Advertisement

Dutch will spend $2.7 billion on improving infrastructure to keep ASML

FILE PHOTO: Illustration shows ASML logo

By Toby Sterling

AMSTERDAM (Reuters) - The Dutch government said on Thursday it would spend 2.5 billion euros ($2.7 billion) to improve transport and other infrastructure in the Eindhoven region to ensure the Netherlands' largest company ASML doesn't move its operations abroad.

ASML, Europe's largest tech firm and the biggest supplier of equipment to computer chip makers globally, welcomed the government plan but said it is still in the process of deciding where it will grow in the future.

Economic Affairs Minister Micky Adriaansens confirmed the 2.5 billion euro figure to reporters as part of a wider plan to retain ASML dubbed "Operation Beethoven". The funding over several years will go to improve housing, education, transportation and the electric grid in the booming Eindhoven technology hub where ASML is based.

In a statement, the Cabinet said it also intends unspecified measures to ease the tax burden on businesses, following an outpouring of concerns from Dutch blue chip firms.

"In taking these measures, the Cabinet presumes that ASML will continue to invest and keep its statutory, fiscal and actual headquarters in the Netherlands," it said.

ASML is based in the Eindhoven suburb of Veldhoven, Netherlands.

The company welcomed the plans and said they would benefit not only tech firms in the Eindhoven region but the Netherlands as a whole.

ASML, which foresees a decade of growth as the computer chip industry grows, said it expects to grow "significantly" in the Netherlands as long as it is supported by "favourable business conditions such as the availability of high quality talent, infrastructure, public housing, and by a strong general business climate."

"The decision we need to take is not if we (will) stay, but where we (will) grow," the company said in an emailed statement.

The company shocked the Dutch government into action after CEO Peter Wennink went public this month with complaints about policy, including plans to end a tax break for skilled migrants which would make it harder for ASML to hire vital staff.

ASML also said the government has failed to invest properly to improve infrastructure in the Eindhoven area, from highways to housing to electrical grid improvements.

A Reuters survey of Dutch blue-chip companies this month found that more than a dozen were considering moving operations outside the Netherlands. Many complained that after populist parties booked major gains in a national election last November, parliament has been pushing through policies without considering the long-term impact.

Talks on a new right-wing government are creeping along, forcing outgoing Prime Minister Mark Rutte's caretaker government to act.

In addition to anti-immigration measures, companies oppose a new tax on share buybacks, limits on the tax deductibility of investments, and complain policy is too unpredictable.

Shell and Unilever moved their headquarters to London after the Dutch government in 2018 was forced to renege on a promise to scrap a dividend withholding tax.

($1 = 0.9257 euros)

(Reporting by Toby Sterling; Editing by Emelia Sithole-Matarise, Kirsten Donovan and Susan Fenton)