THE NETHERLANDS

YOUR GATEWAY TO EUROPE

The European Medical Device Market

June 13, 2012

Katja Berkhout, Area Director Netherlands Foreign Investment Agency

Welcome to the Netherlands

1. Strategic location in Europe

2. Excellent infrastructure

3. Attractive fiscal climate

4. Excellent research

5. (Tax) support measures for R&D

6. International business climate

7. Multi-lingual workforce

8. Stable economy in Eurozone

9. High-quality living

10. Adoption of new technologies

Top Top reasons to invest

Gateway to Europe

Central to healthcare markets

• Europe is the 2nd largest health care market

worldwide (33%)

• The Netherlands is located in the center of

the largest health care markets in Europe

• The Netherlands has more than 16,6 million

inhabitants and, moreover, app. 170 million

people live within a 300-mile radius of

Amsterdam

Attractive fiscal climate

1. Attractive effective corporate income tax rate (greenfield rulings, innovation box, holding

companies, full participation exemption, fiscal unity)

2.

The Netherlands has one of the most extensive tax treaty networks (90) worldwide to

avoid double taxation on cross-border investments and reduce foreign withholding taxes

+ EU member state with access to EU law & directives

3. Free repatriation of funds back to the US pursuant to no or low withholding tax

on dividends, interest and royalties

4. Tax authorities are highly efficient and effective (incl. horizontal monitoring) and provide

advance certainty (rulings, APA/ATR, customs value etc)

5. Customs duty deferral on import through customs bonded warehouse and various

methods for customs value determination

6. VAT deferral at import and VAT shifted to consumer when distributed in the Netherlands

Knowledge base

Integrated life sciences innovation

First rate academia, hundreds of SMEs

and global players in med-/biotech and

pharma within a 120 mile radius

Focal points

•Amsterdam

•Eindhoven/Maastricht

•Groningen

•Leiden/Delft/Rotterdam “Medical

Delta”

•Utrecht

•Nijmegen/Enschede

World class

The “Medical Delta” is 5th in the

European Top 15 regions for medtech

patent applications

Research institutes

12 Research Universities

• Average ranks 8th in the world

8 University Medical Centers (UMCs)

• Employees 60,000

• Medical students 31,000

• Publications 7,500 (annually)

• Clinical studies 2,000 (annually)

Areas of expertise in Medical

technology

• Minimally invasive techniques

• Medical optics

• Medical imaging and image processing

• High precision instruments

• Safe extramural care

Dutch medical technology companies Listed on the Stock Exchange with world leading positions:

Philips Healthcare Royal Philips Electronics of the Netherlands is a diversified Health and

Well-being company. As a world leader in healthcare, lifestyle and

lighting, Philips integrates technologies and design into people-centric

solutions. It focuses on a wide range of therapeutic areas.

DSM DSM is a Life Sciences and Materials Sciences Company and has four

strategic business units with relevance to medical technology, which are

DSM Biomedical (builds on the expertise and strengths of DSM in

polymers, coating technology, materials science and life sciences to meet

the upcoming needs of the medical and biotech industries), DSM Medical

Coatings, DSM Dyneema (developed a new strong high performance

polyethylene fibre), and DSM Engineering Plastics (produces

thermoplastics for barrier packaging, closures and components).

Delft Imaging Delft Imaging Systems is part of Delft Diagnostic Imaging and finds its

origin from Oldelft, the company that introduced the world-famous Odelca

chest screening camera system in 1950. Delft Imaging Systems is

constantly developing new services and products for customers around the

globe, has sufficient and adequate facilities and highly qualified personnel

to carry out the specific training and application courses for the equipment

involved. Delft Imaging Systems is the only imaging company worldwide to

invest in solutions that assist the medical community in the fight against

tuberculosis.

International business climate

• International outlook

• Openness to foreign investment

• High scores in international business location rankings

• 50% of Dutch GDP derived from international activities

• #7 in the Global Competitiveness Report 2011 of World Economic Forum

• More than 10,000 foreign companies are active in the Netherlands

• More than 800 foreign companies have

established their European Headquarters

in the Netherlands, employing more than

60,000 people

Educated and multilingual workforce

• One of Europe's most highly educated,

flexible and motivated workforces

• Dutch professionals among the most

multilingual in the world

• Higher output per person employed in

industry than most other European

countries

• Dutch labor law provides a range of

possibilities to flexibly engage

employees

• Less than four days lost to industrial

strikes per 1,000 inhabitants per year

(average)

“The Dutch have a high level of education, in

depth technical knowledge and linguistic

aptitudes”

CISCO SYSTEMS

Source: Eurobarometer, Europeans and Languages, 2010.

