A Comparison of Investment Environments: Turkiye, the Netherlands, and Other EU States
Introduction
Understanding the market landscape is vital when considering foreign investments. For those looking to diversify portfolios and explore growth opportunities, Turkiye, the Netherlands, and other EU States offer distinct environments shaped by their legal frameworks and economic conditions. Turkiye’s growing market presents strong growth opportunities, while the Netherlands provides a stable, investor-friendly environment. Other EU States, though facing challenges, remain essential players in the global investment landscape.
Investing in Turkiye
Turkiye has become an increasingly attractive destination for foreign direct investment (FDI). In 2023, it ranked 4th in Europe for greenfield investments, with 375 new projects launched. Monthly FDI inflows into Turkiye averaged $807.35 million from 2003 to 2024, reflecting growing investor confidence. The country’s comprehensive legal reforms, including updated labor and trade codes, create a business-friendly environment for both local and foreign investors.
A key feature of Turkiye’s stock market is its classification of stocks into A, B, and C types, helping investors gauge the liquidity and risk of their investments:
A-Type Stocks: High-liquidity stocks, with trading volumes above 30 million TL, attracting institutional investors.
B-Type Stocks: Moderate liquidity, with volumes between 10 million and 30 million TL, offering a balance of growth and risk.
C-Type Stocks: Low-liquidity stocks below 10 million TL, representing smaller companies with higher risk yet potentially high returns.
Turkiye’s structured classification system, combined with its investor-friendly legal environment, offers diverse investment strategies.
Investing in the Netherlands
The Netherlands is a key hub for international trade and investment within the EU. With FDI inflows reaching €477 billion in 2022, it remains one of the most business-friendly states in Europe. The Netherlands benefits from its strategic location, competitive tax policies, and a skilled workforce, making it an ideal destination for multinational companies.
Dutch regulations strongly support competition and investor protection, offering a stable and predictable legal environment. The Netherlands excels in sectors such as technology, finance, and logistics, making it an excellent choice for long-term investments.
The Investment Climate in Other EU States
The European Union remains one of the largest destinations for foreign investment, with FDI stocks reaching €7.7 trillion at the end of 2022. However, recent challenges have emerged, including high energy costs, a shortage of skilled labor, and complex regulatory environments. Surveys show that over 20% of investors see regulatory complexity as a significant barrier to investing in the EU.
Despite these hurdles, the EU continues to offer significant opportunities thanks to its large, integrated market. Other EU states benefit from unified trade policies and a strong legal framework that protects cross-border investments. The EU’s Dispute Resolution Mechanism (DRM) ensures that tax-related conflicts are resolved efficiently through structured legal channels.
Intellectual Property and Legal Considerations for Startups
In the innovation sector, protecting intellectual property (IP) is critical, as is understanding the legal structures that support contracts and partnerships.
Turkiye: IP is safeguarded by the 6769 Industrial Property Law, covering patents, trademarks, and designs. Startups can register their innovations through the Turkish Patent and Trademark Office for exclusive rights.
The Netherlands and the EU: EU startups benefit from the European Union Intellectual Property Office (EUIPO), where a single application secures protection across member states. Dutch startups can also use the Benelux Trademark and Design System, which extends to Belgium and Luxembourg.
International: Startups can secure global IP protection via the Madrid Protocol for trademarks and the Patent Cooperation Treaty (PCT) for patents, allowing for cross-border expansion.
Corporate Structure and Registration
Turkiye: Startups typically choose between a Limited Liability Company (LLC) or a Joint-Stock Company (JSC), depending on their scale and growth goals. Both entities are governed by the Turkish Commercial Code, ensuring transparency and shareholder protection.
Netherlands: Dutch startups can establish a Besloten Vennootschap (BV), offering limited liability and flexibility, ideal for early-stage ventures. The Netherlands also offers the Tech Startups Visa for foreign founders
领英推荐
Taxation and Incentives
Turkiye: Startups benefit from corporate tax rates of 25%, along with R&D tax exemptions through KOSGEB and TüB?TAK for tech-driven innovations
Netherlands: Corporate tax starts at 19% on profits up to €200,000, and startups can benefit from the WBSO tax deduction for R&D and innovation projects
Other EU States: Many EU states offer R&D tax credits, especially for startups focused on digital and green technologies
Employment Law and Stock Options
Turkiye: Startups must comply with Labor Law (No. 4857) and can incentivize employees through Employee Stock Option Plans (ESOP)
Netherlands: Employment contracts and stock options are common, with tax incentives available for startups under the Innovative Startups Scheme
Other EU States: Employment laws vary, however, are governed by the EU Working Time Directive, and ESOPs are often used to attract and retain talent across Europe.
Conclusion
Investing in Turkiye, the Netherlands, or other EU states offers distinct advantages and challenges. Turkiye provides a dynamic market with strong legal protections and stock classification systems to manage risk. The Netherlands, with its stable and business-friendly environment, remains a prime destination for investors. Meanwhile, other EU states, despite regulatory challenges, present significant opportunities due to their large markets and legal safeguards. By understanding the unique strengths and legal frameworks of each region, investors can make informed, strategic decisions that align with their goals.
Thank you,
Corporate & Legal Services, Atlascorp BV
CIO, +90 Ventures
Please follow us for more insights!
_____
Sources