Why is Belgium an attractive entry point into the EU and destination for trade and investment?
By Louise Holton
Belgian – UK Bilateral Relations
The UK and Belgium are close and long-standing trading partners. While the UK’s relations with the European Union date back to 1957, Belgian-British relations alone date back long before Belgium was founded in 1830. In 2020, the UK was Belgium’s 8th largest supplier with EUR 10 billion worth of imports, including chemicals, medical products and automotive equipment. By comparison the UK was Belgium’s 5th biggest client in 2020, with EUR 19.3 billion worth of exports, involving textiles and synthetic materials, chemicals, food and beverages.
As businesses continue to navigate the post-Brexit world, the scope and impact of Brexit becomes clearer. The close geographical proximity and historic trading relationship of the two nations, caused Belgium to bare the direct and indirect impacts of Brexit and ranked fourth out of all 27 EU member states in terms of the economic risk caused by Brexit. This comes as a result of the increased costs and complexities of doing business, including customs duties, administrative burdens and adhering to new technical standards in their dominant economic sectors such as the food industry, biotechnology, automotive and transport and logistics.
Despite the UK’s departure from the EU, the new trade and cooperation agreement between the UK and EU, outlines the start of a new era in Belgian-British relations. Belgium’s many assets and mutual interest with the UK in key economic sectors will play a vital role in continued bi-lateral trade between the UK and Belgium.
UK-EU Gateway Series
In collaboration with Belgium’s regional trade and investment agencies, government officials, and industry experts, BritCham carefully designed a series of events to help facilitate the practical implementation of the trade new agreement, from a Belgian perspective, but for business across the EU. These events acted as an invaluable guide for British businesses on how to do business in Belgium, while highlighting Belgium’s strengths and its ideal position to play the role of gateway for UK-EU trade and investment. We welcomed Belgian ambassador to the UK, Bruno van der Pluijm, who encouraged British business to consider Belgium as its post-Brexit gateway to the EU.
Belgium’s close geographical proximity to the UK, as well as its infrastructure, are tailored to facilitate international trade and investment and make it an important gateway to the European consumer market. Director of Flanders Investment and Trade highlighted that Belgium is “in the top three in the world in terms of reliable supply chains and overall logistics performance. Belgium ranks higher not only on cost but also in on-time delivery.” We welcomed representatives from Belgium’s sea and airports, including the Port of Antwerp, Port of Zeebrugge and Liège Airport, who explained how Belgium’s dynamic road, barge and rail networks connect the ports to the hinterland, further into Europe and the rest of the world. This high degree of interconnectivity enables goods arriving at the ports to reach consumers in a maximum of 24 hours.
The implementation of a streamlined digital customs portal, BE-GATE, is just one example of Belgium’s readiness to serve UK companies as an entry-point into Europe. The system’s ability to process large amounts of data and effectively clear customs applications, showcases Belgium’s investment in platforms and procedures to enhance the capabilities of their network.
We were joined by Werner Rens from the Belgian Customs Authorities, who explained Belgium’s approach in forming strategic partnerships with British businesses looking to enter the EU post-Brexit. The introduction of displaced customs offices enables non-EU originating goods to be checked away from busy ports and congested areas and rather in warehouses authorised as customs offices. This relocation of Border Control Posts, ensures supply chains remain fluid and uncongested.
Director of Flying Logistics, Cali Zhu, who exports into the EU from China and the UK commented on her experiences in finding a post-Brexit hub. She highlighted factors such as cost, connectivity and local government support which drew them to Belgium rather than France and the Netherlands.
Practicalities of Setting-up in Belgium
In his keynote, Mr van der Pluijm highlighted that “Belgium is perfect for investors because in just four days anyone can set-up any type of business here”. Later on in the series, the practicalities of setting-up a business in Belgium were discussed by a notary, covering the decision to establish a branch vs a subsidiary or a non-profit. Corporate tax and legal compliance experts also outlined important considerations and incentives to set-up in Belgium. The ambassador encouraged this further, in stating that “to accelerate investment, we have lowered our corporate tax rate from 34% to 25%, while SMEs are charged just 20% on the first EUR 100,000 of profit”.
Moving, Growing and Establishing a Workforce in Belgium
Belgium’s well-educated, highly skilled and multilingual workforce are distinct assets, enhancing the overall attractiveness of setting-up a business in Belgium. We outlined which procedures, costs and incentives are involved in moving, growing and establishing a workforce in Belgium, including work permits, staffing an organisation, types of employment contract, working times and contract termination. Belgium is often regarded as having high personnel costs, in comparison to neighbouring countries, however when understanding how labor costs are calculated in Belgium and how social security contributions are a part of this calculation, these differences become relatively small. Experts outlined ways to control and mitigate labour costs in Belgium, the ROI of Belgian social security and most importantly, what incentives and reductions are available for new employers in Belgium.
Incentives to set-up in Belgium
Belgium’s regional development agencies and federal governments have several support systems in place and incentives available to assist UK businesses in setting-up in Belgium. The Walloon Agency for Export and Foreign Investments, stressed that support is available from all regions at all stages of export strategy such as financial, marketing and recruitment support. For example, within the first four years, UK businesses can benefit from a reduction in personnel costs by 11% on average, through measures such as, recruitment support, training possibilities and indications on the real costs of hiring. As well as this, investment grants of up to 25% are available, depending on regional location, new employment, industry sector, company size. In terms of R&D, companies considering embarking on series and scientifically solid projects can benefit from an experimental development recoverable advance of 35-70% or industrial research subsidies from 30-80%.
BritCham EU & Belgium would like to thank Belgium’s three regional trade and investment agencies; Flanders Investment and Trade, AWEX and hub.Brussels for sponsoring this successful series. In addition, we would like to thank the Port of Antwerp, the Port of Zeebrugge, Liège Airport, Belgian Customs & Excise, SD Worx, Relocation & Immigration Belgium, Crowe, Berquin Notaires, Claeys & Engels and Van Olmen & Wynant for their expertise and active participation in delivering the series.
For any inquiries on growing your business in Belgium, or using Belgium as an entry point to the rest of Europe, please do not hesitate to get in touch with BritCham EU & Belgium or Belgium’s regional development agencies. All sessions from the UK-EU Gateway series were recorded and can be watched here.