Executive Summary

The Belgian economy is expected to grow 1.5 percent in 2017, primarily driven by investment and net exports. Private consumption growth has been slower than in surrounding countries, mainly attributed to higher inflation. Belgium’s unique position as a logistical hub and gateway to Europe has benefitted, in particular, from low energy prices and interest rates, and a favorable euro/dollar exchange rate which continues to stimulate economic growth and fuel exports. In 2016, Belgium posted a €4 billion current account surplus, the first surplus since 2007. However, the recovery remains fragile: any potential shift to a less open global environment would have negative repercussions on the export sector. Since June 2015, the Belgian government has undertaken a series of measures aiming to reduce the tax burden on labor and to increase Belgium’s economic competitiveness and attractiveness to foreign investment. Unfortunately, the postponement of corporate tax reform and the recent terrorist attacks on Brussels may have taken the country off its optimal growth path. In 2016, the Belgian government passed legislation to improve entrepreneurial financing through crowdfunding and more flexible capital venture rules.

Belgium boasts an open market well connected to the major economies of the world. As a logistical gateway to Europe, host to the EU institutions and a central location closely tied to the major European economies (Germany in particular), Belgium is an attractive market and location for U.S. investors. Foreign and domestic investors are expected to take advantage of improved credit opportunities and increased consumer and business confidence. Finally, Belgium is a highly developed, long-time economic partner of the United States and benefits from an extremely well-educated workforce, world-renowned research centers, and the infrastructure to support a broad range of economic activities.

Belgium’s international competitiveness has been hindered by a rigid labor market that makes Belgian employees relatively expensive compared to neighboring countries. Belgium’s nominal corporate tax rate, at 33.99 percent, is one of the highest in Europe and is only mitigated by a myriad of subsidies and tax deductions. A fundamental reform of the corporate tax system has been postponed until 2018, casting a shadow on short-term investment plans. A January 2016 EU ruling which voids 36 fiscal rulings retroactively to 2004, applied to multinational and domestic companies, has also created investor uncertainty and cast a shadow over Belgium’s attractiveness as a preferred foreign direct investment (FDI) location.

Belgium has a dynamic economy and continues to attract significant levels of investment in chemicals, petrochemicals, plastic and composites; environmental technologies; food processing and packaging; health technologies; information and communication; and textiles, apparel and sporting goods, among other sectors.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 15 of 175 http://www.transparency.org/
World Bank’s Doing Business Report “Ease of Doing Business” 2016 42 of 190 doingbusiness.org/rankings
Global Innovation Index 2016 23 of 128 https://www.globalinnovationindex.org/
U.S. FDI in partner country ($M USD, stock positions) 2015 USD 45.1bn http://www.bea.gov/
World Bank GNI per capita 2015 USD 44,250 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Belgium has traditionally maintained an open economy that is highly dependent on international trade. Since WWII, foreign investment has played a vital role in the Belgian economy, providing technology and employment. It is one of the key economic policies of the current center-right government to make Belgium a more attractive destination to foreign investment. Though the federal government regulates important elements of FDI such as salaries and labor conditions, it is primarily the responsibility of the regions to attract FDI. Flanders Investment and Trade (FIT), Wallonia Foreign Trade and Investment Agency (AWEX) and Brussels Invest and Export, seek to attract FDI to their own regions.

The regional investment promotion agencies have focused their industrial strategy on key sectors including aerospace and defense; agribusiness, automotive and ground transportation; architecture and engineering; chemicals, petrochemicals, plastics and composites; environmental technologies; food processing and packaging; health technologies; information and communication; and services.

Foreign corporations account for about one-third of the top 3,000 corporations in Belgium. According to Graydon, a Belgian company specializing in commercial and marketing information, there are currently more than one million companies registered in Belgium. The federal government and the regions do not currently focus on the retention and expansion of existing investments or maintain ongoing dialogues with investors to ensure a climate free of obstacles.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are currently no limits on foreign ownership or control in Belgium. There are no distinctions between Belgian and foreign companies when establishing or owning a business or setting up a remunerative activity.

