Startup community welcomes new Dutch stock option policy – but warns that failing to maintain momentum on reforms will limit growth

23rd Sep 2021

AMSTERDAM — 23 September 2021 — In a sign of European governments’ growing understanding of how to attract the talent for thriving startup ecosystems, the Dutch government has unveiled changes to its policy on employee stock options: instead of levying tax when the options are converted into shares, from 1 January 2022, tax will normally be levied only once shares can be traded and money becomes available.” 

Granting employees options to buy stock in a company is a vital tool for startups to attract and retain talent, since they rarely have the resources to match competitive corporate salaries. Part of its 2022 Tax Plan, the Dutch government’s move was welcomed by two prominent organisations: Not Optional, a campaign founded by Index Ventures and 500 founders and CEOs of leading European startups to improve employee ownership rules across Europe, and Techleap, a non-profit helping to build the startup ecosystem in the Netherlands.

Not Optional maintains a list of countries ranked according to the favourability of national stock option policies. Following the change in January 2022, the Netherlands will improve its standing in the Not Optional league table, moving ahead of Denmark, but trailing many other European countries including France, Portugal, the UK and Sweden. 

Not Optional and Techleap have long argued that taxation before liquidity (as the situation currently stands in the Netherlands) prevents stock options acting as a real draw for employees. It creates the problem of dry taxation”, where options are taxed but the employee receives no financial benefit on an essentially illiquid asset. This makes it hard for startups to incentivise talent, and stands in the way of successful high-growth businesses. 

Jan Hammer, partner at Index Ventures, said: The Dutch government’s move to reduce the tax burden for startup teams is a small but an important step. Employees should never be taxed ahead of receiving financial benefit. Unfortunately, in too many European countries, employees are still taxed before they see a single euro of gains – which discourages employees from taking up options in the first place. We welcome the new Dutch policy and encourage the government to keep progressing with further reforms.”’s director Community, Myrthe Hooijman, added: We are pleased with this first but important step. The dry taxation problem was something that really had to be fixed and we’re glad that the Dutch government listened to our concerns. Hopefully this contributes to a wider use of stock options within startups and scaleups in the Netherlands and empowers them in the fight for talent. We hope we can maintain the current momentum around employee participation in general and stock options in particular, fueled by the Not Optional campaign, and keep urging the government to be ambitious in its future reforms. Otherwise startups here will continue to be at a disadvantage compared to well-funded corporates and startups in countries with more competitive schemes.”

The European startup ecosystem has never been stronger with national stock options reforms occurring across the continent. To remain competitive, now is the time to make bold reforms that will drastically improve the Dutch startup ecosystem. Not Optional and Techleap look forward to discussing the proposal with the Dutch government, and finding appropriate avenues to improve the environment for Dutch startups.

About Not Optional

Founded by Index Ventures alongside 500 founders and CEOs of leading European startups, Not Optional is a policy campaign set up to support the reform of stock option policies across the continent. 

About Tech​leap​.nl

Tech​leap​.nl is a non-profit publicly funded organisation helping to quantify and accelerate the tech ecosystem of the Netherlands. Empowering people and their tech companies to scale with programs and initiatives for improving access to capital, market, technologies and talent. From international missions to diversity training, Tech​leap​.nl targets all areas of the ecosystem. Special Envoy for Tech​leap​.nl is Constantijn van Oranje.

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