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Start a Pharmaceutical Company in the Netherlands: Procedure, Legal Entities & Tax Benefits

In this article, we will examine factors that make the Netherlands an ideal country to start a Pharmaceutical Company in the Netherlands. Moreover, this article will further focus on why Netherlands is considered as a world-class drug hub.

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    Start a Pharmaceutical Company in the Netherlands

    Do you want to register a pharmaceutical company in the Netherlands or would you like to start a Pharmaceutical Company in the Netherlands market?  Well, there are some steps you need to follow, as well as some other points you need to keep in mind. It is important to be aware that this is a concern for applications of medicines intended for use by humans.

    start a pharmaceutical company in the netherlands

    There are many ways to place a brand new medication onto the Dutch or European market. Thus, you must decide what medication you’re planning to introduce and the best place to launch it and disseminate it:

    In this article, we will examine factors that make the Netherlands an ideal country to start a Pharmaceutical Company in the Netherlands. Let’s begin with the steps needed to register a Pharmaceutical Company in the Netherlands.

    Why Netherlands is considered as a world-class drug hub?

    The Netherlands is one of the globe’s main centres in the field of pharmaceuticals. This is largely to be due to its location as a gateway to and from the European market, however, there are many other factors too which need to consider while planning to start a Pharmaceutical Company in the Netherlands.

    • Advanced collaboration and partnerships between public and private.
    • Many incentives from the government to lure companies into research and development like tax incentives.
    • It is the home to the world’s most significant health regulators.
    • The city is located at the point of entry towards Europe It has Schiphol Airport and port Rotterdam as its principal ports.
    • Digital and physical infrastructure provide the Netherlands with an advantage over neighbouring nations. The Netherlands is within three hours of driving. London, Paris, Brussels and Berlin are just a few hours’ drive via plane or train.
    • Highly trained, English-speaking community.
    • A huge and well-developed market inside the country, and it is the Netherlands is also among the leading exporters of pharmaceuticals.
    • The Netherlands spends relatively large sums on pharmaceutical R&D

    Procedure to register a pharmaceutical company in the Netherlands

    Do you own a pharmaceutical company located in the Netherlands and would you like to introduce a new product for the market in the Dutch as well as the European market? 

    There are some steps you need to follow, as well as some other points you need to keep in mind if you wish to start a pharmaceutical company in the Netherlands. It is important to be aware that this is a concern for applications of medicines intended for use by humans.

    There are many ways to place a brand new medication onto the Dutch or European market. 

    Thus, you must decide what medication you’re planning to introduce and the best place to launch it and disseminate it:

    • National Procedure – Only applicable to medicines you’ll be bringing into the Dutch market. Dutch market.
    • The Decentralized Procedure Can be used to obtain authorisation to market in multiple EU state members. This is applicable if you don’t yet possess a marketing licence within any of the countries.
    • Centralized procedure – Rather than applying for the national process, the central procedure makes your medicines accessible to everyone European resident. Applications are handled through the EMA in Amsterdam.
    • The Mutual Recognition Procedure – in this instance, the medication is already recognized within an EU member state. This procedure seeks the mutual recognition of that approval in another member state.

    You’ll require the authorization of the Medicines Evaluation Board (MEB) for your proposed drug. However, the application will include all the crucial data following the new medication. 

    It will also include information about the medicines’ ingredients as well as the potential risks of taking them. However, at this point, you’ve already submitted the label and the packaging text. As the MEB has strict guidelines for the packaging, for instance, every packaging must contain braille.

    Legal entity for the Pharmaceutical Company in the Netherlands

    A private limited company, or in Dutch, a besloten vennootschap (bv), is a company structure with a legal identity, this implies that the bv is mainly responsible for any debts and safeguards your assets from any losses or bankruptcy by the business.

    Because pharmaceutical companies usually have an incredibly high amount of risk, thus, if you start a pharmaceutical company in the Netherlands, the Besloten Vennootschap (BV) or private limited company is the most preferred legal firm.

    Another reason to select the BV to register a pharmaceutical company in the Netherland is that there is a lot of tax benefits available to a BV. This is because the BV is a legal entity, while the sole proprietorship or partnership can be considered fiscally connected and its proprietors.

    Another reason is that BVs are seen as a more legitimate legal entity. A lot of multinational corporations can have “BV” to their names which improves the reputation of your company and builds trust with clients and vendors.

