Entering the Belgium Market

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Entering the Belgium Market

As a magnet for international expansion and investment Belgium punches above its weight. Belgium may rank only 34th among European nations in area but is often seen as being at the heart of the European market with direct access to the European Union’s consumer base.

Belgium is a modern industrialized society that depends heavily on foreign trade, especially with its European neighbors. Belgium’s impressive transportation infrastructure provides well-integrated networks linking it to the industrial, commercial, and business centers of Europe.

Expansion into a developed economy such as Belgium involves huge challenges - from finding highly qualified staff to complying with strict employment laws and tax and payroll regulations.

There are speedier and more cost-effective alternatives, with Bradford Jacobs opening the door to a hassle-free route into Belgium.

Work alongside our Professional Employer Organization (PEO) recruitment specialists, then utilize our Employer of Record (EOR) in-country experts to handle every aspect of compliance. Employers can depend on our in-depth knowledge of Belgium and how to navigate its challenging language and legislative issues. 

Here we have set out some basic summaries of what you need to make the transition into the Belgian market, whichever sector you operate in.

Starting a Business in Belgium

The new Belgian Companies and Associations Code (BCAC), implanted in 2020, restricted the permitted number of company types to four. They are the Partnership, the Limited Liability Company, the Cooperative Company, and the Public Limited Liability Company.

The BCAC intends the limited liability company (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL) to be the default company choice as it can be smoothly customized through its Articles of Association and has independent legal status to establish separate liability. This company type replaced the former private limited liability company.

Typically, foreign enterprises establishing subsidiaries in Belgium take the BV/SRL option and must then follow set procedures to become operational. Belgium has three legislative areas – Flanders, Wallonia, and Brussels-Capital. Using Flanders as an example, requirements include:

  • Confirm the business entity type for the new subsidiary – the most popular choice is a limited liability company, a BV/SRL
  • Open a bank account – in the company’s name with a financial institution established in Belgium
  • Draw up Articles of Association in the presence of a notary to have them registered with the Commercial Court
  • Publish company documents in the Belgian Official Gazette
  • Obtain enterprise number from the Central Enterprise Databank (BCE/KBO)
  • Official documents have to be translated into Dutch, French or German depending on the legislative region of incorporation
  • Apply for a bank certificate. Under the new BCAC, a minimum amount of capital is not required to incorporate a limited liability company. The bank certificate acknowledges any capital has been deposited in the company’s current account
  •  Shareholders are required to show they have sufficient funds for the incorporation
  • Draw up a Memorandum of Association including the financial plan, bank certificate, company audit and company founders’ report
  • Produce financial plan showing projections for two years
  • Register the Memorandum of Association within 15 days and submit an extract, signed by a notary if applicable, at the commercial court registry in the jurisdiction where the head office is based

Once the company is cleared to operate, other responsibilities include:

  • Electronically notifying the National Social Security Office (NSSO) staff have been hired
  • Registering staff with the NSSO at the start and termination of employment
  • Registering with the Tax Office for their region
  • Taking out an industrial insurance policy
  • Nominating a company officer to deal with employment documents and official correspondence with the NSSO and tax authorities
  • In the case of hiring staff from outside Belgium, notifying the NSSO of the start date and anticipated length of employment

Expanding Business into Belgium

Foreign companies expanding into Belgium are entering one of Europe’s key economies. Despite being one of Europe’s smallest nations in land mass, it is often seen as being at the heart of the European market with direct access to the European Union customer base.

Belgium has Gross Domestic Product of 579 billion US dollars and more than 140 million consumers within a 500km radius. It is home to powerful decision-making institutions, including European Union commissions in Brussels, the capital, and more than 1,400 governmental and non-governmental international organizations.

This is a modern industrialized society that depends heavily on foreign trade, especially with its European neighbors. Belgium’s impressive transportation infrastructure provides well-integrated networks linking it to the industrial, commercial, and business centers of Europe.

Belgium has an ideal location for further expansion into the European market … but has legislative and language issues which erect some business and culture barriers.

Incoming companies have to toe the line in terms of compliance with employment laws and Collective Bargaining Agreements that provide unbreakable protections for the workforce. There are other questions too: where will you find distributors, manufacturers, and offices? Before you make your move – speak to Bradford Jacobs.

