Dutch shocked by Shell over new Brexit blow – Expat Guide to the Netherlands

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For more than a century, Shell has been an iconic presence in the Netherlands, making the energy giant’s decision to set up shop in Britain a painful decision for the Dutch.

Even more infuriating for the Netherlands is that its biggest company wants to follow consumer titan Unilever to London, despite the hoped-for economic boost from Brexit.

Here are some key questions and answers regarding Shell’s announcement on Monday:

– How old is Shell? –

Koninklijke Nederlandsche Petroleum Maatschappij, or Royal Dutch Petroleum, was founded in 1890 to search for oil in what was then the Dutch East Indies and now Indonesia.

On April 23, 1907, it merged with the British firm Shell Transport and Trading to face their main competitor, Standard Oil of the United States.

The “Shell” name and logo come from shells imported in the 19th century by the father of Marcus and Samuel Samuel, the founding brothers of the British firm.

Partly due to national sensitivities, the company was dual-listed, as was Unilever, which was formed by a similar arrangement across the North Sea.

Since 2005 the company has been incorporated in the UK with Dutch tax residency.

– What is its impact on the Dutch economy? –

Shell is by far the biggest Dutch company, with a turnover of 180.5 billion dollars (158 billion euros) in 2020.

The blow to the Dutch treasury if Shell moves its tax base to London will amount to “billions” a year, Dutch media reported without giving a precise figure.

It is also one of the top 25 employers with approximately 8,500 employees in the Netherlands, one tenth of its 87,000 employees worldwide. Shell says those numbers will stay roughly the same.

Beyond the numbers, Shell is also something of a symbol for the Dutch of their self-image as an outward-looking nation of traders and explorers.

Shell buildings can be seen in various cities and its logos adorn huge tankers on the skyline of Rotterdam, Europe’s largest port.

– What was the tax problem? –

In recent years, however, the Dutch have seemed to calm down on their giant multinationals, preoccupied with issues such as tax evasion and the environment.

Prime Minister Mark Rutte has spent a lot of political capital trying to push through an unpopular policy scrapping a corporate dividend tax, with companies like Shell and Unilever in mind.

Meanwhile, multinationals were finding the financial and regulatory burdens associated with their dual status increasingly difficult.

– Wasn’t Brexit intended to boost the Netherlands? –

Britain’s departure from the European Union was intended to boost the Netherlands, but while Amsterdam won over the financial center of London, it did not all favor the Dutch.

In 2018, Marmite manufacturer Unilever had to abandon a plan to locate its headquarters in the Netherlands after a shareholder revolt. In 2020, it took the opposite route, becoming an all-British company.

Politically stung by the failure to retain Unilever, Rutte abandoned his unpopular tax break plan.

It did, however, cause problems for Shell, whose chairman Andrew Mackenzie said the dividend tax line meant Shell was “driven to go UK”.

– Will it affect the climate trial? –

Shell’s woes in the Netherlands were also compounded by a Dutch court verdict in April this year that the company must reduce greenhouse gases.

But the company and environmentalists behind the lawsuit say the ruling will stand even if Shell moves.

“This will have no effect on the case against Shell. This case will remain under the control of the Dutch judiciary,” Peer de Rijk of Friends of the Earth Netherlands told AFP.

Shell said the plans “will have no impact on legal proceedings related to the climate decision… This applies regardless of our tax residency”.

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