Coronavirus impacts the arrival of foreign IT companies setting up shop in the Netherlands in 2020
According to Invest in Holland and the Netherlands Foreign Investment Agency (NFIA), the Netherlands attracted fewer foreign companies in 2020 than in 2019, recording a decrease of 25% of foreign business investments. The reason behind the drop is simple; instead of broader macro-economic concerns impacting other regions, such as Brexit in the UK, the pandemic has pushed businesses to reconsider shifting operations or to open new offices in the Netherlands. A reassuring note, heralding the possibility of healthier foreign investment once the pandemic's impact is reduced.
Indeed, Brexit has actually served the Netherlands well as the country continues to attract a significant number of UK-based companies looking to relocate operations inside the EU bloc. Currently, the NFIA is in discussion with 550 UK-based companies to relocate or expand in the Netherlands.
But despite an overall decline in 2020, the impact is being mitigated by the number of foreign IT and technology companies choosing the Netherlands as their base of operations. Of the 305 foreign companies that set up shop in the country, many focus on deploying digital technologies and new business models to gain success in the market, such as Chargebee, a B2B SaaS subscription management and recurring billing software provider.
Other examples include Switzerland-based PriceHubble, a data & explainable AI-driven real estate valuations software provider, which set up shop in Amsterdam. Danish cybersecurity specialist Heimdal Security set up offices in Eindhoven, and Singapore-based Group-IB, another cybersecurity specialist, chose Amsterdam as its new HQ. The Netherlands is particularly interesting for cybersecurity companies as its home to Europol, the European Network for Cybersecurity, and several other important institutions.
The geographic origin of investment paints an interesting picture too – with the majority of firms setting up shop hailing from North America (100), Europe (91), Asia (86), Africa (12), Oceania (8), the Middle East (7), and South America (1).
Despite this promising investment from foreign tech companies, the overall number of foreign-related IT projects in the Netherlands fell from 98 (creating 3,433 jobs) in 2019 to 68 (creating 2,498 jobs) in 2020. A trend seen across the globe as enterprises look to reduce spending as they wait for a clearer picture of the post-pandemic business environment.
The Netherlands plans to continue to develop its position as the ideal home for foreign firms - Bas van 't Wout, Minister of Economic Affairs and Climate Policy, who is responsible for the NFIA, emphasized an increase in investments in research, development, innovation, and infrastructure through the National Growth Fund to ensure the Netherlands remains an attractive destination for foreign businesses in 2021.