Other Investment Policy Reviews

Belgium has not recently been the subject of third-party investment policy reviews through a multilateral organization such as the OECD, WTO, or UNCTAD.

Business Facilitation

In order to establish a business in Belgium, one has to take the following steps:

  • Deposit at least 20 percent of the initial capital with a Belgian credit institution and obtain a standard certification confirming that the amount is held in a blocked capital account;
  • Deposit a financial plan with a notary, sign the deed of incorporation and the by-laws in the presence of a notary, who authenticates the documents and registers the deed of incorporation. The authentication act must be drawn up in either French, Dutch or German (Belgium’s three official languages);
  • Register with one of the Registers of legal entities, VAT and social security at a centralized company docket and obtain a company number.
  • In all, the business registration process can be completed within one week
  • https://www.business.belgium.be/en/managing_your_business/setting_up_your_business .

Based on the number of employees, the projected annual turnover and the shareholder class, a company will qualify as a small or medium-sized enterprise (SME) according to the meaning of the Promotion of Independent Enterprise Act of February 10, 1998. For a small or medium-sized enterprise, registration will only be possible once a certificate of competence has been obtained. The person in charge of the daily management of the company must demonstrate his or her knowledge of business management by providing relevant diplomas and/or evidence of practical experience.

The three Belgian regions each have their own investment promotion agency, whose services are available to all foreign investors.

Outward Investment

The Belgian governments do not promote outward investment as such. There are also no restrictions to certain countries or sectors, other than those where Belgium applies sanctions associated with particular UN resolutions.

Belgium has no specific investment agreement with the United States; investment-related issues such as “national treatment” are covered in the 1951 Treaty of Friendship, Enterprise and Navigation. Belgium has bilateral investment treaties in force with Albania, Algeria, Argentina, Armenia, Bangladesh, Bolivia, Burkina Faso, Burundi, Chile, China, Croatia, Cyprus, Democratic Republic of the Congo, Egypt, El Salvador, Philippines, Gabon, Georgia, Hong Kong, India, Indonesia, Yemen, Cameroon, Kazakhstan, Kuwait, Korea, Lebanon, Lithuania, Macedonia, Morocco, Mexico, Moldavia, Mongolia, Ukraine, Uzbekistan, Paraguay, Romania, Rwanda, Saudi Arabia, Singapore, South Africa, Sri-Lanka, Thailand, Czech Republic, Tunisia, Uruguay, Russia, Venezuela, and Vietnam.

Belgium and Luxembourg (as The Belgium Luxembourg Economic Union – BLEU) have jointly signed but not yet implemented agreements with Liberia, Mauritania, and Thailand. Belgium and Luxembourg also have joint investment treaties with Poland and Russia, but these are not BLEU agreements. Please see UNCTAD’s Investment Agreement Navigator for a complete list of Belgium’s agreements currently in force: http://investmentpolicyhub.unctad.org/IIA/CountryBits/19#iiaInnerMenu 

Belgium shares a bilateral taxation treaty with the United States, the last version of which dates from 2006 but which has been augmented with various memoranda of understanding (MOUs) since then.

In January 2016, the European Commission ruled that Belgium had to retroactively reclaim more than USD 900 million from companies that had benefitted from inappropriate tax rulings on how profits should be calculated. The Commission’s in-depth investigation, opened in February 2015 , found that the tax scheme illegally derogated from normal practice under Belgian company tax rules and the so-called “arm’s length principle”. This “excess profit” tax scheme, applicable since 2005, allowed certain multinational companies to reduce their corporate tax base by between 50 percent and 90 percent in order to discount for “excess profits” that resulted from being part of a multinational group. Belgium is currently appealing the EU decision. Investors are strongly encouraged to seek legal counsel when establishing a corporate structure in Belgium.

In March 2017, the Belgian government decided to postpone a proposed corporate tax reform until 2018, while at the same time acknowledging that the current corporate tax rate of 34.99 percent is among the highest in Europe and therefore no longer sustainable.

