Subsidy Programs and Financing For Entrepreneurs

The Dutch government offers different types of support for entrepreneurs, ranging from money to making life easier. If your idea meets the requirements for one of the subsidy programs You can apply to the Netherlands Enterprise Agency (RVO) for grants.

Subsidies are essentially government support of certain industries or businesses that might not be financially viable without this support. They are usually given to help struggling sectors and encourage innovation or to promote a specific program or social good. They can be successful economically but at the expense of other groups (for example the food subsidy can help farmers while raising prices for consumers) or they could be unsuccessful economically, but accomplish the goals of culture or politics.

Subsidies from the government can be in a variety of forms. These include tax breaks, grants and rebates, as well as direct cash payments made to suppliers or customers. They can also be indirect, such as road taxes that are paid by all motorists rather than just those who use the roads, or railway track access charges that are not imposed exclusively for passenger trains.

Supporters of subsidy programs claim that they can boost efficiency of the economy by protecting from international competition or by promoting domestic production. They can also be useful to combat market failures, such as externalities, or information asymmetries. But, critics contend that these policies have negative consequences, ranging from inequality to corruption and that they crowd out more equitable and efficient public spending. They also can create negative incentives. For instance, a firm that is benefited by a government subsidy will have an incentive to make donations to politicians, thereby contributing to “regulatory capture” and rent-seeking.

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