of FDI shareholding in Dutch companies and allows the appointment of non-residents of NL and non-Dutch nationals to the management or supervisory board of directors, capital contribution and repayment, cross border debt borrowing and lending and for repatriation of dividend (profit), royalties and management fees.

All public procurement of goods and services by the government in each EU member State must undergo a EU-wide public tender published in the EU journals, though only above certain thresholds, e.g. for supplies under defense contracts to the central government of each member state >The EU threshold (in the year 2016) for defense was € 135,000, for non-defense € 209,000, for works contracts in general € 5,225,000, for water, energy, transport and postal services € 418,000. So most of the significant public procurement is tendered.

 

Foreign Exchange control

Several EU countries have some form of foreign exchange  control on inbound investment or trade payments. NL only requires reporting, for purely statistical purposes, to the Dutch Central Bank (“DNB”) of transactions in excess of € 25,000.

Also, it should be noted that the 2005 EU Directive 2005/60/EF on Anti-Money Laundering requires all financial service providers (including attorneys) to report so called “unusual transactions“ to the domestic Financial Intelligence Unit (“FIU”) agencies.

 

Competition law

European competition policy under the EU Treaty on the Functioning of the European Union (“TFEU”) is a vital part of the EU internal market aiming at the optimal allocation of production means and locations, lowest price-setting and free flow of goods and services within the entire EU internal market. EU competition legislation and case law (from the European Court of Justice) originating from the 1950s forms a comprehensive set of rules that restrict the abuse of a dominant position of companies by limiting concentration and  establishes a level playing field among the market participants by prohibiting state aid, import tariff and non-tariff barriers, cartels and price fixing.

Dutch domestic competition law is greatly inspired by EU law and is, for a greater part, replaced by it, above EU thresholds including merger control for a € 5,000 million (combined) turnover worldwide and a turnover of € 250 million EU wide.

Competition law is excluded (the so called “de-minimis” threshold) in the event of less than 10% of the total relevant market share and if less than eight companies are involved with a combined annual turnover not exceeding € 5.5 million (for supply of goods) or € 1.1 million in all other cases.

 

Forms of investment

FDI can vary from a non-capital cooperation to shareholders’ equity investment. The “light” versions are commercial agency (1986 EU Directive 86/653/EC) implemented in national law e.g. regulating goodwill compensation at termination and, secondly distributorship which falls under the EU Vertical Restraints Regulation regarding interstate restrictions such as price fixing. Few EU member states (including Belgium, not NL) have national legislation on distributorship protecting the distributor when terminated.

The “heavy” versions of FDI are the branch (a non-independent part of the foreign “parent”) and the incorporated limited liability companies (“Ltd.’s”, in NL “Besloten Vennootschap”, abbreviated to “BV”) which are harmonized under several  EU Directives, allowing member states within limits to create their own versions, such as the Dutch “Flex BV” introduced in 2010 with innovative options like non-voting and non-profit shares and a minimum paid-up equity of € 0.01.

The Dutch public company (“NV”) alternative is not suitable for most FDI. Establishment of a BV must be done by a deed executed by a civil law notary, a specialized lawyer. No approval for incorporation is required from the Dutch State.

In NL there is no legal entity version for FDI similar to the Chinese Wholly Foreign Owned Enterprise (“WFOE”) and the Sino-Foreign Equity Joint venture (“SFEJV”).

The corporate data are lodged with the Commercial Register which is publicly accessible through www.kvk.nl

 

Finance rules

The Dutch Financial Services Act appoints DNB to license and supervise all financial institutions (such as banks) and the Autoriteit Financiële Markten (“AFM”) for the monitoring of capital markets.

EU “passports” from the European Central Bank (“ECB”) in Frankfurt simplify obtaining branches of financial institutions in each EU member state.

Investment funds comprise two versions under the 2011 EU Directive 2011/61: Undertakings for the Collective Investment in Transferable Securities (“UCITS”) and Alternative Investment Fund Managers (“AIFM”).

In NL, public offerings of shares are prospectus-free if offered to no more than 150 natural or legal persons or if the nominal value per share is below € 100,000.

 

Mergers and acquisitions (M&A)

The popular alternative to a green field investment is the acquisition of a going concern or the statutory merger of the shares or the assets of two existing companies, abbreviated to “M&A”. A cross border statutory merger with a non–EU company is not permitted. So, a PRC company is not eligible for a merger, unless it first creates a EU subsidiary as its EU merger vehicle.

The process of an acquisition of shares (or assets) is in line with international standards, such as non-disclosure agreement, letter of intent, memorandum of understanding, due diligence, share purchase agreement and share transfer agreement (only by notarial deed) and escrow of purchase price. Dutch documents are typically far more brief than Anglo-American style documents.

