International business law: contracts, courts and compliance

International business law is not one body of rules. It is the combination of your contract, the law the parties chose, the court or tribunal they agreed on, and the mandatory rules of every country the transaction touches. For a business trading from or into the Netherlands, four instruments decide most questions: the Rome I Regulation on the law applicable to contracts, the Brussels I bis Regulation on jurisdiction and enforcement within the EU, the Vienna Sales Convention (CISG) for the sale of goods, and the New York Convention for the enforcement of arbitral awards. The main exception is the set of mandatory rules, such as sanctions, export control and data protection, that apply whatever the contract says. Getting these points right when you draft the contract removes most of the risk that would otherwise surface years later.

Which law governs an international contract?

Within the EU the answer follows from the Rome I Regulation. Dutch courts apply it to every contract concluded from 17 December 2009 onwards, whether or not the chosen law is that of a member state.

The starting point is freedom of choice. The parties may designate the law of any country, and the choice may be express or clearly demonstrated by the terms of the contract. A clause that simply says Dutch law applies is effective even if neither party is Dutch.

What if the contract says nothing about governing law?

Then the regulation assigns a law by contract type. A contract for the sale of goods is governed by the law of the country where the seller has its habitual residence. A contract for services is governed by the law of the service provider, a distribution contract by the law of the distributor, and a contract relating to immovable property by the law of the country where the property is situated.

Only where the contract is manifestly more closely connected with another country does that other law take over. In practice, a Dutch supplier who never addresses governing law will usually find Dutch law applying. A Dutch buyer in the same position will usually find foreign law applying.

Where does the freedom of choice stop?

Two limits matter in practice. First, consumer contracts and individual employment contracts remain subject to the protective rules the consumer or employee would enjoy under the law of their own country, whatever the contract says. Second, overriding mandatory provisions of the court seised, and in some cases of the country of performance, apply regardless of the chosen law.

Commercial agency is the clearest example. The Court of Justice ruled in Ingmar (C-381/98, 9 November 2000) that the protection the EU agency directive gives an agent working in the EU, including the payment on termination, cannot be avoided by choosing the law of a non-EU country. In the Dutch Civil Code that payment is the goodwill indemnity (klantenvergoeding). Our overview of the agency agreement under Dutch law sets out those mandatory elements.

Does the governing law clause also cover claims outside the contract?

Not automatically. Non-contractual claims follow a separate instrument, the Rome II Regulation. Under it, the applicable law is in principle that of the country where the damage occurs, with special rules for product liability, unfair competition, infringement of intellectual property rights and environmental damage.

A well drafted clause therefore states that it extends to non-contractual claims arising out of or in connection with the contract.

Which court decides, and can you enforce the judgment?

Between EU member states, the Brussels I bis Regulation decides which court has jurisdiction and makes the judgment enforceable across the EU. Outside the EU, enforcement is far less certain and needs to be planned before you sign.

The general rule is that a defendant is sued in the member state where it is domiciled. For contractual claims there is an alternative: the place of performance of the obligation. For the sale of goods that is the place of delivery, and for services the place where the services were provided. Tort claims can also be brought where the harmful event occurred.

A written choice of court agreement prevails over these rules and is in principle exclusive. The chosen court decides on its own jurisdiction, and any other court seised must stay its proceedings.

How does enforcement work within the EU?

A judgment given in one member state is enforceable in the others without any declaration of enforceability (exequatur). A Dutch creditor with a judgment can go straight to enforcement in another member state on production of the judgment and a certificate. The debtor may resist only on limited grounds, such as a manifest breach of public policy or a defect in the service of the document that started the proceedings.

Two EU procedures avoid an ordinary national procedure entirely: the European Order for Payment for uncontested cross border claims, and the European Small Claims Procedure for low value cases. Our article on small claims in the Netherlands explains when the latter is worth using.

What about judgments from outside the EU?

Here the position is different, and this is the point most often missed. The Netherlands has no general treaty on the recognition of judgments with most non-EU states. A foreign judgment is in principle not enforceable here without fresh proceedings.

Dutch courts will, however, recognise a foreign judgment that meets the conditions developed in case law: jurisdiction on internationally acceptable grounds, a proper procedure, no conflict with public policy and no incompatible Dutch decision.

Two conventions narrow the gap. The Hague Choice of Court Convention obliges the courts of contracting states to respect an exclusive choice of court clause and to enforce the resulting judgment. The Hague Judgments Convention of 2019, in force for the European Union and therefore for the Netherlands since 1 September 2023, gives a broader basis for recognition and enforcement between the states that have joined it. Check which of the two applies, and whether the other party’s country has joined at all, before you draft the clause rather than after judgment.

Does the Vienna Sales Convention apply to your sale of goods?

