Dutch investing into more UK firms than before Brexit vote: British Embassy
The number of investment by organizations in the Netherlands into the United Kingdom has actually been higher over the past two years than before the 2016 Brexit referendum, said British embassy senior staff member Michiel Veldhuizen. Veldhuizen, the Country Director for the UK Department for International Trade, gave the remarks at the embassy's fourth Cyber-FinTech Summit on Thursday in The Hague.
Veldhuizen told NL Times that his department supported 47 Dutch foreign direct investment (FDI) projects last year, meaning they helped 47 companies from the Netherlands either establish new offices in the UK or expand their existing presence there. He said that despite uncertainty in recent years the UK is still attractive to Dutch business and investment, with 60 Dutch FDI projects completed in 2018, creating 2,240 jobs and safeguarding another 633. Veldhuizen expects to see similar numbers next month when they publish project numbers for 2019.
Though the number of investments is rising, the amount of money invested has fallen considerably. While Dutch organizations infused 50 billion euros into UK firms in 2016, that number was halved a year later, Dutch statistics office CBS said. Over all of 2018, Dutch companies divested 11 billion euros from their United Kingdom businesses. All this happened while British firms quadrupled their investments in Dutch businesses, from 14 billion euros in 2016 to 80 billion euros in 2018.
At the Cyber-FinTech Summit, Veldhuizen maintained that the trend is in Britain's favor, and he said he is optimistic because of the figures his department is set to release. The event itself fits well within the British government’s trade goals, which are to help UK businesses export to the Netherlands and to help Dutch companies or investors conduct business across the North Sea. There is a final component to Veldhuizen’s work that seeks to ensure the conditions for trade between the Netherlands and the UK remain as “favorable for British companies as possible”.
He said the summit and “everything we do needs to add value to the UK economy”. The event was attended by many British fintech and cybersecurity companies seeking better access to Dutch business. When these companies were asked whether Brexit uncertainties had impacted their prospects in Europe, the answers were mixed.
Christopher Dean O'Driscoll, from Edinburgh-based fintech firm DirectID, said the two main challenges resulting from Brexit concerned sales and talent acquisition. He stated, “We have seen a slowdown in terms of onboarding our fintech and relative products into European financial services companies. There’s also the element of talent – we’ve seen a slowdown in obtaining talent from Europe, specifically in the area of product and data science.”
However, Jamie Collier from Digital Shadows, a software-as-a-service platform headquartered in London said their business had not been affected by Brexit, probably owing to the fact that passporting is not an issue for them. The thought was echoed by Kieran Brophy from cybersecurity company Panaseer, who said they had not experienced any difficulties in dealing with European companies post-referendum, possibly due to their decision to work with a Benelux partner.
With negotiations ongoing, the British government are doing their best to reassure the world that they will remain “a business-friendly place”. Veldhuizen said, “We are forming our mandate and have been clear that the UK will remain an open economy and a place where you want to do business in.”
He admits that the uncertainty means it has become a slightly tougher sell but emphasized that the characteristics of the UK remain unchanged. He said, “The British government, over the years, has established a very favorable climate for Dutch and all foreign investment into the UK. This includes a favorable tax system, the lowest corporation tax in the G20, R&D incentives, a highly skilled labor force, and four out of the top ten global universities.”
While the UK does indeed boast an array of attractive trade characteristics – not least its sizable market of 65 million residents in comparison to the Netherland’s 17 million – the number of British companies moving to the Netherlands is not insignificant. In response to recent figures released by the Netherlands Foreign Investment Agency, which show 78 so-called "Brexit" businesses landed in the Netherlands last year, Veldhuizen agreed that choosing the Netherlands as a business location makes sense for companies that need clarity on EU export and import rules.
He added, “It is unclear to me how many of these businesses [mentioned in NFIA’s findings] are just mentioning Brexit as one reason for establishing themselves in the Netherlands and while the headline figures look good for the country what I’m more interested in is what the economic impact is on the UK – because to me it seems relatively limited at the moment.”