What To Keep In Mind For Starting A Business In Belgium In 2024

Belgium, known for its strategic location in Europe and highly skilled workforce, offers many reasons for starting a business. Entrepreneurs are attracted by the favourable market conditions and access to international markets.

However, specific considerations are crucial when setting up a business here. These include understanding the current economic state, navigating the legal and regulatory requirements, managing applicable business taxation, and complying with labour laws.

It is essential that entrepreneurs thoroughly prepare to ensure a smooth and successful business launch in Belgium.


Economic Overview


Belgium’s economy is currently presents both resilience and challenge. The growth outlook remains positive, with forecasts predicting a steady increase of around 1.3% for 2024 and 2025, following a strong performance in 2023 driven by consumer spending and a rebound in business investment, according to the European Commission.

However, inflation poses a significant concern. As government measures to control prices phase out, inflation is expected to peak at 4% in 2024 before gradually easing. This inflationary pressure could strain household budgets and potentially dampen consumer spending.

In terms of employment, the unemployment rate is anticipated to remain stable at approximately 5.6%, which is a positive indicator. Nevertheless, the European Commission points out that job growth is expected to decelerate.

Global tension such as the ongoing conflict in Ukraine continue to disrupt supply chains and elevate energy prices, impacting Belgium’s export-driven economy. High government debt, currently around 105% of GDP, further constrains the government’s ability to stimulate the economy during downturns.


Legal And Regulatory Framework


Starting a business in Belgium presents a mix of opportunities and regulatory requirements. Entrepreneurs need to follow several steps to ensure compliance.

The initial step involves selecting a business structure. Common options include a sole proprietorship, which is simple but offers no liability protection, and a limited liability company (BV/SRL), which is popular due to its protection of personal assets.

Once the structure is chosen, the registration process begins. This includes checking the availability of a unique company name and registering it, drafting the Articles of Association—which might require a notary for certain structures—and registering the business with the Crossroads Bank for Enterprises (CBE).

VAT registration is necessary if the annual turnover exceeds a specific threshold, and affiliation with a social security fund is required for the business owner and any employees. Depending on the industry, additional permits or licenses might be necessary.

Essential documents include a business plan, proof of identity for directors and shareholders, proof of company address, and a minimum capital investment, which varies based on the business structure.

It is advisable to seek professional assistance from a lawyer or accountant to ensure all legal requirements are met. Research specific requirements for your business type and industry to ensure a smooth registration process.



Taxation and Financial Management


Belgium’s tax system provides both opportunities and challenges for new businesses. Understanding the key taxes is essential for financial planning.

Belgium imposes a standard corporate income tax rate of 25%. However, for profits under €100,000, startups benefit from a reduced rate of 20%, providing a valuable tax break as FPS Finance reports. Local taxes may include property taxes imposed by municipalities. Employers and employees must contribute to social security, which funds healthcare, unemployment benefits, and pensions.

The standard VAT rate is 21% and applies to most goods and services as reported by Securex. Businesses collect VAT from customers and remit it to the government. Some items may qualify for reduced rates or exemptions. FPS Finance further reports that registration for VAT is required if annual turnover exceeds €25,000.

Sole proprietors face progressive income tax rates ranging from 25% to 50%, depending on their earnings, as reported by Expatica.

Businesses can reduce their taxable income by deducting legitimate business expenses. Given the complexity of tax regulations, consulting a tax professional is advisable to ensure compliance and optimise tax strategies. While tax rates may appear high, relief options like reduced corporate rates for startups and deductible expenses can decrease its burden.


Hiring and Managing Employees


Employers can choose between fixed-term and open-ended contracts, but there are restrictions on using fixed-term contracts. Probationary periods are generally not permitted unless included in a collective bargaining agreement.

The standard workweek is 38 hours, averaged over a reference period, Skuad reports. Overtime is strictly regulated. Belgium mandates a minimum wage, currently around €1,842.28 per month for full-time employees over 18 according to Multiplier. Employees are entitled to substantial paid time off, including vacation days, sick leave, and public holidays.

Strict non-discrimination laws protect employees from bias based on race, gender, disability, and other factors. Termination of employment contracts requires notice periods that increase with seniority, and employers must provide valid reasons for dismissal. Employers also contribute to social security, which offers benefits like healthcare and unemployment insurance.

Many industries are governed by sector-specific collective bargaining agreements that set minimum wages, working conditions, and benefits. Additionally, companies with 50 or more employees must have an internal system to report any misconduct.

Belgium offers a promising, albeit complex environment for businesses. Economic resilience is tempered by challenges like inflation and global uncertainties. The legal and regulatory framework, while providing essential protections, requires careful consideration to ensure compliance. Tax incentives and financial management strategies can help ease high rates, and understanding labour laws is key to maintaining a productive workforce. Overall, thorough preparation and professional guidance are essential for success in Belgium’s dynamic market.