 

Real estate

In NL there are no  nationality or residence based restrictions in regard to ownership of real estate. Transfer of property is solely by notarial deed. The public land registry can be relied upon as to ownership entitlement.

 

Tax

EU tax rules and regulations have substantial effect on domestic tax legislation which however retains its sovereignty regarding the tax rates and the sorts of taxes (mainly Corporation tax, Income tax, Inheritance tax). Value Added tax (VAT) is however harmonized within the EU due to frequent inter-state transactions, but the rates differ per country.

In NL there are special regimes for foreigners for example 30 percent points reduction of Income tax, and bonded warehousing for customs and VAT. Corporate tax is 20 to 25 % (for profits above €400,000). Dividend withholding tax (15%) is lowered to a 5% source tax in the treaty CN/NL but can be lowered even to zero % by interposing a Dutch cooperative. The source tax between NL and Hong Kong is zero %. However, the government may abolish the dividend tax altogether as of 1 January 2018, both  for foreign and domestic shareholdings.

 

Immigration

For work and a stay longer than 3 months, a stay permit “Machtiging Voorlopig Verblijf (“MVV”) must be applied from the Dutch embassy in Beijing, the consulates in Shanghai, Guangzhou, Chongqing and a number of dedicated agencies in second-tier cities in China. For work, the most popular method to obtain a MVV is the so called “highly-skilled” or “Knowledge Migrant” (“KM”) procedure. The KM employee must hold a Dutch employment contract for an indefinite period at a gross monthly salary of at least € 3,170 for age below 30, € 4,342 above age 30 and € 2,272 if graduated in NL. The employer must obtain a KM sponsor license from the Dutch Immigration Authority (“IND”), if existing shorter than 18 months or with less than 50 staff. The employer must draw up a business plan. One-time KM sponsor license costs for an unlimited number of KM workers are € 5,276 or € 2,638 for a start-up company.

The 2013 Modern Migration Policy Regulation (“MoMi”) of IND simplifies residence procedures into one single application.

A “golden visa“ is available for wealthy migrant  with a  personal capital over € 1,250,000 in cash or invested in an own company or in real estate or in qualified investment funds.

 

Labour law

NL labour law is comprehensive and changes fairly often reflecting labour market conditions, new notions of cooperation within trade and industry and the general state of the economy.

 

Summary

The Netherlands is an obvious intermediate or final destination for OBOR investments from China, due to its logistic position in Western Europe and historic economic ties with China.

Getting familiar with EU and Dutch law, albeit through professional lawyers, is crucial for Chinese OBOR investors.

 

Bart Kasteleijn

Wintertaling lawyers & civil law notaries

Amsterdam

The Netherlands

 

Legal and economic aspects of Chinese “One Belt One Road” investments into Europe via The Netherlands

Introduction

President Xi JinPing has in his opening speech at the 19th Congress of the Communistic Party of China in October 2017 highlighted the ambitious plans of the Peoples Republic of China (“PRC” or “China”) to expand its new Silk Road to Europe also named as One Belt One Road, abbreviated to “OBOR”.

Command of competition law and harmonization law of the European Union (“EEC” law) is vital for attorneys advising Chinese investors in regard to their European inbound investments in capital markets, private companies and real estate. EEC law is extensive and detailed, even for lawyers specialized in this domain. This article describes the macro-economic and legal backdrop against which Chinese investments should be perceived, from a Dutch/EU perspective.

Economic data

To start with, the economic parameters of the trade and investment flows between the PRC and the EU, as reported by the EU Statistical bureau Eurostat https://ec.europa.eu/eurostat  for the calendar year 2015, as reported on 12 June 2016, are summed up as follows:

Imports from the PRC to EU totaled € 350,5 billion, and the breakdown of this figure is as follows: primary goods € 8,1 billion (of which food/drink 4,8, raw materials 2,9 and energy 0,4), manufactured goods € 341 billion (chemicals 12, machinery & vehicles 176, other manufactures 149) and Others € 1,3 billion.

Exports from the EU to PRC totaled € 170 billion, resulting in an overall trade deficit (for the EU) of € 180,5, or approximately 50%.

The ranking of EU countries for China (“CN”) imports into Europe is: Germany € 69 billion, The Netherlands (“NL”) € 66 billion (primarily due to its trans-shipment function towards  the European hinterland), UK € 55 billion, France € 28 billion and Italy € 27 billion.

The Chinese Ministry of Commerce for the period January to September 2016 (www.countryreport.mofcom.gov.cn) reports a combined export and import volume NL/CN totaling $ 57.7 billion, a decrease of 4,6% compared to 2015. Export NL to CN during this period was: $ 8,33 billion, with an increase of 12%. Import CN to NL was $49,35 billion, a decrease of 6,9%. The trade deficit is $41,01 billion, a decrease of 10%.

