The Dutch government is reconsidering at least some details of its plan to prevent hostile takeovers of national companies, due to fears in the business sector that this would damage the country’s investment climate. Along with other European countries, the Netherlands hopes to welcome UK investors post-Brexit.

Shortly after US rival coatings maker PPG walked away from its bid to acquire AkzoNobel, the government in The Hague began drafting plans that would have allowed Dutch firms a “time-out” period to refuse mergers with foreign buyers.

However, t in a letter to parliament this week, Economic Affairs Minister Henk Kamp conceded that the original plan – which foresaw a one-year grace period – could actually discourage foreign investment and was most likely in breach of EU law. The government’s proposals are “still under construction,” he said.

Parliament had been expected to reject the plan in its current form, reports said, although a majority of lawmakers was seen as willing to back a more general motion asking the government to research other options.

Private equity investors are reported to have spoken out against restrictions on takeovers, The International Corporate Governance Network (IGCN) – said to represent investors holding $26 trillion in assets – among them. The news agency Reuters quoted from a letter the network wrote to Kamp, asserting that the negative consequences could include “entrenching ineffective company managers and disenfranchising institutional investors."

With many European countries competing to win businesses, as well as the European Medicines Agency (EMA) and the European Banking Agency (EBA),that will have to leave the UK after Brexit, the Dutch parliament last week passed a motion calling on the country’s newly elected government to drop plans for a 20% cap on financial industry bonuses. The German parliament has also moved to tweak labor laws to protect bankers’ bonuses.

Shortly after PPG backed away from its grab for Akzo Nobel, reports emerged that company managers had cooperated closely with the Dutch government to foil the US plans.