While London is adapting to post-Brexit life, Amsterdam is rising as the new number one hub of finance in Europe.
As Brexit was introduced in 2018 and became reality in January 2020, many (fintech) companies moved or expanded their European presence beyond London. As Amsterdam was already home to many financial firms and were having a similar business environment compared to London, Amsterdam was considered as an attractive option. Several companies increased their presence in Amsterdam, either by expanding their offices or moving their European headquarters there.
What makes Amsterdam attractive?
Amsterdam has a great reputation as a (fin)tech hub by their healthy financial ecosystem, the highly skilled and English speaking workforce, the superior connectivity and the location. The Netherlands creates a dynamic location where (foreign) companies can easily innovate and excel. According to the Global Innovation Index (GII) 2019, the Netherlands ranks in the top five countries for innovation. Moreover, the Netherlands has a great talent pool with technological expertise. The Netherlands’ education system produces some of the best graduates in Europe. Besides the highly educated local workforce, also multiple languages are spoken. The Netherlands ranks at the top of the EF English Proficiency Index, which measures English fluency worldwide. Also, Amsterdam is one of the most connected cities in the EU, serving as home to the Amsterdam Internet Exchange, which is one of the largest networks of digital traffic in the world. Furthermore, Amsterdam is located within hours of many major European cities and frequent flights are available from Schiphol Airport to reach other (European) financial hubs.
The Dutch bonus cap
A significant deterrent for many bankers looking to relocate to the Netherlands is the national banker bonus cap, which is the strictest in the European Union. The Netherlands limits banks, insurance and investment companies to offering bonuses of no more than 20 per cent of an employee’s annual salary, against an EU-wide average of 100 per cent. This rule capping bonuses remains an obstacle in Amsterdam’s expansion as financial hub.
SPACs populairity in Amsterdam
A SPAC, short for Special Purpose Acquisition Company, is a company without activities that goes public. It is formed to raise capital and liquidity for the purpose of acquiring a private company. As SPACs have gained enormous popularity in the US in 2020 and early 2021, SPACs are now also gathering pace in Europe. Amsterdam’s Euronext exchange was the leader for the SPAC listing in the first half of 2021.
Setting up a SPAC in the Netherlands is attractive since the Dutch regulatory framework is perceived as being closer to the US one, with hardly any SPAC-specific restrictions in place. Therefore, forming a SPAC in the Netherlands is fast, easy and flexible. Moreover, Euronext is also an integrated market being part of the EU’s Capital Markets Union with connections to other European markets.
The next Dutch glory
Amsterdam is home to the world’s oldest stock exchange (AEX, now part of Euronext) as well as the first public listed company (the Dutch East India Company). After the Netherlands lost its 17-th century glory, the time of the Dutch Golden Age, Amsterdam is now emerging as Europe’s next financial centre.
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