Transparency of the Regulatory System

The Belgian government has adopted a generally transparent competition policy. The government has implemented tax, labor, health, safety, and other laws and policies to avoid distortions or impediments to the efficient mobilization and allocation of investment, comparable to those in other EU member states. Recognizing the need to streamline administrative procedures in many areas, the federal government established a special task force in 2015 to simplify official procedures, so far with little result. It also agreed to streamline laws regarding the telecommunications sector into one comprehensive volume after new entrants in this sector complained about a lack of transparency. The Finance Ministry established a foreign investment tax unit in 2000 to provide assistance and to make the tax administration more “user friendly” to foreign investors. Belgium has additionally strengthened its Competition Policy Authority with a number of academic experts and additional resources

The American Chamber of Commerce has called attention to the adverse impact of cumbersome procedures and unnecessary red tape on foreign investors, although foreign companies do not appear to be impacted more than Belgian firms. Draft bills are not generally made available for public comment, but have to go through an independent court for vetting and consistency. Traditionally, scientific studies or quantitative analysis conducted on the impact of regulations are made publicly available for comment; not all comments received by regulators are made public. Belgium publishes all its relevant legislation and administrative guidelines in an official Gazette, called Le Moniteur Belge (www.moniteur.be ).

Both foreign and domestic investors in some sectors face stringent regulations designed to protect small- and medium-sized enterprises. Many companies in Belgium try to limit their number of employees to 49, the threshold above which certain employee committees must be set up, such as for safety and trade union interests.

Accounting standards are regulated by the Belgian law of January 30, 2001, and balance sheet and profit and loss statements are identical with international accounting norms. Cash flow positions and reporting changes in non-borrowed capital formation are not required. However, contrary to IAS/IFRS standards, Belgian accounting rules do require an extensive annual policy report.

International Regulatory Considerations

Belgium is a founding member of the EU, whose directives are robustly enforced. Member states can always apply stricter rules, as is the case for Belgium when it comes to data privacy issues.

Through the European Union, Belgium is a member of the WTO, and notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). The country does not maintain any measures that are inconsistent with the Agreement on Trade-Related Investment Measures (TRIMs) obligations.

Legal System and Judicial Independence

Belgium’s (civil) legal system is independent of the government and is a means for resolving commercial disputes or protecting property rights. Belgium has a wide-ranging codified legal system dating back to 1830. There are specialized commercial courts which apply the existing commercial and contractual laws. As in many countries, the Belgian courts labor under a growing caseload, and backlogs cause delays. There are several levels of appeal.

Laws and Regulations on Foreign Direct Investment

Payments and transfers within Belgium and with foreign countries require no prior authorization. Transactions may be executed in euros as well as in other currencies.

Belgium has no debt-to-equity requirements. Dividends may be remitted freely except in cases in which distribution would reduce net assets to less than paid-up capital. No further withholding tax or other tax is due on repatriation of the original investment or on the profits of a branch, either during active operations or upon the closing of the branch.

Since there are three different regional Investment Authorities, the links to their respective websites are given below.

Flanders: www.flandersinvestmentandtrade.com 
Wallonia: www.awex.be 
Brussels: www.investinbrussels.com 

Competition and Anti-Trust Laws

In 2016, the Belgian Competition Authority ruled in the case of the merger between a Belgian and a Dutch supermarket chain. The Authority ruled that the newly created supermarket chain would be in a position to abuse its dominant market position and ordered the chain to shed 19 stores.

The contact address for competition-related concerns:

Federal Competition Authority
City Atrium, 6th floor
Vooruitgangsstraat 50
1210 Brussels
+32 2 277 5272

Expropriation and Compensation

There are no outstanding expropriation or nationalization cases in Belgium with U.S. investors. There is no pattern of discrimination against foreign investment in Belgium.

When the Belgian government uses its eminent domain powers to acquire property compulsorily for a public purpose, adequate compensation is paid to the property owners. Recourse to the courts is available if necessary. The only expropriations that occurred during the last decade were related to infrastructure projects such as port expansion, roads, and railroads.