Belgium Business Facts

  • Capital city – Brussels.
  • The Regions – Wallonia (French spoken) Flanders (Flemish/Dutch spoken) and Brussels.
  • Population – 11.65 million.
  • Official languages – Flemish/Dutch, French, German.
  • Economy and world ranking – GDP €492 (US$579) billion. Ranked 25th in the world ranking for GDP.
  • Leading sectors – services (69%) industrial (20%) and agricultural (1%) of GDP. Also, metallurgy, steel, textiles, chemicals, glass, paper, and food processing are the dominant industries.
  • Main exports – include chemicals, road vehicles, pharmaceuticals, plastics, machinery, and equipment, finished diamonds cultured pearls, mineral oils.
  • Main imports – include mineral fuels and oils, road vehicles, machinery and equipment, chemicals, raw diamonds, pharmaceuticals, nuclear reactors.
  • Main trading partners – Germany, France; Netherlands, UK, USA.
  • Government – a federal, representative democratic, constitutional monarchy. Plays host to NATO.
  • Currency – Euro.

Advantages and Challenges of the Belgium Market

Advantages of expanding into the Belgian economy include:

  • Trade: Among the world’s top exporters with no trade restrictions
  • Business: Established procedures for setting up new entities in an entrepreneur-friendly business environment
  • Logistics: Excellent infrastructure and transport links with coastal and inland ports, airports and extensive rail and road networks providing European and worldwide links
  • Consumers: Culturally diverse population ideal for testing new products and more than 500 million consumers within the EU
  • Location: Close to major production centers and sales markets
  • Global role: International decision-making center with many European and international institutions and over 2,000 multinationals
  • Communications: First class internet and telephone networks
  • Workforce: Highly qualified and multi-lingual

Challenges of entering the Belgian economy:

  • Regulations: Legislative and language complications posed by having three separate regions
  • Economy: Excessively dependent on western Europe business
  • Taxation: High corporate taxes can deter incoming businesses
  • Employment: Strict laws and regulations, particularly for employee dismissals
  • Politics: Brexit complications following departure of the United Kingdom, which is Belgium’s fourth largest trading partner
  • Intellectual Property: Rights apply independently to Belgium’s three legislative regions, meaning companies have to obtain patents and licenses for each

Limited Company / Subsidiary or Branch in Belgium?

International companies targeting Belgium for expansion will generally choose a limited liability subsidiary (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL) as they have independent legal status to establish separate liability. Under the 2020 Belgium Companies and Associations Code (BCAC) this company type replaced the former private limited liability company.

The parent company has the advantage of exploring the potential of the Belgian market without committing to major capital investment. There is also the potential to move further afield across Europe and into Scandinavia. Branch offices, however, are an extension of the parent company and are not a separate legal entity.

More characteristics can be seen below.

Main characteristics of a subsidiary:

  • It is a separate legal entity to the parent company, which has little responsibility for the subsidiary’s debts or liabilities
  • The subsidiary is treated the same as a local Belgian company
  • Subsidiaries do not have to provide the parent company’s financial records or accounts
  • The subsidiary does not have to pay Withholding Tax on profits paid to the parent company
  • Can operate under a different name to the parent company and pursue its own contracts and business activities
  • The subsidiary is treated the same as a local Belgian company. It pays corporate tax on its worldwide income and is also liable for VAT and social security taxes

Main characteristics of a branch:

  • A branch in Belgium does not have its own Articles of Association, but presents those of the parent company translated into the relevant language for that region
  • Documents are submitted to the Registrar of the Commercial Court and with the Bank for Enterprises
  • The legal representative needs to be based in Belgium, but does not have to be a Belgian citizen
  • Registration with the tax and social security authorities applies to branches
  • Branches have the same name as the parent company and must follow identical business activities

Expert guidance is vital when weighing the options between a subsidiary and branch in Belgium. There is an alternative route – one that is quicker, stress free, cost effective and will have you up-and-running in days rather than weeks or even months. Bradford Jacobs will source top talent for your company. Once you select your new employee our Employer of Record (EOR) specialists will handle every aspect of employment law, including payroll and tax.

Legal Structure for Belgium Market Entry

All entities established in Belgium come under the Belgian Company Act, the Company Code, Corporate Governance Act and Financial Supervision Act.

The legal structure for a limited liability company:

  • The legal structure for a subsidiary allows it to operate independently from the parent company, under its own name and able to follow its own commercial and business activities. 
  • Subsidiaries in Belgium are likely to be formed as a limited liability subsidiary (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL) as they have independent legal status to establish separate liability. 
  • Under the 2020 Belgium Companies and Associations Code (BCAC) this company type replaced the former private limited liability company. 
  • The BV / SRL is allowed to have only one shareholder, whether an individual or an entity. One or more individuals can be designated to run daily operations without needing to convene board meetings.

