The Netherlands may gain a multinational listed construction company. The Spanish Ferrovial announced this week that it intends to move its headquarters from Madrid to the Netherlands. In addition to a stock exchange listing in Madrid, it also wants a listing on the Amsterdam stock exchange.
Ferrovial (annual turnover 7.5 billion euros, more than 24,000 employees) is involved worldwide in the construction and maintenance of large infrastructure projects such as roads, bridges and metro tunnels. It owns 25 percent of London’s Heathrow Airport and also manages toll roads in the US and Canada.
The Spanish employees will not notice the move, the management of the construction company promises, and the investments in Spain will also remain intact. The relocation plans also lead to great political anger in Spain. Ferrovial is seen as the crown jewel of the Spanish business community, and the choice for the Netherlands is mainly driven by tax motives in the eyes of Spanish politicians. For example, CEO Rafel Del Pino regularly complained about the Spanish business climate, in particular the tax on excessive corporate profits that Spain recently introduced. The move is believed to save Ferrovial tens of millions of euros through tax benefits. Once the shareholders have approved the plan, Ferrovial wants to move to the Netherlands this year. Four questions.
1 Why does Ferrovial want to go to the Netherlands?
Ferrovial says it wants to move because of the favorable laws and regulations in the Netherlands. For example, the Netherlands offers ‘stability’ and ‘lower financing costs’ and more importantly: short lines to the international market. The construction company itself states that the move is mainly intended to realize its international ambitions – including a listing on the New York stock exchange.
Shareholders will wonder aloud how ‘Spanish’ Ferrovial really is. The company achieved more than 80 percent of its turnover outside Spain in 2022 – the most important markets are North America (36 percent) and the United Kingdom (21 percent).
The Netherlands is also not entirely new to the construction company: Ferrovial has already transferred part of its international operation from London to the Netherlands in view of the approaching Brexit. Five people are currently employed by Ferrovial in a multi-company building near Amsterdam Sloterdijk station.
2 What role does tax benefit play?
The term fell in Spanish media tax haven [belastingparadijs] soon. However, it is not yet clear to what extent tax advantages play a role. If Ferrovial wants to make use of this, it must have deductions here, says Professor of Tax Law Jan van de Streek of Leiden University. “It depends on how much turnover they have here. And maybe they have a favorable ruling [afspraak met de belastingdienst] got.” The exemption of listed companies from paying dividend tax on the purchase of its own shares may also play a role: Ferrovial purchased 388 million euros in its own shares in 2022 and wants to increase this to 500 million euros in 2023.
What the head office will look like is still the question. “This must be apparent from the prospectus for the IPO in Amsterdam. Then you also know whether it will remain with a letterbox, or whether a new office will really be opened here,” says Van de Streek. It is certain, however, that directors have to move to the Netherlands, because the decisions have to be made here. “Shell CEO Ben van Beurden also sold his house in Wassenaar and moved with Shell to London,” says Van de Streek. “That will also have to happen here if the head office has more to do than a letterbox.”
3 What does the arrival of such a large party mean for the construction sector?
The location of Ferrovial will not cause great panic among Dutch construction companies. The Spanish multinational mainly earns its money from large projects outside the EU, whereas Dutch companies such as BAM, Heijmans and Strukton focus on projects in the Netherlands and on a selective number of foreign markets.
The fact that Ferrovial’s head office is located here does not mean that construction activities will actually come to the Netherlands, says sector banker Leontien de Waal of ABN Amro. “Only a few tenders are planned for the construction of major infrastructure works in the short term. And the projects that have already been put out to tender have in many cases been delayed or postponed. It would be great news if they suddenly applied for tenders.”
4 Where does the Spanish political anger come from?
The Spanish government reacted furiously to the news of the move plans on Tuesday evening. Minister Nadia Calviño (Economic Affairs) accuses Ferriovial of having benefited from Spanish investments and public support to grow into the company it is today, before leaving. “Ferrovial owes everything to Spain,” said Calviño, “It is a decision that goes against the interests and image of our country.” She conveyed her dissatisfaction personally in a telephone conversation to CEO Del Pino, son of the founder of the same name. The billionaire has a net worth of 4 billion euros, making him one of the richest men in Spain.
The decision is seen as betrayal. The news comes at a time when Spain is trying to attract similar companies to its own country. But whether that battle with the Del Pino family makes sense remains to be seen. “Facing Rafa is not easy. It’s like going to war with the United States,” his ex-wife Gil-Casares said in an interview with Vanity Fair magazine. Del Pino is known as one hardliner, who rarely allows himself to be interviewed. Ultimately, it is the shareholders who will decide on the move.
A version of this article also appeared in the newspaper of March 3, 2023