Dispute Settlement

ICSID Convention and New York Convention

Belgium is a member of the International Center for the Settlement of Investment Disputes (ICSID) and regularly includes provision for ICSID arbitration in investment agreements. It is also a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, which requires courts of contracting states  to recognize and enforce arbitration awards  made in other contracting states.

Investor-State Dispute Settlement

The government accepts binding international arbitration of disputes between foreign investors and the state. There have been no investment disputes involving a U.S. person within the past 10 years. Local courts are expected to enforce foreign arbitral awards issued against the government. To date, there has been no evidence of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Alternative Dispute Resolution is not mandatory by law and is therefore not commonly used in disputes, except for matters where the determination by an expert is sought, whether appointed by the parties in agreement or in accordance with a contractual clause or appointed by the court in the context of dispute resolution.

Belgium has no domestic arbitration bodies.

Local courts recognize and enforce foreign arbitral awards. Judgments of foreign courts are recognized and enforceable under the local courts.

Bankruptcy Regulations

In the World Bank’s Doing Business Report, Belgium ranks number 10 (out of 198) for the ease of resolving insolvency. The Business Continuity Act of 2009 provides the possibility for companies in financial difficulty to enter into a judicial reorganization. These proceedings are to some extent similar to the U.S. approach in Chapter 11 as the aim is to facilitate business recovery.

Belgian bankruptcy law is governed by the Bankruptcy Act of 1997 and is under the jurisdiction of the commercial courts. The commercial court appoints a judge-auditor to preside over the bankruptcy proceeding and whose primary task is to supervise the management and liquidation of the bankrupt estate, in particular with respect to the claims of the employees. Belgian bankruptcy law recognizes several classes of preferred or secured creditors. A person who has been declared bankrupt may subsequently start a new business unless the person is found guilty of certain criminal offences that are directly related to the bankruptcy.

Investment Incentives

Since the law of August 1980 on regional devolution in Belgium, investment incentives and subsidies have been the responsibility of Belgian’s three regions: Brussels, Flanders, and Wallonia. Nonetheless, most tax measures remain under the control of the federal government as do the parameters (social security, wage agreements) that govern general salary and benefit levels. In general, all regional and national incentives are available to foreign and domestic investors alike.

In their investment policies, the regions emphasize innovation promotion, research and development, energy savings, environmental stewardship, exports, and most of all, employment. The three regional agencies have staff specializing on specific regions of the world, including the United States, with representation offices in different countries. In addition, the Finance Ministry established a foreign investment tax unit in 2000 to provide assistance and to make the tax administration more “user friendly” to foreign investors.

Belgian investment incentive programs at all levels of government are limited by EU regulations and are normally kept in line with those of the other EU member states. The European Commission has tended to discourage certain investment incentives in the belief that they distort the single market, impair structural change, and threaten EU convergence, as well as social and economic cohesion. In January 2016, the European Commission ordered Belgium to reclaim up to USD 900 million in tax breaks from 36 companies (12 of whom are U.S. companies) going as far back as 2004. The Belgian Government had given these breaks to companies through a series of one-off fiscal rulings. Belgium is now appealing the EU decision.

In 2005, the Belgian Federal Finance Ministry proposed a new investment incentive program in the form of a notional interest rate deduction. This was adopted by Parliament, and since January 1, 2006, the new tax law permits a corporation established in Belgium, whether foreign or domestic, to deduct from its taxable profits a percentage of its adjusted net assets linked to the rate of the Belgian long-term state bond. The law permits all companies operating in Belgium to deduct the “notional” interest rate that would have been paid on their locally invested capital had it been borrowed at a rate of interest equal to the current rate the Belgian government pays on its 10-year bonds. This amount is deducted from profits, thus lowering nominal Belgian corporate taxes (currently 33.99 percent). The applicable interest rate is adjusted annually, but will never be allowed to vary more than one percent (100 basis points) in one year nor exceed 6.5 percent. For 2016 the rate was 1.63 percent for large corporations and 2.13 percent for SMEs.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are no foreign trade zones or free ports as such in Belgium. However, the country utilizes the concept of customs warehouses. A customs warehouse is a warehouse approved by the customs authorities where imported goods may be stored without payment of customs duties and VAT. Only non-EU goods can be placed under a customs warehouse regime. In principle, non-EU goods of any kind may be admitted, regardless of their nature, quantity, and country of origin or destination. Individuals and companies wishing to operate a customs warehouse must be established in the EU and obtain authorization from the customs authorities. Authorization may be obtained by filing a written request and by demonstrating an economic need for the warehouse.

