The Dutch government offers a variety of support to entrepreneurs, from money to making life easier. If your business idea meets the requirements of one of the subsidy programs, you can apply for a grant from the Netherlands Enterprise Agency (RVO).
Subsidies are the government’s support of certain industries or activities that might not be profitable without the support. Subsidies typically are provided to help struggling sectors, promote new developments, or promote particular policies or social goods. They can be financially successful, but at a cost to other groups (for example food subsidies help farmers, but increases prices for consumers) It is also possible that they fail economically, yet achieve political and cultural goals.
Subsidies provided by the government can come in many forms. They include tax breaks, grants and rebates as well as direct cash payments made to suppliers or customers. They may be indirect too, such as road tax, which is paid by all motorists, not just those who drive, or railway access charges that do not just apply to trains for passengers.
Advocates of subsidy programs claim that they improve efficiency in the economy by providing protection from international competition or by stimulating domestic production. They can also be beneficial in preventing market failures such as externalities or information asymmetries. Critics argue that these policies could cause negative consequences ranging from corruption to inequality, and that they crowd-out more efficient and equitable spending by the government. They also can create unjust incentives. For instance, a firm that is benefited by a government subsidy will have an incentive to give money to politicians, which can contribute to “regulatory capture” and rent seeking.