Logistics and Infrastructure

Boston Scientific in Holland

"Boston Scientific is a worldwide developer,

manufacturer and marketer of medical devices.

Our Kerkrade distribution center serves all the

company's product lines distributed outside of

the United States, including Europe, the Middle

East, Asia, Australia, Africa, South America, and

Canada. Our location in the Netherlands means

that we have access to a superb road, rail,

water, and air transportation system.

This connects us to our customers globally, in

an efficient and cost-effective manner. The

Netherlands' logistics infrastructure is the

best in the world, which is vital for us as a

global leader in the medical devices

industry.”

Hans Willems, VP Operations, BSCI Kerkrade

≈ 170 Million Customers

within 300 Miles

≈ 244 Million Customers

within 600 Miles

• The Netherlands is geographically

conveniently located in the center

of the three largest economies in

Europe: Germany, France and the

United Kingdom.

• This geographic advantage makes

it possible to easily serve all major

European markets with minimum

effort and at competitive costs.

• Strong government support;

logistics is a top priority sector with

e.g. PPPs for ICT solutions,

synchromodality and business

mindset at customs authorities.

Central location in Europe

Location

Ports Rotterdam; 4th largest in the world

Airports Schiphol Amsterdam: EU’s 3rd largest

Highways 2nd highest density in Europe

Internet Amsterdam #1 internet hub in ‘the world

• Centrally located between Germany,

France, UK.

• Amsterdam Schiphol Airport is

Europe’s third-largest cargo airport.

• Biggest container port is Seaport

Rotterdam

• Extensive and state-of-the-art road,

water, rail transportation networks.

• Well-established logistics industry.

12,000 companies offering road

haulage services and over 150 logistic

service providers operate general and

specialty warehousing facilities.

Excellent infrastructure

The Netherlands is home to the largest port in Europe, as well as the 4th largest port in Europe.

Sources: Port of Rotterdam 2011

94.7

140.4

189.4

421.4

0 50 100 150 200 250 300 350 400 450

Amsterdam

Hamburg

Antwerp

Rotterdam

Throughput in million metric tons

Seaports in the Netherlands

Schiphol Airport

• Amsterdam Airport Schiphol provides 313

direct flight connections to airports in over 90

countries, provided by more than 100

different airlines.

• It is in close proximity to the Port of

Amsterdam and the Port of Rotterdam, and is

further supported by a wide rail and road

transport network.

• For passengers, as well as for cargo, all the

main European markets are easily

accessible.

Airfreight

422

476

639

644

663

705

1.473

1.512

2.177

2.199

0 500 1000 1500 2000 2500

Milan

Brussels

Liege

Cologne

Leipzig

Luxemburg

London(LHR)

Amsterdam

Paris (CdG)

Frankfurt

Source: Amsterdam Airport Schiphol, 2011

In 2011, Amsterdam Airport Schiphol was the 3rd largest cargo airport in Europe

• 3% of freight transport by rail, 80% growth since ’98

• 2.888 km of rail road in the Netherlands

• 18% of freight transport by inland vessels

• 1.500 km of waterways used for commercial transport

• 40% of European fleet sails under Dutch flag

Multi-modal transport

• Highest density in motorways in Europe

• >12.000 transport companies of which 82% offer international

transport

• 15% of all road transport companies in Europe is Dutch

• Short sea shipping most economical form of transport

• 17% of freight transported via short sea shipping

• Regular services to 110 European ports from Port of

Rotterdam

Express Road

24 Hours 48 Hours

24 Hours 72 Hours

24 Hours 96 Hours

24 Hours 120 Hours

48 Hours 144 Hours

Lead times are subject to

departure frequencies. This

means that they may vary

between different area codes.

Source: TMI Integrated Logistics; NDL/HIDC, 2009

Transportation lead times

An EDC is a distribution center from which at least 5 countries are served.

Source: Cap Gemini, 2008

This is an indication of:

• The quality of location

• The quality of transportation

• The quality of infrastructure

• The quality of service providers

• The quality of customs

• The quality of workforce

Rest of Europe

30%

Netherlands 15%

France 13%

UK 13%

Germany 10%

Spain 7%

Belgium 6%

Poland 6%

“The most wanted country for the location of

European distribution centers is The Netherlands.”

- Cap Gemini, Europe’s Most Wanted Distribution

Center Locations 2008

Of all the EDCs in the Netherlands, 75%

are outsourced operations, compared to

66% in the rest of Europe.

