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The consumer

Consumer Profile
The median age in Belgium is 41.9 years. The population grew at a rate of 0.44% in 2020. Some 17% of the population is under 14 years old and 64% is between 15 to 65 years old. On average, households are made up of 2.3 people with 32% of households are made up of one person and 47.7% are couples with or without children. The gender ratio is 97 men for every 100 women with 98.3% of the population living in urban areas, which makes the country one of the densest in the world. Most of the population is concentrated in the northern two-thirds of the country, the south being less populated. The main cities are Brussels and Antwerp. The level of education is among the highest in OECD countries with 75% of adults have a secondary education and 36.5% have higher education. Some 39.6% of the active population are employed in the private sector, 24.3% are private sector workers, 21.9% are public sector employees, 9.5% are self-employed, 4% are employers and 0.7% are unpaid carers .
Purchasing Power
GDP per capita (PPP) was estimated at EUR 54,545 per year in 2019 (World Bank). The average monthly salary of full-time workers is EUR 3,627 (Statbel). The adjusted annual disposable income is about EUR 26,320 according to the OECD. Private consumption is estimated to account for 51.4% of GDP in 2019. The Gini index on income inequality is among the lowest in Europe and falling. The pay gap between men and women is 6.1%, with Belgium having one of the lowest gaps in the European Union. The directors of large companies have the highest salaries while servers and barmen have the lowest. People over 60 still in office earn 113% more than the working population under 20. The highest salaries are in Brussels and the surrounding area, and holders of a master's degree have a salary 51% higher than the national average.
Consumer Behaviour
Belgium is a consumer society. In the wake of the crisis consumers have given increasing importance to product prices. With the return of growth and stability quality products are increasingly in demand. Purchases are more often made in city centres than in shopping centres. In addition, many Belgians go to border countries to do their shopping. Consumers are moving away from supermarkets but their average basket is growing. On average per week a consumer spends EUR 119 of food shopping. Consumer confidence is falling because of unemployment in the country. About 3/4 of consumers buy on the internet with sales are around EUR 7 billion. Belgian consumers are generally open to international brands but may prefer national or European companies.

Brand loyalty depends mainly on positive experiences, quality and price. Also, consumers are more loyal to car and cosmetics brands than to food brands. About 65% of the population is active on social networks. However, 25% of internet users use advertising blockers (this figure rises to 47% among young people). Social networks thus help the consumer to learn about products and Belgians will tend to seek information and not wait for it to come to them. Data protection is important but less than in the rest of the European Union with 62% of the population trusting the authorities on this.
Environmental awareness is very present in Belgium. Organic products, sustainable, local, traceable, fresh, vegan, etc. are growing. The food scandals that have taken place in Europe and the growing interest in health are one of the reasons for the success of organic products. The second-hand market is developed, and 61% of exchanges are made between individuals. Collaborative platforms are widely developed in Belgium, especially in large cities, with companies such as Uber, Airbnb, Blablacar, Deliveroo, etc.
Consumer Recourse to Credit
Credit and debit cards are widely accepted in Belgium. Visa and Mastercard are common, but American Express cards may not be accepted in some stores. It is possible that the stores / restaurants / hotels where you want to pay ask you for a piece of identification or a passport. Household debt is rising, although it has been slowing from the end of 2018. The level of household debt to GDP exceeds 60%. The National Bank of Belgium estimates that in 2019, 6,268,110 people have at least one credit (mortgage or consumer). Household loans are roughly divided between 80% mortgages and 20% consumer loans. Consumer loans in Belgium mainly serve to finance vehicles, furniture, weddings or to finance private needs. As the National Bank of Belgium is vigilant in the face of rising household debt, it is possible that measures will be put in place to limit expansion.
Growing Sectors
Accommodation and food services, education, motor vehicles and transportation services, recreation and cultural services, tobacco, food, non-alcoholic beverages, recreation and garden equipment, pets, goods and services for home upkeep.
Consumers Associations
Test Achats
CEC Belgique
Flanders
 

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Importing & Distributing

Import Procedures
Customs procedures include, apart from importing with payment of duties, the following tax exemption procedures: release for consumption, transit or temporary admission, customs warehousing, inward processing, processing under customs control.

