LONDON — Paris, Frankfurt, New York, and Dublin have dominated the conversation about where finance firms may move jobs if forced to be Britain’s looming “Hard Brexit.”
But the Netherlands may well emerge as a surprise beneficiary of any Brexit jobs exodus.
HSBC chairman Douglas Flint recently floated the Netherlands as a possible place to relocate around 1,000 jobs post-Brexit and John Veihmeyer, the global chairman of KPMG, one of the world’s biggest accounting firms, told Business Insider last month: “Folks are also considering places like Amsterdam.” Mitsubishi UFJ Financial, Japan’s biggest banking group, has also decided to drastically expand its Dutch operation in the wake of Brexit.
“Logistically and geographically, it’s a great place,” Harry Waterer, a British commodities trader who recently moved to Amsterdam, told Business Insider.
“You’ve got the whole trucking network of Europe, you’ve also got the major sea ports in Rotterdam and Amsterdam where a much vaster proportion of trade comes in via sea trade in comparison to the UK. By being here I’ve got access to a lot wider variety of products that I can then offer back to the UK.”
Amsterdam’s dominant position in global trade is so great that it even has its own phrase: the Rotterdam effect. This describes the phenomenon by which trade figures with the Netherlands are artificially inflated because so much international trade passes through the country on its way to somewhere else.
Obviously, this makes it perfect for an insurer or trading bank like HSBC. If you want to finance a supply chain or insurer a vessel involved in the process, it helps if you’re close by. And of course, the Netherlands has passporting rights, allowing finance firms there to sell services across the EU.
‘I can’t tell you how many new office buildings are springing up’
There are plenty of other benefits too. Waterer, who relocated last August over Brexit concerns, says: “It’s very easy to settle in, everyone speaks English, people are very forthcoming and helpful. It’s a lot more accommodating to English speakers than somewhere like Frankfurt.
“Business-wise it’s a smaller community. There’s a lot of competition but there are a lot more opportunities here because you’re not stuck on an island. I can get on a train and meet a client in Germany in 2 or 3 hours, I can go to Paris is 3 hours.”
For all these reasons and more the New York Times last year named Amsterdam the most likely city to become the “new London” in Europe, just beating Frankfurt. Amsterdam’s only black mark is a 20% cap on bankers bonuses as a percentage of salaries, likely to put off many top performers.
Conscious of that, Amsterdam is targeting more niche, less bonus-focused industries such as clearing, high-frequency trading, and fintech. Kajsa Ollongren, Amsterdam’s deputy mayor, told Bloomberg last year that people who work in clearing “are not the guys with the large bonuses and the fast cars… [they are] very solid, very reliable, very important. We’re good at that. I think it would be fantastic.”
Amsterdam is not the land of milk and honey, however. One disadvantage is its size: the city’s population is less than 800,000, compared to over 8 million in London. Waterer says it’s “a nightmare is trying to find somewhere to live here.”
But Amsterdam appears to be working on its problems. Waterer says: “The financial district, which is called Zuidas in the south — I can’t tell you how many new office buildings are springing up. I went there at the start of the year and it was like comparing it to Dubai in the 1980s compared to now.
“There is just building work going on everywhere, new offices, new luxury apartments. The whole place is really growing. That’s a significant expectation. If the building industry is kicking off then there’s financial support and investment.”
‘Amsterdam retains its international outlook’
The Dutch face another, thornier issue that’s harder to solve and contributed to Brexit in the first place: right wing populism.
The Netherlands go to the polls in March and Geert Wilders’ far right Party of Freedom is predicted to make big gains. Analysts at Barclays said recently that the Dutch election is one of the biggest risks facing Europe in 2017.
Amsterdam seems confident it can overcome whatever hurdles it faces. It has set up a Brexit information centre to help expats living in Holland keep up to date with changes and, with a knowing wink to any entrepreneurs or businesses considering setting up shop there, notes on its website: “Whatever the outcome of the referendum and potential negotiations is, Amsterdam retains its international outlook, open to Europe as well as the rest of the world.”
Waterer says: “There’s a lot of things you have to consider and a lot of things that you have to weigh up. I get paid in euros at the moment, if you want to go back it’s a little bit expensive. On the whole, it’s a great place for a young person to seek new opportunities.
“I’m extremely happy. I don’t regret moving over here in any shape or form. Apart from the fact that it’s very difficult to get Marmite and bacon. The Dutch don’t do good bacon.”