    Permits to start a Pharmaceutical Company in the Netherlands

    permits to start a pharmaceutical company in the netherlands

    After your Pharmaceutical Company in the Netherlands has been legally registered, you must be aware of the permits you require to start a pharmaceutical company in the Netherlands. 

    1. Wholesale permit

    If your corporation in the pharma industry is included in the distribution and selling of products in the EEA (EU countries, plus Norway, Iceland and Liechtenstein) then you’ll require a wholesale license from the Netherlands. 

    This license is called Groothandelsvergunning or GDP in Dutch. There is a fee for the registration of up to EUR 1700 with an annual cost of a similar amount.

    2. Manufacturer’s license

    This is important for firms that make medicines and also, for firms that import medicines from outside of the EEA. Labelling and packaging are viewed as “preparing” and therefore covered under this manufacturer’s permit. 

    Similar to the wholesale permit, thus the permit of the manufacturer can be handled by Farmatec. The procedure is begun by filling in a form. The costs are more expensive than wholesale permits.

    3. The license of the broker

    Being a broker, you’re not involved in the actual shipping and distribution of medicines (wholesale). But, under Dutch law, you’ll need the broker’s license. More details on the broker’s license are available on the Farmatec website.

    4. Selling or producing

    The Active Pharmaceutical Ingredient (API) is the most biologically active ingredient of a drug. Manufacturers and sellers of APIs must be registered with Farmatec. Additionally, they must comply with Europe’s Good Manufacturing and Distribution Practices (GDP)

    4. Additional permits and licenses

    • If you manufacture or trade in APIs that are used in veterinarian medicine, you should typically register with Farmatec
    • If your business deals with blood products, then you’ll probably require authorization. This is the case if you’re exporting or importing from outside of the EEA. Eventually, if you’re shipping blood commodities to another EEA country other than the Netherlands.
    • Organ banks require authorization.
    • Donor test labs need a permit.

    5. Pharmaceuticals and logistics

    Usually, the distribution of medicine or pharmaceutical products is contracted out to special distribution and transport companies. This directory is a good resource to find a specialized organization. 

    Environment for Pharmaceutical Company in the Netherlands

    The Netherlands is being utilized as a gateway country, but more than a producing country. For the pharmaceutical industry, however, it’s not the case. Studies show that the Netherlands is experiencing a boom in terms of the production and distribution of products for pharmaceutical use. 

    For instance, all major pharmaceutical firms (Johnson & Johnson, MSD/Merck, Gilead and others) are developing or enhancing their manufacturing factories within the Netherlands. 

    In addition, it’s not just production which is increasing, but the development of the medications that these large pharmaceutical companies make appears to be shifting more towards the Netherlands. Biotech companies like Pharming and Europe’s biggest Biotech business, Danish Genmab, are investing massively.

    Additionally, the Netherlands draws manufacturers of pharmaceuticals to the Netherlands by offering tax incentives. For instance, the lower corporate tax rate for innovative companies. However, there is also an income tax cut to lure highly skilled foreign workers, referred to as the 30% rule.

    The Netherlands has had a long-standing tradition of innovation in the field of life sciences and this country is home to numerous pharmaceutical firms and research facilities, as well as public initiatives, financing schemes, and tax incentives. This has led several pharmaceutical firms and organisations to govern themselves in the Netherlands. 

    Acquiring capital for a Pharmaceutical Company in the Netherlands

    With the ageing population and the consequences of a pandemic that is spreading across the globe more evident than ever before investors are now lining up for investment opportunities in healthcare, pharmaceutical and life science firms. However, it can be difficult for you to understand the Dutch market if you don’t know what it is.

    Regional Innovation push

    There are numerous public or semi-public initiatives within the health and life sciences. The majority of the funding efforts by the government are carried out through regional investment organizations ( ROMs). There are eight located in the Netherlands and some are more skilled in life sciences than other. 

    The most important could be ROM from the region of Noord-Brabant in the southern part of the Netherlands. The region is regarded as the centre of innovation in the Netherlands. The Eindhoven region is specifically focused on medical technology, while the north-east Brabant is focused on the field of pharma.

    Other regions are also seeing an increase and investments are being seen across the whole country. Thus, the development agency responsible for the northern part of the Netherlands has launched the Pharma Connect Capital (PCC) investment fund.

