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Friday, June 24, 2016, was the kind of sparkling summer’s day that usually inspires giddy buoyancy in London. On that morning, however, anxiety and distress fell on the city like a lead weight, as the results of the previous day’s Brexit referendum rolled in. More than 17 million Brits, nearly 52% of those who cast a ballot, had voted to leave the European Union, after 43 years in the world’s biggest single market.
For Rhian Ravenscroft, an attorney for U.S.-based bond-trading platform MarketAxess, there was plenty of time to consider her next move. Seven months pregnant and deeply upset, she had an hour-long journey from her suburban home to the company’s European headquarters in London’s Barbican district. By the time she reached the office, she knew what she would do. “I was the first one to ask to move,” says Ravenscroft, who is British.
When I meet Ravenscroft in October, more than three years later, it is on another sparkling, sunny morning. But now she is sitting in a centuries-old canal-side house in Amsterdam—MarketAxess’s new EU headquarters. The sound outside the picture windows is not London traffic but rather the lapping of water from riverboats gliding by. In London, Ravenscroft, now the company’s senior legal counsel, had a $32 roundtrip train commute. Today, she has dropped off her 3-year-old daughter, Seren, by bicycle at a kindergarten nearby, then locked her bike with its infant buggy outside the office. Total commuting time: five minutes. Total cost: zero. “The quality of life has totally changed,” says Ravenscroft, 36, still stunned by the shift. “Not having to commute up to three hours a day frees up a lot of time to concentrate on your job.”
Ravenscroft is hardly alone in having her life radically upturned by Brexit. The question of whether or when the U.K. will leave the EU has dragged Britain’s economy and political apparatus into dysfunction. A U.K. general election on Dec. 12 and a Jan. 31 deadline for an exit deal are the next plot twists in this long-running drama that could cement the country’s departure—or not. But much of the corporate world has decided it can’t wait any longer to see the final episode. Since the votes were counted in 2016, hundreds of businesses have pulled their operations entirely out of Britain, or relocated key segments to the other 27 EU countries, uprooting thousands of employees to avoid running afoul of European regulations.
The disruption of a final Brexit is impossible to calculate, and its full dimensions will take years to become clear. Even so, in tiny, orderly Amsterdam, it is already possible to glimpse what post-Brexit Europe might look like—because it is already here. About 100 companies with operations in Britain have opened offices in the Netherlands because of Brexit, according to the Netherlands Foreign Investment Agency (NFIA), part of the Ministry of Economic Affairs. Of those, at least 65 are in Amsterdam, a city with a population of 800,000—a sliver of London’s 9 million. City officials say the influx will create about 3,500 jobs in the next three years. And that could be a trickle compared with a future flood. NFIA commissioner Jeroen Nijland says the agency is in talks with almost 350 other companies—up from 80 last January—about possible moves. “This is developing fast,” he says.
Major media entities and big life-sciences companies have recently expanded into Amsterdam. But nowhere is this change felt as sharply as in the financial services industry. For decades, finance’s European identity has centered on one square mile of London called simply The City, as though there were none other. That is no longer the case. Since the Brexit referendum, the industry has splintered across the Continent, in a shift that could ultimately be profound and permanent.
For Amsterdam, the migration has been an undeniable boon. But for many in the city, celebration feels premature. New residents are straining a market where affordable housing is in short supply. And it’s hardly certain that the Dutch will gain more than they lose from Brexit. About 225,000 jobs in the Netherlands are related to trade with Britain. Exports alone are worth about 25.5 billion euros ($28.3 billion) a year—an economic artery now at risk. Simone Kukenheim, Amsterdam’s deputy mayor for economic affairs, insists the corporate-hub windfall is one the city never chased. “This is a reaction to Brexit, not us saying, ‘Hah, let us see what we can get out of this,’ ” she says. “There is deep sadness over Britain leaving.” Still, for now, the heartache is theoretical; the benefits are real.
The Netherlands has long been welcoming to business outsiders. Some 4,000 foreign companies, about half of them American, have set up in the country since the 1970s, according to NFIA. Amsterdam’s vast international airport is a global hub, an hour’s flight time from London. English is widely spoken; ultrafast Internet service has long been ubiquitous. And the 25% corporate income-tax rate, while higher than in the U.K. or Ireland, is lower than those of continental giants France and Germany.
