Subsidy Programs and Financing For Entrepreneurs

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The Dutch government aids entrepreneurs in various ways, from providing money to making it easier. If your idea is eligible for one of the subsidy programs you can apply to the Netherlands Enterprise Agency (RVO) for grants.

Subsidies provide government support of certain sectors or activities that would not be profitable without such support. Subsidies typically are provided to assist struggling sectors or to promote new developments or to promote specific policies or social goods. They could succeed economically however at the cost of other groups (for example the food subsidy can help farmers while increasing prices for consumers), or they may be unsuccessful economically, but accomplish the goals of culture or politics.

Subsidies from the government can take many forms. They include grants, tax breaks and rebates in addition to direct cash payments to suppliers or customers. They may also be indirect, like road taxes that are paid by all motorists rather than just those who travel on the roads, or railway track access charges that are not imposed exclusively for passenger trains.

Advocates of subsidy programs argue that they increase economic efficiency by providing protection from international competition or by encouraging domestic production. They can also be beneficial to combat market failures, like externalities or information imbalances. Critics argue that these policies could cause negative effects ranging from corruption to inequality, and that they impede more efficient and equitable spending by the government. They also can create negative incentives. For instance, a company which receives a government subsidy could be enticed to donate to politicians, which can contribute to “regulatory capture” and rent seeking.

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