The legal structure for a branch:

  • Legally, the branch is an extension of the foreign parent company, operates under the same name and follows the same business activities. 
  • The branch has no equity or board of directors, but legally the parent company’s directors are responsible for its debts and liabilities. 
  • The branch does not have its own Articles of Association but presents those of the parent company to the Registrar of the Commercial Court. 
  • The legal representative must be a Belgian resident but not necessarily a Belgian citizen.

Opening a Business Bank Account in Belgium

The Belgian banking system is considered to be a sophisticated and liberal player in the international banking market, a forerunner in the cashless society. As one of the major financial centers of the European Union, Belgium operates around 100 different banks with the majority of them foreign owned.

Electronic transactions, phone and e-banking are well established. Free movement of capital, good governance and organization means hassle-free procedures for consumers, especially since the 2020 Banking Review. Ease of banking for companies and opening business bank accounts is good news. Make sure you are up to date, so as not to miss out.

If you do not want to trawl through the new regulations and directives, this is where Bradford Jacobs can help with 20 years’ experience in the global marketplace, not just with operational systems (payroll and compliance) but also with the small details that can mean so much to the smooth running of your business. After all, ‘success is in the details’.

Considerations when opening your business bank account:

  • Choose your bank carefully. For example: Fees for services. How much and how are they applied; collectively or individually? Other services offered e.g., number of ATMs, language spoken, availability of risk capital, currency accounts etc. according to your company needs
  • Maybe you have a bank account already in your home country or another EU country that has branches available in Belgium
  • Documents required to open the corporate account, which is mandatory for companies in Belgium:
    - Two references
    - Documentation regarding address
    - Two passport photos
    - Mandate for all signatories on the account
    - Legal documentation for foreigners / residence permit
    - Certificate of incorporation
    - Company Memorandum and Articles of Association
    - Letter from Board of Directors authorizing opening an account

Some banks may ask for more (or less) documentation depending on the type of account or bank chosen – so talk to them. Ask also whether your company is still required to deposit share capital as there were changes in the banking system in 2021 for some private limited companies.

Company Formation in Belgium

All entities established in Belgium come under the Belgian Company Act, the Company Code, Corporate Governance Act and Financial Supervision Act. The Belgium Companies and Associations Code (BCAC), implemented in 2020, rationalized the number of companies to the following:

  • Partnership (Société simple / Maatschap)
  • Limited Liability Company (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL)
  • Cooperative Company (Société cooperative / Coӧperatieve vennootschap)
  • Public Limited Liability Company (Société anonyme / Naamloze cennootschap)

Foreign companies will typically choose to register a limited liability company and must follow strict registration procedures. These include:

  • Draw up Articles of Association in the presence of a notary to have them registered with the Commercial Court
  • Publish company documents in the Belgian Official Gazette
  • Obtain enterprise number from the Central Enterprise Databank (BCE/KBO)
  • Official documents have to be translated into Dutch, French or German depending on the legislative region of incorporation
  • Apply for a bank certificate. Under the new BCAC, a minimum amount of capital is not required to incorporate a limited liability company. The bank certificate acknowledges any capital has been deposited in the company’s current account
  • Shareholders are still required to show they have sufficient funds for the incorporation
  • Draw up a Memorandum of Association including the financial plan, bank certificate, company audit and company founders’ report
  • Produce financial plan showing projections for two years
  • Register the Memorandum of Association within 15 days and submit an extract, signed by a notary if applicable, at the commercial court registry in the jurisdiction where the head office is based

Once the company is cleared to operate, other responsibilities include:

  1. Electronically notifying the National Social Security Office (NSSO) staff have been hired
  2. Registering staff with the NSSO at the start and termination of employment
  3. Registering with the Tax Office for their region
  4. Taking out an industrial insurance policy
  5. Nominating a company officer to deal with employment documents and official correspondence with the NSSO and tax authorities

Finding an Office in Belgium

Belgium is packed with potential across a wide range of industries in an important European hub. A major competitor in the European market, with prime connections to the rest of the continent, Belgium offers a strategic ‘landing spot’ for all businesses. From budding entrepreneurs to established companies and start-ups.

Belgium has thriving and rapidly developing ‘business clusters’ featuring Innovative Business Networks (IBN) and ‘spearhead clusters’.