Performance and Data Localization Requirements

Performance requirements in Belgium usually relate to the number of jobs created. There are no national requirement rules for senior management or board of directors. There are no known cases where export targets or local purchase requirements were imposed, with the exception of military offset programs, which were reintroduced under Prime Minister Verhofstadt in 2006. While the government reserves the right to reclaim incentives if the investor fails to meet his employment commitments, enforcement is rare. However, in 2012, with the announced closure of an automotive plant in Flanders, the Flanders regional government successfully reclaimed training subsidies that had been provided to the company.

There is currently no requirement for foreign IT providers to share source code and/or provide access to surveillance agencies. There is currently no forced localization.

Real Property

Property rights in Belgium are well protected by law, and the courts are independent and considered effective in enforcing property rights. Mortgages and liens exist through a reliable recording system operated by the Belgian notaries. However, World Bank ranks Belgium as 131st of 190 countries for ease of registering property,

Intellectual Property Rights

While Belgium generally meets very high standards in the protection of intellectual property rights (IPR), rights granted under specific American patent, trademark, or copyright law can only be enforced in the United States, its territories, and possessions. The EU has taken a number of initiatives to promote intellectual property protection, but in cases of non-implementation, national laws continue to apply. Despite legal protection of intellectual property, Belgium experiences a rate of commercial and private infringement – particularly internet music piracy and illegal copying of software – similar to most EU states.

The Office of Intellectual Property, Directorate General Regulation and Market Organization (ORPI) administers all IPR in Belgium. The Director General is Mr. Emmanuel Pieters. This office manages and provides Belgian intellectual property titles, informs the public about IPR, drafts legislation and advises Belgian authorities with regard to national and international issues. Belgium is currently not listed on USTR’s Special 301 Report. http://economie.fgov.be/en/entreprises/Intellectual_property/ Aspects_institutionnels_et_pratiques/OPRI/ )

Enforcement of IPR is in the hands of the Belgian Ministry of Justice. For additional information about treaty obligations and points of contact at local IP offices, please see the World Intellectual Property Organization’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

Belgium has policies in place to facilitate the free flow of financial resources. Credit is allocated at market rates and is available to foreign and domestic investors without discrimination. Belgium is fully served by the international banking community and is implementing all relevant EU financial directives. At the same time, Belgium ranks 101th out of 187 for “getting credit” on the World Bank’s “Doing Business” Index, and in the bottom quintile among OECD high income countries.

Belgium claims to have established the world’s first stock market almost 600 years ago (challenging the Netherlands’ similar assertion), and the bourse is well-established today. Euronext rules allow a company to increase its capital either by capitalizing reserves or by issuing new shares. An increase in capital requires a legal registration procedure, and new shares may be offered either to the public or to existing shareholders. A public notice is not required if the offer is to existing shareholders, who may subscribe to the new shares directly. An issue of bonds to the public is subject to the same requirements as a public issue of shares: the company’s capital must be entirely paid up, and existing shareholders must be given preferential subscription rights.

In 2016, the Belgian government passed legislation to improve entrepreneurial financing through crowdfunding and more flexible capital venture rules.

Money and Banking System

Because the Belgian economy is directed toward international trade, more than half of its banking activities involve foreign countries. Belgium’s major banks are represented in the financial and commercial centers of dozens of countries by subsidiaries, branch offices, and representative offices. The country does have a central bank, the National Bank of Belgium (NBB), whose governor, as a Eurozone member, sits on the board of the European Central Bank.

