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Brexit and the Netherlands

On 26th August 2019 the "Brexit"  spotlight shone on the Netherlands with the announcement by the NFIA, the Netherlands Foreign Investment Agency,  that so far 98 companies have established operations in the Netherlands because of Brexit.

In addition, the NFIA reported that a further 325 British-based companies have made enquiries of the Agency about relocating operations from the UK to the Netherlands.

According to the NFIA, the Netherlands is proving particularly attractive for companies in the financial services, IT, media and advertising industry and life sciences and health sectors.

The companies moving operations from the UK to the Netherlands because of Brexit include both native UK companies as well as US and Asian companies.

Both Sony and Panasonic have announced plans to move their European bases from the UK to the Netherlands and media groups like Bloomberg and the Discovery Channel are also reported to be moving staff from London to Amsterdam.

The transfer of the European Medicines Agency from the London to Amsterdam is also regarded as a significant event, meaning ( according to the official Dutch Government website) that "more people will visit and spend money in the Netherlands".

The Netherlands, with its stable political democracy and high levels of spoken English, is perceived as a clear choice for many companies faced with relocation dilemmas because of Brexit. Tax breaks in the Netherlands,  such as the reported tax relief for newly arrived workers who do not pay income tax on 30% of their salary for eight years, also help explain the Netherlands as a desirable relocation jurisdiction from the UK because of Brexit.

The NFIA has reported that as of January 2019 it had attracted €300 million worth of investments and 2500 jobs from the UK since the Brexit referendum in the UK of 23rd June 2016 and that these figures have continued to grow since January 2019.

The Netherlands is by no means alone amongst EU member states in attracting or seeking to attract UK business operations to their countries because of Brexit  and , for instance , in the financial services sector, Dublin, Paris, Frankfurt and Luxembourg are attracting UK-based operations.

The increasing possibility of a "no deal" Brexit  is causing "major economic unrest" for some UK - based businesses, according to the NFIA, which is likely to make them more interested in setting up operations in the Netherlands or elsewhere in the EU.

According to the NFIA, access to the European market is the main motivator for businesses seeking to relocate operations from the UK to the Netherlands because of Brexit, although most of these businesses will seek to retain operations in the UK as well.

Despite all this, the Netherlands is certainly not crowing about potential economic  benefits to it deriving from Brexit. The reverse is the case.

According to "The Times" , Mr  Jeroen Nijland, Head of the NFIA,  has said that Brexit "remained bad news for the Netherlands" because of its close trading relationship with the UK and that " Brexit economically speaking has a huge negative impact on the Dutch economy [ Brexit ] is not a good development."  In the same vein , Mr Mark Rutte, the Dutch Prime Minister, is reported to have said that he "doesn't see Brexit as a business opportunity".

According to the official Dutch Government website, the loss to the Dutch economy deriving from Brexit could total 1.2% of GDP by 2030.

Uncertainty over citizens' rights , particularly in a "no deal" Brexit scenario, remains a concern for Dutch and UK citizens based in an each other's countries, despite Government re-assurances both in the UK and in the Netherlands.

The UK- Netherlands experience in relation to Brexit continues to be mired in both legal and economic uncertainties, with a growing number of  European-focused businesses seeking to hedge their bets in the manner described in this article.