Does Amsterdam have what it takes to overtake London’s Financial Capital status?
As one of the main global FinTech centres, London has managed to bring in approximately four billion Pounds of investment in the last six years alone. The city is home to many headquarters of both big and small financial companies. However, shortly after the Brexit news, seniors within the technology community have started voicing fears that financial companies will choose to move elsewhere, should the regulatory climate become too unpredictable and costly. Aspects such as taxation and instability of the British economy as a result of leaving the EU, could very well topple London from its coveted reputation as a global FinTech hub. While worrying for the UK, this can benefit other European financial capitals such as Berlin, Amsterdam and Zurich. Such cities have already started to use the opportunity to brand themselves as attractive alternatives to London. Promotional campaigns used by those cities’ governments focus on their relatively liberal and easy business climate and high quality of living.
For many small startups that work with tight budgets, London’s cost of living makes the city a very expensive playground. Such startups might consider other European hubs to relocate to as an alternative to London. Amsterdam has been mentioned quite often as a top contender for many different reasons. The city has recently topped a New York Times ranking for best cities to replace London in the FinTech industry. One of its greatest advantages over competitors is its location, as Amsterdam is referred to as the gateway to the rest of Europe. The Netherlands’ high digital connectivity creates a very efficient digital infrastructure for businesses. With more than 2,600 international companies based in the city, and over 170 different nationalities, Amsterdam stands out as a world-class, tolerant and international destination for expats.
The Dutch capital has a number of distinct shortcomings though. Tax can be as high as 52%, and as a result of the financial crisis, financial bonuses for jobs such as bankers have been drastically affected. The city’s limited size, combined with its increasing popularity as a business capital, have made the property market tight and led to a price increase of 17 percent in 2015. However, the local government has taken some measures to tackle the surging prices and make it easier for expats. Even today, the cost of living in Amsterdam is reasonable when compared to cities such as Paris and Zurich. Additionally, the city’s benefits make it an attractive destination for expats. Good education system, reasonable health insurance and a high proficiency level of English make Amsterdam a relatively easy destination to relocate to for expats. The Netherlands ranks fairly high on quality of life and happiness lists, and was recently ranked as the sixth-best place in the world for expats by HSBC.
Currently, industry professionals estimate that no single city has the capability to become the sole FinTech epicentre of Europe. Instead, it is likelier that multiple cities across the continent will rise as leading financial hubs to replace the British capital. It is agreed that this transition from London to other cities is inevitable, and is likely to occur in the next few years. Though these changes may be far down the road, Amsterdam is well on its way to become a FinTech leader by attracting international companies to relocate to one of Europe’s most treasured cities.