ASML's threat to leave uncovers deeper concerns in Netherlands Inc.

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12/03/2024 12:40

By Charlotte Van Campenhout and Toby Sterling
       AMSTERDAM, March 12 (Reuters) - A threat by the
Netherlands' largest company ASML  AMSL.AS  to quit the country
if it cannot grow there has laid bare wider corporate concerns
that the nation's business climate is deteriorating.
    While the semiconductor equipment maker's CEO has since
ruled out a total departure from the Netherlands, a Reuters
review of Dutch blue chip firms has shown that ASML is far from
the only one considering its options. 
    After corporate tax increases and protests and court cases
against Shell  SHEL.L  and others in recent years, populist
parties booked big gains in 2023's national elections. That has
prompted companies to speak out against policies that would
discourage immigration and force them and their investors to
shoulder more taxes.
    Such policies may appeal to voters, but ASML and other tech
firms that depend on foreign staff argue that they undermine the
country's future prosperity. With the rise of far-right parties
across other European countries, similar concerns are being
voiced in Germany, where CEOs from Infineon  IFXGn.DE  to
Volkswagen  VOWG_p.DE  have warned about the threat of
right-wing extremism to the country's economy.
    Dutch blue chip firms also say plans to tax share buybacks,
limit investment deductions and gut innovation funds are being
pushed through without considering the consequences, especially
at a time when other countries are courting foreign investment. 
    "Many stock market-listed companies are investigating moving
their head office to another country," Ingrid Thijssen, the head
of the country's largest industry group VNO-NCW told Reuters.
    "You'd need two hands to count them."
    That chimes with a January study by SEO Economic Research
commissioned by the Finance Ministry that found a third of Dutch
multinationals would consider moving operations abroad in the
next two years.
    The government has now launched an all-hands effort code
named "Project Beethoven" to persuade ASML to stay, including
looking at ways to "undo the harm" of ending a tax break 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 companies responded to Reuters questions
asking if they were concerned about the national business
climate and would consider moving their operations.
    Though only a handful said they would consider relocating
their headquarters, some, including heavyweights Shell and
Unilever  ULVR.L , already have. Others said they are
prioritising foreign expansion. All, including the country's
main financial and industrial firms, said they were worried
about predictable government policy making, essential for
business.
    Jean Schreurs, the head of the Dutch branch of semiconductor
maker NXP  NXPI.O , echoed ASML's concerns over 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
good.
    "I think we need to be careful of throwing away everything
we've built up in all these years."
    Chip equipment supplier ASM International  ASMI.AS  recently
expanded in the U.S. state of Arizona, and BE Semiconductor
Industries  BESI.AS  in Vietnam. Payments firm Adyen  ADYEN.AS 
said it is prioritising hiring at its offices around the world
over its Amsterdam seat.
    Dredging company Boskalis - which helped relieve the 2021
Suez Canal blockage - said it is considering moving its
headquarters to Abu Dhabi. The company pointed to remarks made
by CEO Peter Berdowski on an NOS radio program on Thursday.
    "The only thing that I've seen is that the scales are
tending to weigh against the Netherlands," Berdowski said,
citing a worsening legal and fiscal backdrop.
    University of Amsterdam strategic management professor Henk
Volberda cautioned that while the Netherlands still ranks well
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 said.

 (Reporting by Charlotte van Campenhout and Toby Sterling;
Editing by Kirsten Donovan)
 ((toby.sterling@thomsonreuters.com;))