Why Amsterdam means business

With the recent news that Uber are about to open shop in the heart of Amsterdam, we wanted to take the chance to offer our own perspective on the (in)famous city. Perhaps only a small portion of our readers know this, but The Next Web’s headquarters can also be found in the same small city. However, while Amsterdam is our home, so too is New York, San Francisco, London, Manchester, India… the list continues.

TNW is a global tech news outlet, and therefore our reporters are based all over the world to support this, helping us catch the biggest stories as they break.

That said, the bulk of our business team – our developers, designers, project managers, marketers, events team and founders – are all based in ‘the Venice of the North,’ and have been since the company’s inception.

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This means that we’ve seen Amsterdam’s benefits (and, inevitably, some of its drawbacks), and feel that it’s time for us to make a case as to why Amsterdam is the perfect environment for growing your startup or planting your European Headquarters.

So much attention is given to cities such as Dublin, London, Berlin and others. But what about the city that was built by early entrepreneurs and innovators (AKA pirates and merchants)? Let us defend Amsterdam – a place that is now best known for its liberal attitude, canals, avid cycling population and tolerated cannabis consumption – as a location for your company’s next office.

The global village

Let’s start with the city’s defining feature when it comes to setting up shop. According to Amsterdam’s bureau of research & statistics, 180 nationalities live in Amsterdam, making it the most international city in the world. Europe may be physically small when it comes to continents, but its compact size has done nothing to curtail its vast range of languages and different cultural practices.

Therefore, having an effective entrance into the European market relies on your ability to localize – something which the diverse population of Amsterdam can easily accommodate.

Alongside this, Amsterdam is one of the few European cities that is comfortable operating in a non-native language. The Dutch are far and beyond the best non-native English speakers out there, with a grasp of the language that is arguably better than the average Anglophone.

As the map above shows, English-language penetration in the Netherlands is bettered only by the UK and Ireland (both native English-speaking nations) – and even then it is only by little more than 5 percent of the population. This is an essential facet for doing business (if English is your company’s language of operation), and perhaps one of the driving factors for companies choosing London or Dublin for their European HQ.

However, where the Netherlands beats both of these places hands down is in the diversity of other languages spoken. As an example, 71 percent of IT-related professionals can also speak German (Germany is the United States’ largest European trading partner) and 29 percent speak French, which is essential for capturing the Benelux region.

Add this to the 180 different nationalities in the city and you have some pretty useful skills on offer, if you don’t want the early stages of your operation to be riddled with Google Translate fails.

Aside from having an incredible talent base for international business, Amsterdam also has excellent infrastructure. Amsterdam Schiphol airport ranks as the continent’s best airport, and the third best in the world.

Schiphol offers an incredible number of connecting flights all over the world – with 70 direct daily flights to London, a dozen to New York, and even a handful for the 11+ hour slog to San Francisco.

And if you’re more concerned with moving petabytes than people, Amsterdam is also home to the largest data transport hub in the world (AMS-IX). Since the transatlantic cables surface in Amsterdam, the capital is blessed with extremely high bandwidth and low latency.

And let’s not forget, all of this exists in a city with a population of fewer than 800,000 inhabiting a space that you can cross in less than 25 minutes by bike.

In the face of all its internationalism, connectedness is built into almost every facet of the city. Amsterdam is renowned for being the most bicycle-friendly place on the planet, with its infrastructure for human-powered pedaling machines unparalleled by any other city.

Nearly everyone in the city cycles to work, cycles to school, cycles to meetings and to dinner, or to any other function imaginable. So much so that the parking at Amsterdam Central Station looks like this:

In fact, the country is home to more bicycles than it is humans. This serves for a pretty relaxed way of life – except for those moments when you need to find your vehicle in a hurry.

Tax and legal incentives

According to a 2012 report by Bloomberg, the Netherlands is the best place in the western world to do business. This is in no small part due to the country’s favourable tax climate and legal incentives, and the availability of assistance in setting up from the Netherlands Foreign Investment Agency (NFIA).

What’s more, from January 1st 2015 Dutch immigration law will be changed to allow for special visas for startup founders.

If you know anything about corporate tax, you’ll be happy to hear that the Netherlands offers a competitive rate of 25 percent (and 20 percent on the first €200k profit). If numbers aren’t your game, you’ll be equally happy to hear that the NFIA is particularly proud of its ability to take care of (almost) everything for its international clients, dealing with the brunt of the heavy lifting on your behalf.

From anything as small as picking you up at the airport when you’re first scoping the city, to introducing you to lawyers, potential clients and showing you available office locations, the NFIA is charged with the single task of making the process of setting up in the Netherlands as painless as possible.

Once you’re set up, building a suitable team is also made simple thanks to a 30 percent tax-free income allowance for highly skilled migrants. The Netherlands has no bias against bringing a team with you, sourcing talent from London and the rest of Europe, or anywhere else in the world. In Amsterdam, what matters is that if you’ve got the skills you’ll have to pay considerably fewer bills.

A flourishing tech scene

No doubt due in part to the reasons listed above, Amsterdam already has a thriving tech scene – with a company landscape that ranges from extremely early-stage to Fortune 500 blue-chip.

Starting at the top, companies such as IBM, Microsoft, Twitter, Vodafone and Cisco all have major offices or European HQs in the city (as well as Google, Facebook, LinkedIn, Palo Alto Networks, Apple and more). Heavyweight startups such as Adyen, WeTransfer, 3DHubs and Silk all started in the city, while incubators and accelerators such as Startupbootcamp, Rockstart and Venturelab ensure that the smaller companies receive the nurturing and mentoring that they need to thrive.

However, the features of a successful ‘scene’ can’t be defined by business alone. The beauty of the tech scenes in cities such as San Francisco and New York is the way that both business and culture collide to create the sort of ecology that ensures an industry and its individuals can grow.

The cultural side of such a scene doesn’t just come from nowhere, it morphs and mutates from older roots, converting into something new. In this sense,  Amsterdam has a cultural scene that closely resembles San Fran. With it’s history of alternative and liberal ways of life, partnered with its artistic and countercultural population, Amsterdam is the sort of place that’s primed for breeding new (often crazy, or even unachievable) ideas.

Like the early-SF hacker community, Amsterdam admires innovation and originality.

In more concrete terms, this has translated into an ever-increasing number of meetups, conferences and communal workshops. Get-togethers such as OpenCoffee, Hackers/Founders and events organised by not-for-profit Appsterdam ensure that both knowledge and networks are shared over a drink, whilst larger scale events such as Startup Weekend and The Next Web Conference bring the entire tech community together in one place to learn and do business.

That last one might sound like shameless self-promotion, but we have Amsterdam’s inquisitive and engaged community to thank for enabling us to grow over the last 10 years into one of the world’s biggest tech conferences.

OK, show me the Money

The only thing that Amsterdam is missing? VCs. Whilst the city does have a limited number of investment firms – such as Amsterdam Angels, members of which have a $3 million average valuation – investors are somewhat lacking in the city.

Luckily, the Dutch government is playing an active role in trying to reverse this issue. Since 2012 the National Office for Entrepreneurial Netherlands (RVO) has been sponsoring a large number of seed capital funds (the entire list of which can be found here).

This sort of assistance means there’s no lack of innovation in the city, but the next step is to start attracting large scale investors to support companies that are looking for large scale exits.

Rather than losing successful startups to Silicon Valley, attracting the right sort of finance to the country’s capital would mean that serious startups could remain in the city when they’re ready to scale or move to their next phase of growth.

Image Credits: Jakubmarian.com, Searchenginepeople.com, Wikimedia Commons, Shutterstock