As part of the "SAFE" standards set out by the World Customs Organisation (WCO), the European Union has set up a system of import controls (Import Control System- ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system is part of the Community Programme eCustoms, which requires operators to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
The Single Administrative Document (SAD) is the official model for written declarations to customs. The SAD describes goods and their movement around the world and is essential for trade outside the EU, or of non-EU goods. Goods brought into the EU customs territory are, from the time of their entry, subject to customs supervision until customs formalities are completed. 

Since 1 July 2009, all companies established outside of the EU are required to have an Economic Operator Registration and Identification (EORI) number if they wish to lodge a customs declaration or an Entry/Exit Summary declaration.

The TARIC (Tarif Intégré de la Communauté) is available to help determine if a licence is required for a specific product. Furthermore, the European Commission maintains a trade helpdesk with information regarding import restrictions of various products.

For more information please visit the European Commission Portal on Taxation and Customs Union.

Specific Import Procedures
In the framework of intra-European trade, some goods are still prohibited or subject to particular formalities (medicines for human use, waste, plants or live animals). For further information, please visit the Trade Helpdesk of the European Commission.
Distribution channels

Latest economic data suggest the Belgian economy will be severely hit by COVID-19 pandemic with a fall in GDP of -6.4% in 2020 (IMF). In this context, total retail spending is set to decrease in 2020 compared to 2019 with a direct impact on the turnovers of retailers. Among the new trends due to the crisis there is the growth of small shops closer to home, in fact the retail trade outside the city is doing better than in the main streets and shopping centres, fashion is experiencing difficulties while sports and leisure products are booming, finally there is the increase in takeaway and home delivery for Food & Beverage operators as well as the increase in e-commerce.

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 market. Premiumisation has become more common in Belgian consumers' shopping habits. As a consequence, discounters like Aldi and Lidl have started to enlarge their offers with branded products. And, in order to compete with larger supermarket channels, Lidl has also opened a web shop.

New types of outlets such as Bio C'bon (organic range of products) are being developed, especially in Brussels area. Within supermarkets' traditional channels, stores have been upgrading because of price competition affecting their benefit margin on top-of-the-line products and because of the bad effect on brand image. Upgrading and proximity are the key factors behind the success of supermarkets and convenience stores, with convenience stores in urban areas are gaining ground at the expense of supermarkets. Overall, retailing floor space per inhabitant is relatively low in Belgium in comparison to other European countries.

The divide between the northern and southern regions of Belgium is very relevant when it comes to retailing. The Belgian Label Law states that the label on each product should be written in the language corresponding to the area where it was packaged. In northern Belgium inhabitants speak Flemish (Dutch), in the south they speak French and they speak German in the eastern part of the country. Therefore, most producers prefer to make their labels bi-lingual or even tri-lingual, especially if they also intend to export their goods. Because of these cultural differences marketing and advertising should be developed that reflect the populations of each region.

According to the latest online retail data published in August 2020, Belgians still prefer to shop in a physical shop. However, online retail has been growing exponentially for many years (mainly due to more choice and better prices) and saw a strong boost during the first lockdown, which grew by 20%. Food retailers also benefit from this growth in online retail. Almost 50% of consumers favour brands that have developed an omni-channel strategy, combining online sales with a physical shop as they are considered trusted brands. 

Distribution market players
Foodstuffs distribution is organised by a few chains, as the market is highly concentrated. Distribution of other consumer goods is organised by smaller and more numerous outlets.
The group Etn Franz Colruyt NV continued to lead supermarkets in 2019, thanks to its three brands, Colruyt, Bio-Planet and Cru. Colruyt was the leading brand and remained significantly ahead of its nearest competitor, Delhaize’s “Le Lion”. Some of the other major market players are: Carrefour, Lidl, SPAR, Aldi, Intermarché and Albert Heijn.
Färm Coop was the supermarket with the highest current value growth in 2019, albeit from a relatively small base, due to its focus on the widespread, increasing interest in organic produce (Euromonitor).
In 2020, German discounter ALDI and French retailer Carrefour were the largest food retailers in the country in terms of the number of stores, with around 430 stores each (Statista).
Retail Sector Organisations
Federation of Belgian Chambers of Commerce

