The UK has left the EU. In the referendum in 2016, 51.9% voted to leave. The UK government has been very busy, working through a tangle of complexities and hard choices for the past 4 years. Needless to say, UK’s departure will have an impact on every EU member country. Here is a look at what Brexit means for the Netherlands.
The Brexit Deal
With the UK out of the EU, the number of countries responsible for the union’s budget went from 28 to 27. The UK accounted for approximately 14% of the EU’s GDP. It was a significant contributor to the EU budget. The remaining members must now step up and even out the numbers. According to the Dutch government, the Dutch contribution to the EU budget will increase from EUR 8.3 billion to approximately EUR 10 billion.
Bilateral Trade
The UK is the Netherlands’ third biggest trading partner. The CPB Netherlands Bureau for Economic Policy Analysis examined the potential impact of Brexit on the Dutch economy. It found that the decline in trade with the UK could potentially cost The Netherlands EUR 10 billion. This represents 1.2% of its GDP. Losses on the UK side would amount to even more.
Brexit will most notably affect trade, healthcare, education, international business, and customs. To offset the damages both sides have agreed to keep most things unchanged for a while. This will give them some time to come to terms with the new trade deal. The UK will have to renegotiate new bilateral trade deals with all EU member nations. The Netherlands only needs to work out new deals with the UK.
Both countries are home to vast communities of migrants. Expats in the Netherlands emphasize higher earnings and more savings to send remittances back home via the Ria Money Transfer App and similar channels. Starting 2021 UK citizens will need visas stay and work in the EU for more than 90 days. This applies both ways. The UK will be regarded as a third country. Every EU country will have to renegotiate new terms for work permits, employee visas, and tax policies.
One Man’s Loss is Another Man’s Gain
On 1 February 2019 a British business association called the ‘Institute of Directors’ completed a survey of 1,200 company directors. It concluded that “nearly one of three UK firms” was planning to relocate due to Brexit. All have shortlisted the Netherlands as a possible location. The Clingendael Institute reported that the financial sector was the first to jump ship. It was followed by pharmaceutical companies. The European Medicines Agency moved 900 staff from London to the Netherlands in 2019. It is already operating out of temporary premises in Amsterdam. Media and entertainment firms came next.
Euronews said in February 2020 that the Netherlands has “lured 140 Brexit-wary companies since the 2016 referendum to quit the EU”. The relocations are expected to bring more than 4,200 jobs and infuse EUR 375 million in investments into the Dutch economy. NFIA Commissioner Jeroen Nijland said that, “With an English-speaking population, the excellent connections to the UK and the EU by road, boat, train and plane and our strong digital infrastructure, choosing the Netherlands is an attractive alternative.”
Tax haven
Brexit is not the only reason for companies to move to the Netherlands. In 2017 the University of Amsterdam conducted a survey. It showed that the Netherlands was a conduit for 23% of corporate taxes. Brexit simply made the Netherlands more attractive as a destination for business.
A place to Save your Business from Brexit
During the Brexit transition period, a large number of businesses relocated to the Netherlands. Their aim was to continue operating within EU borders. Bloomberg moved its EU trading units from London to Amsterdam in May 2018. This move will give it continued access to EU trading markets after Brexit. Media giant Discovery moved its European HQ to Amsterdam in January 2019. President and CEO of Discovery International JB Perrette said, “They (the Dutch Govermnent) have created the right stability and conditions for us to create a dynamic content and creative hub.” These transitions are creating new jobs in the Netherlands. The country also welcomed many young foreign entrepreneurs. They bring ideas with great potential. This is a strategy for the Netherlands to not just nullify the negative impacts of Brexit, but to make the most of it.
About the Author:
Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.