Opinion | The Netherlands transit country: the VOC mentality is very much alive
Luna Arena is a sustainable eight-storey office building with an atrium and a roof garden in Amsterdam-Zuidoost. More than sixteen hundred companies are located in this complex. Companies die over many millions and employ zero employees.
These companies are letterbox companies. More than 90 percent of the more than 12,000 letterbox companies in the Netherlands have no staff, no economic activities and only exist by virtue of registration with the Chamber of Commerce. The administration is conducted by trust companies. In the Luna Arena building, this is the TMF Group, an international trust firm that has emerged in the Pandora (201) and paradise (2017) paper about simple money flows to tax havens.
The Netherlands plays a key role in these money flows. Not as a tropical paradise, but as a transit country. Earlier this year historic, De Nederlandsche Bank issued a report Mapping the flow through the Netherlands, and other financial vehicles established in the Netherlands. Until 2019, the Netherlands was even “the absolute world leader”. an irregular the United States, with much larger economy, surpassed the Netherlands; as number two, the Netherlands is the largest transit country in the world. Total foreign direct investment capital in the Netherlands earned more than 4,700 billion euros in 2021. That is 11 percent of total foreign direct investment in the world and more than five times the size of the Dutch economy.
On an annual basis, the inflow amounts to an average of 257 billion euros and the outflow 235 billion. It is about money flows of escape capital from oligarchs and their companies from Russia, and especially profits of multinational companies that use smart ‘tax planning‘ make use of the scope that Dutch tax legislation offers to reduce taxable profits of companies. Two examples: Uber is a taxi service, but a tax construction through the Netherlands, and Starbucks is minimizing its profits because it has not registered coffee roasting as an intellectual property in the Netherlands. In the DNB report, Droog states: “Multinationals also use the Netherlands to evade full taxation.”
Long history
The existence of the Dutch letterbox companies past in a historical tradition. The foundation of the VOC in 1602, the first company instruments with shares, the Amsterdam Exchange Bank (1609), the forerunner of today’s central banks, and the Stock Exchange (1611) the cornerstones of modern capitalism. In the 17th century, Amsterdam grew into the most important financial center in the world. Money flowed from all European countries to the Amsterdam capital market in search of investments. European monarchs financed their wars, royal households, colonial conquests, mistresses and expert excesses with loans from Amsterdam bankers. The Netherlands had a stable currency and low interest rates: for two centuries, the Netherlands was the richest country in the world.
Also read this opinion piece by Paul Tang: Pandora Papers show: European approach to tax havens is a wax nose
Bankers and merchants pioneered new financial instruments, which are common in the financial markets to this day. In 1609 merchant Isaac Lemaire, who had fallen into disfavor because of a receipt affair, speculated against the monopoly of the VOC. Lemaire sold shares he did not own in the hope that the price at the time of delivery would be lower. The States General prohibited this trade in ‘blank deeds’, as it was then called. This was the first time that a government intervened in the securities trade. Lemaire, the inventor of what is known today as “going short,” a fortune.
In 1636-37 the ‘tulip bulb madness’ struck Dutch cities: the trade in tulip bulbs, where prices rose so spectacularly that for a bulb of the Semper Augustus tulip an Amsterdam canal house could be bought. When prices collapsed, the States of Holland intervened to develop trade. The tulip bulb mania is known today as the first speculative bubble.
As the loyal servant Joost from the comics by Tom Poes and Ollie B. Bommel, companies in the Zuidas sell their tax-legal services to the highest bidders.
Three hundred and fifty years ago, in the ‘disaster year’ of 1672, the world’s first stock market crash took place. Sixteen years later, a second stock market crash followed. To the start of the crisis of 1688 the world’s first book on stock market speculation: Confusion de Confusiones. Joseph de la Vega, a Spanish-Jewish stockbroker in Amsterdam, wrote the stock market as a carnival of fools.
In 1753, Willem Gideon Deutz, banker and mayor of Amsterdam, launched the first negotiation loan. It concerns negotiable loans to slavery plantations in Suriname with mortgages on the plantations. In the second half of the 18th century, negotiations financed the expansion of colonial slavery plantations in South America and the Caribbean, and with it the slave trade. Enslaved people acted as collateral for loans from the plantation owners who could buy new slaves.
Banker Abraham van Ketwich thought that a number of loans could be bundled in a fund. In 1774, he launched the world’s first mutual fund, Unity makes Magt. The fund was such a success that it was widely imitated.
Letterbox companies little note
Deutz’s negotiations and Van Ketwich’s investment fund are forerunners of mortgage-backed securities (mortgage-backed loans) and collateralised debt obligations (bundled debt securities). These complex financial products played a key role in the 2008 financial crisis, when US mortgage markets collapsed. Banks that need invested and like payments with tax money are spent, in the Netherlands ABN Amro ING.
Also read the piece by Roel Janssen: The Russian oligarch is left untouched in the Netherlands
As innovative as the bankers of the Amsterdam canal belt in the 17th and 18th centuries were with new forms of capital provision, accountants, tax advisers, lawyers, bankers and employees of trust firms in Amsterdam’s Zuidas are just as amoral today. Side sector Netherlands transit country. As loyal servant Joost from the comics of Tom Poes and Ollie B. Bommel, they sell their tax-legal services to the highest bidders.
The Dutch economy is not doing anything with it, because bus companies do not deliver letters; the Dutch treasury and that of countries become tax revenues other damage. The only yield is the dubious reputation of the Netherlands as a flow delta of money.
Now that the government is throwing around billions to keep energy bills affordable and is diligently looking to cover that expenditure, it can’t hurt to visit the Luna Arena building in Amsterdam-Zuidoost and the sixteen hundred companies that are firmly established there. to tax.