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Operating a Business

Type of companies

Société Privée à Responsabilité Limitée / Besloten Vennootschap met Beperkte Aansprakelijkheid (SPRL/BVBA): Private Limited Liability Company
Number of partners: Minimum one shareholder.
Capital (max/min): No minimum capital required.
Shareholders and liability: Partners' liability is limited to the amount contributed.
La société privée à responsabilité limitée « Starter » - (SPRL-Starter ou SPRL-S): Private Limited Liability Company - Starter
Number of partners: Minimum one shareholder.
Capital (max/min): From 1 to maximum EUR 18,549.
Shareholders and liability: Reserved for natural person and can not hire more than 5 full time employee. Partners' liability is limited to the amount contributed.
Société Anonyme / Naamloze Vennootschap (SA/NV): Public Limited Company
Number of partners: Minimum two shareholders.
Capital (max/min): EUR 61,500 totally subscribed and released.
Shareholders and liability: Partners' liability is limited to the amount contributed.
Vennootschap Onder Firma (VO) is a limited joint-stock partnership
Number of partners: Minimum two partners.
Capital (max/min): No minimum capital required.
Shareholders and liability: The responsibility of the partners is joint and plural.
la Société en commandite simple (SCS/GCV) is an Ordinary Limited Partnership
Number of partners: Two types of partners: active partners and sleeping partners.
Capital (max/min): No minimum capital required.
Shareholders and liability: Active partners' liability is joint and several, while the sleeping partners are liable for debts until the amount of the sum contributed.
La société coopérative (SC) avec responsabilité illimitée et conjointe (SCRIS) ou réunion d'un groupe de sociétés: Cooperative society (SC) with unlimited and joint liability (SCRIS) or group meetings of companies
Number of partners: Maximum 3 partners.
Capital (max/min): No minimum capital required.
Shareholders and liability: Partners' liability is joint and unlimited on their whole personal assets.
La société coopérative avec responsabilité limitée (SCRL): Cooperative society with limited liability (SCRL) similar to a BVBA / SPRL.
Number of partners: Maximum 3 partners.
Capital (max/min): No minimum capital required.
Shareholders and liability: Partners' liability is limited to the amount contributed.
 
Setting Up a Company Belgium OECD
Procedures (number) 5.0 5.2
Time (days) 5.0 9.5

Source: Doing Business - Latest available data.

 

Cost of Labour

Minimum Wage
Since June 2020, the national minimum wage in Belgium remained fixed at 1,625.7 € per month, that is 19,508 euros per year, taking into account 12 payments per year.
Average Wage
According to the official statistical office Statbel, the gross average monthly wage was EUR 3,627 in 2019 (latest data available).
Social Contributions
Social Security Contributions Paid By Employers: The employers’ standard social security contributions are equal to 25% of gross salaries (including the base rate of 19.88% and the wage moderation of 5.12%). However, additional general contributions should be calculated (Asbestos Fund, Closure Fund, sector-specific fund for subsistence, etc.), thus the average employers’ contribution for white collar workersgenerally goes up to 27.5%.
Social Security Contributions Paid By Employees: Withholding tax is estimated at 13.07% of gross salary.
 

Intellectual Property

National Organisations
Belgian Office for Intellectual Property (OPRI)
Regional Organisations
For the protection of patents: the European Patent Office (EPO). To control trademarks, designs and models: the European Union Intellectual Property Office (EUIPO).
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

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Tax Rates

Consumption Taxes

Nature of the Tax
VAT (value added tax) - Taxe sur la valeur ajoutée (TVA)/ Belasting over de toegevoegde waarde (Btw)
Tax Rate
21%
Reduced Tax Rate
A reduced rate of 6% applies on goods such as food, pharmaceuticals, water, hotels and campings, transport services of persons, copyrights, concerts and exhibitions, certain medical equipment, works on immovable properties (subject to strict conditions), original works of art, contract farming, repair of bicycles, shoes and leather goods, clothing, and household linen, etc.

A 12% reduced rate applies on: items including public housing and restaurant services (excluding drinks), phytopharmaceutical products, certain combustible material, margarine, inner tubes and social housing.

Other Consumption Taxes
Excise duties applied in Belgium are divided into two categories: "community excise products" which are subject to EU procedures (such as alcohol, tobacco, petrol, gas, etc.); and "national excise products" that can be defined at the member state level on a voluntary basis (for Belgium, they consist of drinks like soda, water, and coffee).

Stamp duties are due on transactions relating to public funds if a professional intermediary intervenes in these transactions.