Usually yes, unless you exclude it. The United Nations Convention on Contracts for the International Sale of Goods has been part of Dutch law since 1992. It applies automatically to sales of goods between parties whose places of business are in different contracting states, and also where the rules of private international law lead to the law of a contracting state.

Choosing Dutch law therefore brings the convention with it, because the convention is part of Dutch law for international sales. Excluding it takes an express clause.

Should you exclude the convention?

That is a commercial decision, not a reflex. The convention offers a neutral regime that neither party has to learn from scratch. It has a developed body of international case law, and its remedies are workable.

It does differ from Dutch domestic law on points that matter:

• It has no requirement of a written contract.
• It treats a fundamental breach as the threshold for avoiding the contract.
• The buyer must examine the goods within as short a period as is practicable and give notice of a lack of conformity within a reasonable time, with an outer limit of two years from handover.

Domestic Dutch sales law uses the different standard of complaint within a reasonable time. The fixed two month period applies only to consumer sales and not to commercial transactions.

Whose general terms and conditions apply?

Dutch law and the convention pull in different directions here. Under the Dutch Civil Code, a reply that refers to different general terms and conditions than those in the offer does not bring the second set into force unless the first set is expressly rejected. That gives the first set the advantage.

The convention is generally applied as a “last shot” system, in which the terms attached to the final communication prevail. In both systems the terms must have been made available before or at the time of contracting. A reference to terms published on a website may be enough between businesses, but a foreign counterparty is in a stronger position to argue that terms it never received are not binding. The safest practice remains to attach your terms to the offer, in the contract language.

Should you choose arbitration or the courts?

For contracts with counterparties outside the EU, arbitration is usually the more enforceable option. The New York Convention obliges the courts of over one hundred and seventy states to recognise both the arbitration agreement and the award, with only narrow grounds for refusal.

That enforceability, rather than confidentiality or speed, is the main argument for arbitration in an international contract. Within the EU, an ordinary court judgment already circulates freely, so the balance is different.

Is the Netherlands a good place for arbitration?

The Netherlands offers a well developed seat. Dutch arbitration law is set out in the fourth book of the Code of Civil Procedure and was modernised with effect from 2015. The Netherlands Arbitration Institute (NAI) administers proceedings under its own rules, and The Hague hosts the Permanent Court of Arbitration for disputes involving states.

An award rendered in the Netherlands can be enforced after leave from the preliminary relief judge. It can be set aside only on the grounds listed in the statute, such as the absence of a valid arbitration agreement, a tribunal constituted in breach of the rules, a tribunal that exceeded its mandate, an award without reasons or a conflict with public policy.

What does the Netherlands Commercial Court offer?

The Netherlands Commercial Court (NCC) is a court option designed for international commerce. It is a chamber of the Amsterdam district court, with an appeal chamber at the Amsterdam court of appeal. It hears international commercial disputes in English if the parties have expressly agreed to this.

The NCC applies ordinary Dutch procedural law, and its judgment circulates as a Dutch judgment under the enforcement instruments described above. Its court fees are substantially higher than those of the ordinary courts, so compare them with the cost of arbitration before you choose. The comparison between the routes is set out in our article on international dispute resolution.

Which trade compliance rules apply regardless of the contract?

Customs, export control and sanctions rules apply whatever the parties agree. A commercial agreement can be perfectly drafted and still be unlawful to perform.

Customs and dual use goods

Goods leaving or entering the European Union are subject to the Union Customs Code. The classification, origin and customs value of the goods determine the duty and the documents you need.

Items with a possible military application fall under the EU dual use regulation and require an export authorisation. In the Netherlands the customs administration (Douane) issues it on behalf of the responsible minister. The definition is broader than many exporters expect: encryption software, certain sensors and a range of machine tools are all listed.

Why are sanctions the sharper risk?

EU sanctions regulations apply directly in the Netherlands and bind every Dutch company and every EU national, wherever they are. Breach is enforced through the Sanctions Act 1977 (Sanctiewet 1977) and is an economic offence. That means criminal rather than administrative liability, with investigation by the Fiscal Intelligence and Investigation Service (FIOD).

The obligations go beyond avoiding listed parties. They extend to the ownership and control test, under which an entity is caught where a listed person holds fifty per cent or more of it or otherwise controls it, and to the prohibition on circumvention. The twenty five per cent figure that circulates in this context belongs to the ultimate beneficial owner (UBO) register. It is a different threshold for a different purpose.

What about sustainability due diligence?

The Corporate Sustainability Due Diligence Directive (CSDDD) was substantially amended in 2026 by the Omnibus I package. The harmonised EU civil liability regime was removed, the ceiling for penalties is three per cent of net worldwide turnover, member states must transpose the directive by 26 July 2028 and companies must comply from 26 July 2029. After the amendment it covers only very large groups.

Until then the directive creates no direct obligations for Dutch companies. Sustainability clauses that larger customers impose in their contracts already do, however, and those clauses are enforceable now.

