Two advertising giants choose Netherlands as their optimal HQ location

2013-12-12

Advertising giants Publicis and Omnicom announced in July that they were combining in a "merger of equals" that would create the world's largest advertising firm, one worth more than $35 billion. The new group will join a string of international corporations that are registered in the Netherlands but that have their headquarters elsewhere.

Although the operational head offices will continue to be based in New York and Paris, the combined entity will be placed under a newly formed holding company that will be registered in the Netherlands, the companies said.

When Maurice Levy, CEO of Publicis, was asked in a press interview why the Group chose the Netherlands as the location for the new headquarters, Levy emphasized that it was important to avoid giving clients and their teams the impression that one of the two groups was absorbing the other. So they decided to headquarter in a neutral, European country close to their common roots. Levy added that a large number of European companies have their holdings and headquarters in the Netherlands  with their operations in their respective countries, citing EADS, STMicroelectornics and Renault-Nissan Alliance as examples. 

The Netherlands as a Holding Jurisdiction

In 2012, 25 international companies established their headquarters in the region, accounting for 972 new jobs. The Netherlands is an ideal environment for international business transactions due to its neutral political climate and minimal government interference. Additionally, Dutch laws offer the flexibility needed to account for the specific characteristics of the constituent businesses and management of the new group. Companies can opt for either a single or two-tier board.

The Netherlands' tax regime has been ranked as the most attractive in Europe for businesses. Dutch corporate taxes are among the lowest in Europe, and international companies use their legal home base in the Netherlands to reallocate profits in order to reduce the amount of tax they have to pay in other countries. Companies may also request advanced tax rulings from Dutch tax authorities. Under the Dutch participation exemption, benefits such as dividends, capital gains on shareholdings, and profits from a foreign branch are exempt from corporate income tax.

The Netherlands’ favorable fiscal environment has also attracted wealthy celebrities, ranging from athletes to rock bands like U2 and the Rolling Stones, who have set up holdings which are known as "mailbox companies" in the Netherlands.

The Netherlands has an excellent infrastructure that supports international business transactions. The Amsterdam Metropolitan Area hosts a large and diverse pool of professional service providers and hundreds of companies in the fields of finance, media, ICT, advertising, venture capital and shared services. Amsterdam Airport Schiphol has been rated the 4th best airport in Europe. It is easily accessible from the Amsterdam Metropolitan Area and voids swift, reliable connections all over the world. 

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