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Unilever is a storied name in Dutch business history, and\u00a0it\u2019s also a harbinger of what the future may hold\u00a0for what was once continental Europe\u2019s most open\u00a0economy.\u00a0<\/p>\n
The consumer goods behemoth, which left its Dutch headquarters to consolidate\u00a0in the UK four years ago, is considering listing its \u20ac17 billion\u00a0ice cream business in Amsterdam or\u00a0London.\u00a0The decision depends on the Dutch business climate being attractive, Chief Executive Officer Hein Schumacher told the Buitenhof TV program on Sunday. But that is far from certain.\u00a0<\/p>\n
\u201cWe have seen some surprises in recent years,\u201d he said. \u201cA predictable government and regulations are very important.\u201d<\/p>\n
Recent laws to tax share buybacks and reduce tax benefits for expatriates \u2014 alongside a bill that would cap the number of foreign students allowed to study in the country \u2014 have set off alarms at firms that rely on international talent. Those concerns have been supercharged as it\u00a0becomes\u00a0clear that a country that has long prided itself on its liberal consensus\u00a0is preparing to clamp\u00a0down on immigration.<\/p>\n
The resounding victory of far-right ideologue Geert Wilders\u00a0in last November\u2019s election illustrates how far public opinion\u00a0has shifted among Dutch voters since 2022, when the influx of migrants into the country increased\u00a0by 60%<\/a>. Wilders recently abandoned his bid to become prime minister, but still has the power to be a political kingmaker, and all three of the parties likely to have seats in the next government\u00a0campaigned\u00a0on anti-migrant platforms.\u00a0<\/p>\n The backlash in the Netherlands, home to companies like ASML, Boskalis and NXP\u00a0Semiconductors NV, highlights a developing threat to businesses across Europe: that rising populist sentiment could endanger access to the overseas labor on which they have come to rely.<\/p>\n \u201cWhat I\u2019m hearing from business leaders that have bigger operations here is that they are not going to be able to get people \u2014 or many won\u2019t be interested in coming,\u201d said Marjella Lecourt-Alma, chief executive officer of Datamaran, a software analytics company that focuses on\u00a0ESG risks. \u00a0<\/p>\n With coalition talks still in progress, the political\u00a0direction of the European Union\u2019s fifth-largest economy\u00a0remains uncertain.\u00a0And\u00a0corporate heads are now speaking up, with some threatening to leave \u2014\u00a0or expand overseas, rather than at home.<\/p>\n Dredging and salvage company\u00a0Boskalis NV\u2019s Chief Executive Officer Peter Berdowski recently told\u00a0De Telegraaf<\/a>\u00a0that the company is\u00a0deciding whether to relocate its headquarters out of the Netherlands. That puts it\u00a0with the\u00a016% of Dutch companies considering\u00a0moving at least part of their operations abroad within the next two years, according to a\u00a02023 report<\/a>\u00a0commissioned\u00a0by the Economic Affairs Ministry.\u00a0Among organizations that are mainly global, that\u00a0figure rose to about 33%.<\/p>\n Corporate leaders have\u00a0 expressed concern about possible restrictions on hiring foreign workers as well as\u00a0existing regulations that complicate day-to-day business.\u00a0Kaan Terzioglu, CEO of Amsterdam-listed telecommunications firm Veon Ltd,\u00a0 singled out\u00a0the country\u2019s visa schemes. Under the current\u00a0rules, Terzioglu complained that he\u2019s rarely able to fly Pakistan and Bangladesh-based employees without EU passports\u00a0over\u00a0for meetings.\u00a0\u201cIt takes six months to get an appointment for a visa,\u201d he said.\u00a0<\/p>\n Among the various firms uneasy with the current state of affairs, tech companies\u00a0are the most influential.\u00a0<\/p>\n Semiconductor equipment manufacturer ASML, which has a \u20ac360 billion market capitalization,\u00a0is so critical to the Dutch economy that Mark Rutte, the outgoing prime minister,\u00a0set up a\u00a0task force<\/a>\u00a0to ensure it didn\u2019t expand outside of the country. Yet\u00a0it would be strongly affected by restrictions on hiring non-Dutch nationals. More than 40% of its employees in the Netherlands hail\u00a0from abroad, as do more than half of new hires at chipmaker\u00a0NXP. Roughly 70% of the staff in\u00a0the Amsterdam office of DataSnipper, a company valued at\u00a0$1 billion<\/a>\u00a0that uses AI in auditing software, are foreigners.<\/p>\n Should it become harder to find qualified candidates in the Netherlands, corporate leaders have\u00a0warned that they\u2019ll follow the talent.<\/p>\n \u201cIf the Netherlands shuts down and we cannot get immigrants or foreign students, then fine, you should accept the consequences,\u201d ASML Chief Executive Officer Peter Wennink said at a press conference in January. \u201cWe are a global company, we will go where we need to go to make sure the company can grow and service our customers.\u201d\u00a0<\/p>\n Although it\u2019s become more apparent since the November election,\u00a0the\u00a0anti-immigrant, anti-business mood that\u2019s taken hold of the Netherlands has been brewing for years. Public attitudes towards\u00a0big corporations began to\u00a0sour\u00a0during the financial crisis, according to business leaders, when Dutch taxpayers were forced to spend\u00a0billions bailing out banks.<\/p>\n Rutte, who started his career as a human resources manager at Unilever and went on to lead the pro-business People\u2019s Party for Freedom and Democracy, has fought to keep the\u00a0Netherlands attractive to businesses. In recent years,\u00a0he has encouraged\u00a0CEOs to appear on television shows\u00a0to improve the Dutch public\u2019s dim view of big businesses, according to people familiar with the matter.<\/p>\n Even so, Rutte\u00a0was unable to block measures\u00a0to raise taxes on banks and tax share buybacks \u2014\u00a0moves he warned\u00a0would\u00a0\u201clead to the departure of banks\u201d \u2014 as well as a dividend tax that targets\u00a0multinationals. Nor could he stop Pieter Omtzigt, whose center-right party is now in coalition negotiations with Wilders, from cutting\u00a0a tax benefit designed for expats.<\/p>\n Some companies have already acted\u00a0in response to what they view as the country\u2019s increasingly unfavorable tax measures. In 2021, energy giant Shell Plc opted to move its headquarters to London\u00a0following the Dutch government\u2019s decision to tax dividends and a court ruling ordering\u00a0it to speed up emission cuts.<\/p>\n In a recent parliamentary debate, Dutch economic affairs minister Micky Adriaansens expressed concern about the Netherlands\u2019\u00a0global image. The shifting\u00a0regulations are \u201cno longer an irritation,\u201d for companies, but a big issue. \u201cBusiness owners indicate that the unclear, changing policies are incredibly damaging to investing in the Netherlands.\u201d<\/p>\n With concern mounting, the Dutch finance ministry is currently working on alternative proposals to the bank and\u00a0share buyback taxes as well as shrinking expatriate tax breaks. Ministry officials expect to present an outline to parliament in coming days, according to people familiar with the matter.<\/p>\n In the meantime, any clarity about what might come\u00a0next would be welcome.\u00a0<\/p>\n \u201cCompanies can live with populist governments,\u201d said Corn\u00e9 van Zeijl, a strategist at Cardano Asset Management.\u00a0<\/p>\n The\u00a0main problem\u00a0is\u00a0\u201cunpredictability \u2014\u00a0that they don\u2019t know what the government is going to do.\u201d<\/p>\n<\/div>\nSubscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up<\/a> for free.<\/div>\n