Start your business in Belgium on the right foot by learning about the potential hurdles and Belgian regulations for foreigners starting a business in Belgium.
Starting a new business is always fraught with risk, but it can be all the more complex in a foreign country. However, being prepared when starting your business in Belgium can help you overcome the small hurdles, and it is important to research the Belgian red tape for expats to open a business in Belgium.
Starting a business in Belgium
Briton Roger George runs a highly-successful supermarket on the outskirts of Brussels.
The three-floor store opened 27 years ago, sells everything from greeting cards and British foodstuffs to bed linen and clothing. It attracts expats from miles around.
But the difficulties the George encountered in setting up his business still makes him wince.
“The red tape in Belgium was the worst of it,” recalls George, who hails from Norfolk and gave up a top job with a multinational company to start the business with his wife.
Even now, he does not believe things have improved very much.
“For example, I have been trying no less than six years to change the name of the business. It is the sort of thing which, in the UK, you could do in a couple of days, but here it is a nightmare,” he says.
Reducing the risks
Depending on who you talk to, advice for anyone thinking of starting a business in Belgium ranges from, “Don’t bother, it isn’t worth it,” to, “Go for it.”
Louise Harvey, who has lived in Belgium for 14 years, set up a Brussels-based public affairs consultancy three years ago and has not looked back since.
“It was a little long-winded, but relatively straight-forward,” she says. “It did help, however, that I can speak good French and Flemish and that I knew my way round the Belgian system.”
Everyone, though, agrees on one thing: get a good accountant and notary.
To reduce the risks to a minimum, the services of such professionals are indispensable says Valerie Echard, formerly with the British Chamber of Commerce in Belgium.
The notary can take care of a range of formalities, such as obtaining the required work permits. A good accountant — who is likely to have a good understanding of local taxation requirements — will be able to liase professionally with your local tax administration.
All self-employed people must have a TVA/BTW number, social security registration and — depending on the type of activity — a company number.
The chamber of commerce can provide details of professionals who can offer help and advice to anyone starting their own business.
Ed Cutting was, until recently, president of the Chamber and has set up two businesses in Belgium in the past 10 years; a financial services company and a tax and accountancy firm.
“I found it quite difficult at first because there was no real support network. A French or Dutch speaker would find it easier to get the necessary information from the local commune,” he says.
If you do take the plunge, Cutting, 43, says any would-be self-employed person should be aware of a few basic facts.
“Belgium is a high-tax country but, because there is no capital gains tax, if you sell your company you will not pay anything in tax so you can do rather well out of a sale,” he says.
“The problem, though, is finding the right business that is going to make you a profit.
“Another problem is that it’s quite expensive to run a business here, mostly because of the high labour costs.
“For example, if I pay someone a gross monthly salary of EUR 2,000, out of this they will pay 13 percent in social security and up to 40 percent in tax. But I, as an employer, must contribute to the social security payments so, in real terms, the salary is quite a bit higher, more like EUR 2,700.
“So you can see it is an expensive commitment to take people on and also to run a business that actually makes money here.”
Kristel De Prins of VIP offices caters for clients who come from all over the world, from the one-man business to large organisations. “We offer everything from virtual offices to fully furnished and equipped offices with all the services a business would need.” For internationals setting up abroad, Kristel thinks it’s important to have a one-stop shop. “They can come here and do everything, from company registration to tax, through our database of proven professionals.”
Step-by-step to starting a business in Belgium
If, despite some reservations, you are still keen in ‘going it alone’ and starting a business, there are four initial steps you must follow:
- First, you must deposit at least 20 percent of the initial capital with a Belgian credit institution;
- second, deposit a financial plan (usually in French, Dutch or German) with a notary;
- third, file with the local commercial court and for publication in the Belgian Official Gazette;
- and, lastly, register with the Register of Legal Persons.
There are various corporate forms in Belgium, differing mostly in their capital requirement.
They include an SA/NV category which must have no less than two shareholders and a minimum capital of EUR 61,500; an SPRL/BVBA, which needs only one shareholder and a capital of EUR 18,550 and an SCRL/CVBA, which must have no fewer than three shareholders and a capital of EUR 18,550.
If the person managing the business is living in Belgium but does not have Belgian nationality, evidence of registration at the commune is required together with a certified copy of the work permit or professional card for non-EU citizens.
Prospects of success
According to the OECD, economic growth in Belgium is expected to pick up over the coming months, reaching 2.3 percent in 2007, although unemployment is unlikely to fall much from the current 8.4 percent.
So, is this a good time to start a new business?
Guy Harrison, works for the British embassy in Brussels and helps UK companies identify business opportunities in Belgium and Luxembourg.
While the exact number of businesses run by expats in Belgium is unknown, Harrison says there is no reason why anyone should be put off from launching a new business here.
Ed Cutting says it is difficult to generalise and says the question of whether now is a good time for new start-ups depends largely on the business.
He says the same applies when comparing the complexities of starting a business in Belgium with other countries, although Russian-born Elena Bucciero is among those who says she did not experience any undue problems in recently launching a new magazine in Brussels.
“It is never easy, but I do not think it is any more difficult here than anywhere else,” she says. “I would advise anyone thinking of doing so to go for it.”
Red tape warning
Eleven years ago, the maze of red tape, for which Belgium is notorious, almost made Irishman John O’Shea reconsider his decision to open a butchers shop in Brussels.
“It took me over 12 months to sort everything out. It was unbelievable and — even though my business has been very successful and has an annual turnover in excess of EUR 1 million, I still see Belgium as an anti-business country. It is not for entrepreneurs,” he says.
“The advice I would give to anyone thinking of doing what I did would be to seriously think hard about it.
“If you decide to start a business, you must get a good accountant and lawyer and let them do the initial work. Otherwise, it could drive you mad and you will just pack up and go home.”
- Abatis: accountants helping new businesses: 02 777 1881
- British Chamber of Commerce in Belgium: 02 540 9030, www.britcham.be
- American Chamber of Commerce in Belgium: 02 513 6770, www.amcham.be
- VIPOFFICES.com – for anyone looking to set-up a business in Belgium (assistance from A-Z): 02 400 00 00, www.vipoffices.com
- Federal Government Department of Economic Affairs: 02 506 5111, www.mineco.fgov.be
- Foreign Investments Department of the Brussels Ministry: 02 513 9700
- ‘Doing Business in Belgium, a guide published regularly by Ernst & Young