Foreign-controlled multinational subsidiaries most profitable

In 2020, subsidiaries of foreign-controlled multinationals had the highest profit ratio of all non-financial corporations in the Netherlands. The profit ratio of multinational corporations under foreign control was around 50 percent. That of Dutch-controlled multinationals with subsidiaries abroad stood at 40 percent. This is evident from new figures on non-financial corporations, released by Statistics Netherlands (CBS).

The profit ratio is the result of revenues minus costs (gross operating surplus) expressed as a percentage of value added. Multinationals have a higher profit ratio than other large corporations and small and medium-sized enterprises (SMEs). Not only were foreign-controlled corporations more likely to operate in relatively more profitable sectors, but also within their sector, they tend to achieve higher profit ratios.

Profit margin of non-financial corporations
JaarForeign-controlled (%)Dutch-controlled (%)Other large corporations (%)SMEs (%)

Multinationals more often active in sectors with higher profitability

Foreign-controlled corporations were more profitable than Dutch-controlled corporations , in part because they are over-represented in sectors with high profit ratios. For instance, foreign-controlled corporations were more often represented in wholesale trade, a relatively profitable activity. In contrast, Dutch-controlled multinationals were more often represented in the temporary employment sector, which has a low profit ratio.

Other large corporations had low profit ratios in 2020. Many healthcare producers operate in this sector, for instance hospitals and home care institutions. The profit ratio is low in this sector. Over the past few years, the profit ratio among other large corporations declined, partly also because mining and quarrying took up a large share of the sector. Natural gas extraction has a high profit ratio, but is being phased out. This has resulted in a declining average profit ratio among the other large corporations.

Shares held by sectors in value added, 2020
SubsectorAgriculture, mining and manufacturing (%)Construction, transport and hospitality (%)Wholesale and retail trade (%)Other commercial business services (%)Health care and other services (%)
Foreign-controlled corporations351024291
Dutch-controlled corporations361620253
large corporations

Relatively high profit ratios within the sector as well

The subsidiaries of foreign-controlled multinationals were not only overrepresented in sectors with a high profit ratio, they also tended to have relatively high profit ratios within that sector. In the other commercial and business services sector, foreign-controlled corporations achieved a profit ratio of 46 percent, while the profit ratio of other corporations in this sector ranged between 31 and 35 percent.
However, there were some exceptions. For example, the gas extraction industry remained an important contributor to the high profit ratio in agriculture, mining and quarrying and manufacturing as a sector. The profit ratio of foreign-controlled corporations was relatively low in construction, transport and hospitality, partly because of lower results for aviation in 2020.

Profit ratio by sector, 2020
BedrijfstakForeign-controlled (%)Dutch-controlled (%)Other large corporations (%)SMEs (%)
mining and
Construction, transport and hospitality30342637
Wholesale and
retail trade
Other commercial
business services
Healthcare and
other services

The higher profit ratio among foreign-controlled companies was not due to a few large corporations. On the contrary, in this subsector, small multinationals actually had a higher profit ratio than larger ones.

Profit margin by enterprise size, 2020
 Foreign-controlled (%)Dutch-controlled (%)SMEs (%)Other large corporations (%)
Large corporations474019

From now on, figures on the NFC sector will be published in more detail on StatLine. The corporations are broken down into foreign-controlled, Dutch-controlled, other large corporations and independent small and medium-sized enterprises (SMEs). The updated data on NFCs are explained in an article on Multinationals in the Dutch economy (in Dutch only).