Saudi Arabia tax treaty in force
A new income tax treaty between the Kingdom of Saudi Arabia (KSA) and the Netherlands came into force on 1 December 2010.
Most favourable jurisdiction for Saudi investors
The treaty contains several features which places the Netherlands at the top of the list of the most favourable holding jurisdictions for Saudi investors investing internationally. A Dutch holding company provides Saudi investors with access to the extensive Dutch tax treaty network as well as to a tax free repatriation of return on their investments to KSA. In addition, by using a Dutch holding company, access to the extensive Dutch investment protection treaty network may be obtained, providing protection against potential nationalisations without proper compensation.
Vital role in international investments
Tax treaties play a vital role in achieving tax efficiency on cross-border investments. The Netherlands has one of the most extensive and internationally recognised treaty networks in the world, comprising tax treaties with over 90 countries. By using the Netherlands as an investment hub, through the Treaty, KSA investors gain indirect access to these tax treaties and therefore may substantially increase the return on their investments.
Attractive investment hub
The Netherlands, and the Amsterdam Metropolitan Area in particular, provides an attractive holding, (project) financing or investment hub location for Saudi investors investing cross border globally. Amsterdam is a major European financial centre and finance is the most important sector in the Amsterdam Area generating approximately 20% of the region’s GDP.
Amsterdam has a strong, internationally oriented services sector with Euronext as Europe’s largest cross-border exchange. The area is home to approximately 60 foreign banks (in addition to Dutch institutions) and over 100 international insurance companies. They host hundreds of companies in the fields of legal, accounting, taxation, media, ICT, advertising, venture capital and shared services. These companies possess a pan European and innovative mindset enabling them to facilitate European growth from a single location at competitive rates. Companies can build on this experience so they don’t have to start from scratch.
Currently, tax treaties between the Netherlands and Kuwait, UAE, Bahrain and Qatar are already in force; a treaty with Oman has already been signed and is also expected to enter into force soon.
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