 

Corporate Taxes

Company Tax
25%
Tax Rate For Foreign Companies
A company is considered to be a resident of Belgium for tax purposes if it has its registered office, its principal place of business, or its seat of management in Belgium (i.e. the place where the corporate decision-making process actually takes place).
Capital Gains Taxation
Capital gains derived by companies from the sale of tangible and intangible fixed assets generally are fully taxable at the normal corporate tax rate. Nevertheless, taxation of gains on such assets can be deferred if the assets were held for more than five years before the disposal and the entire sale proceeds are reinvested in qualifying assets within three years. In the case of a qualifying reinvestment, the tax due will be spread over the life of the asset in which the sale proceeds have been reinvested.

Net capital gains on shares are fully exempt provided that the shares have been held for at least one uninterrupted year; the acquisition value is of at least EUR 2.5 million or 10% of shareholding; the payer company must be subject to corporate income tax on the profits out of which the distribution is made.

Main Allowable Deductions and Tax Credits
Companies may deduct all business expenses when calculating taxable income, on the general condition that they are legitimate, at arm’s length and that they are incurred in order to maintain or to increase taxable income. Royalties and all fees generally are deductible without additional requirements. Various deductions and incentives are provided for R&D-related activities. Under the notional interest deduction, Belgian companies and branches are also entitled to an interest expense for qualifying equity (within a thin capitalisation/30% EBITDA limit). Belgium offers an innovation income deduction regime that reduces the effective rate of taxation on qualifying net IP income (raising the tax deduction rate that applies to gross patent revenue from 80% to 85%, resulting in an effective rate of 3.75% from tax year 2021).

Goodwill arising at the occasion of an asset deal can be amortised in a period of minimum five years applying a straight-line method (client lists can be amortised over a period of 10-12 years). Start-up expenses may be deducted fully in the year of incorporation or can be depreciated over a period of up to five years. Provisions and bad debts can be deducted (conditions apply). Charitable contributions (above EUR 40 and within 5% of the total net income of the taxable period, with a maximum of EUR 500,000) can be eligible for deduction. Belgian companies can claim a deduction for royalties, management service fees, and interest charges paid to foreign affiliates (the arm's length principle must however be respected). The cost of company cars can be deducted between 50% and 100% depending on the CO2 emission, with fuel costs deduction also being linked to the level of CO2 emission.
With some limitations, tax losses can be carried forward without any limitation in time. Losses carry-back is generally not allowed; however, special measures have been taken following the COVID-19 pandemic, allowing companies to claim a temporary exemption applicable to tax years 2019 or 2020.

The following expenses are not deductible: taxes (with some exemptions, like the real estate tax and foreign taxes), capital losses on shares, half of representation expenses and business gifts, 31% of restaurant expenses, 17% of the benefit in kind of company cars or 40% if the fuel costs are fully borne by the company, hospitalisation insurance premiums and small gifts for employees.

Other Corporate Taxes
Indirect taxes include a real estate tax on annual rental income calculated in function of the cadastral income of the property, stamp duties, a fixed fee on increase in capital of EUR 50, a transfer or registration tax on the transfer and leasing of real estate (at rates varying between 0.2% and 12.5%).

Belgium also applies a secret commissions tax at a rate of 0% for payments to legal entities or 100% in all other cases, which is due if taxpayers fail to report on a timely basis, wages, fees, commissions, rebates and other benefits or gratifications that constitute professional income in the hands of the beneficiary, unless a legal exception or administrative tolerance applies. The secret commission’s tax assessment is applied on the amount of the costs or the fringe benefits. The secret commissions tax also applies to turnover not reported as such (“hidden gains"), at a rate of 100%.
Banks are subject to a bank levy and a subscription tax on savings deposits.

Social security contributions - generally fixed at 30.57% of 1.08 times the gross salary for blue-collar employees and 25% of gross salary for white-collar employees - in practice vary according to the size and industry of the company and the salary of the employee.

Other Domestic Resources
Service Public Fédéral Finances (FPS)
Doing Business: Belgium, to obtain a summary of taxes and mandatory contributions
 

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Federal Public Service Finance (FPS)
Withholding Taxes
Dividends: 30%; Interest: 30%; Royalties: 30% (lower rates are available under double taxation treaties)

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