Is The Netherlands A Rich Country?


The Netherlands has the reputation of being a rich country. It is indeed peculiar that such a tiny country has been doing well economically for so long. Therefore, I dived deep into the economic data to determine how rich The Netherlands is compared to other countries and why the Dutch have become so wealthy.

The Netherlands is among the ten richest countries globally, with a GDP of $ 708 billion and a GDP/per capita of $ 57.334 in 2020. In addition, the mean wealth/adult reached $ 377.090 in 2020. The reasons for Dutch wealth are an innovative mindset, abundant natural resources, and an excellent geographic location.

Find out if the Netherlands is one of the wealthiest countries in the world? How did the Dutch become and stay wealthy for so long?

How Rich Is The Netherlands?

How rich is the Netherlands looks like an easy question at first sight. However, it is more complicated than you think because being rich is always relative.

Economists like to use Gross Domestic Product (GDP) as a yardstick to compare the wealth of different countries because GDPs and the size of the population are relatively easy to measure. GDPs per capita (GDP/capita) are used to correct different population sizes and recalculated in the same currency, usually USD.

I extracted the GDP/capita of developed economies from the latest IMF database (World Economic Outlook of April 2021) to determine the GDP/capita of The Netherlands compared to other countries. The table below shows that The Netherlands was among the ten developed countries with the highest GDP/capita (see the third column of the table below).

The Netherlands is among the ten richest developed countries globally, with a national GDP of USD 708 billion and a GDP/capita of USD 57.334 in 2020. The GDP/capita of The Netherlands is significantly higher than neighboring countries in Europe but below the United States.

GDP/capita is a general measure of the wealth of a country but says nothing about how the national income is divided among its inhabitants. The country as a whole may be rich, but that wouldn’t do much good if the national income was primarily pocketed by a few billionaires, leaving most of the population in dire straits. The Gini index is a measure of inequality that economists use most. The lower the Gini index, the lesser the disparity. The worldwide range of the Gini index is about 26-63.

The Gini-index of The Netherlands for income is 28,1 and at the lower end of the worldwide spectrum, indicating that the inequality in the Netherlands is low compared to other countries. The Netherlands is a very egalitarian country with its progressive tax system.

Ranking Country GDP/capita (USD) Gini index (%)
1Luxembourg118.00235,4
2Singapore 97.057not available
3Ireland94.39231,4
4Switzerland72.87433,1
5Norway65.80027,6
6United States63.41641,4
7Denmark58.93328,2
8San Marino58.427not available
9Netherlands 57.53428,1
16Germany54.07631,9
18Belgium51.09627,2
21France46.06232,4
23United Kingdom44.11735,1
33Spain38.39234,7

Economists may use GDP/capita to compare the wealth of nations, but GDP/capita is a measure of income. Although income relates to wealth, measuring income to compare the wealth of countries is not entirely correct.

Fortunately, several direct comparisons of the wealth of nations are available, among them the Credit Suisse Global Wealth Report 2021. This report compares the mean and median wealth per adult of the largest countries in the world.

According to the Credit Suisse Research Institute, the Netherlands is the 5th most prosperous country in the world, with a mean wealth/adult of US$ 377.090 (see table below).

Rank Country mean wealth/adult (USD)
1Switzerland$ 673.960
2United States$ 505.420
3Hong Kong SAR$ 503.340
4Australia$ 483.760
5The Netherlands$ 377.090
6Denmark$ 376.070
7Belgium$ 351.330
8New Zealand$ 348.200

The ranking of The Netherlands is not much different when Credit Suisse calculated median wealth/adult. Median wealth/adult provides a better insight into wealth distribution than mean wealth/adult.

According to the Credit Suisse Research Institute, the Netherlands is the 7th most prosperous country globally, with a median wealth/adult of US$ 136.110 (see table below). This ranking confirms the low Gini index and shows that the Netherlands is among the most egalitarian countries in the world.

RankCountry median wealth/adult (USD)
1Australia$ 238.070
2Belgium$ 230.550
3Hong Kong SAR$173.770
4New Zealand$ 171.620
5Denmark$ 166.620
6Switzerland$ 146.730
7The Netherlands$ 136.110
8France$ 133.550

Wealth Equality In The Netherlands

A sensitive (and hotly debated) political question is if there is enough wealth equality in The Netherlands, even when the Gini coefficients indicate there is. It seems that there is never enough wealth equality for some Dutch politicians on the left side of the political spectrum.

Of course, some persons in The Netherlands own more than $136.110. A study by the Dutch Central Bureau of Statistics showed that in 2020 approximately 278.000 Dutch households owned more than € 1,0 million.

The average wealth of these millionaire households was € 1,6 million per household. However, only 3% of the millionaire households in The Netherlands owned more than € 10 million. Most of the wealth of the Dutch millionaire households was derived from their businesses and real estate.

Looking at all households in the Netherlands, household wealth in The Netherlands is primarily invested in pensions and homes and, therefore, illiquid. A 2022 Dutch government study showed that accumulated household wealth in The Netherlands in pensions and homes reached 63% of overall household wealth.