Goods exported to China are mainly: electronics, food, drink, tobacco and watches. Imports into EU from China consist of a wide range of manufactured and raw materials.

The major competitors in Europe of China are Germany, US and Japan. China stays competitive in labor-intensive sectors, like furniture, toys and textile.

Many leading and midsized Chinese corporations have located their European headquarters, marketing and sales forces, customer care centers, and assembly & repair activities centers in NL due to its geographical, logistical and organizational gateway function to the heart of Europe. Rotterdam is the largest container seaport in the EU and Schiphol airport ranks number 3 in EU (2016).

Sectors such as electronics, automotive and aviation are heavily represented by Chinese investments. In the Dutch high tech industry, outbound investment from NL to PRC focuses on environmental technique, food processing and agriculture technique. The main motivating factor behind such investments is “technology transfer” sought by Chinese companies, rather than market expansion.

NL ranks number 3 (2015) on the European index of National Gross Product, the most prominent indicator of prosperity and wealth.

The Dutch Government, within the parameters of EU legislation actively promotes and encourages research & development through expansive subsidies and tax credits.

Market access of investment

There is no EU agency that generally supervises, let alone approves foreign direct investment (“FDI”) from outside the EU, but each EU member state is allowed to operate an approval system as long as it does not distort the intra-EU community free flow of capital. The Dutch typically scrutinize FDI in the domains of national security, sea and airport infrastructure, nuclear energy, military equipment and IT/telecom and also in all domains all goods originating from United Nations and OECD blacklisted countries.

NL pursues a completely non-discriminative treatment of FDI shareholding in Dutch companies and allows the appointment of non-residents of NL and non-Dutch nationals to the management or supervisory board of directors, capital contribution and repayment, cross border debt borrowing and lending and for repatriation of dividend (profit), royalties and management fees.

All public procurement of goods and services by the government in each EU member State must undergo a EU-wide public tender published in the EU journals, though only above certain thresholds, e.g. for supplies under defense contracts to the central government of each member state >The EU threshold (in the year 2016) for defense was € 135,000, for non-defense € 209,000, for works contracts in general € 5,225,000, for water, energy, transport and postal services € 418,000. So most of the significant public procurement is tendered.

Foreign Exchange control

Several EU countries have some form of foreign exchange  control on inbound investment or trade payments. NL only requires reporting, for purely statistical purposes, to the Dutch Central Bank (“DNB”) of transactions in excess of € 25,000.

Also, it should be noted that the 2005 EU Directive 2005/60/EF on Anti-Money Laundering requires all financial service providers (including attorneys) to report so called “unusual transactions“ to the domestic Financial Intelligence Unit (“FIU”) agencies.

Competition law

European competition policy under the EU Treaty on the Functioning of the European Union (“TFEU”) is a vital part of the EU internal market aiming at the optimal allocation of production means and locations, lowest price-setting and free flow of goods and services within the entire EU internal market. EU competition legislation and case law (from the European Court of Justice) originating from the 1950s forms a comprehensive set of rules that restrict the abuse of a dominant position of companies by limiting concentration and  establishes a level playing field among the market participants by prohibiting state aid, import tariff and non-tariff barriers, cartels and price fixing.

Dutch domestic competition law is greatly inspired by EU law and is, for a greater part, replaced by it, above EU thresholds including merger control for a € 5,000 million (combined) turnover worldwide and a turnover of € 250 million EU wide.

Competition law is excluded (the so called “de-minimis” threshold) in the event of less than 10% of the total relevant market share and if less than eight companies are involved with a combined annual turnover not exceeding € 5.5 million (for supply of goods) or € 1.1 million in all other cases.

Forms of investment

FDI can vary from a non-capital cooperation to shareholders’ equity investment. The “light” versions are commercial agency (1986 EU Directive 86/653/EC) implemented in national law e.g. regulating goodwill compensation at termination and, secondly distributorship which falls under the EU Vertical Restraints Regulation regarding interstate restrictions such as price fixing. Few EU member states (including Belgium, not NL) have national legislation on distributorship protecting the distributor when terminated.

The “heavy” versions of FDI are the branch (a non-independent part of the foreign “parent”) and the incorporated limited liability companies (“Ltd.’s”, in NL “Besloten Vennootschap”, abbreviated to “BV”) which are harmonized under several  EU Directives, allowing member states within limits to create their own versions, such as the Dutch “Flex BV” introduced in 2010 with innovative options like non-voting and non-profit shares and a minimum paid-up equity of € 0.01.

The Dutch public company (“NV”) alternative is not suitable for most FDI. Establishment of a BV must be done by a deed executed by a civil law notary, a specialized lawyer. No approval for incorporation is required from the Dutch State.

In NL there is no legal entity version for FDI similar to the Chinese Wholly Foreign Owned Enterprise (“WFOE”) and the Sino-Foreign Equity Joint venture (“SFEJV”).

