Follow us on Google News Follow Blog


ASML's threat to leave highlights deeper worries in Netherlands Inc.

ASML logo is shown at the headquarters in Veldhoven, Netherlands June 16, 2023

AMSTERDAM, March 12 - A warning by the Netherlands' biggest firm ASML to exit the country if it cannot expand there has put bare larger corporate fears that the nation's economic environment is worsening. 

While the semiconductor equipment maker's CEO has subsequently ruled out a complete exit from the Netherlands, a Reuters examination of Dutch blue chip corporations has showed that ASML is far from the only one contemplating its options.

After corporate tax rises and demonstrations and court proceedings against Shell (SHEL.L), opens new tab and others in recent years, populist parties made strong victories in 2023's national elections. That has driven firms to speak out against measures that would discourage immigration and require them and their investors to pay greater taxes. 

Such measures may appeal to voters, but ASML and other tech businesses that rely on foreign labor say that they jeopardize the country's future economy. With the emergence of far-right parties in other European nations, similar worries are being aired in Germany, where CEOs from Infineon (IFXGn.DE), opens new tab to Volkswagen (VOWG_p.DE), opens new tab have warned about the danger of right-wing extremism to the country's economy.

Dutch blue chip corporations also warn measures to tax share buybacks, restrict investment deductions and destroy innovation funds are being rushed through without contemplating the repercussions, particularly at a time when other governments are seeking international investment. 

"Many stock market-listed companies are investigating moving their head office to another country," Ingrid Thijssen, the president of the nation's biggest industry organization VNO-NCW told Reuters.
"You'd need two hands to count them." 

That aligns with a January survey by SEO Economic Research commissioned by the Finance Ministry that revealed a third of Dutch companies would contemplate shifting operations overseas in the next two years. 

The government has now begun an all-hands effort code dubbed "Project Beethoven" to urge ASML to remain, including looking at methods to "undo the harm" of withdrawing a tax benefit for skilled migrants.

"If we want to keep companies in our little country, we will have to really work harder," Economy Minister Micky Adriaansens told Reuters. 

More than a dozen firms answered to Reuters questionnaires asking whether they were worried about the national business environment and would consider shifting their operations. 

Though just a few indicated they would consider transferring their headquarters, several, like giants Shell and Unilever (ULVR.L), opens new tab, already have. Others indicated they are emphasizing international growth. All, including the country's largest financial and industrial enterprises, indicated they were concerned about predictable government policy making, vital for business. 

Jean Schreurs, the head of the Dutch arm of semiconductor giant NXP (NXPI.O), opens new tab, reiterated ASML's worries about immigration restrictions. 

While anti-Islam law maker Geert Wilders negotiates a government with other parties opposed to immigration, parliament has adopted a motion to cap the number of foreign students allowed to study at Dutch universities as well as end the skilled migrant tax break - both important pipelines for skilled labour. 

"If people feel they are not welcome... the Netherlands will not be the top country that they look at," NXP's Schreurs told Reuters, adding that the country's reputation is still generally favorable. 

"I think we need to be careful of throwing away everything we've built up in all these years." 

Chip equipment provider ASM International (ASMI.AS), opens new tab recently expanded in the U.S. state of Arizona, and BE Semiconductor Industries (BESI.AS), opens new tab in Vietnam. Payments giant Adyen (ADYEN.AS), opens new tab announced it is prioritizing employment at its locations throughout the globe above its Amsterdam seat. 

Dredging firm Boskalis - which helped ease the 2021 Suez Canal bottleneck - says it is contemplating shifting its headquarters to Abu Dhabi. The corporation cited to statements made by CEO Peter Berdowski on a NOS radio show on Thursday. 

"The only thing that I've seen is that the scales are tending to weigh against the Netherlands," Berdowski added, noting a deteriorating legal and budgetary environment. 

University of Amsterdam strategic management professor Henk Volberda emphasized that although the Netherlands still rates highly in international business surveys, "there is a disconnect between politics and business". 

"I think this government has to rethink the fiscal changes that have been made lately," he stated.

Post a Comment

Cookie Consent
We serve cookies on this site to analyze traffic, remember your preferences, and optimize your experience.
It seems there is something wrong with your internet connection. Please connect to the internet and start browsing again.
AdBlock Detected!
We have detected that you are using adblocking plugin in your browser.
The revenue we earn by the advertisements is used to manage this website, we request you to whitelist our website in your adblocking plugin.
Site is Blocked
Sorry! This site is not available in your country.