Belgium has one of the highest number of banks per capita in the world. The banking system is considered sound but was particularly hard hit by the 2008 financial crisis, when federal and regional governments had to step in with lending and guarantees for the three largest banks. Following a review of the 2008 financial crisis, the Belgian government decided in 2012 to shift the authority of bank supervision from the Financial Market Supervision Authority (FMSA) to the NBB. The country has not lost any correspondent banking relationships in the past three years, nor are any currently in jeopardy.

The developments since September 2008 have resulted in a major de-risking of the Belgian banks’ balance sheets, resulting in a rising share of exposure to the public sector and a gradual expansion of the domestic mortgage loan portfolio. Since the introduction of the Single Supervisory Mechanism (SSM), the vast majority of the Belgian banking sector’s assets are held by banks that come under SSM supervision, including the “significant institutions” KBC Bank, Belfius Bank, Argenta, AXA Bank Europe, Bank of New-York Mellon and Bank Degroof/Petercam. Other banks governed by Belgian law – such as BNP Paribas Fortis and ING Belgium – are also subject to SSM supervision as they are subsidiaries of non-Belgian “significant institutions”.

In 2016, the banking sector conducted its business in a context of only gradual economic recovery and persistently low interest rates. That situation had two effects: it put pressure on the sector’s profitability and caused a credit default problem in some European banks.

Under pressure from the European Union, bank debt has decreased in volume overall, from close to 1.6 trillion euros in 2007 to just over 1 trillion euros in 2016, according to the National Bank of Belgium, particularly in the risky derivative markets. KBC, the country’s largest bank, has total assets equivalent to € 275.2 billion. According to the NBB, 3.4 percent of all the currently outstanding loans are considered to be non-performing, compared to an average of 8 percent in the Euro area.

The country’s banks use modern, automated systems for domestic and international transactions. The Society for Worldwide Interbank Financial Telecommunications (SWIFT) has its headquarters in Brussels. Euroclear, a clearing entity for transactions in stocks and other securities, is also located in Brussels.

Opening a bank account in the country is linked to residency status. FATCA (Foreign Account Tax Compliance Act) requires Belgian banks to report information on U.S. account holders directly to the Belgian tax authorities, who then release the information to the IRS.

Foreign Exchange and Remittances

Foreign Exchange

Payments and transfers within Belgium and with foreign countries require no prior authorization. Transactions may be executed in euros as well as in other currencies.

Remittance Policies

Dividends may be remitted freely except in cases in which distribution would reduce net assets to less than paid-up capital. No further withholding tax or other tax is due on repatriation of the original investment or on the profits of a branch, either during active operations or upon the closing of the branch.

Sovereign Wealth Funds

Belgium has a sovereign wealth fund in the form of the Federal Holding and Investment Company (SFPI/ FPIM), a quasi-independent entity created in 2004 and now mainly used as a vehicle to manage the banking assets which were taken on board during the 2008 banking crisis. The SFPI has a board whose members reflect the composition of the governing coalition and are regularly audited by the “Cour des Comptes” or national auditor. At the end of 2015, its total assets amounted to € 2 billion. Due to the origins of the fund, the majority of the funds are invested domestically. Its role is to allow public entities to recoup their investments and support Belgian banks. The SFPI is required by law to publish an annual report and is subject to the same domestic and international accounting standards and rules. The SFPI routinely fulfills all legal obligations. However, it is not a member of the International Forum of Sovereign Wealth Funds, and as such does not subscribe to the Santiago Principles.

