The Netherlands is a constitutional monarchy with a representative parliamentary system. The reigning sovereign is Queen Beatrix, who acceded to the throne in 1980, while executive power is exercised by the Prime Minister and his cabinet, which consists of all ministers. Parliament exercises legislative power and consists of two houses: the First Chamber (senate) of 75 members elected by Provincial States and the Second Chamber of 150 members, directly elected to a four-year term.

All Dutch citizens, 18 years of age and older, may vote. In general, votes are cast for parties, not individual candidates. As no single political party in the Netherlands is large enough to obtain a majority vote, the country is always governed by broadly-based coalitions of moderate political parties. This means that government policies remain generally consistent.

A stable political climate is of key significance to the long-term goals of foreign operations in an unfamiliar business environment. The Dutch political system is characterised by a multi-party structure and a democratic and consensus-based legislative system that is pro-business and supportive of innovation and investment.