Keeping money in the Bank:
- Bank interest in NL is around 1% if you maintain your money in the “savings account”
- NL Banks offer you different products that can get you higher interest upto about 5%. If you want to keep your money in Euros, better option is to keep the money in an FCNR bank account in India – the interest rate is guaranteed.
- If your savings is more than € 20,000 you need to pay “Savings tax” @1.2% of the entire savings (goes into Box 3 in the tax filing form). However, if you have 30% ruling, this tax is not applicable making it effectively 0%.
- If you don’t mind the risk of Rupee devaluation, keeping the money in a FD in a NRE account in India makes more sense. The interest from NRE account is tax free. Different banks give different interest rates. So check on the internet which bank gives the highest rate. The money is also fully repatriable (i.e you can convert them back to Euro) at the current rate.
- It is allowed to open a trading account and invest in the stock market. Whatever money you have invested+gained in the stock market is subject to “Savings” tax applicable @1.2% (to be filled into Box 3 in the tax filing form). However, if you have 30% ruling, this tax is not applicable making it effectively 0%.
- There is no short term and long term gains concept. All gains fall under point 1 above.
- You can open a trading account with many banks….however practically I think ABN AMRO is the only place you can open it because the others ask that you know Dutch language to even speak to you beyond a few sentences!!
- Each transaction costs €10 to €150 depending on the volume of shares traded. On top of it, banks may charge maintenance fee.
- It is allowed to trade in other country stock exchanges via a Dutch trading account. For example, you can trade US stocks listed in NASDAQ, UK stocks etc with your Netherlands trading account. Again, bank may charge extra for this service.
- ESOP is taxed like in India when it is exercised – (FMV on exercise date – grant price)*% time spent in NL during the vesting period. Check this link for an example: http://www.globalequity.org/membersonly/GlobalUpdates/NetherlandsPlcyStatmnt32202.pdf
Out of the box:
- Some people take personal loan at about 5% interest from a NL bank, convert it to Rupee FD @9% in India! They payback the loan in Euros as they earn in Euros 🙂
Starting a company:
- You are allowed to start your own company in NL. For details, go to http://www.kvk.nl. The website also has English pages. For any questions, you can call them and they will be more than happy to clarify your questions.
Disclaimer: This is my personal opinion only. No responsibility will be taken for inaccuracies. Base your decisions at your own risk.