Everything you need to know about entrepreneurial funds

What is an entrepreneurial fund?

An entrepreneurial fund is a shared pot of money for entrepreneurs in a municipality, shopping area, or business park. All entrepreneurs in the area concerned must pay contributions to the fund. The board of the fund, together with business organisations and the municipality, decides what to spend the money on. The fund should not replace activities that the municipality already carries out. Such as standard maintenance of roads, pavement, and squares. The fund is extra financing for camera surveillance, for example, or monitoring and signage on a business park. Or for festive lighting and extra decoration of a shopping street or centre.

Setting up an entrepreneurial fund

A business association often takes the first step towards setting up an entrepreneurial fund. This is because such a fund needs support from businesspeople in the area. The business association must convince the municipality that an entrepreneurial fund is needed. The municipal council makes the decision on whether a fund will be set up. If this is the case, then the entrepreneurs and municipality set up a foundation for this purpose. The municipality collects the entrepreneurs' contributions on behalf of the foundation.

Governance

The board of the foundation defends the interests of entrepreneurs in the municipality and is independent. The foundation draws up a work plan together with entrepreneurs and the municipality. The board ensures that the plan is implemented. In the case of larger funds for the entire municipality, the foundation divides the money between different business parks, shopping areas, or specific sectors.

Models for entrepreneurial funds

There are different models for financing entrepreneurial funds. The 3 most common funds are:

The Leiden model

This model is named after the city of Leiden where it was first used. In this model, businesses pay an extra amount (surcharge) on top of the onroerendzaakbelasting (ozb, property tax). The Leiden model applies to the entire municipality and must include plans for the entire area. There is a national platform for ozb entrepreneur funds (in Dutch). Here you can see in which municipalities such a fund is active.

Entrepreneur fund via advertising tax

This fund is financed by a levy on business advertising visible from public roads. Advertising tax (in Dutch) can apply to a specific area or to the entire municipality.

Business investment zone (BIZ)

As in the Leiden model, companies in a Business Investment Zone (BIZ) pay an additional amount on top of the property tax (ozb). A BIZ is always for a specific area within a municipality. Every 5 years, the companies must indicate whether they still want to continue with the BIZ. They must also draw up a new plan.