Budget Day 2025: Entrepreneurship Must Pay Off, Half a Billion Extra for Innovation

This is urgently needed, as the economic growth figures for the Netherlands are concerning. The Central Planning Bureau (CPB) expects economic growth to be 1.4% in 2026 (2025: 1.6%). That may sound positive, but the Netherlands needs higher economic growth to be able to continue to pay for everything - from education to security. Moreover, the Netherlands has already experienced a longer period of moderate growth, and the CPB predicts that this growth will further decline in the longer term.

Minister Karremans (Economic Affairs): “Good care and a social safety net for those in need are extremely important. However, we also see that rising expenditures are swallowing our economic growth. In order to keep these provisions strong and affordable in the future, we must leave room to invest in our economy. This can only happen if that money is first earned. For that, we need a strong and entrepreneurial business community.”

Equally important is that companies can rely on stable government policy. Especially regarding stability around tax regulations and not constantly placing the burden on businesses. Entrepreneurs can therefore continue to take advantage of important regulations to operate in the Netherlands. Such as the SME profit exemption, interest deduction within corporate tax, and the expat scheme.

The SME gives the Dutch entrepreneurial climate a tight pass, so we are not there yet with just stability. Therefore, the cabinet will additionally focus on reducing regulatory pressure by eliminating, adjusting, or clarifying rules. As part of this approach, the cabinet has decided to eliminate the mileage registration (reporting obligation for work-related mobility) for the entire SME (<250 employees).

Minister Karremans: “Entrepreneurs have too little trust in politics. This calls for action, so that we do not frustrate but rather stimulate businesses. That is why this budget is ‘entrepreneur-friendly’ and we are investing in our future earning capacity. But the fact remains that our business climate, especially for SMEs, requires significant improvements. The cabinet is fully committed to this, among other things, by reducing the stifling regulatory pressure in the Netherlands. In this context, we are eliminating the mileage registration for the entire SME, as the first of the 500 regulations that the cabinet wants to simplify or eliminate by the summer of 2026. At the same time, it is necessary to strengthen the business community. The Netherlands must increasingly do more with fewer people. This requires smarter working and additional investment in knowledge, technology, and innovation. Therefore, the half a billion euros in investments in this area is crucial.”

The Ministry of Economic Affairs will contribute more than half a billion euros extra to innovation starting in 2026. Below are the three main new investments.

In the coming years, new applications of semiconductors in the industry will accelerate. These developments are rapid and have a significant impact on our earning capacity. Thanks to innovation, the Netherlands currently has a good international starting position. The cabinet wants to maintain that knowledge and competitive strength while also preventing unwanted dependencies in technology and industry.

Therefore, the cabinet is making 230 million euros available for the Netherlands participation in an IPCEI, an Important Project of Common European Interest, in the field of Advanced Semiconductor Technologies (AST). ICPEIs are large-scale European collaborations of companies and knowledge institutions around an innovative technology, a production chain, or infrastructure that is considered strategically important for the EU. Member states may provide more public funding than is normally allowed.

The growth of startups in Europe lags far behind that of, for example, the United States, partly due to a lack of available (venture) capital. Therefore, various countries have joined forces to gather financing for this purpose.

For Dutch startups with the potential to grow into scale-ups, additional budget is available. The Ministry of Economic Affairs is contributing €200 million to the so-called European Tech Champions Initiative (ETCI). With this funding, innovative Dutch companies can also take steps forward. In 2023, the cabinet already invested 100 million euros in this.

The subsidy for the Wet Bevordering Speur- en Ontwikkelingswerk (WBSO subsidy) is a tax advantage scheme for innovation. The budget for the WBSO will increase to 1.8 billion euros in 2026 (was 1.6 billion euros). This means companies will pay less tax for their research and development (R&D) and can innovate more cheaply. This leads to more companies conducting R&D in the Netherlands.