How do you protect intellectual property abroad?

By registering in each market that matters, because intellectual property is territorial. An international expansion plan that does not deal with it early is expensive to repair.

A Benelux trade mark registration covers the Netherlands, Belgium and Luxembourg and nothing else. An EU trade mark covers the whole internal market but is vulnerable to a single earlier right anywhere in it. Outside the EU, protection depends on national filings or on the international registration system administered by the World Intellectual Property Organization (WIPO). Patents follow the same pattern, with the European patent and the patent with unitary effect on one side and national filings on the other.

Two contractual points recur. Ownership of what is created during a project must be allocated expressly, because default rules differ between countries and a clause that works under Dutch law may not transfer anything abroad. And know how that cannot be registered is only protected as a trade secret if reasonable steps were taken to keep it secret. That means confidentiality agreements, access restrictions and exit procedures, not a clause alone. Our guide to intellectual property law in the Netherlands sets out the rights and the registration routes.

How do you enter a foreign market: branch, subsidiary, agent or distributor?

The way you enter a market determines which law follows you. Each route brings its own registration, liability and termination rules.

Branch or subsidiary?

A Dutch private limited company (BV) trading abroad without an establishment keeps its Dutch corporate law, but may acquire tax and employment obligations elsewhere. A branch has to be registered locally. A subsidiary is a separate legal person with its own governance and its own liability.

Foreign businesses entering the Netherlands register a branch or a subsidiary with the Netherlands Chamber of Commerce (KVK). A Dutch subsidiary, such as a BV, must also register its ultimate beneficial owners in the Dutch UBO register. A foreign company that only has a branch here reports its UBOs in the register of its home country, not in the Dutch one.

Agent or distributor?

Where you enter through an intermediary, the choice between an agent and a distributor has consequences that cannot be drafted away. A commercial agent negotiates in the name of the principal and enjoys the mandatory protection of the Dutch Civil Code. That includes notice periods that increase with the length of the relationship, and a goodwill indemnity on termination where the agent has brought new customers and the principal continues to benefit.

A distributor buys and resells in its own name and has no statutory regime. Dutch case law does, however, require a reasonable notice period when a long standing distribution relationship is ended. What is reasonable depends on the duration, the distributor’s dependence and the investments it made at the supplier’s request. Termination without that notice can lead to damages, usually measured by the profit the distributor would have made during the notice period it should have received.

Does competition law limit these agreements?

Yes. Article 101 of the Treaty on the Functioning of the European Union and the Dutch Competition Act (Mededingingswet) prohibit restrictive agreements. The block exemption for vertical agreements gives a safe harbour only within its conditions.

Resale price maintenance and absolute territorial protection remain hard core restrictions. A clause of that kind is void and can trigger an investigation by the Authority for Consumers and Markets (ACM).

What does data protection add to an international operation?

Duties that a contract alone cannot shift. Any international operation moves personal data, and the General Data Protection Regulation (GDPR) follows it.

Transfers to countries outside the European Economic Area require an adequacy decision, standard contractual clauses supported by a transfer impact assessment, or one of the derogations. You cannot shift that responsibility to the recipient by contract. Where a supplier processes data on your behalf, a processing agreement with the content the GDPR prescribes is mandatory. Under the accountability principle, the documentation has to exist before a supervisory authority asks for it, not after.

In what order should you work?

Start with the four questions that determine everything else, then work outwards. The four are: which law governs the contract, which forum decides a dispute, whether the decision can be enforced where the other party has assets, and which mandatory rules apply regardless of the answers.

A choice of court in a state where the other party holds nothing is worth less than an arbitration clause that reaches its bank accounts. Then:

• Decide consciously whether the Vienna Convention applies or is excluded, and make sure your general terms are attached and in the right language.
• Screen counterparties and goods against the sanctions and export control regimes before signing, not before shipping.
• Register the trade marks that matter in the markets that matter, and put confidentiality arrangements in place before the first technical meeting.
• Have a tax adviser look at the tax consequences from the start. The legal structure and the tax structure have to be decided together, and that tax decision is not one for the legal team.
• Review your standard contracts at intervals. The instruments described here change, and a template drafted five years ago may well name a regime that has since been replaced.

In summary

• Rome I lets you choose the governing law; without a choice, the law follows the contract type, but mandatory rules on consumers, employees and commercial agents still apply.
• Within the EU, a judgment is enforceable without exequatur under Brussels I bis; outside the EU, check the Hague conventions or opt for arbitration under the New York Convention.
• The Vienna Sales Convention applies to international sales of goods under Dutch law unless you exclude it expressly.
• Sanctions, export control, customs and GDPR rules apply regardless of the contract; a sanctions breach is a criminal matter in the Netherlands.
• Choose your market entry route, agent or distributor, branch or subsidiary, with the termination and registration consequences in mind.

Frequently asked questions

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