Brexit – Why Firms Might Go Dutch
Brexit or no Brexit, the world is truly a global market place. Competition to attract inward investment into cities and countries has never been more frenetic for city mayors, business forums (such as Chambers of Commerce) and national business ministers.
One of the starkest stories of Brexit, or Britain’s uncertain approach to delivering Brexit, has been the rise of the Netherlands as a potential new global business hub.
The Japanese Chamber of Commerce in the Netherlands welcomed over 20 new members last year – a rise of ten percent.
Asian investors seem particularly worried. Some fifty percent reported to business consultants EY in the UK “Attractiveness Report” that they were worried about EU market access (compared to 39% elsewhere).
In 2018 Japan’s electronics giant, Panasonic, stated that they were relocating their Bracknell, UK, HQ to central Amsterdam.
Likewise, in 2017 Mitsubishi UFJ Financial Group filed a license application to open a subsidiary in Amsterdam too. Japanese bank, Norinchukin have joined them. (Others, Mizuho, Nomura, and Daiwa chose to move their European head offices to Frankfurt.)
Why is the Netherlands becoming more attractive?
“The infrastructure is very good, including roads, air links, and ease of logistics into the wider European continent,” said Richard Bingley, Managing Director of the Global Banking School, GBS. “There is generally a low-tax and efficient government support-base for business, as well as a strong financial infrastructure with close access to reliable financial services and investment pots. Moreover, the quality of life is good for executives and employees,” Bingley added.
However, according to Rudlin Consulting, the Netherlands still provides a mix of potential political and bureaucratic obstacles.
Japanese business consultancy experts, Rudlin Consulting, reported:
“Japanese companies who are looking at moving their base to Amsterdam have one increasing headache, which is the uncertainty of the Dutch political situation. In a survey from 2016 (i.e. before the election where Wilders’ Party for Freedom did not do as well as feared) of the members of the Japanese Chamber of Commerce in the Netherlands, political, economic and social environment came second as an increasing area of concern, after worries about employment (being able to hire or bring in Japanese employees, tax, pensions and ability to lay off workers).
“The third biggest area of concern was for expatriate visas and the process of obtaining ID cards. The fourth was the legal and regulatory framework – obtaining permits, approvals, meeting standards and whether those standards are appropriate.”
Rudlin Consulting concluded:
“There is a concern that if the Netherlands cracks down on immigration, it will be difficult to hire a diverse labour force – one of the UK’s traditional strengths and attractions for Japanese companies.”