ASML Warns: Netherlands' New Policies Threaten Business Growth, Driving Multinationals Away

The Netherlands, once a popular destination for multinationals, is losing its appeal due to new migration rules and fiscal reforms.

ASML, Europe's most valuable technology firm, worth €360 billion, has warned politicians in The Hague that it may leave the country due to lack of space, talent, and political support for expansion.

The outgoing Dutch government responded with a €2.5 billion support scheme, but it might not be enough as a right-wing, anti-business government is expected to take over.

Multinationals are considering relocating to more business-friendly countries.

The Netherlands is experiencing political instability and potential relocations due to the election of the far-right Party of Freedom (PVV) led by Geert Wilders.

The country, known for its open economy, is facing limits to growth and could undergo significant changes in taxation and immigration policies under a Wilders-led government.

This uncertainty is causing concern for businesses, particularly ASML, which may consider relocating if the situation worsens.

The potential shift could mark a significant change in four centuries of open trade and commerce in the Netherlands and Europe.

The Netherlands is known for being the first European country to open for business with the establishment of the Dutch East India Company, the world's first joint-stock company and a multinational enterprise with a monopoly on Asian trade during the 17th and 18th centuries.

The country's strategic location as Europe's port of entry led to the settlement of many companies.

Unilever, a multinational corporation known for brands like Dove, Hellmann's, and Knorr, was formed in the 1930s through a merger of a Dutch margarine company and a British soap maker.

Shell, an oil company, was also created in 1907 through a partnership between Dutch and British rivals.

The text discusses how the Netherlands had benefited from dual Anglo-Dutch business structures, such as Unilever and Shell, which kept their headquarters, stock listings, and tax registries in the country.

However, these companies put pressure on politicians to keep them satisfied, as they could relocate their headquarters abroad.

In 2020 and 2021, Unilever and Shell did just that, moving their headquarters to the UK.

ASML's situation is different, as the issue isn't about registration but actual investment plans.

The global chips industry is projected to nearly double in size and reach $1 trillion in revenues by 2030, and ASML is threatening to invest elsewhere if its concerns are not addressed.

ASML, a unique supplier in the tech industry, is considering expanding its base beyond Eindhoven, the tech hub where it currently operates.

ASML's CEO, Wennink, expressed frustration with the gap between what companies need to grow and the perception of politicians.

One specific issue was an amendment last October by key lawmaker Pieter Omtzigt to eliminate a 30 percent expatriate tax break.

Omtzigt's startup political party, New Social Contract, holds significant influence in the ongoing negotiations for a new Dutch national government.

ASML, a Dutch technology company, is facing challenges in restoring a tax break due to rushed and unpredictable policy making in the Netherlands.

This policy change, which includes measures like curbing expat advantages and limiting share buyback options, has been criticized by the Dutch employers federation VNO-NCW.

The federation's chairwoman, Ingrid Thijssen, has expressed concern over the potential departure of headquarters abroad as a result of these policies.

The federation's spokesperson, Edwin van Scherrenburg, described these measures as a sign of unpredictable and thoughtless policy making.

Around 40 percent of ASML's workforce is not Dutch, making the impact of this policy particularly significant for the company.

The text criticizes the unpredictability of The Hague's government and its impact on businesses.

Robert-Jan Smits, a Dutch executive board president, emphasizes the need for a stable government for company growth.

He expresses concern over the Netherlands' continuous uncertainty and ad hoc fiscal policies.

Dutch lawmaker Laurens Dassen adds that policymakers are shortsighted for using funds from a €20 billion National Growth Fund for short-term projects instead of long-term investments.

Additionally, concerns arise as Prime Minister Mark Rutte is approaching the end of his tenure.

Rutte, a former Unilever manager, has been supportive of some business concerns, such as abolishing the dividend tax.

However, his last government fell, leading to an election where the anti-immigrant PVV party gained power.

In its election program, PVV pledged to limit international students on masters programs, raising concerns for multinationals about attracting global talent and housing foreign workforces.

Coalition talks are ongoing, but companies like ASML are concerned as 65% of international students at the technical university in Eindhoven settle in the region and are a valuable source of talent for the company.