Amsterdam is somewhat of a creative hub here in the Netherlands, with a lot of designers, photographers, advertising people and other creative types. There are also a number of good, but relatively expensive, data centers where you can host your servers. It has never really been a technical hub, though. Most technically focussed businesses (including startups) in the Netherlands seem to be in places like Eindhoven (with the technical university and Philips campus at its core) and other towns with technical universities, like Delft and Twente. Amsterdam is a bit of a hipster town, like people who work in advertising or make iOS applications, not a nirvana for nerds. One of the exceptions seems to be the CWI at the Amsterdam Science Center, which is were Guido van Rossum started working on Python.
That being said, there is some technical talent in the Netherlands and distances are small enough that you can attract people from towns like Eindhoven to work at a startup in Amsterdam. Most people also speak English, allowing easier cooperation with foreign co-workers and customers.
Downsides of the Netherlands are bad conditions for immigrants, high taxes (expect to pay over 50% on income tax alone), high cost of labour due to all kinds of government enforced perks like daycare and a lot of free time, business-unfriendly labour law, bureaucracy and the lack of an entrepreneurial culture. Technical and scientific education is also declining in both popularity and quality, despite the half hearted efforts of our government to position the country as a "knowledge economy". Getting a visum is relatively easy for immigrants from the EU and US (there is a special treaty with the US to enable easier immigration), but immigrants may be forced by the government to participate in expensive language and integration courses due to a streak of xenophobic politics in the last ~10 years.
Amsterdam has a reputation as a liberal city and a "gay capital". There seems to be some correlation between a vibrant gay culture and tech hubs, if you look at Tel Aviv and San Francisco. I hope that Amsterdam can turn the current decline around in that respect, because the city isn't as gay-friendly as it used to be anymore (according to the homosexual community; I can't report from first hand experience here). Homosexual couples are apparently harassed and beaten by groups of second and third generation immigrants from muslim countries (whom are quite prevalent here). A homosexual couple (or visually distinguishable Jew for that matter) will get harassed, bullied out of immigrant neighborhoods and in some cases physically threatened or worse. This development is accompanied with a rather ugly, xenophobic and isolationist political movement rooted in the lower middle classes that feel left behind in the current economy. Their main political hero, Geert Wilders, gained popularity by constantly picking on muslim immigrants in the rudest possible manner and is currently heading the second biggest party in Dutch parliament. The other parties have silently adopted a similar tough stance on non-Western immigrants to retain or win back voters, but usually without the ugly rhetoric. The tolerant atmosphere that brought intellectuals from Descartes, to John Adams to Einstein to our country seems to be in peril.
I think Amsterdam has potential for startups. Particularly in the creative and mobile apps industry. That being said, the current entrepreneurial atmosphere in the Netherlands isn't great and I doubt that we will be able to compete with places like Silicon Valley. I think it won't attract many foreign founders before some of the cultural problems are solved (I'm pessimistic and distrust any government initiatives in that respect because politicians won't be able to create a startup culture) and the town becomes a local tech hub in its own right (competing with towns like Eindhoven). But this is a cool initiative. I'm sure it will do at least some good and will be valuable to the participants. I'm not in Amsterdam, but as a Dutch hacker I might drop by one of the meetings at some point.
Thanks for the clarification. Granted, I oversimplified. The 52% is for everything over ~50K. As a business owner, however, you pay this income tax on top of 20%/25% corporate taxes.
If you make a 100.000 euro profit and extract it from your business the company pays 20% corporate tax (that is the rate below 200.000 euro profit), leaving you with 80,000. That remainder is taxed as follows: http://en.wikipedia.org/wiki/Income_tax_in_the_Netherlands. This leaves you with 46.408 euro from your original 100.000 (using the rates that include mandatory pension, social security and State funded medical care payments).
Please correct me if I'm wrong, I'm far from a tax specialist.
Of course, you also have to pay all sorts of other taxes with the remainder, including municipal taxes, a hefty value added tax on most things you buy and property taxes. In return you get the ability to subtract part of your mortgage from your taxes, as well as a government that takes care of you (if you want it or not) when it comes to social security or affordable health care.
EDIT: If you sell a company as a resident of the Netherlands you also get taxed quite heavily, but there are ways to mitigate part of that (e.g. using a holding company, so you don't have to pay income tax directly over the money you get for your shares). If you're moving here to start a business, I would suggest consulting a tax advisor or lawyer before you make any decisions or file paperwork.
Actually the Netherlands has amazing tax incentives for technology companies. It's quite common for tech companies here to pay essentially no payroll taxes. Things like VAT passthrough are also a huge tax break.
