Tech companies in the Netherlands are concerned about government measures to bar advanced technology from Chinese firms. Various national industry associations objected to a recently introduced law.

With the parliament’s approval secured, the law will allow the national government to investigate every investor with a share of 10 percent or more in Dutch tech companies from 2023 onwards. The government wants to review whether investors pose a national security threat. The law was introduced amid international pressure to bar Chinese firms from accessing advanced technology.

Opposition

Various industry associations objected to the law, according to local media reports. According to the opposition, the move will reduce foreign investments in the Netherlands, slowing the growth of Dutch tech companies and jeopardizing their international market position.

Similar laws in neighbouring countries are less strict. In Germany and France, investigations only take place when an investor holds a stake of 25 percent more. In the United Kingdom, the limit is 15 percent.

Interest groups for quantum computing and photonics are particularly concerned. The organizations pleaded with the economy ministry to relax the law’s implementation in the quantum computing and photonics sector.

Time investment

One of the biggest objections is the time it takes to investigate investors. The economy ministry allocated a period of eight weeks to determine whether a foreign investor has ties to China, Russia or other countries barred from accessing advanced technology. The process can take several months if further investigation is deemed necessary.

In response to the objections, the economy ministry said that the procedure can be shortened if the company in question informally provides information in advance. Dutch intelligence agencies strongly support the law. According to them, China and Russia actively attempt to spy on developers of quantum computing and photonics technology.

Tip: The Netherlands and US are in talks over further Chinese export bans