Foreign employers locating offices in the relevant business hubs and clusters can:

  • Find free support helping them to grow on the international stage
  • Access coaching, guidance, and networking opportunities
  • Maximize ideas, knowledge, research, and development opportunities

Whether your preference is for shared space and facilities, or ‘bricks and mortar’, there are questions to ask:

  • What local government funding or tax breaks are available?
  • Ease of travel and good transport links for staff and clients
  • Is it light, airy, and modern to keep the work force happy?
  • Is the locality clean and good for mental health, provides services and accommodation to attract the top talent and keep them?
  • Is it necessary to be near to manufacturers or distributors?

Examples of Belgian hubs and prime locations for new companies to establish offices, are:

  • Hub.brussels: This is the Brussels Business Support Agency, firmly focused on innovation and inspiration for city projects and users, as well as supporting businesses and hosting six specialized innovative clusters
  • Smart Hub Flemish Brabant: An initiative including five innovative tech clusters: health, food, logistics, cleantech, media and creative industries. Flemish Brabant encircles Brussels, the capital, and its mission is to stimulate innovation and encourage collaboration
  • Flanders: Innovation & Entrepreneurship is a government agency: Its main goals are to unlock unused economic potential and increase competitiveness

An alternative to renting office premises or working from home is to rent space in office units for small enterprises. The advantages are relatively low rent and flexible conditions and notice terms are usually short.

Bradford Jacobs, as part of their international expansion services, can act as office brokers for companies expanding into Belgium.

Finding a Belgian Manufacturer

Companies may need to partner with manufacturers in Belgium. 

Belgium’s largest manufacturing sectors are chemical products (19% of total production); food products and beverages (16%); basic metals (11%); motor vehicles, trailers, and semi-trailers (10%); pharmaceuticals (8%); machinery and equipment (5%) and fabricated metal products (5%).

Checking the options before making the move is critical to success. Globally ambitious businesses and entrepreneurs must ask key questions in their search for a manufacturing partner.

  • Do they hold relevant quality certificates?
  • Can they deliver direct to customers?
  • What businesses have they worked with? Ask about current clients!
  • Can they keep up with demand?
  • Are they financially sound?
  • How will local customs impact production?
  • Can they source or outsource materials?
  • How will language impact on communication – a major consideration in Belgium?
  • What is their minimum order quantity?
  • Discuss possible penalties for poor quality or late deliveries.

You may also want to consider:

  • Market research and avoid manufacturing a product in a saturated market
  • Licensing to a company that can handle manufacturing, marketing, and distribution
  • Can the manufacturer build and test a prototype?
  • Protecting your intellectual property

Explore links to Belgian manufacturers and reach out to local business groups and check local business directories. Multi-sector directories for Belgian manufacturers include:

Finding a Belgian Distributor

A successful move into Belgium will prove wasted without a front-line distributor to move your products around the country, or across mainland Europe and farther afield. Finding the perfect match among the distributors is critical to accomplishing your objectives. Treat distributors as long-term partners and work with them to formulate goals and business plans.

Finding an agent or distributor requires clear and to-the-point communication. The decisive part is getting to the right person first by phone, which might be difficult to do in English. In northern Belgium inhabitants speak Dutch-Flemish, in the south they speak French, with German spoken in the eastern part of the country. Because of these cultural differences marketing and advertising should be developed that reflect the populations of each region.

Largely open to foreign trade and home to sophisticated distribution systems and well-developed infrastructure, Belgium has attracted many foreign companies and, in return, developed a highly competitive marketplace.

Finding a distributor in Belgium is easy but finding a top line one is not! This is where Bradford Jacobs can guide you step-by-step from finding an office to launching your product. For those who want to go it alone … here are a few pointers. 

Some countries governments organize trade missions to encourage mutual trade. They can target relevant companies more easily to arrange for face-to-face meetings as well as being aware of the best trade fairs or conferences to attend. 

Joining B2B groups, accessing local directories and magazines or exploring social media; all good vehicles for networking to become familiar with your new country. Explore links to distributors, such as:

At Bradford Jacobs, we mean business!

Treat Bradford Jacobs as your business consultant when planning your move into Belgium. Our in-country specialists will steer you towards the frontline manufacturers and distributors and help you locate your offices in prime locations for your specific business activities. We find the staff, we get them working, and your company will be up-and-running in no time. 

We are ready - call us now!