Belgium ranked 46th out of 190 countries in the World Bank’s Ease of Doing Business Survey for 2020, and ranked first in trading across borders. Anyone doing business in this nation will be exposed to a diverse, open and globalised economy where companies can thrive and reach their full potential. Employees show great respect to rules, hierarchy and are results orientated. Belgians are naturally hard workers and generally good employees.
Belgium in the past has been a good tester market for companies looking to expand into Europe. It has multiple opportunities for high quality and top-end pricing services and products in a dynamic and open market. It is ideally located via train from rich economic powerhouse cities like London, Paris and even Amsterdam, and Brussels has excellent infrastructure and accessibility.
World Bank Ease of Doing Business Ranking (1-190)
Tax rates 2020
As of tax year 2021: 25%
Foreign companies are not required to be legally registered in Belgium in order to deliver Belgian payroll. They also do not have to set up in-country bank accounts to make payments to employees and tax authorities.
Employers in Belgium are required to deduct withholding taxes from employee wages to maintain payroll compliance. They must pay withholding taxes (quarterly or monthly) to tax authorities, file withholding tax returns, and to prepare an individual yearly tax slip that is sent to employees and tax authorities.
The Belgian social security system is based on the payment of social contributions on your income from work. These social contributions serve to finance the social security system. Each month the employer pays a considerable amount on top of your salary into the social security fund.
Belgium Corporate income tax rate is 33% (33.99% including the 3% surtax).
The total cost of employment to hire an employee in Belgium is normally in the region of 1.27 times employees salary.
The time to first hire is usually 6 weeks for an NRE and 8-10 weeks for a subsidiary but will naturally fluctuate for different companies and unique circumstances.
Most employment law is laid down in separate federal acts and executive royal decrees, the most significant of which is the Act on Employment Agreements of 3 July 1978. Apart from the Social Penal Code and Health and Safety Code, Belgian employment law is mostly uncodified.
Employees are protected by strict Belgian employment law and adhere to the social security scheme for employees.
By law employees are entitled to a minimum of 21 days plus bank holidays. However, the amount of paid holiday employees can take will be determined by the amount of time they worked last year and if they were paid holiday pay when they left their last employer.
For Belgian maternity and paternity leave, employees must tell their employer no later than eight weeks before the due date. Mothers can take up to 15 weeks maternity leave, receiving benefits equivalent to 82% of full salary for the first 30 days and 75% for the remainder.
Other types of leave:
Both workers compensation and statutory pension are mandatory in Belgium. The same goes for social security contributions which include; old-age and survivor’s pensions, unemployment benefits, insurance for accidents at work, insurance for occupational diseases, family allowances, sickness and disability benefits and annual vacation.
After choosing the legal structure of the company based on the size of the future business and share capital, you will need to apply for a bank certificate and open a bank account. You will need to gather all company documents that are mandatory constitutive and prepare the Articles of Association.
You must register with the Crossroad Bank for Enterprises. The Belgian Company Registry must receive all relevant documents from the company founders. At this point, the company number, which is also the VAT number, can be issued. The company must also be registered with the health insurance fund and the social security fund.
The choice of branch vs. subsidiary will depend on the level of liability the foreign corporation is ready to undertake when foreign companies may opt to open either a branch or a subsidiary in Belgium. The branch is merely an extension of another current company and the subsidiary is classed as a separate business form.
You must have a minimum capital of EUR 61,500 for a public limited company in Belgium.
Any key management decisions must be made in Belgium for all public limited and limited companies.
To start your business in Belgium you must have a separate Belgian bank account from any personal account.
It typically takes 13 weeks to set up a Belgian entity.
Common business structures in Belgium include:
• Société anonyme (SA) (public limited company)
• Société privée à responsabilité limitée (SPRL) (limited liability company)
• Société privée à responsabilité limitée “starter” (SPRL-S) (start-up limited liability company)
• Société coopérative à responsabilité limitée ou illimitée (SCRL or SCRI) (Co-operative company with limited or unlimited liability)
• Société en nom collectif (SNC) (general partnership)
• Société en commandite simple (SCS) (Ordinary Limited Partnership)
• Société en commandite par actions (SCA) (Limited partnership with share capital)
Foreign companies that open a branch will need to conduct the same business activities in Belgium as the parent company conducts in its country of origin. The procedure to start a branch is not entirely the same as that required to open a company in Belgium because of the fact that the branch does not need to have its own Articles of Association.
For a subsidiary, minimum share capital is €61,500, which must be fully subscribed and paid up. For a branch, no minimum capital is required.
The BVBA company in Belgium is essentially a private limited liability company. The two used names for this business form, BVBA or SPRL are derived from the Dutch and French names respectively.
If you do not have the expertise or the time to do your own payroll, outsourcing is a common and reliable method of setting up payroll in Belgium.
Some banks permit you to open a bank account online; you simply submit an online request and the bank will send you the required forms and information. You can also walk into any branch and open a Belgian bank account in person. To open a bank account in Belgium, you need to show proof of identity (passport or ID card) and proof of your address. In some EU countries, you may be refused a basic bank account if you already have a similar account with another bank in the same country. You must have a Belgian bank account, separate to a personal account before you start your business in Belgium.
The total cost of employment to hire an employee in Belgium is typically around 1.27 times employees salary.
For the employed, typically your employer will pay around 25% on top of your salary into a social security fund, and you’ll contribute an extra 13 percent from your salary. Read more about Belgian taxes. Self-employed individuals can also claim social security.
In Belgium, the use of probationary periods actually ceased at the start of 2014.
Belgium offers its workers 20 days paid annual leave a year but then they also get extra time off for the country’s 10 public holidays.
Government and local administration offices are generally open to the public from 8.30 AM– 1.00 PM. Most stores are open from 9:00 AM – 6:00 PM. The EU Working Time Directive has been adopted by the Belgian government limiting individuals to a maximum working week of 48 hours. The traditional 8.30-5.30 (sometimes 9.00-6.00) five-day working week, with an hour off for lunch, generally still applies in most Belgian companies.
Medical insurance and death/ Life insurance are the top two sought after supplementary employee benefits in Belgium. Other incentives to work for certain companies will include the option to receive stock shares, collective bonuses and warrants. In particular circumstances there may be family allowances for fringe benefits like a gym membership or staff discount in leisure and hospitality for instance. Other than that, standard choices such as company cars, petrol and meal expenses, vouchers or the provision of electrical equipment such as a work phone, laptop or tablet may entice the employee.
The employer may terminate the employment contract without notice or payment in lieu on ‘serious grounds’. The employer must provide a written statement of the specific reasons for dismissal in certain circumstances.
If you’re a national from outside the EU/EFTA, unless you already have a Belgian residence permit, you must apply to get a professional card (carte professionelle/ beroepskaart) to set up a business in Belgium. The professional card acts as your work permit.
Work permit A: This applies to all employee categories and is a ‘permanent work permit’. It is valid for an unlimited period of time, with any employer.
Work permit B: This allows you to work for only one employer and is restricted to one year.
Work permit C, which is available for all waged-base occupations and with any employer. It is renewable after one year.
The Crossroads Bank for Enterprises (CBE) is a database owned by the Belgian Federal Public Service Economy containing all the basic data concerning companies and their business units. The purpose of the Crossroads Bank for Enterprises (CBE) is increasing the efficiency of public services and simplifying administrative procedures for companies.