After the monumental vote in the United Kingdom to exit the European Union, a flurry of rumours began: whether international companies would exit the UK as a response.
News reports have indicated that various industries have been on the hunt for new headquarters. European cities have been busy vying for attention – but the jury is still out on whether or not the economy will really see an exodus. Broadstreet Cross Border Specialists explores what to consider when moving businesses to a new country following Brexit; learn why the Netherlands has ranked high on the list of choices.
The state of business after Brexit
International companies headquartered in London now face a daunting decision: stay within the UK and face the unknown, or move operations to the EU. The creative sector in the UK risks slowing down, according to EU think tank Bruegel. A chunk of the industry is already eyeing a move; a survey in March 2017 showed that 40 percent of UK-based gaming companies are considering relocating.
The spotlight has shone particularly brightly on the financial services industry, which has, for the past century, called London home. A New York Times report published almost immediately after the vote in June 2016 showed that several finance executives indicated they would move a “significant” amount of their workforce to a location within the EU as a result of Brexit.
Considerations when moving a business to the Netherlands
The report went on to detail the criteria for a new location. They include an English-language environment, favorable regulations, good transportation and communications infrastructures, availability of commercial and residential real estate, and enough culture for relocated employees to enjoy. In the end, Amsterdam topped the list.
The city already has a storied history as a global financial center. Amsterdam has reportedly been in talks with various financial institutions about the potential relocation. But though the focus in the news has been on globalized institutions, small- and medium-sized businesses in other industries have already packed up and found a new home in the Netherlands. One such example is the fancy dress manufacturer Smiffys.
Doing business in the Netherlands: rules and regulations
Each business moving to the Netherlands must carefully examine local regulations beyond the EU. The Netherlands has a rule limiting bankers’ bonuses to 20% of their salary; the EU cap is set at 100%. This restriction has been somewhat of a deterrent for financial institutions and its high-level employees. However, according to the World Bank, the Netherlands still ranks fairly high in terms of ease of doing business; it lands in spot 28 worldwide and at 14 among EU countries.
Ease of employee relocation and integration
Regardless of industry, a business relies on its talent to succeed. When a business plans to move its operations to the Netherlands, ensuring that the process goes smoothly for the employees, not just the business itself, is paramount to success. This includes payroll; relocated employees should have no gaps in payment, especially since they are uprooting their lives to follow a company. Because so much must be arranged when moving a company from the UK to the Netherlands, businesses should work with specialists in international, relocation, payroll and accountancy services that can ease the process, especially for employees. These firms can also determine if there any other benefits for your employees to take advantage of, such as the 30% ruling.
High levels of English-language proficiency in the country helps not only the business but its employees integrate. Nearly all Dutch people speak English, especially in the Randstad. There will be far fewer language barriers; hiring new talent simply for language skills will not be necessary.
Beyond its English readiness, the country of choice should be rich in culture. This is something the Netherlands has in abundance, thanks to its vibrant art scene, culinary powerhouses, and history.
Starting a business in the Netherlands
Those still in the planning stages of founding a business have certainly heard of the excitement around Amsterdam. It has become a hotspot for techy startups and media companies; Netflix, for example, has its European HQ in the city. The World Bank rankings for starting a business show that the Netherlands fares even better; the country ranks 22nd worldwide and seventh in the EU.
The focus has now shifted, highlighting Amsterdam as a place for businesses large and small in any industry. With Brexit hovering over businesses, many are looking to remain in the EU despite their ties to the UK. The Netherlands has emerged as a top candidate.