07 Ago Subsidy Programs and Financing For Entrepreneurs
The Dutch government supports entrepreneurs in various ways, from offering money to making the process 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 are basically government support of certain industries or businesses that might not be financially viable without this support. Subsidies typically are provided to help struggling sectors or to promote new developments or promote specific policies or social goods. They can be successful economically, but at the cost of other groups (for example the food subsidy aids farmers, while increasing prices for consumers), or they may fail economically but achieve political or cultural goals.
Subsidies from the government are available in a variety of forms. They include tax breaks, grants and rebates as well as direct cash payments made to customers or suppliers. They may also be indirect, such as road taxes that are paid by all motorists rather than just those who travel on roads or railway track access fees that are not only imposed for passenger trains.
The advocates of subsidies claim that they can improve the efficiency of an industry by protecting it from international competition or by encouraging local production. They can also help to counteract market failures, like externalities or information asymmetries. The opposition claims that these policies could cause negative effects that range from inequality to corruption, and that they crowd-out more efficient and equitable spending by the government. They also can create perverse incentives. For instance, a business that is benefited by a government subsidy may be enticed to make donations to politicians, which can contribute to «regulatory capture» and rent seeking.
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