Going Dutch: Which Firms Are Moving To The Netherlands .

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Continued uncertainty about Brexit has ledmany UK-based businesses to activate theircontingency plans. Companies have decidedto move all, or part, of their operations toEU member-states in order to continueto serve their customers in the singlemarket. Precautionary measures includesetting up EU offices alongside their UKones, deferring investments from UKsites to European plants, or relocatingaltogether. On 1 February 2019, theInstitute of Directors – a British businessassociation – reported that, based on itssurvey of 1200 company directors, “nearlyClingendael AlertGoing Dutch: Which firms aremoving to the Netherlandsbecause of Brexit?Rem KortewegSEPTEMBER 2019

Clingendael Alertone in three UK firms” were planning for aBrexit relocation.1The Netherlands is one of the countriesfirms have put on their shortlist. In lateJanuary, the Dutch government’s foreigninvestment arm, NFIA, announced that itwas talking to more than 250 companieswhich were thinking of moving some, orall, of their activities to the Netherlands.2Of course, any prudent executive willshop around and compare what Dutchregulators and tax authorities have tooffer over their Irish, German, Spanish orFrench peers. It is one thing to discussthe possibility of moving, actually movingis quite another. In August 2019, the NFIAconfirmed that 98 companies had “optedfor the Netherlands” as a consequence ofuncertainty around Brexit, but it offered littledetail about the companies or their plans.3So, what companies are moving tothe Netherlands because of Brexit?The Clingendael Institute has compiled adatabase of companies that have announcedtheir decision to move to the Netherlands,or have been reported to do so. This list isbased on open-source information. Thoughcompanies may have additional reasons forwanting to reduce their footprint in the UK,each decision listed here to shift operationsto the Netherlands has been attributed toBrexit uncertainty and is drawn from mediareports or press statements. It should notcome as a surprise that our list containsfewer companies than the 98 companiesmentioned by the NFIA. Firms may beunwilling to make their plans public, or hold1232Institute of Directors, “Nearly a third of firmslooking overseas due to Brexit”, 1 February IA, “More Foreign Companies invest in Hollandin 2018: 10,000 extra jobs”, 9 February s/.NFIA, “More Brexit-impacted companies choosethe Netherlands due to ongoing uncertainty”,26 August 2019, -uncertainty/.off announcing their plans until Brexit hashappened. Our list, however, mentions thosecompanies that have already moved, orare in the process of moving. The list alsoincludes a number of firms which haveannounced a move to the Netherlands inthe event the UK leaves the EU withouta deal, but for obvious reasons have notyet enacted those plans. It is also the firstpublicly available list of its kind for theNetherlands.The Netherlands of course is not the onlydestination for UK-based companiesnervous about Brexit. For instance, in thefinancial sector alone, Ireland announcedthat 100 asset-managers had moved tothe country since the EU referendumin June 2016. Large commercial bankshave shifted balance-sheet assets andpersonnel to Frankfurt and Paris, or havemoved their European headquarters there.This Clingendael Alert does not seek toassess how the Netherlands comparesto other countries as a destination forcorporate Brexit refugees. Instead, it aimsto offer a degree of detail about who arecoming to Holland. By September 2019,the list comprised 56 companies.There are several different ways in whichBrexit-impacted companies move to theNetherlands:– Relocate activities to the EU market.In the case of multinationals, this willlikely include setting up a legal entityor headquarters. This can also includemoving a particular production line tothe Netherlands;– Expand existing activities in theNetherlands, and downscaling thosein the UK;– Set up a European headquartersthat covers all European, including UK,activities;– Open an EU office, allowing it toreproduce services for the EU market.

