The Dutch economy — which has gone through three recessions since the 2007 start of the financial crisis — is finally growing again. Boosted by rising property prices and consumer confidence, all the signs are there for a lasting recovery said Dutch Central Bank President Klaas Knot. “We will have to wait for mid-February to see whether the fourth-quarter gross domestic product numbers confirm the recovery,” he said, “but there is no need to think that the Dutch economy will lag the euro zone any longer.”
Part of that recovery, confirmed Knot, was Amsterdam’s continued attraction to foreign firms wanting to establish a European foothold or expand their existing networks in mainland Europe. Last year 115 new international companies set up offices in central Amsterdam and its surrounding business districts, according to Amsterdam InBusiness, the city’s foreign investment agency.
“The fact that Amsterdam remains attractive to companies and that we are able to hold on to businesses once they are here gives us increased confidence for the future,” said economic affairs expert, Carolien Gehrels.
For the second year running North American firms made up the bulk of the businesses establishing premises in the capital, with the creative industries, business-to-business services and the IT sector ranking highest. In the past year almost two dozen headquarters and 53 marketing and sales offices were opened in Amsterdam creating employment for 1,727 people between them.
Businesses from other parts of the Netherlands are also moving to Amsterdam, including the likes of shoe retailer Crocs, coffee importer and blender Douwe Egberts, and American Medical. It’s now estimated that the 2,000-plus companies with premises in or near the capital provide at least 15 per cent of the region’s employment.
And online travel company, Expedia has announced it will create 120 new jobs when it consolidates its Dutch operation this spring. The group’s local market management team initially established operations in the city in 2004, and will also relocate to larger offices in the city centre’s prestigious Gouden Bocht neighbourhood.
“The impressive calibre of talent found in the area’s workforce made Amsterdam a prime location when deciding where to expand our organisation,” said Frank Zijlstra, vice president of Expedia’s global financial operations. “We hope to grow our operations here over the months and years to come, so we are very much looking forward to strengthening our ties with the city of Amsterdam.”
The company was advised by the Netherlands Foreign Investment Agency and its regional partner, Amsterdam InBusiness, during the site selection process. Expedia’s new offices will house its global finance operations centre and provide support for several of its internet travel brands, including Expedia and Hotels.com.
Henny Jacobs is director of investment projects with the NFIA. “We believe that the Netherlands’ reliable and consistent labour force, the majority of which speak English, and its wide ranging job skills make it an ideal location for multinational companies looking to expand their global presence,” she said.
Meanwhile a New Year law change has given Dutch real estate investment trusts (REITs) a competitive edge by allowing them to offer maintenance and in-office services to their tenants.
In 1969 The Netherlands became the first European country to allow the formation of its own version of tax-efficient real estate investment trusts. Now it has updated its original Corporate Income Tax Act to expand the scope of their activities to include such things as in-house catering and reception and office management.
Provided through a taxable subsidiary, the new value-added services could also include public relations support, providing meeting space, supplying energy to tenants, and using social media and marketing tools in locations such as shopping centres. Since the start of the year Dutch REITs also have expanded opportunities to engage in joint property ventures.
Dutch Reits are the second biggest after the UK, with six companies having a combined market capitalisation value of €24bn.
Ronald Wijs is a corporate lawyer and member of EPRA’s tax committee. “This legislation is a major improvement and should give Dutch Reits the chance to manage their property portfolios in a more dynamic way and to meet the changing demands from investors and tenants,” he said.
“It should also enable the Dutch FBIs to compete on a more level playing field with Reits in other countries. The Dutch listed property industry, with the strong support of EPRA, has consulted closely with the Ministry of Finance to achieve this very positive change in the rules.”
In 2007 a number of changes were made to the Dutch Reit tax regime, mainly affecting foreign shareholders. The combination of a lowering of the statutory dividend tax rate from 25 per cent to 15 per cent and the introduction of a full refund procedure for EU pension funds, made Dutch Reits internationally more competitive. The distinction between Dutch and foreign investors was also abolished giving foreign pension funds the chance to build up a 100% interest.
Finally there is some light at the end of the tunnel. The dutch property market has gone through a big recession. I hope this grow will continue because a lot of people are in trouble because the value of their house has dropped.