Subsidy Programs and Financing For Entrepreneurs

The Dutch government offers various types of support to entrepreneurs, from funding to making life easier. If your business idea meets the criteria of one of the subsidy programs, then you can apply for a grant through the Netherlands Enterprise Agency (RVO).

Subsidies provide government support for certain industries or activities that would not be profitable without it. Subsidies usually are offered to help struggling industries, promote new developments, or to promote specific policies or social goods. They could be profitable economically but they will be costly to other groups (for instance, a food subvention helps farmers, while increasing prices for consumers) However, they can also fail economically, but achieve the goals of culture and politics.

Government-provided aid can take many forms, such as grants and tax breaks, rebates or direct cash payments to customers or suppliers as well as price controls. They can also be indirect, for instance, road taxes that subsidized education loans are paid by all motorists rather than just those who travel on the roads, or railway track access charges which are not exclusively imposed for passenger trains.

Supporters of subsidy programs claim that they can boost economic efficiency by providing protection from international competition, or by encouraging domestic production. They can also aid in overcoming market failures such as externalities and information inequalities. Critics argue that these policies could cause negative consequences ranging from inequality to corruption, and that they hinder more efficient and equitable spending by the government. They also create perverse incentives. A company that is receiving a government subsidy could be enticed to make a donation to politicians. This can lead to “regulatory capture” and rent-seeking.