Britain’s looming departure is amplifying these advantages. Most people think of Brexit headaches in terms of trade in goods, imagining tariffs on French wine and German cars, or 10-mile truck backups at the borders. But the hurdles for service industries are just as big, if not bigger. From the moment Brexit begins, every company now based in Britain, regardless of its nationality, will need new regulatory licenses to do business in the rest of the EU, along with new contracts for EU clients.
This looming reality has spurred the financial industry to mount an early Brexodus. So far, 332 financial companies have moved core elements out of London, according to U.K. think tank New Financial. Those numbers may understate the eventual departures: Accounting firm EY’s Brexit Tracker estimates that about 7,000 financial jobs will leave London in the near future, and that about a trillion British pounds ($1.29 trillion) in banking assets could also leave.
Already, Citibank and JPMorgan Chase have each spent more than $100 million moving their EU hubs out of London. Bank of America relocated about 125 people to new EU headquarters in Dublin and will have another 400 in Paris, where EU banking regulators have moved from London.
Amsterdam, for its part, has become a magnet for “diversified financial” firms—a category that includes financial-data companies, brokerages, and providers of exchanges and other trading infrastructure. Most of the city’s financial headquarters belong to this category, according to New Financial, and Amsterdam has lured more such firms from Britain than any other EU city. That gives the Netherlands critical mass—likely at London’s expense. “For investors who invest for the first time in Europe, Britain will be less often on the short list,” says NFIA’s Nijland.
For firms that have moved operations out of Britain, the Brexit argument has long since been settled. “None of us could hang around waiting for politicians to agree on what to do,” says Nick Charteris-Black, managing director of market development for AM Best, the insurance rating agency headquartered in Oldwick, N.J. Last year, AM Best moved its EU headquarters from London to Amsterdam, taking space in the high-rise Zuidas financial center on the southern edge of the city, a 10-minute train ride from Schiphol Airport. “About one-third of our business has moved from London,” says Amsterdam manager Angela Yeo, as she sips a fine-brewed espresso in the lobby café of cutting-edge NoMA House, the company’s new digs. She describes NoMA as a hub for “Brexit refugees”; its anchor tenant is Kraft Heinz, which opened a “center of excellence” last year with 450 people.
Few financial firms have abandoned Britain entirely, and many keep most of their European staff there. MarketAxess has 10 staffers in Amsterdam, while 120 remain in London. AM Best has 70 people in London and about a dozen in Amsterdam. But if and when Brexit becomes official, more of their business will likely emanate from Amsterdam, and the staffing balance could eventually shift further—along with the industry’s center of gravity.
Amsterdam boosters insist they have done relatively little to actively attract newcomers. The Dutch did not bend their laws or tax code for interested companies. Many banks, for example, have bypassed the Netherlands for Paris, Dublin, and Frankfurt, in part because Dutch law caps bankers’ bonuses at 20% of annual base salary, compared with 200% in London and 100% in other EU countries. And while Frankfurt and Paris ran massive campaigns to promote their cities to London-based executives, Amsterdam leaders almost regarded it as unseemly, says Hugo Niezen, senior manager of foreign investments for amsterdam inbusiness, the city’s promotional organization. “If we bad-mouth our competitors, it will not make us look good,” he says.
Still, for at least one organization, the Dutch turned on the charm. The morning after the 2016 Brexit vote, Noël Wathion woke up in London with more reason than most to be anxious. Wathion is deputy executive director of the European Medicines Agency (EMA), a bureau analogous to the U.S. Food and Drug Administration that had been headquartered in London since 1995. Because it’s an EU entity rather than a private company, under Brexit, the EMA would have to leave Britain entirely. Staffers “were devastated,” recalls Wathion, a Belgian who had lived in London for 20 years. “They had built their lives in the U.K.”
The Brexit vote effectively forced the EMA to shut down its headquarters—triggering what became the single biggest job-related move resulting from Brexit. (It also cost the agency $650 million on its London lease.) For the rest of Europe, the EMA was a giant prize to be fought over. Whichever city won could inherit more than 900 high-earning newcomers. It would also have the chance to lure an influx of pharmaceutical and biotech companies, which must work closely with the EMA to get drugs approved.
The Netherlands threw itself into an all-out fight. The government offered a $330 million headquarters in Zuidas, built to EMA’s specs. It noted that tourist-friendly Amsterdam had hotel space for the hordes of specialists who would visit. It produced a video in which Dutch children greeted viewers in flawless English, while a narrator reassured EMA staff in London that “after all, we are not that different. We also have a very stylish queen and enjoy fish and chips.” In 2017, the final vote by EU foreign ministers resulted in a tie between Amsterdam and Milan. To the fury of Italian politicians, the winning city was drawn out of a bowl—and had lots of canals.