Clingendael AlertType of move302520151050RelocationExpansionFinancials come firstCompanies in the financial sector makeup the majority of firms arriving in theNetherlands: 32 of the 56 companiesidentified. Among them are tradingvenues and boutique firms while – withsome exceptions – few large commercialinstitutions have opted for the Netherlands.One subgroup of firms consists oftrading venues, markets or platforms.These include exchanges like the CBOE,Bloomberg’s swaps market, TP ICAP,MarketAxess, the EU trading platformsof the London Stock Exchange andCME’s EBS and BrokerTec derivativesmarkets. Though the number of employeesconnected with these moves is not large,the volumes of trade which will be routedthrough the Netherlands as a result ofthese moves are. For instance, in August2019, CME’s BrokerTec average dailyEuropean volume was EUR 263 billion.4Of course, the tax proceeds fromtransaction fees will accrue to the Dutch43CME Group averaged 16.6. million contracts perday in July 2019, up 23% from July 2018, 9--up-23-from-july-2018--300895521.html.Europe HQEU officetreasury. The arrival of these trading venuesand exchanges now lays the foundation forthe further expansion of financial tradingactivities in and around Amsterdam.A second subgroup includes boutiquetrading firms, many of them high-frequencytraders, and FinTech companies. Theyinclude companies like Jump Trading,Radix, Hard Eight, the Gelber Group,Azimo and CurrencyCloud. Aside fromaccess to the EU single market, it seemsthese firms are attracted by the friendlyregulatory environment for FinTech andAmsterdam’s high-speed internet exchangepoint. The decision of important derivativesmarkets to base their EU platforms inAmsterdam will also have played a role.A third group consists of larger, and moretraditional, financial companies. Some, likeBlackRock and Royal Bank of Scotland,have migrated assets, accounts or otherparts of the balance sheet from the UK toan EU office in the Netherlands. These stepsare not accompanied by large transfers ofstaff. Others, including Australia’s CBA,two big Japanese banks – Norinchukin andMUFG – and two shipping insurance firms– Steamship Mutual and UK P&I Club – havechosen the Netherlands as their EU base,and their moves involve more staff rotationto Netherlands. Meanwhile, at the behestof European financial regulators, the Dutch

Clingendael AlertType of sectorFinancialsPharmaceuticalsMedia & HealthcareInfrastructureRetail0510bank ING is moving risk managers, bondand currency traders from its Londonoffice to Amsterdam. A No Deal Brexitwhich would sever ties between the Cityof London and the EU single market wouldsurely add momentum to this trend amongfirms in the financial sector.Pharma follows slowlyThe EU’s decision in November 2017 torelocate the European Medicines Agency(EMA) from London to Amsterdam hasgiven a boost to the development of apharmaceutical cluster in the Netherlands.In the wake of that decision, some expectedthat pharmaceutical companies would wantto set up a presence close to the regulatoryagency. This trend is materialising, butonly marginally so: five pharmaceuticalcompanies have set up an EU office in theNetherlands, including Shionogi, Alnylamand Dechra. The EMA has also attractednon-EU regulatory peers, including an EUoffice of the US Food & Drug Administrationand the British Standards Institution.Amsterdam’s proximity to London wasone of the reasons for relocating theEMA there, but it might also be a reasonwhy many London-based pharmaceuticalcompanies now see no need to move staff41520253035to Amsterdam. With EMA’s arrival the seedsare sown for a pharmaceutical cluster in theNetherlands, but it remains to be seen howit will grow.A media magnet?Ten percent of the firms identified in thedatabase work in the media industry.For instance, the Japanese multinationalSony has decided to move its Europeanheadquarters to the Netherlands. This isprimarily a move for legal purposes, ensuringbusiness continuity in the event of a NoDeal Brexit. Companies like Discoveryhave opted for the Netherlands to obtainEU licenses and guarantee their ability tobroadcast across the EU. Online and digitalmedia companies like DAZN and TVT Mediaseek access to those same licences, but arealso attracted by Amsterdam’s high-speedinternet, its creative sector and the presenceof other media firms like Netflix. In theevent of a No Deal Brexit, the BBC has alsoannounced that an office in the Netherlandswill allow it to operate with the necessaryEU licenses.Besides these three larger developments,the steps taken by a number of individualfirms are worth noting:

Clingendael AlertCountry of Origin302520151050UKUSJapan– Three humanitarian NGO’s have decidedto move their office from the UK toThe Hague;– Ferrovial, the Spanish infrastructure firmthat manages Heathrow Airport, hasmoved its international headquarters toAmsterdam;– BMW hinted that it will shift productionof the Mini from Oxford to Limburg in theevent of a No Deal Brexit;– TEC Farragon is planning to open aferry service between Edinburgh andGroningen to avoid the Dover-Calaischokepoint;– Philips is closing a plant in Glemsford,and expanding its operations in Drachten;– Pirate’s Grog Rum is shifting its bottlingoperation for the non-UK market tothe Netherlands.Japanese clusterAside from British firms seeking a footholdinside the EU single market, US andJapanese firms have also taken an interestin the Netherlands. Most of the US firms onthe list work in the financial sector, includingmany Chicago-based high-frequency traders.The Japanese cluster, however, isnoteworthy as it includes a diverse groupof very large multinational companieslike Panasonic, Sony, Mizuho, MUFG and5NLAustraliaGERSpainShionogi. Some of the moves merely involvechanging the company’s European legalstructure – such as Sony’s decision tomove its European headquarters – whileother moves also include substantial jobshifts, as is the case with Shionogi’s arrival.Amsterdam is becoming a Japanesehub in Europe. Aside from Amsterdam’sworld-class connections, one reason foropting for the Netherlands may also be theexisting presence of a number of Japanesehousehold names including Mitsubishi,Hitachi and Canon.Spoils of Brexit?This database offers a preliminary list ofthe companies moving to the Netherlandsas a consequence of Brexit. It reveals thatthe companies inclined to ‘go Dutch’ areprimarily those in the financial services,media, and pharmaceutical sectors.Amsterdam already has a vibrant (online)media sector, and is a mid-sized financialcentre. It is therefore not surprising thatUK-based financial and media companieshave been looking at the Netherlandsas part of their contingency planning.The pharmaceutical cluster, however, isunderdeveloped and its future has becomemore promising in the wake of the EMA’srelocation to Amsterdam. Japanese firmslooking for an EU base have also cast their

Clingendael Alerteye on the Netherlands. This Japaneseinterest stretches across sectoral boundaries,and could develop further.One word of caution, however, beforeDutch politicians, policymakers andreal estate agents cheer these ‘spoilsof Brexit’. Some companies have longerplanning horizons; their decision to leavethe UK, to set up a European office in theNetherlands or to invest in operations there,will not be reversed overnight. This holds truefor many brick-and-mortar firms. But mostof the companies in the database trade inservices and operate globally. Companiesthat move for administrative or regulatorypurposes, and which are not making largeinvestments in the Netherlands or relocatinglarge amounts of personnel, might behavemore opportunistically. Their decision to pickthe Netherlands is much more brittle.The EMA’s move to Amsterdam is likely tolast for some time. The EMA was basedin London for 22 years; its relocationwas agreed by the European Council andsigned off by the European Parliament.The pharmaceutical cluster it is starting to6bring to Amsterdam should be expectedto stick, though this may largely meanthat pharmaceuticals have an interest inbasing their legal or regulatory offices inthe Netherlands, and less so their researchand production divisions. The clusteremerging around Amsterdam’s newderivatives exchanges could also havethe characteristics of a new businessecosystem, with a focus on innovativefinancial products and services.By contrast, decisions like Royal Bank ofScotland’s shift in balance-sheet assetsor Sony’s corporate restructuring may bemuch less enduring. If the circumstances ofBritain’s departure from the EU change orthe threat of a No Deal Brexit recedes – orif the Dutch business or tax environmentchanges – might these firms be temptedto move back, or go elsewhere? It is worthremembering that it will require morethan just Brexit to sustain an image ofthe Netherlands as an attractive destinationfor business.We aim to update our database regularly.Should you have any further additionsto this database, please fill in this form.

Clingendael Alert7AlnylamExpansionAM BestEU officeAzimoEU officeBBCRelocationBedford RowEU officeBlackRockExpansionBloomberg Trading MTFEU officeBMWRelocationBritish Standards InstitutionEU officeCBA (Commonwealth Bank of Australia)EU officeCBOE EuropeRelocationChesnaraExpansionCME - BrokerTecRelocationCME - EBSEU officeCurrencycloudEU officeDaznRelocationDechra PharmaceuticalsExpansionDiamond BiopharmEU officeDiscoveryEurope HQEuclidRelocationEur

Institute of Directors – a British business association – reported that, based on its survey of 1200 company directors, “nearly . 2 Clingendael Alert one in three UK firms” were planning for a Brexit relocation.1 The Netherlands is one of the countries firms have put on their shortlist. In late January, the Dutch government’s foreign investment arm, NFIA, announced that it was .