Marketshare European distribution centers

• Customs duty deferral in customs bonded

warehousing

• Efficient customs authorities and customs valuation

• No customs duty in case of re-export outside EU

• VAT tax deferral upon import in NL (with fiscal

representative) (no cash out)

• VAT shifted to NL customer

• Easy and quick VAT refund procedure upon import

The main customs and VAT facilities

• Value Added Tax (VAT) is a broadly based tax on import and transactions

(known as “supplies”) of both goods and services.

• The principles and structure of this tax are contained in EU law and national

legislation of EU member states. EU Member States retain some discretion,

such as the rates and certain specific regimes.

• In the Netherlands, the standard rate of VAT is 19% which applies to most

goods and services. There is also a reduced rate of 6% and 0%. Most food

and beverage products are subject to 6% VAT.

• Exports of goods and supplies from the Netherlands to other EU member

states are subject to 0%, as is the export of certain services. The 0% VAT

rate also applies to non-EU B2B customers.

Value Added Tax

Source: Ministry of Finance 2012

• In principle VAT has to be paid at the time of the import declaration filing,

but is not deducted until the filing of the VAT return. Normally, this creates

a cash flow disadvantage for the importing company.

• In order to overcome this cash flow disadvantage, the Netherlands, unlike

most other EU Member States, has implemented a VAT deferment

system.

• This deferment system allows a company to defer VAT payments, due at

import, until the filing of periodic VAT return. The company will have to

declare the import VAT on the periodic return, but will also be able to

deduct it at the same time ─ resulting in a zero cash flow payment of VAT

at import.

• To use this deferment system, a company must be registered for VAT in

the Netherlands as a domestic entrepreneur or as a foreign entrepreneur

with a permanent establishment for VAT and have regular imports into the

Netherlands. Alternatively, they can appoint a fiscal representative for VAT

purposes.

Source: Ministry of Finance 2012

VAT Deferment

• A customs-bonded warehouse allows for the storage of products that have

entered the EU without the payment of customs duties, import VAT, and

other levies. There is a postponement of duty payments till the moment the

goods are actually moved out. If the buyer is based outside the EU, it is

possible to transport the goods to that location under customs bond. As a

result, no customs duties, import VAT, or other levies are payable in the EU.

• The advantages of a customs-bonded warehouse :

• Avoidance of double duty payment (both within the EU and in the

country of destination)

• Postponement of duty payment till the moment the goods are actually

imported

• Possibility of storage for an unlimited period of time

• Less customs interference (depending on type of warehouse)

• Value added logistics (assembly, configuration) can take place in a

customs-bonded warehouse

Custom-bonded warehousing

Source: NDL/HIDC 2012

Foreign Medtech companies in the Netherlands

European headquarters Sales and Marketing Research and

Development

Distribution Center

American Medical Systems Boston Scientific American Medical Systems Biomet

Atrium Medical Cordis BSN Medical Hollister

Biomet GE Medical Systems

Conmed Idexx Laboratories

Cameron Health Hollister

Idexx Laboratories

Medicom

Coherent Imaging Dynamics

Medicom

Medtronic

Idexx Laboratories

Kinetic Concepts

Medtronic

Performance Systematix

Medrad

Medtronic

Merge Healthcare

Boston Scientific

Merge Healthcare (EMEA)

Palomar Medical

Technologies

Oliver Medical Packaging

Stryker

Pioneer Surgical Technology

Raymedical

Toshiba Medical Systems

Sunrise Medical

Scanlan International

ResMed

Uroplasty

Thermo Fisher Scientific

Spectranetics

Spectrum Medical

Vitatron

Transmedics

How can NFIA support you?

• Founded 30 years ago, the NFIA is an operational unit of the Dutch Ministry of Economic Affairs,

Agriculture and Innovation. Throughout the years it has supported thousands of companies from all

over the world to successfully establish their business in the Netherlands.

• Our services consist of:

Preliminary in-person meetings

Comprehensive general background information

Personalized insight and data for your project

Introductions to a variety of Dutch networks

3PL matchmaking

Customized fact-finding trips

Intense personal guidance on e.g. tax, labor, legal and permits

All services rendered free of charge and on a confidential basis

Katja Berkhout

Area Director | New England and Eastern Canada

Netherlands Foreign Investment Agency | Boston, MA

T +1-617-426-9224

C +1-857-205-2634

E katja@nfia.com

http://www.nfia.com/boston

Netherlands Foreign Invest Agency