Geographical Dwarf, FDI Giant—Protecting Security and Prosperity: The Peculiar Case of the Netherlands

The Netherlands is highly reliant on international investment and trade and is one of the most attractive destinations for foreign direct investment (FDI) worldwide. Until the beginning of the twentieth century, Dutch policymakers approached the economic and national security spheres as largely separate realms. But over the past two decades, FDI in critical infrastructure has become a national security issue. By the early 2020s, the Dutch government had created the legal and institutional framework and the necessary policy instruments to assess and address the potential risks associated with FDI. This chapter examines the evolution of Dutch perceptions and policies towards FDI in critical infrastructure and critical economic sectors. The first section surveys the size and scope of FDI in the Dutch economy. The second section reviews key developments that have affected Dutch government policies vis-à-vis FDI and assesses contemporary risk perceptions. The third section describes the existing policy framework for FDI screening in the Netherlands. The conclusion identifies the main takeaways and reflects on what these imply for the future.