You are not a tax expert. I understand that. We actually do have tax experts, who are available to Appsterdammers, and are working on a nice write up of this information for publication in the near future.
"The 52% is for everything over ~50K. As a business owner, however, you pay this income tax on top of 20%/25% corporate taxes."
No you don't. You pay 52% wage tax in the upper bracket, but in that case it's not taxed for corporate tax since it's an expense. The companies profit is taxed at 23%, and if you pay dividend to the shareholder(s), then they pay another 22 or so percent dividend tax, making the total tax pressure roughly equal to the top income tax bracket, leaving aside special arrangements like starter deductions, WBSO subsidies etc.
No worries. I still roughly agree with your point that it's too expensive to do business here. That said, compared to the rest of Europe .nl is quite ok for technology companies (especially software) but only for people who actively go out and search for lawyers and accountants who know about the many special situations for IP creation deductions, R&D subsidies etc. Plus one needs to take advantage of EU freedom of establishment rules to move profits abroad for maximum tax optimization. A software company can optimize to only pay a fraction of the taxes what a plumber or widget manufacturer would pay. (and still legal)
Your pessimism seems endemic in European culture. It's actually a bigger problem, to my mind, than anything else you've mentioned here. As I like to say, Americans need to calm the hell down, and Europeans need a kick in the ass. Hopefully the Appsterdam movement will help us help each other, and we can find cultural bliss in the middle.
I will say this though, every gay person I know is a lot less worried about being beaten up by a cultural stereotype and a lot more worried about when they are going to be able to get married. That's something Amsterdam has that even San Francisco doesn't.
And hey, if you're right and the government (AKA the people) manage to turn the Netherlands into an intolerant police state, we'll move the whole thing to Germany.
I don't really disagree with anything you said, but I have to laugh at the idea of moving to germany to escape some future police state in the Netherlands. I am part german, love germany and germans, but that idea is funny. Maybe you were making a joke.
When last in berlin, I remember reading something that said "If germans were going to storm a subway station in protest, they'd all be sure to buy tickets first."
You can also get a significant discount on taxes (30% of your wage will be tax-free) by coming to the country as knowledge migrant. You have to get hired from abroad, be a specialist and earn high enough salary.
Coming from Eindhoven I'am a bit jealous of the Startup community in Amsterdam. But still I would not really consider working in Amsterdam. The 1:20 hour single trip commute by train would take the best of me.
Seems like we should do a local HN meetup, because all of a sudden lots of Dutch hackers are coming out of the woodworks, with you and Skrebbel from Eindhoven and me in Tilburg (~25 minutes by train). Anyway, the environment for startups in Eindhoven is great. There is the Technical University, Philips and a number of technical spinoffs from these two places, including a lot of startups. Although I'm highly skeptical of this ranking, the fact that the region around Eindhoven is ranked as the "smartest region in the world" is a good indicator[1].
Then do a startup in Eindoven. On the international scale of things, Eindhoven is a suburb of Amsterdam. Or the other way around.
People don't live in SF and work in San Jose much, either.
That said, my underbelly feeling is that Eindhoven is getting a nice startup scene, slowly swelling, though mostly focused on devices and not so much on software. But in all honesty I don't think there's much of a difference. Whether my startup buddies make html5 apps or the next revolution in fitness machinery, we face much of the same kinds of problems.
Addendum: I think Eindhoven might have near virgin hiring grounds. Thousands of brilliant people currently work at a small number of high-tech BigCo's, spending a week on fixing two bugs in 30M lines of unmaintainable C code (I'm talking to you, ASML). Some of these must know, deep inside, that things can be better.
I think that a startup that grows a fair bit past ramen profitability has a lot to offer to these kinds of people. The biggest problem is how to get the word out.
Contrary to your assumption I've done a reasonable amount of traveling. This summer, for example, I'm working from Paris for a month. I've done an internship in the US and visited four continents and around fourteen countries. I'm not done traveling, because there is so much left to see and experience, but I do have a little international perspective.
I tried to give some perspective with my post, but didn't intend to be overly pessimistic. In fact, I applaud your initiative (in hindsight, I could've been more clear about that). That being said, I still think that we lack an entrepreneurial culture here in the Netherlands[1] and that the image of intellectual and cultural freedom that might attract foreign startups has lost part of its shine in the last decade of isolationism[2], high-profile political murders and racial tension.