     This fund focuses on as well as early stage development of medicines. It is also the most populous area that should be included as well. The region is home to three top Universities (Delft, Rotterdam and Leiden) within 30 minutes of driving distance, and the region is dotted with Science/Bio Parks as well as R&D and production facilities. 

    Private funds

    There are many VC funds as well as other investors looking to invest in pharmaceutical and life science products. The majority of them focus on certain aspects that are involved, from early development to the distribution process and logistics. Locating the perfect investor could be a major difficult task. Particularly if you’re not familiar with the Dutch market.

    Tax benefits for Pharmaceutical Company in the Netherlands

    Many tax advantages may apply to your life sciences company located in the Netherlands. These incentives are designed to boost creativity and innovation across the Netherlands and attract skilled high-skilled people. 

    However, it’s crucial to understand the various tax benefits while planning to start a Pharmaceutical company in the Netherlands for the betterment of the firm.

    1. Innovation Box

    The first is known as the Innovation Box. This is an incentive that is appropriate for research and pharmaceutical companies as it promotes ingenuity as well as high-tech research. The profits you earn from this research and development are deposited in the “Box”. 

    Tax on corporate profits for The Innovation Box is currently 9%. This is a significant cut when compared with the regular corporate income tax rates that are below.

    Profit

    2022

    2023

    SME tariff

    15% (up to EUR395.000)

    19% (up to EUR200.000)

    Standard tariff

    25,8% (profits exceeding EUR395.000)

    25,8% (profits exceeding EUR200.000)

    Innovation Box

    9% of profits from innovative and qualifying activities

    9.9% of the profits from innovative activities that are deemed to be innovative

    There are a few conditions you must meet to be eligible for this Innovation Box. It’s an extremely administrative procedure, however, If you plan to conduct innovative and serious research and earn huge profit margins it will be worth it.

    The Netherlands pays a very significant amount of cash on pharmaceutical R&D

    2. 30% of the facility

    The purpose of the 30% ruling in the Netherlands is to attract skilled people to the Netherlands. To be qualified for this scheme the candidate should originate outside the Netherlands. The applicant should satisfy the following conditions:

    • You possess an employed relation;
    • You have been recruited from a different country by your initial company in the Netherlands or you are working in the Netherlands from a different country.
    • You have particular expertise that isn’t readily available in the Dutch job market.
    • You’ve got a legal tax decision from the Tax Authorities.

    If the requirements are met, the worker doesn’t have to pay tax on the maximum amount of 30 percent of his or her earnings. This is particularly lucrative for those earning an income that is higher due to the progressive income tax system (see an overview below for more details).).

    Personal Income Tax (IB)

    2022

    2023

    Bracket 1

    37,10% up to EUR68.508

    36,93% up to EUR73.031

    Bracket 2

    49,50% of the price from EUR68.508

    49,50% off EUR73.031

    3. WSBO Tax Cut for the Cost of Loans for R&D Projects

    If you’re an innovative company that deals in life and pharma sciences, it might be worthwhile to investigate the WSBO. However, it’s essentially an R&D tax relief via payroll tax credits for withholding, and it’s important to plan for the development of a project or production process or even software. 

    Your Pharmaceutical Company in the Netherlands is the one who is responsible for solving technical issues. This is not something you can outsource if you wish to utilize the WSBO. There is an exhaustive list of regulations on the authorized website of the Dutch government.

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      Conclusion

      Odint Consultancy is specialize in guiding foreign entrepreneurs as well as established companies across the Dutch business environment. When it’s about company formation, tax keeping with laws, or specific guidelines and laws, you can contact Odint Consultancy. 

      So, if you have any other doubts regarding the process to start a Pharmaceutical Company in the Netherlands, just getting touch with our professional experts.

       

      FAQ’s

      To enrol a new firm or co-operation in the Dutch Business Register (Handelsregister), you are required to reimburse a non-recurring cost of € 51.95.

      Yes, as a foreigner you can begin your firm in the Netherlands, or fetch their business from abroad. Distinct circumstances require to be followed, like the fundamental legal residence, and ‘authorization’ to operate in the Netherlands.

      The 30% structure is available to workers who are called up from outside the Netherlands to function here temporarily. If they assure ailments for the 30% structure, they are free from reimbursing tax on up to 30% of their earnings.

      Tax is imposed at a regular price of 26.25%, however, this percentage will rise to 26.9% in 2023. Non-residents are taxable on money earned and legal revenue from a significant interest in a firm resident in the Netherlands

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