The Netherlands has several business opportunities to help investors earn a hefty profit. However, people who want to start or finance their business in the Netherlands have to follow specific steps. Most people are unaware of these steps, which causes them numerous problems.
However, if you are one of those people, today is your lucky day. Today we will discuss the essential steps you can follow to finance a business in the Netherlands.
8 steps to finance a business in the Netherlands
Below-specified is the 8 key steps you need to follow to finance or start a business in the Netherlands.
Step 1: Check if you are authorized by the authorities to start a business in the Netherlands
One of the primary steps to follow when considering financing or starting a business in the Netherlands is to check the rules and regulations stated by the Netherland government about business.
- Typically, EU citizens, without any hassle, can finance or start their own business.
- Swiss citizens and citizens of EEA can also finance a business without facing any legal issues from the government.
- However, in most cases, non-EU citizens need to have a permanent residency permit (PR) or a work visa to finance a business in the Netherlands.
- However, as there are different ways to finance a business in the Netherlands, there are numerous admission schemes for foreign investors.
If you do not know about the rules and regulations, you can consult with a lawyer to learn more.
Hiring a lawyer would also make sure that you get your rights boldly stated as comprehending the legislature without one is strenuous.
Step 2: Getting help from Regional Development Agencies
One of the ways in which you can finance a business in the Netherlands is getting funds from Regional Development Agencies (RDA). RDAs have investors, bankers, and public shareholders who work for the betterment of the Dutch economy.
There are 8 RDAs in the country that can help you finance a business in the Netherlands. RDAs in the Netherlands fund innovative and fast-growing businesses. So, if your business is one of those, there is a high probability of you getting the venture capital.
Moreover, RDAs also help in internationalization, which means whether you are a resident of the EU or not, you can get funds from them to finance a business.
It is worth mentioning that sometimes, RDAs might put up a proposal to business owners suggesting equity ownership.
Step 3: Financing through Venture Capital Companies
You can also contact Venture Capital Companies to finance a business in the Netherlands and bolster its growth. Venture Capital is a fund that investors, bankers, shareholders, or companies give to businesses without having the certainty it would be profitable in the market.
- However, Venture Capital Companies in the Netherland give funds to businesses that are fast-growing and promising.
- Venture Capital Companies in the Netherland tend to invest up to $250,000 or more in a company.
- As Venture Capital companies get tons of applications from startups to small and medium scale businesses, it is hard to get selected.
It is why always make sure to consult or hire a lawyer that can help with the overall process, which includes knowing how investors assess companies. Or individuals require a fund.
Step 4: Getting funds from the crowd
Another way you can finance a business in the Netherlands is by luring the public to like your business. However, for this, you need to find the best crowdfunding platforms where you can showcase your idea or explain the overview of your company.
Crowdfunding can be in numerous forms. Some of those include:
- Equity-based funds
- Profit-sharing funds, and more.
Therefore, make sure to investigate what types of crowdfunds you are comfortable with. Otherwise, it can cause you numerous problems in the latter.
There are numerous websites such as Crowdfundmarkt and Fundwijzer that can help you get in contact with some of the most reputable crowdfunding platforms.
Step 5: Seed capital
If you think your business is innovative or creative, you can get the seed capital to finance it. Seed Capital refers to the capital that investors, typically private ones, give only to startups or relatively new companies (0-5 years old).
The Seed Business Angel Fund in the Netherlands is administered and run by two parties. It includes:
- Ministry of Economic Affairs and Climate Policy (EZK)
- Private investors.
Both the parties give half the funds to the businesses they think can rise in the market. Most of the time, equity-based capital or funding is offered to business owners by the platform.
Step 6: Private investors can be your friends
You can also pitch your business idea to private investors, and if they find it innovative or ground-breaking, they might invest in it. Private investors do not, by any means, contact authorities before investing in a company.
Private investors can typically invest somewhere between €50,000 and €750,000. However, unlike RODs and crowdfunding, private investors give you the capital in the form of a loan or equity. Moreover, private investors can also provide a company with valuable resources such as office space, skilled workers, and more.
Step 7: Bank
Numerous banks in the Netherlands can help you finance a business in the Netherlands. However, to take a loan from a bank in the Netherland, if you are not an EU/Swiss Citizen, there are some rules and conditions for which you should be eligible. Bank loans are ideal for small to medium-sized businesses.
Step 8: Have a business plan.
After checking your resident and legal rights, making sure they comply with the Netherlands’ government, and selecting the way in which you want to finance a business in the Netherlands, create a business plan.
A business plan includes all the primary aspects of a business, including its strongest points and stats that can convince the lenders because they should invest in your business.
Having a business plan would allow you to focus on key steps that you need to take to finance your business.
We have covered the 8 steps you can follow to finance a business plan in the Netherlands. Before getting funds from one of the specified parties, make sure to read the terms and agreements of the contract.