I do wish to concede on my point that Amsterdam isn't really a local technical startup hub in the first place, apart from the creative industry and mobile applications. From the Dutch perspective this might be true, as we have more advanced hubs in Enschede/Twente and Eindhoven, but from an international perspective distances are so small that this isn't really a factor and your initiative seems to be broader than just Amsterdam anyway. Amsterdam definitely has more allure to foreigners than provincial towns like Eindhoven and Enchede. E.g. Utrecht is one of the universities on the forefront of the Haskell community and this city is 30 minutes by train from Amsterdam. Groningen is a bit further, but their university has some great hackers working on cool stuff too (like two NLP specialists that are also on HN: http://nlpwp.org/book/).
Other than the "inappropriately pessimistic" tone, is there anything in my post you disagree with on a factual basis? I do consider myself an optimist, by the way, because you almost have to be as a startup guy. So what you might consider "inappropriate pessimism" is realistic optimism to me. I do wish your initiative to succeed and it is a lot more promising than the government-funded campaigns we've seen. I'm highly skeptical about government intervention because it rarely (if ever) works. Private initiatives like Appsterdam do have potential, though. In fact, I'm hoping to attend one of your meetings to see what all the fuzz is about.
[1] The Dutch people aren't very much inclined towards risk taking and entrepreneurialism, to say the least. Also, high taxes and business-unfriendly labour laws aren't helpful either. Contrary to the American Dream, we have a culture of applauding the average and consensus. We're keen on making money and sometimes prone to mass hysteria when speculating (e.g. the famous 17th century Tulip Mania and the more recent WorldOnline debacle), but the average Dutchman frowns on people that want to excel. A typical Dutch saying is "Doe maar gewoon, dan doe je al gek genoeg" (lose translation: "Just be normal and average, that is sufficiently special and crazy").
[2] E.g. the majority of the country is very negative about the EU and the Euro, famously voting against the very reasonable referendum on the European 'constitution' a few years back out of spite towards the political elite. These people live in a world where they think everything got more expensive since the introduction of the Euro, while in fact the opposite is true.
That being said, there is some technical talent in the Netherlands and distances are small enough that you can attract people from towns like Eindhoven to work at a startup in Amsterdam. Most people also speak English, allowing easier cooperation with foreign co-workers and customers.
Downsides of the Netherlands are bad conditions for immigrants, high taxes (expect to pay over 50% on income tax alone), high cost of labour due to all kinds of government enforced perks like daycare and a lot of free time, business-unfriendly labour law, bureaucracy and the lack of an entrepreneurial culture. Technical and scientific education is also declining in both popularity and quality, despite the half hearted efforts of our government to position the country as a "knowledge economy". Getting a visum is relatively easy for immigrants from the EU and US (there is a special treaty with the US to enable easier immigration), but immigrants may be forced by the government to participate in expensive language and integration courses due to a streak of xenophobic politics in the last ~10 years.
Amsterdam has a reputation as a liberal city and a "gay capital". There seems to be some correlation between a vibrant gay culture and tech hubs, if you look at Tel Aviv and San Francisco. I hope that Amsterdam can turn the current decline around in that respect, because the city isn't as gay-friendly as it used to be anymore (according to the homosexual community; I can't report from first hand experience here). Homosexual couples are apparently harassed and beaten by groups of second and third generation immigrants from muslim countries (whom are quite prevalent here). A homosexual couple (or visually distinguishable Jew for that matter) will get harassed, bullied out of immigrant neighborhoods and in some cases physically threatened or worse. This development is accompanied with a rather ugly, xenophobic and isolationist political movement rooted in the lower middle classes that feel left behind in the current economy. Their main political hero, Geert Wilders, gained popularity by constantly picking on muslim immigrants in the rudest possible manner and is currently heading the second biggest party in Dutch parliament. The other parties have silently adopted a similar tough stance on non-Western immigrants to retain or win back voters, but usually without the ugly rhetoric. The tolerant atmosphere that brought intellectuals from Descartes, to John Adams to Einstein to our country seems to be in peril.
I think Amsterdam has potential for startups. Particularly in the creative and mobile apps industry. That being said, the current entrepreneurial atmosphere in the Netherlands isn't great and I doubt that we will be able to compete with places like Silicon Valley. I think it won't attract many foreign founders before some of the cultural problems are solved (I'm pessimistic and distrust any government initiatives in that respect because politicians won't be able to create a startup culture) and the town becomes a local tech hub in its own right (competing with towns like Eindhoven). But this is a cool initiative. I'm sure it will do at least some good and will be valuable to the participants. I'm not in Amsterdam, but as a Dutch hacker I might drop by one of the meetings at some point.