Dutch employers looking abroad for investments over murky Dutch policy

Employer organizations worry that unclear government policy is hampering the business climate in the Netherlands. Uncertainty about permits, space on the power grid, and labor migration are resulting in companies making new investments abroad instead of in the Netherlands, VNO-NCW and MKB-Nederland wrote in a letter to parliament, NOS reports.

Investments are the engine of the economy. Ultimately, we use that to pay our police officers, nurses, and teachers,” VNO-NCW chairman Ingrid Thijssen told NOS. That engine is stalling, she said. “More investments are now leaving the Netherlands than coming in. Expansion and replacement are increasingly happening abroad.”

According to the employers, the government changes the rules too often, “You have to imagine that if you make an investment as an entrepreneur, for example, in a new factory, you are taking a financial risk,” Thijssen said. “You invest your own money, or you borrow it from the bank. Then, you want to be sure about the rules that apply to you. And that also applies to taxes.”

Entrepreneurs themselves are also getting more pessimistic about the Netherlands. According to a poll by VNO-NCW and MKB-Nederland, 60 percent of entrepreneurs believe that the business climate has deteriorated in recent years. Three-quarters of entrepreneurs consider the Dutch government policy unstable. And that uncertainty can be devastating to the business climate, the employers’ organizations said.

The employers’ concerns seem to be reflected in figures published by Statistics Netherlands (CBS) on Monday. CBS reported that investments in material and permanent activities in the Netherlands dropped by 3.6 percent in November compared to a year earlier. Investors pushed less money into buildings and infrastructure, in particular.

CBS pointed out that there are many factors that play a role in the extent to which companies are prepared to invest, including the situation in the sales market and performance in the financial markets. In October, investments increased by over 2 percent compared to October 2022. CBS also reported that entrepreneurs consider the circumstances for investments more favorable in January than in November.