On 10 October 2017 the coalition agreement of the new Cabinet was presented to Parliament. The Cabinet agreement brings some interesting spearheads for entrepreneurs and companies. The following is a summary of the highlights in the areas of corporate, M&A and business law:
Making room for entrepreneurs
- Laws and regulations is modernized so that companies can better respond to social and technological changes.
- Regulatory burden and administrative burdens are limited.
- More space for enterprises with social or societal goals while maintaining a level playing field.
- After evaluation of the current temporary “usual-wage scheme”, the Government will be seen if the scheme needs to be adjusted. Be seen or regulation of the payment in shares for start-ups and scale-ups must be extended.
- Procurement by the Government should be more accessible for SMEs.
- The Central Government always pay within 30 days and encourages companies to improve the payment behaviour accordingly.
Strengthen innovation power
- In education of specialist professions, technology and craftmanship will be given a new impulses.
- The Government invests 200 million euro per year in fundamental research. In addition 200 million euro per year extra available for applied technology research.
- Part of this is an additional investment for large technological institutes which demonstrably meet market needs and public-private partnerships at universities with focus on beta-sciences and technology.
- The existing ‘top sector policy’, focusing on cooperation of business, knowledge institutes and Government will be more strongly focused on the economic opportunities that offer the following three major social themes: energy transition/sustainability; agriculture/water/food; quantum/high-tech/nano/photonics.
- The mainport-status of the Eindhoven region, will be further developed together with the region.
- The Cabinet focuses on preservation of the ESTEC space center Noordwijk (near The Hague).
- The government is going to act as launching customer innovation driven businesses with the Small Business Innovation Research Scheme (SBIR).
- To overcome existing the cross-national and other barriers in digital entrepreneurship, the Government will deploy policy making efforts to come to a European digital market.
Credits and banking sector
- The Cabinet put the creation of a Dutch financing and development institution, InvestNL, by design, in accordance with the already underway with three main objectives and draw up 2.5 billion euro available for equity capital.
- Financial technological innovations (Fintech) contribute to innovation and competition in the financial sector. The accession of these innovative companies is simplified through the introduction of a banking and other licensed in light form, subject to adequate protection of the customers.
A good and level playing field for entrepreneurs
- An open economy does bad to the barriers where Dutch entrepreneurs too often in other countries outside the European Union. That also applies to foreign companies that are (partly) state-owned or state supported. The Netherlands intend to make policy at European level and agreements with third countries to strive for better balance.
- Companies in specific ‘vital’ sectors get legislative protection against take-overs. After analysis of risks for national security designated companies from vital sectors can only be accepted, if necessary with active approval subject to conditions.
- It will be investigated whether in addition to the existing list also vital sectors for agricultural zones and infrastructural projects a similar protection regime is necessary.
- Measures for the shift of influence of activist shareholders with short term focus towards shareholders and other stakeholders with an interest in creating value in the long run: a listed company which at the general meeting of shareholders (AGM) to deal with proposals for a fundamental change of strategy can call a cooling-off period of up to 250 days. In this period the board should account to the shareholders for the company’s policy and all stakeholders must be consulted along the way. This measure cannot be used in combination with existing protection structures, such as the issuance of preference shares or priority shares.
- Listed companies with annual sales of more than 750 million euro gain the ability to shareholders to ask, when they more than 1% of the share capital, as a major shareholder to register with the authority Financial Markets.
Competition and regulated markets
- The Consumer and Markets Authority (‘ACM’) is requested to set up a special team in the field digital competition.
- To unfair commercial practices and disturbed market power in the food chain to address comes at the ACM also a special team for the agri-nutrition sector. If necessary, specific powers with regard to the ACM gets any dispute relating to the code of conduct for fair trading.
- The competition act is adapted so that cooperation in agriculture and horticulture is explicitly allowed to unequal power relations to compensate.
- At the request of industry or producer organisations can the Government agreements in agriculture and horticulture declaring, for example for research funding and obligating of more sustainable standards.
- To improper and unwanted competition between Governments and private parties, the public interest provision in the law market and Government be strengthened.
- There will be additional legislation in the area of franchise to the position of franchisees in the pre-competitive phase.
- The letter mail market is shrinking for years. Send physical post less and less consumers. The Government wants the universal postal service on the current quality level, in the countryside and in shrinking regions. It will be investigated whether tender of the universal postal service may or may not be preferable to the current model where the Government PostNL compensates for the loss-making activities.
A competitive business climate
Government seeks to put an end to the situation that firms establish themselves only formally in the Netherlands.
- The Netherlands intends to lead by example through a withholding tax on interest and royalties on fundflows to jurisdictions with very low taxes.
- Promoting the business financing with equity, and limit the tax breaks for debt financing.
- Reduction in the corporate income tax (in Dutch abbreviated to ‘VPB’) and agandoning the dividend withholding tax with an aim to allow businesses to attract private capital from abroad more easily, and to become less vulnerable to (hostile) takeovers. To finance this, the Cabinet aims to reduce the interest deduction possibilities and loss carry back or forward rules. In addition, tax breaks for expatriates will be limited.
If you see opportunities or want to know more about the measures and the possible consequences to your business or investment activities, please feel free to contact corporate law Rogier Dahmen (author), Bart Bendel or Mark Eising.