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Home / Business

Amsterdam is the reason so many firms are going Dutch

By Hannah Boland
Daily Telegraph UK·
17 May, 2019 08:00 PM6 mins to read

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Dozens of big-name companies have set up HQs in the capital. Photo / 123RF

Dozens of big-name companies have set up HQs in the capital. Photo / 123RF

On a warm Friday afternoon in Amsterdam, the sun-soaked bars are a hive of activity.

After-work drinkers cluster around small tables dotted near the canals, while locals weave deftly through crowds on their bikes.

But as stereotypically Dutch as this scene may be, listen closely and you may be surprised. Among the cacophony of sounds are American voices, British, Spanish, Scandinavian, Australian - everything but Dutch.

"I'd almost say Amsterdam is not really Holland," laughs Edwin Prinsen, the general manager of US giant Cisco's local arm. "Take us for example - we have 44 nationalities of people on our site here. Funnily enough, the city is actually thinking of changing its official language to English. A lot of the big technology companies are in Amsterdam right now, so it is a very cosmopolitan city."

He's not wrong. In the past six years, 90 companies have set up either European or regional headquarters in the city, creating nearly 2,500 jobs and attracting swathes of people from overseas. Slotted into historic buildings lining Amsterdam's canals are the European offices of household names such as Netflix, Uber and Booking.com.

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Whilst the city is also home to a growing number of local start-ups, recent figures suggest around 16 per cent of the technology companies there are foreign businesses.

For some, the attractiveness of the Netherlands as a place to set up shop is as a direct result of the UK's Brexit vote. After all, the Dutch government this year revealed it had held talks with more than 250 companies to try to persuade them to move jobs to Amsterdam, including American and Asian firms as they weighed up how to structure their European arms.

This push has certainly had some major successes - both Panasonic and Sony last year announced they were shifting European headquarters out of the UK and into the Dutch capital.

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Boris Veldhuijzen van Zanten, Dutch serial entrepreneur and founder of technology website The Next Web, says it is undeniable that Brexit has had some effect on how the city is drawing in companies, seen as an opportunity to host the EU headquarters of major firms.

"The trends started around the Brexit vote, and I think most people in the Netherlands realised: 'Wait a minute, we're the obvious alternative to London.' Now it feels like all the technology companies are leaving London, and they all mention the same cities they're looking at. It's either Brussels, Berlin, Stockholm or Amsterdam," he says.

Amsterdam may seem the least likely choice. Figures from EY this week placed it lower than the others in a study of the "most attractive tech hubs".

But, Veldhuijzen van Zanten says, when companies "visit all of them, Amsterdam just sticks out - we're really in the process of becoming a bigger central hub in Europe."

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Perhaps this shouldn't be such a surprise. Amsterdam was named the world's 11th best place to live in earlier this year, 30 places above London and roundly beating most major cities in France, Germany and Sweden.

Veldhuijzen van Zanten says it was these more holistic factors which attracted Uber: "I remember when they were looking for a main office, and they were trying to choose between Brussels, Paris and Amsterdam. I organised a dinner at my house and invited them, some people from the city of Amsterdam, a few start-ups as well, and at the time they got so excited about Amsterdam, they decided to open the offices here. I guess they all fell in love with the city."

This is something local companies are definitely seeing. Chris Hall, chief executive of software firm Bynder, says people just "like to live here".

"And, now, you don't have to explain to people where Amsterdam is any more," he adds. "That actually used to be the case. People would ask me, is Amsterdam in Belgium?"

As more companies progress to a scale-up stage, and push overseas, Patrick Studener, from Silicon Valley scooter company Bird, said there will be more businesses eyeing up the city.

"There comes a point where all companies have to decide where they're going to base their European headquarters," he shrugs. "I think Amsterdam in particular is interesting for a number of reasons. There was the talent of course. But also, if you're running a business that is working across several countries all across the world, Netherlands - just given its status as a big trade nation - has great inter-nation treaties. It's not just companies like Bird or Netflix who are attracted to that. You see Nike here."

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Its treaties may be attractive and it may be an easier place to trade than elsewhere, but for years all that has been overshadowed by the Netherlands' reputation when it comes to tax.

The country has been widely seen as one of Europe's major tax havens for multi-nationals, seemingly allowing them to move profits through subsidiaries based in the country.

Speaking last year to The New York Times, Dutch state secretary of finance Menno Snel said the country must be "fair in recognising that some companies are misusing the open tax system that the Netherlands has".

At the very least, the country has been seen as inducing foreign firms to set up there by aggressively promoting the benefits of its tax system.

But, says Dick Hofland, a tax partner at Linklaters in Amsterdam, this is changing: "It's trying to get rid of the image that it unfairly competes with other jurisdictions on tax," he pauses, "under pressure from the European Union, I should add."

It's now becoming more similar to the rest of Europe. The Netherlands is not promoting Amsterdam as aggressively as it used to for its tax system, because of all these international discussions.

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"Gradually it is changing. What is left is the tax administration is open and welcomes a discussion about how a company is going to be taxed," Hofland adds.

With this internal crackdown, it could be said the Netherlands is losing one of its most attractive qualities.

But, looking around the teeming city it doesn't seem this is having much effect. The battle for talent is heating up.

And with sun, Dutch beer and cobbled streets, that talent seems more than happy in Amsterdam.

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