Amsterdam taking measures to keep letterbox firms out of flexible office space
The city of Amsterdam is negotiating with providers of flexible office spaces to limit the misuse by letterbox companies, AT5 reported on Wednesday. This initiative follows a study by research platform Investico, which revealed that many companies are renting co-working spaces not to use them but to bypass stringent trust laws.
In its investigation, Investico surveyed over 200 co-working locations run by the twelve largest providers across the Netherlands. About 60 locations in the city offer flexible or co-working spaces, originally designed to cater to freelance workers.
It found that freelancers are now a minority in these spaces, with only one in ten registered companies being a sole proprietorship. Those companies often have a foreign parent company and hardly any business activities or employees in the Netherlands.
As noted by the investigative journalism platform, these foreign companies have been registering for these spaces to secure a fiscal address. This shift from trust offices to coworking spaces is attributed to stricter regulations in the trust sector to combat money laundering and terrorism financing.
In Amsterdam, companies registering but not using co-working spaces have led to many such spaces remaining largely vacant. For instance, at the Teleport Tower near Sloterdijk business park, only two people were present during a random visit by the Investico researchers, despite the registration of 1116 companies at this location.
Amsterdam's alderman for Economic Affairs Sofyan Mbarki referred to these incidents as "undesirable practices" in a response to a question by city councilor Amel Namane (PvdA). He stated, "These letterbox firms do not add value to the local economy. We also note the pressure on the space in the city.”
Mbarki announced that the city is currently negotiating with providers of such office spaces to explore methods to prevent shell companies from exploiting them. He acknowledged that the city legally cannot implement these restrictions unilaterally as companies are not required to obtain a permit before establishing a business.
