Ambitious startups consider leaving the Netherlands, says DSA

A survey conducted by the Dutch Startup Association (DSA) among Dutch startups that have successfully raised venture capital in the past year shows that a significant proportion are considering moving their business abroad.

Of the entrepreneurs surveyed, 37% indicate that it is (very) likely they will move their business abroad within 2 years; 41% say it is (very) unlikely, while 22% remain neutral. DSA is the independent representative of startups in the Netherlands.

The representative sample was conducted among 45 startups, representing 13% of all Dutch startups that raised funding in the past year. Startups that have not yet raised funding or have already started elsewhere were not included. The sample includes startups in all stages of growth.

In additional interviews, entrepreneurs gave three main reasons why they would leave:

1. Lack of competitive investment capital

In the Netherlands and Europe, it is considerably more difficult to raise venture capital at all stages, especially during growth phases. As shown in the recent quarterly report on startup investments by the DSA-led consortium of startup organizations, the number of investments in Dutch startups is at its lowest level in the past five years.

2. Small fragmented markets

Although Europe has been working on an internal market for years, in practice, it is far from complete, and startups are the first to encounter this problem when they succeed and expand internationally. This is evident, among other things, from the IMF report on the costs of internal European trade barriers. These vary around 44% for goods and 110% for services. In the US, these factors are lower, at around 15%.

3. Too much regulation

Entrepreneurs in the Netherlands and Europe experience excessive, unclear, unenforceable, inconsistent, and varying regulatory pressure across EU countries. This is evident from research conducted by the Danish startup organization Danish Entrepreneurs TTIR survey in 2024.

These factors make it attractive for fast-growing companies to continue their activities outside the Netherlands and Europe. A number of well-known startups in later stages are known to have already taken the step abroad.

The 28th regime

The European Commission has included the so-called 28th regime in its mission as a solution to these barriers by offering a legal entity with the same rules in every member state. Recently, its design has been watered down by keeping open the option of a directive, which would add 27 new entities in Europe. Startup organizations in the Netherlands and across Europe are warning of an increasing exodus if this direction continues.

“Startups are naturally global in focus, but it is worrying if they want to leave the Netherlands and Europe because of obstacles that we can solve,” says Lucien Burm, chairman of the Dutch Startup Association. “We must ensure that the Netherlands and Europe become the most attractive base for starting and growing trillion-dollar companies, with a particular focus on the talent and investment required to do so. A 28th regime in the form of a regulation is the essential first step in this process.”