Risks and considerations of doing business in Belgium
Brexit and Belgium
Belgium has strong ties to the United Kingdom, putting it at high risk from Brexit fallout. The UK is Belgium’s fourth-largest trading partner.
Estimates suggest that Brexit could result in significant job losses in Belgium, which could further compound an already high unemployment rate.
Belgium has intellectual property rights that are territorial, meaning that businesses are only granted protection in the specific regions in which they are registered. Additionally, there isn’t a single European patent; companies must instead get a “bundle” of patents in each region in which they do business.
Belgium consistently ranks high for salary spending when compared to other regions in the European Union. The country’s social security contributions and income tax rates are among the highest in the European Union. Only France has higher social security contributions.
However, the country offsets this expense with a lower income tax.
Taxation is skewed toward labor income, which can negatively impact growth and employment in Belgium, according to the OECD Economic Survey. The country’s total tax and contribution rate is 55.4 percent. This is high compared to the average 39.9 percent of OECD high-income jurisdictions. Of the 55.4 percent tax rate, about 44 percent is dedicated to labor tax and contributions.
Additionally, companies doing business in Belgium are required to make 11 tax payments annually.
Expanding with greater success
Operating in a new country (even one as business-friendly as Belgium) is often a daunting task. Without a firm grasp on the evolving nature of local laws, regulations and business practices, expanding businesses can face the possibility of delayed entry, rising costs, tax penalties—or even civil or criminal litigation.
In order to avoid such a scenario, it's important to find a trusted partner with global reach and the experience to help ensure a smooth transition. CT can help you get set up, provide a single point of contact and provide you with customized solutions for all your needs. We know that one size does not fit all.
To learn more about how CT can help you better manage your global compliance needs, contact a CT representative at 855-444-5358 (toll-free in the U.S.).
Frequently asked questions
Why should I consider doing business in Belgium?
Belgium’s geography and French-, Dutch- and German-speaking populations make it an attractive location to test new products in the European market. The country is also the 12th largest exporter and the 14th largest importer of goods worldwide. A strong infrastructure and robust shipping systems make it an attractive place to do business due to industry and logistics.
What challenges should I consider when expanding to Belgium?
Belgium is at high risk due to Brexit because of its strong links to the United Kingdom. The UK is Belgium’s fourth-largest trading partner and is responsible for 8% of the country’s exports and 5% of its imports.
Additionally, the country has territorial intellectual property rights that require businesses to undertake additional processes to get protections in individualized territories. High tax rates are skewed toward labor income and may adversely affect growth and employment.
What are the entity types available?
There are several entity types to choose from, including public limited company, private limited company and Belgian Branch Office.
How long does it take to complete the incorporation process?
It takes one week, provided that all documents and required translations are completed.