The corporate data are lodged with the Commercial Register which is publicly accessible through www.kvk.nl

Finance rules

The Dutch Financial Services Act appoints DNB to license and supervise all financial institutions (such as banks) and the Autoriteit Financiële Markten (“AFM”) for the monitoring of capital markets.

EU “passports” from the European Central Bank (“ECB”) in Frankfurt simplify obtaining branches of financial institutions in each EU member state.

Investment funds comprise two versions under the 2011 EU Directive 2011/61: Undertakings for the Collective Investment in Transferable Securities (“UCITS”) and Alternative Investment Fund Managers (“AIFM”).

In NL, public offerings of shares are prospectus-free if offered to no more than 150 natural or legal persons or if the nominal value per share is below € 100,000.

Mergers and acquisitions (M&A)

The popular alternative to a green field investment is the acquisition of a going concern or the statutory merger of the shares or the assets of two existing companies, abbreviated to “M&A”. A cross border statutory merger with a non–EU company is not permitted. So, a PRC company is not eligible for a merger, unless it first creates a EU subsidiary as its EU merger vehicle.

The process of an acquisition of shares (or assets) is in line with international standards, such as non-disclosure agreement, letter of intent, memorandum of understanding, due diligence, share purchase agreement and share transfer agreement (only by notarial deed) and escrow of purchase price. Dutch documents are typically far more brief than Anglo-American style documents.

Real estate

In NL there are no  nationality or residence based restrictions in regard to ownership of real estate. Transfer of property is solely by notarial deed. The public land registry can be relied upon as to ownership entitlement.

Tax

EU tax rules and regulations have substantial effect on domestic tax legislation which however retains its sovereignty regarding the tax rates and the sorts of taxes (mainly Corporation tax, Income tax, Inheritance tax). Value Added tax (VAT) is however harmonized within the EU due to frequent inter-state transactions, but the rates differ per country.

In NL there are special regimes for foreigners for example 30 percent points reduction of Income tax, and bonded warehousing for customs and VAT. Corporate tax is 20 to 25 % (for profits above €400,000). Dividend withholding tax (15%) is lowered to a 5% source tax in the treaty CN/NL but can be lowered even to zero % by interposing a Dutch cooperative. The source tax between NL and Hong Kong is zero %. However, the government may abolish the dividend tax altogether as of 1 January 2018, both  for foreign and domestic shareholdings.

Immigration

For work and a stay longer than 3 months, a stay permit “Machtiging Voorlopig Verblijf (“MVV”) must be applied from the Dutch embassy in Beijing, the consulates in Shanghai, Guangzhou, Chongqing and a number of dedicated agencies in second-tier cities in China. For work, the most popular method to obtain a MVV is the so called “highly-skilled” or “Knowledge Migrant” (“KM”) procedure. The KM employee must hold a Dutch employment contract for an indefinite period at a gross monthly salary of at least € 3,170 for age below 30, € 4,342 above age 30 and € 2,272 if graduated in NL. The employer must obtain a KM sponsor license from the Dutch Immigration Authority (“IND”), if existing shorter than 18 months or with less than 50 staff. The employer must draw up a business plan. One-time KM sponsor license costs for an unlimited number of KM workers are € 5,276 or € 2,638 for a start-up company.

The 2013 Modern Migration Policy Regulation (“MoMi”) of IND simplifies residence procedures into one single application.

A “golden visa“ is available for wealthy migrant  with a  personal capital over € 1,250,000 in cash or invested in an own company or in real estate or in qualified investment funds.

Labour law

NL labour law is comprehensive and changes fairly often reflecting labour market conditions, new notions of cooperation within trade and industry and the general state of the economy.

Summary

The Netherlands is an obvious intermediate or final destination for OBOR investments from China, due to its logistic position in Western Europe and historic economic ties with China.

Getting familiar with EU and Dutch law, albeit through professional lawyers, is crucial for Chinese OBOR investors.

 

Bart Kasteleijn

Wintertaling lawyers & civil law notaries

Amsterdam

The Netherlands

 

We are happy to introduce our new partner Marlies van Schoonhoven-Sloot

Marlies van Schoonhoven-Sloot admitted to the Dutch bar in 2002. Her area of expertise is real estate with a focus on commercial lease law serving real estate investments companies and/or users of real estate, like (international) retailers/occupiers. Marlies is a member of of the association of lease law lawyers (Vereniging van Huurrecht Advocaten) and is a member of the editorial staff of Tijdschrift voor Huurrecht bedrijfsruimte, a journey that focuses on the leasing of commercial premises. In addition, she regularly teaches and publishes articles about lease topics. Marlies has been with Wintertaling (as a partner) since 1 October 2017. Before that she worked for DLA Piper, Dentons-Boekel and Lexence.