The New York Times published a very interesting article titled: After ‘Brexit,’ Finding a New London for the Financial World to Call Home,
Even if we do not come in first in this bid, second or third place will mean a huge influx of foreign business and tax Euro’s, we should at least bring our rules in order not to deter companies to even consider the Netherlands as an exile.
We already informed you that the Netherlands have the best tax papers to be the successor of London as the financial capital of Europe, even though we do not have major international banks anymore.
Surprisingly, Amsterdam also seems to have the best (non-tax) score to attract financial institutions that are bound to flee the London City, even better than Frankfurt. Apparently there is one major obstacle, we quote the NY Times:
(…) the Dutch have capped bankers’ bonuses at just 20 percent of their annual salaries — a far more drastic curb than was imposed by the European Union. Several bankers told me that unless the Dutch repealed the cap, they wouldn’t consider moving to Amsterdam. “I’d love to relocate to Amsterdam,” one top executive told me. “But I don’t think we’re wanted there.”
Nevertheless, the Netherlands does not act to take up this challenge, prime Minister Rutte hurried to point out that the bonus cap should not really be a problem and that we furthermore should not openly lobby to attract companies from the City.
This reaction shows remarkable defeatism for a right of centre (VVD) pro business prime minister and can only be explained if you know the cartoon Calimero.
The Netherlands should in our view adopt the following first measures without delay:
- amend this ‘holier-than-thou’ Calvinistic Dutch bonus cap rule to ensure that the bonus may be 100% of the salary again for these companies (there is a loophole to pay 100% in case more than 75% of the personnel perform services primarily outside the European Union for more than three years, but this is not enough incentive and too unclear, keeping this rule in place is penny wise, pound foolish)
- decrease the Dutch business-to-business dividend withholding tax from 15% to zero, just as for cooperative societies (co-ops), see our previous column.
- decrease the top corporate income tax rate from 25% to 20%;
- keep the 30% ruling facility and the knowledge migrant rules firmly and unaltered in place;
- the Netherlands should step-up the implementation of the revised blue card scheme and promote the possibilities of the EU Directive for intra-group assignments as this Directive will be implemented within a few months, see our previous columns about this: the revised blue card scheme and facilitation of intra eu mobility
- have the Netherlands Foreign Investment Agency (NFIA) greatly intensify its presence and activities in the London city and in the US for this purpose, it is a shame that international finance is not even mentioned as a focus industry on the NFI website!, see investinholland.com;
- Advise the Dutch big 4 accounting firms and the major law firms to send their best senior commercial talents to the UK and New York desks to persuade these companies to consider Amsterdam if they intend to leave (and 10-40% intends to do so at this point and the number will increase);
- Typical Dutch inefficiency: a 1,9 billion infrastructural project for the Amsterdam “Zuidas” (also called the goldcoast; the place where these companies would likely move to) should not take the currently planned 10(!) years to complete but 2 or 3 years, this is not Corsica but the capital of a modern country that should seriously but informally bid for the upcoming positive fall-out of the Brexit, a bid that is far more lucrative and permanent than any Olympic Games or Soccer tournament.
It is time to shed our Calimero-complex and invest in this informal bid, it will be worth every Eurocent, even if we win silver (and we are great in coming in second…).