Dutch Startups Hindered by Outdated Regulations, Techleap Report Finds
Amsterdam, Friday, 28 November 2025.
A Techleap report highlights how regulations designed for stable companies restrict the growth of Dutch startups in sectors like AI and medtech, despite strong infrastructure and institutions.
Regulatory Challenges for Startups
The Techleap report released on 28 November 2025 underscores the regulatory constraints hampering the growth of startups and scaleups in the Netherlands. The report points out that existing labor laws, including mandatory two-year sick pay and inflexible dismissal laws, are major obstacles for young, dynamic companies in sectors such as artificial intelligence (AI), semiconductors, medtech, and energy. These regulations, originally crafted for stable companies with long-term employment structures, are increasingly seen as misaligned with the operational realities of startups that thrive on rapid iteration and flexibility [1][2].
A Call for Modernization
Techleap advocates for a modernization of these regulations to foster a more conducive environment for innovation. Suggested reforms include shortening the mandatory sick pay period with public insurance stepping in subsequently, simplifying contract and dismissal procedures, and allowing greater customization within collective labor agreements. Such changes aim to reduce the financial risks and administrative burdens currently faced by startups, thereby enabling them to scale and innovate more effectively [1][2].
Positive Outlook Amidst Challenges
Despite these challenges, 35% of startups maintain a positive outlook, attributing their optimism to the Netherlands’ solid infrastructure, strong institutions, and professional working conditions. This sentiment reflects the potential for growth if regulatory frameworks align with the needs of modern businesses. The report emphasizes that a reformed labor market could unlock significant growth potential for startups, thereby enhancing the overall competitiveness of the Dutch economy [1].
Broader Implications for AI and Innovation
The regulatory hurdles identified by Techleap also resonate with broader efforts to boost AI innovation in the Netherlands. Initiatives like the proposed ‘AI Delta Plan’ aim to establish the Netherlands as a leader in AI by enhancing infrastructure, easing regulations, and fostering a supportive ecosystem for startups and scaleups. This strategic alignment is crucial as the country seeks to maintain its competitive edge in a rapidly evolving technological landscape [3][4].