Dutch to dangle investment bait for US business
The Dutch government is going into the venture capital business. A new law, expected to be passed by the Dutch parliament this week, will provide for creation of a venture capital firm with money available to US or other foreign corporations, as well as Dutch firms. Its capitalization will be at least $225 million.
So says Allard Jistook, permanent adviser to the Netherlands' Ministry of Finance and a board member of some of Europe's largest corporations. The money will be used to buy minority participations in new business ventures in the Netherlands, where unemployment is running at 9 percent.
''The investment bank that the legislation would set up would be willing to supply up to 49 percent of a qualified medium-size US corporation which would want to supply goods or services to Western Europe, and take advantage of the geographic, legal, and financial benefits offered by the Netherlands, and the linguistic benefits. We do business in English,'' Mr. Jistook said in a recent visit to Chicago.
''The majority of the capital is being provided by the Dutch government - roughly $125 million - and the remaining $200 million by banks and life insurance companies in the Netherlands. The government is committed to increasing that pool substantially if the venture is a success and there is a need for more capital - up to $1 billion. Hopefully, there will be such a demand ,'' Mr. Jistook said.
The legislation, sponsored by the Netherlands' Liberal Party, has already passed the lower house of Parliament and is assured of passage in the Senate, according to Mr. Jistook. He says the legislation was so clearly favored by the lower house that it passed on a voice vote.
The legislation would establish a Company of Industrial Projects, or MIB (Maatschappy Industriele Projecten) which would offer a US company the opportunity to gain between $2 million and $25 million in capital. Interested corporations could apply for information through the industrial commissioner of the Netherlands in the United States, Pierre Dobbelman, whose office is in New York City.
In elections in early September, the Liberal Party gained the largest number of seats of any of the Netherlands' 20 parties, 37 out of a total of 150. It is soon expected to negotiate with some of the other parties to form a government. Despite its name, the Liberal Party nurtures a conservative philosophy and is considered pro-business.
Mr. Jistook was accompanied on his Chicago trip by Mr. Dobbelman, Harry Leliveld, director general for industry in the Netherlands' Ministry of Economic Affairs, and Dr. A. J. M. Weebers, commissioner for foreign investment in the ministry. The entourage visited Chicago as part of a celebration of 200 years of economic and diplomatic ties between the Netherlands and the US. In a sense, the MIB venture repeats the first official transaction between the two countries.
According to Gustave Springer, director of the Netherlands-US 200 Foundation in Holland, John Adams ''signed the Treaty of Amity and Commerce with the Netherlands, thus establishing one of the longest-running and (most) mutually profitable trade agreements between any two countries in history.''
The treaty was signed Oct. 8, 1782, and the deal included a loan to the US, which had just concluded the American Revolution.
The Dutch delegation in Chicago cited data which indicate that the US is the largest investor in the Netherlands, having invested $8 billion. Conversely, the Netherlands claims to be the largest source of foreign investment in the US. The the US economy, they say.
''If you look at the Netherlands immediately after World War II, when we started practically from scratch, a lot of new investments were made by many US corporations, and partly through the Marshall Plan. Well, this is like the Marshall Plan, only it's going from the Netherlands to the US,'' he says.