Introduction to NETHERLANDS

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3 Introduction to NETHERLANDS The Netherlands is a small, densely populated country, with 504 persons per km². Only 50% of its territory is more than one metre above sea level. It is among the richest countries in the world, its GDP per capita being almost 30% above the EU average. The country benefits from a favourable geographical location, being at the centre of Europe s wealthiest region. The seaport of Rotterdam is the largest in Europe and Schiphol international airport is the fourth busiest airport in Europe in passenger terms and third in cargo volume. Thanks to its favourable fiscal environment and excellent infrastructure, it is home to many multinational corporations. It is also an important financial centre. The banking sector had accumulated assets of around 335% of GDP by end 2016, while private pension fund assets were worth about 178% of GDP (end 2015). The Netherlands has a very open economy. Exports of goods and services made up 83% of GDP in However, due to the large share of re-exports, the contribution of exports to GDP is limited: only around 40 cents of every euro exported. The economy ran into severe problems during the global economic crisis. The government nationalised several banks and provided loans to financial institutions. Several austerity programmes had to be introduced to reduce the deficit to below 3% of GDP. Moreover, household spending had to be contained as, following the bursting of the real estate bubble in 2013, 40% of mortgage holders owed more on their loans than their homes were worth. At the same time, banks shrunk their balance sheets to improve their capitalisation. The economy has finally turned the corner and has been growing at a rate of just over 2% both in 2015 and House price have turned around and are, on average, above their value before the financial crisis. The share of underwater mortgages has declined to 20%. In addition, the labour market has tightened again and the unemployment rate declined to only 4.8% in mid Despite the improved economic environment, the government coalition of VVD (conservative liberals) and PvdA (social democrats) suffered heavy losses in the 2017 election. After a record 208 days, a coalition was finally formed under Prime Minister Mark Rutte comprising the business-friendly liberal VVD party, the progressive D66 party and the Christian CDA and Christian Union parties. Summary BNP Paribas presence The Netherlands is a major market for BNP Paribas and the bank provides a comprehensive range of services to institutional customers including retail payments. BNP Paribas' corporate and financial institution customers are supported from three business centres in Amsterdam, Rotterdam and Eindhoven. Amsterdam is BNP Paribas' largest cash concentration hub in Europe, leveraging the right of set-off permitted under Dutch law. Working with BNP Paribas Although the Netherlands is well-served by domestic banks, most corporations operating in the Netherlands operate across a variety of European countries and beyond, and therefore value BNP Paribas' pan-european and global network. In addition, the bank's customer-centric approach with dedicated relationship and product management enables the bank to develop highly specific solutions to meet customers' specific in-country and pan-european cash management and international trade finance requirements, supported by a comprehensive service offering. BNP Paribas has particular strength in supporting multinational companies operating in Netherlands and mid-cap and large Dutch companies' domestic and international cash management needs on an integrated basis.

4 Currency Currency The Netherlands uses the euro (EUR). Bank accounts Resident / non-resident status A company is generally considered resident in the Netherlands if its place of effective management is located there or it is incorporated under Dutch law. Bank accounts for resident entities Inside Netherlands Outside Eurozone Local Currency Foreign Currency Bank accounts for non-resident entities Inside Netherlands Outside Eurozone Local Currency Foreign Currency Not applicable Payments & Collections Credit transfers Credit transfers are used by companies to pay salaries and suppliers, and to make tax and treasury payments. SEPA credit transfers can be settled via Equens CSS, STEP2 or via correspondent banking networks.

5 Approximately 45 banks in the Netherlands participate in the SEPA credit transfer scheme. The Telegiro Nieuwe Stijl (TNS), a domestic low-value and urgent credit transfer scheme, remains outside of the scope of SEPA and is not affected by the SEPA end date regulation. IBAN-Acceptgiros are pre-prepared, in-payment transfers initiated by the payee. Plans to phase out IBANAcceptgiros in 2019 have been cancelled. High-value and urgent EUR-denominated domestic and cross-border (within the euro zone) credit transfers can be settled in real time via TARGET2. High-value and urgent cross-border credit transfers can also be settled with end-of-day value via the Euro Banking Association's EURO1 system. Five banks in the Netherlands participate directly in EURO1. Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad. In November 2017, the European Payment Council s SCTInt scheme (a pan-european 24/7 instant payment scheme for SEPA credit transfers) will go live across all SEPA countries. The scheme will enable the transfer of funds (the maximum threshold value for SCTInsts will be EUR 15,000) to another account in less than ten seconds. Direct debits Direct debits are used for regular payments, such as utility bills. SEPA direct debits can be settled on a same-day basis via Equens CSS or STEP2. Liquidity management Domestic: notional pooling Domestic notional cash pools are available. Resident and non-resident bank accounts can participate in the same notional pool structure, as can different legal entities. Inter-company cross-guarantees are required when participating entities have different beneficial ownership structures. The Netherlands's rules on transfer pricing and thin capitalisation may affect intercompany cross-guarantees. Domestic: cash concentration Domestic cash concentration structures are widely available. Resident and non-resident bank accounts can participate in the same cash concentration structure, as can different legal entities. Commonly used structures include zero balancing and target balancing. Transactions between approximately 2,000 resident entities and non-residents must be reported to the DNB on a monthly basis. Cross-border notional pooling Cross-border notional cash pools are available. Resident and non-resident bank accounts can participate in the same cross-border notional pool structure, as can different legal entities. Cross-border cash concentration Cross-border cash concentration structures are available.

6 Resident and non-resident bank accounts can participate in the same cross-border cash concentration structures, as can different legal entities. Zero balancing is a commonly used structure. Transactions between approximately 2,000 resident entities and non-residents must be reported to the DNB on a monthly basis. The Netherlands is a popular location for central treasury units due to its relaxed regulatory environment. International trade General trade rules As a member of the EU, the Netherlands follows the EU customs code and applies all associated regulations and commercial policies. Trade with other countries in the European Economic Area (EEA) and Switzerland is exempt from tariffs and other controls. Imports / exports Imports Machinery and transport equipment Chemicals Fuels Foodstuffs Clothing Primary Import sources Germany (14.7%) China (14.5%) Belgium (8.2%) USA (8.1%) UK (5.1%) Exports Machinery and equipment Chemicals Fuels Foodstuffs Manufactured goods Export markets Germany (24.5%) Belgium (11.1%) UK (9.3%) France (8.4%) Italy (4.2%) Import / export volumes goods USD m 546, , , , ,446 - services USD m 132, , , , ,371 - goods USD m 455, , , , ,861 - services USD m 144, , , , , Exports Imports Current account as % GDP

7 Source: IMF, International Financial Statistics, June Market data updated as of

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