Fewer American investments in Netherlands
American companies are investing less and less in the Netherlands. This is mainly due to tax reforms in the United States - president Donald Trump reduced corporation tax significantly, making it more attractive for American companies to invest in their own country. But the Rutte III government's planned crackdown on shell companies may also play a role, NOS reports.
Figures from the U.S. State Department show that American companies invested 70.7 billion dollars less in the Netherlands in the first quarter of 2018. That is around 60 billion euros less. Worldwide, American investments decreased by 149 billion dollars.
In total, American companies invested 946 billion dollars in the Netherlands in 2017. Around 80 percent of that money did not stay in the Netherlands for long, but passed on to other countries. Foreign companies often used holdings based in the Netherlands, often shell- or letterbox firms, in order to pay less tax. The Netherlands is one of the most attractive countries in the world for this kind of money transit, according to NOS.
The Dutch government plans to put an end to this. State Secretary Menno Snel of Finance announced a list of measures, the first of which will be implemented next year. He wants the Netherlands to attract companies with real economic activities that generate jobs in the country. Such companies will be received with "open arms", he said previously. "But we'll close them if a company is only about channeling money."
According to a spokesperson for the Ministry of Finance, the fact that American companies are already withdrawing from the Netherlands can be attributed to a combination of American tax cuts and Dutch policy. The "announcement effect" may play a role, the spokesperson said to NOS. "Financial institutions that want to establish themselves here only to transfer money know what kind of measures are coming, after all."
Patrick Mikkelsen, director of the American chamber of commerce in the Netherlands AmCham, called the latest figures worrying. "This is a trend that has been going on for some time", he said to NOS. According to him, this is not only because of Trump's tax cuts. "This has everything to do with the measures that the Netherlands has announced." According to Mikkelsen, these measures are not only chasing away shell companies, but also companies that really want to invest in the Netherlands. "These figures are exemplary for that and in line with what we hear in practice."