The Dutch government provides a variety of support for entrepreneurs, ranging from financial assistance to making life easier. If your business idea meets the requirements of one of the subsidy programs, then you can apply for a grant through the Netherlands Enterprise Agency (RVO).
Subsidies are basically government support for certain activities or industries that wouldn’t be financially viable without it. Subsidies are usually provided to help struggling sectors as well as to promote new innovations or promote specific policies or social benefits. They could be successful economically however, at the cost of other groups (for instance, a food subsidy helps farmers while increasing prices for consumers), or they may fail economically but achieve the goals of culture or politics.
Government-provided subsidy can take a variety of forms, such as grants, tax breaks, rebates or direct cash payments to customers or suppliers, and price controls. They may also be indirect, such as road taxes that are paid by all motorists rather than only those who drive on roads, or railway track access fees which are not exclusively imposed for passenger trains.
Advocates of subsidy programs argue that they can increase efficiency in the economy by providing protection from competition from abroad or by increasing domestic production. They can also be beneficial to counteract market failures, like externalities and information inequalities. But, critics contend that these policies can have negative effects, ranging from inequality to corruption and that they crowd out more equitable and efficient public spending. They also create perverse incentives. A business that receives a government subsidy might be enticed to make a donation to politicians. This can lead to “regulatory capture” and rent-seeking.