Household WealthPercentage of Wealth
Pensions47%
Homes25%
Company Equity (owners)12%
Savings & Investments12%
Other Real Estate5%
Other Company Equity2%

The same government study found that excluding pensions, 1% of households owned 26% of the wealth, while the wealthiest 10% owned 61% of all non-pension wealth. Those are politically explosive data in a country like The Netherlands that prides itself on its egalitarian fundamentals. The Dutch government is currently contemplating a new wealth taxation set-up, and these data will definitely play a role in that political debate.

Some Countries Want To Be More Equal Than Others

When It Comes To Wealth Equality

What Is A Good Salary In The Netherlands?

A high GDP/capita indicates that a country as a whole is rich, but that is pretty much irrelevant for an individual. For individuals, their salary will decide how rich they will be or will feel.

The table below shows the gross and net minimum and median salaries for Dutch employees in The Netherlands in 2021. The minimum wage is mandated by law, and the median salary is the salary that most wage earners earn. The mean (average) salary for 2021 is still unknown but will be a few thousand euros higher than the median salary.

The net salaries for expats working in the Netherlands will be higher than for Dutch employees because expats don’t have to pay income tax over the top 30% of their income for the first five years of working in The Netherlands.

Salary Type Gross salary/year (€) Net salary/year (€)
Minimum salary€ 20.412 € 19.104
Median salary € 36.500€ 27.850

The table below provides an overview of how (gross) salaries are divided between employees and will help you understand what a “good salary” in the Netherlands will be for you.

You have to earn more than € 40.000 annually to belong to the Top 25% of wage earners in The Netherlands. The top 5% make more than € 70.000 annually, and less than 1% of all wage earners in The Netherlands earn an annual salary of more than € 90.000.

% of wage earners Gross yearly salary (€)
Top 25%> € 40.000
Top 5% > 70.000
Top 1% > 90.000

Why Is The Netherlands A Rich Country?

There are six reasons why The Netherlands is a rich country.

  1. The Netherlands has fertile soil and a mild maritime climate
  2. The Netherlands was rich in natural resources
  3. The Netherlands has a good business climate for international companies
  4. The Netherlands has an excellent geographic location with fantastic natural transportation routes
  5. The Netherlands has an entrepreneurial, innovative spirit and created an export powerhouse
  6. The Netherlands has a stable political system with a collaborative and consensus attitude

1. Fertile soil and a mild maritime climate

The Netherlands is located mainly on sea or river clay, rich in minerals and moisture. In addition, rainfall in the Netherlands is much more regular than in countries with a continental climate. The combination of these two factors resulted in excellent agriculture yields and harvests that hardly ever failed and allowed The Netherlands to become one of the largest agricultural exporters in the world. For example, Dutch cheese is famous worldwide, and even Dutch wine is now exported worldwide.

2. Rich in natural gas resources

In 1959 an incredible amount of natural gas was discovered in the Netherlands. The exploration of these natural gas resources generated tens of billions in wealth annually for Dutch society. Our welfare state has primarily become possible due to these natural gas resources. Education in The Netherlands is free of charge, and the Dutch Health Care system is one of the best in the world. The income from natural gas exploration has also been used to build excellent public transportation infrastructure.

3. Good business climate for multinational companies

The Netherlands has a good business climate for multinational companies, with their European or worldwide headquarters located in the Netherlands. The Dutch population is a highly educated workforce with a strong work ethic. In addition, the tax climate for multinational companies is favorable. It is no coincidence that many high-ranking countries in the GDP/capital table above have good tax conditions for companies and individuals. These multinational companies, especially those in financial services, generate plenty of high-paying jobs and taxes for The Netherlands.

4. Excellent geographic location

The Netherlands is located in the center of Europe with fantastic natural transportation routes via the rivers Rhine and Meuse. It is impossible to think of any better location than The Netherlands in Europe, making The Netherlands the gateway to Europe. Transport has never been a significant problem in the Netherlands. Even heavy cargoes could easily be transported by large ships using the vast, wide rivers. The port of Rotterdam is one of the largest harbors globally and one most important economic engines of the Netherlands, with its access to Europe via the Rhine and Meuse rivers. In addition, Schiphol airport contributes to economic welfare as the third largest airport in Europe.

5. Entrepreneurial, innovative spirit

The Netherlands has been good at trading for as long as it existed, and the entrepreneurial Dutch sailed all over the world to trade their goods. These days, the entrepreneurial spirit is driving further innovations in what is already one of the most advanced economies in the world. The Netherlands annually exports more than € 500 billion in goods and services. One of the most peculiar export products is the Dutch skills in water management. Furthermore, The Netherlands cleverly exploits its rich cultural heritage, and tourism is a booming sector. A visit to Europe is not complete without visiting Amsterdam and its beautiful canals and walking around surrounded by the Dutch, the tallest people in the world.

6. A stable political system

The Netherlands is politically stable, and the political parties strive (primarily) for collaboration and consensus. In addition, the Netherlands is known for its liberal attitude. Collaboration is a natural part of the Dutch culture because the Dutch had to work together for centuries to keep the water out of their country, mainly below sea level. In addition, The Netherlands has not been involved in wars for centuries, except for the Second World War.

Pim

Pim has lived his entire life in The Netherlands in various parts of the country. Pim enjoys writing this blog because it is a wonderful excuse to revisit all the parts of the Netherland that he liked and rediscover all the activities that he enjoyed. He hopes that you will enjoy The Netherlands as much as he does.

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