If you are an entrepreneur on the journey of establishing a technology-focused Startup, one of the criteria determining which market you will choose as the centre of your business is the government support offered to technology Startups. In this respect, the Netherlands provides hope for many entrepreneurs and an example for many countries. If you want to get an overview of government support, government loans and tax advantages for Dutch technology startups, you are in the right place. As Unusual Companies specializes in company establishment and business growth processes in the Netherlands, we list how a tech state supports a technology company in this article.
Overview of the Dutch start-up ecosystem
Before explaining government support for technology startups in the Netherlands, it is necessary first to analyse the general outlines of the Dutch startup ecosystem. The Netherlands, known worldwide for its culture of openness to development and innovation, also hosts a developing and collaborative startup ecosystem. Notes compiled by PwC on the Netherlands are listed as follows:
- According to Startup Genome's Global Start-up Ecosystem Report 2022 study, the Netherlands is the 4th best European country for Startups. Amsterdam is positioned as the second-best city to establish and grow a Startup.
- The Netherlands is also internationally recognised for hosting accelerators and incubation centres such as Holland in the Valley, ScaleNL, and Global Entrepreneur.
- Data compiled by Dealroom shows that there are more than 20 unicorns in Amsterdam alone, making the city, the capital of the Netherlands, one of the third fastest-growing tech hubs.
- The Dutch city of Eindhoven is listed seventh among the world's best science centres, according to Dealroom.
- Current 2023 data on the Dutch Startup ecosystem shows that Netherlands-based Startups received € 525 million of investment in the second quarter of 2023 alone, despite the global economic recession.
- The Netherlands offers entrepreneurs who want to establish a start-up in the country various privileges, such as the Netherlands Startup Visa, which allows them to develop their business ideas for a year in the Netherlands and includes a residence permit.
Summary of Government supports for Tech Startups in the Netherlands
Government grants, loans, funds, mentoring programs and tax advantages for technology Startups in the Netherlands impact the success of Netherlands-based Startups. The Dutch Enterprise Agency (RVO) offers private financing, a strong national network and personalised advice for passionate entrepreneurs who want to start and grow their businesses in the Netherlands. Within the scope of the Passionate Entrepreneurship Action Plan, the Dutch government is bringing together many pieces to provide Dutch technology startups with better access to capital, know-how, innovation and the global market, and allocates a budget of € 75 million for the following activities stated in official sources:
- Early-stage financing to investigate whether an idea or product is technically feasible and market-friendly.
- Scale-up support for companies that are past the seed stage and ready to scale
- Foreign entrepreneur incentives with programs such as Techleap and Netherlands Point of Entry
- Temporary residence permit for entrepreneurs from outside the European Union with the Startup Visa program
- Funding under Horizon 2020, the European Commission program to promote research and innovation in Europe.
Financial Dutch government supports for technology Startups
The main forms of financial governmental support in the Netherlands for technology Startups are as follows:
- Reduction in payroll tax, R&D incentive: This support, also known as the WBSO tax credit advantage for start-ups, provides companies that engage in R&D with a discount on the payroll taxes.
- Innovation credit: Companies working on the technological development of a new product, process or service or developing a drug / clinical device can benefit from the Dutch innovation credit.
- Seed capital: The Seed Capital program, developed by the Ministry of Economy and Climate Policy to provide state support to Startups, provides capital support to investment funds that invest risk capital in innovative initiatives in the technology and creative sectors.
- Seed angel investment: The Dutch government offers a loan to investors who want to make angel investments in entrepreneurs with this fund.
- 30% Ruling: The 30% Ruling, known as a tax incentive that companies employing highly skilled migrants in the Netherlands can benefit from, stipulates that the employed highly skilled migrant will be taxed on 70% of their total income, and thus, companies can pay higher salaries to their expat employees.
The Dutch government's incentives for technology Startups are not limited to capital financing. The Dutch government, which guarantees bank loans to technology start-ups with programs such as loan guarantees for SMEs and corporate finance guarantees, makes it easier for entrepreneurs to navigate the economy with Dutch Startup individual consultancy programs.
Communities and incubators for Dutch tech entrepreneurs
The Netherlands also hosts many Startup communities and accelerator programs such as Tecleap, Dutch Startup Association, Startup Amsterdam, Startup Bootcamp, Techstars, Plug and Play, Rockstart, and High Tech XL. Incubation centres such as Dutch Incubators, Security Delta, Cambridge Innovation Campus, and Impact Hub also offer environments where entrepreneurs who are in the process of establishing a company in the Netherlands can grow their business ideas.
Unusual Companies knows how to grow in the Netherlands
At Unusual Companies, we bring extensive experience in the Dutch market through our international team and establish ourselves as a trusted service provider supporting your growth journey. We understand the entrepreneurial journey and the opportunities for growth in the Dutch Startup ecosystem. Starting as a small Startup in the Netherlands ourselves, we have expanded our customer base across diverse industries and from around the globe. Our team now comprises experienced professionals from various backgrounds and nationalities. Reach out to us today for information on our comprehensive range of services, from Company Establishment in the Netherlands to Startup Visa Consultancy.