The EMA officially set up shop in Amsterdam this March, and its arrival has already paid off for the Netherlands. Eight health care or life-sciences companies, including Japanese biotech firm Rakuten Medical, opened offices in the city last year, Amsterdam officials say, presumably to be in proximity to the EMA, bringing with them hundreds of jobs. DuPont, British med-tech company Aparito, and South Africa–based Synexa Life Sciences have all opened European headquarters in Leiden, a short train ride away.
Walk—or cycle—around Amsterdam, and it’s easy to see why “Brexit refugees” would choose it as their sanctuary. Its calm atmosphere is in striking contrast to much of Europe, especially London. On a nighttime bike ride through the suburbs, I see parks filled with children playing soccer long after dark. Adam Eades, president of the European unit of the Chicago Board Options Exchange (CBOE), had the job of deciding where it would relocate. Amsterdam, he says, beat out Frankfurt, Dublin, Paris, and Madrid. Eades shuttles weekly from London, where his wife and child still live, to CBOE’s new EU headquarters in the same Zuidas building as AM Best. “It is much less frantic here,” he says.
Eades had one more criterion: reasonably priced housing. That has proved far more elusive. Amsterdam’s property values have shot up about 36% since the Brexit vote, according to Capital Value, residential investment advisers in Utrecht. An 800-square-foot apartment costs about 1,800 euros a month ($2,000) to rent, or about 500,000 euros ($550,000) to buy. And that’s if you can find one. Many units are rent-controlled, with 13-year waiting lists. Yeo, of AM Best, says her company was forced to revise upwards its offers to new recruits, to account for soaring housing costs.
In a sign of changing times, London home prices have sunk, while Amsterdam’s have hit bubble-risk territory, according to a recent UBS report. Eeg De Veer, housing manager for relocation experts Expat Help, says his company has helped resettle more than 700 EMA staffers. Many are keeping their London homes while renting in Amsterdam, waiting for the British pound to recover before they commit to selling and reinvesting. “Everyone is in a vacuum,” De Veer says, “waiting to see what will happen with Brexit.”
A short bus ride from from Zuidas, office towers give way to low-rise warehouses along a blustery channel feeding into the North Sea: the port of Amsterdam. From here, centuries ago, Dutch merchants turned the Netherlands into a commercial giant, helping to open the Silk Road and virtually invent global trade. Starbucks’ mammoth warehouses are here, and the port is the world’s biggest processor of cocoa beans; a strong smell of chocolate wafted over the terminal on the day I visited.
Port authorities in Amsterdam and larger, busier Rotterdam have spent months preparing for Brexit, fearing total upheaval. If the U.K. leaves the union, all British imports and exports will require customs declarations—a regime that has not existed for 30 years. The Netherlands estimates Brexit could reduce its GDP by up to 1.2%, or about 10 billion euros annually, by 2030. (Britain, by most estimates, will suffer much greater damage.)
“Exporters and importers will have increased costs for sure,” says Michael van Toledo, general manager of TMA Logistics. TMA oversees six container-ship crossings per week between Britain and the Netherlands. The vessels headed to Britain are laden with food and other goods. (The Netherlands sends vast quantities of fish, cut potatoes, and mayonnaise, basics for fish-and-chips meals; Britain produces little of its own.) Those arriving in Amsterdam? Most are filled with trash—literally. Some of Londoners’ household waste, van Toledo explains, is incinerated and turned into electricity for 40,000 Amsterdam homes.
It’s intriguing to imagine London’s garbage lighting the homes of former residents whose old lives, like the trash, have gone up in smoke. Now, as the Brexit wrangling continues, the newcomers are considering a future they could not have predicted before: becoming Dutch.
Geoffroy Vander Linden, head of MarketAxess’s Netherlands business, is now living in Amsterdam after 12 years in London. He was expecting his first child—a baby boy to be born in Holland—as Fortune went to press. His colleague, Rhian Ravenscroft, says her toddler, Seren, is now fluent in Dutch: “She even competed in her first bike race!” Rhian’s husband, Toan, 35, will soon move from London to be management partner of M&C Saatchi Sports and Entertainment, which will open its new EU headquarters in Amsterdam. It is not clear the couple will ever return to London. However Brexit plays out, Rhian says, “this is a lovely place to raise a family.”
A version of this article appears in the November 2019 issue of Fortune with the headline “Brexit Goes Dutch.”
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