Belgium has about 80,000 employees working in SOEs, mainly in the railways, telecoms and general utility sectors. There are also several regional-owned enterprises where the regions often have a controlling majority: for a full listing (including Wallonia, Brusssels and Flanders), see www.actionnariatwallon.be 

Private enterprises are generally allowed to compete with public enterprises under the same terms and conditions in Belgium. However, since the EU started to liberalize network industries such as electricity, gas, water, telecoms and railways, there have been regular complaints in Belgium about unfair competition from the former state monopolists. Complaints have ranged from lower salaries (railways) to lower VAT rates (gas and electricity) to regulators with a conflict of interest (telecom). Although these complaints have now largely subsided, many of these former monopolies are market leaders in their sectors, due mainly to their ability to charge high access costs to networks that were fully amortized years ago. Former telecom monopolist Proximus still remains on the EU’s list of companies receiving state aid.

Privatization Program

Belgium currently has no ongoing privatization program. There are ongoing discussions about the possible privatization of the state-owned bank Belfius and the government share in telecom operator Proximus. There are no indications that foreign investors would be excluded from these prospective privatizations. No timeline has been established.

The Belgian government encourages both foreign and local enterprises to follow generally accepted Corporate Social Responsibility principles such as the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights. The Belgian government also encourages adherence to the OECD Due Diligence guidance for responsible supply chains of minerals from conflict-affected areas. More information about the Belgian National Contact Point for the OECD Guidelines can be found here: http://mneguidelines.oecd.org/ncps/belgium.htm 

When it comes to human rights, labor rights, consumer and environmental protection, or laws/regulations which would protect individuals from adverse business impacts, the Belgian government is generally considered to enforce domestic laws in a fair and effective manner.

There is a general awareness of corporate social responsibility among producers and consumers. Boards of directors are encouraged to adopt a due diligence approach to corporate social responsibility in the 2009 Belgian Code on corporate governance. This Code, also known as the ‘Code Buysse II’ was drafted by a group of independent corporate experts and stresses the importance of sound entrepreneurship, good corporate governance, an active board of directors and an advisory council. It deals with unlisted companies and is complementary to existing Belgian legislation. However, adherence to the Code Buysse II is not factored in public procurement decisions. For listed companies, far stricter guidelines apply, which are monitored by the Financial Services and Markets Authority.

Belgium is not a candidate country in the Extractive Industries Transparency Initiative.

Belgian anti-bribery legislation was revised completely in March 1999, when the competence of Belgian courts was extended to extraterritorial bribery. Bribing foreign officials is a criminal offense in Belgium. Belgium has been a signatory to the OECD Anti-Bribery Convention since 1999, and is a participating member of the OECD Working Group on Bribery. In the Working Group’s Phase 3 review of Belgium in 2013 it called on Belgium to address the lack of resources available for fighting foreign bribery.

Under Article 3 of the Belgian criminal code, jurisdiction is established over offenses committed within Belgian territory by Belgian or foreign nationals. Act 99/808 added Article 10 related to the code of criminal procedure. This Article provides for jurisdiction in certain cases over persons (foreign as well as Belgian nationals) who commit bribery offenses outside the territory of Belgium. Various limitations apply, however. For example, if the bribe recipient exercises a public function in an EU member state, Belgian prosecution may not proceed without the formal consent of the other state.

Under the 1999 Belgian law, the definition of corruption was extended considerably. It is considered passive bribery if a government official or employer requests or accepts a benefit for him or herself or for somebody else in exchange for behaving in a certain way. Active bribery is defined as the proposal of a promise or benefit in exchange for undertaking a specific action. Until 1999, Belgian anti-corruption law did not cover attempts at passive bribery. The most controversial innovation of the 1999 law was the introduction of the concept of ‘private corruption,’ or corruption among private individuals.

Corruption by public officials carries heavy fines and/or imprisonment between 5 and 10 years. Private individuals face similar fines and slightly shorter prison terms (between six months and two years). The current law not only holds individuals accountable, but also the company for which they work. Contrary to earlier legislation, the 1999 law stipulates that payment of bribes to secure or maintain public procurement or administrative authorization through bribery in foreign countries is no longer tax deductible. Recent court cases in Belgium suggest that corruption is most serious in government procurement and public works contracting. American companies have not, however, identified corruption as a barrier to investment.

The responsibility for enforcing corruption laws is shared by the Ministry of Justice through investigating magistrates of the courts, and the Ministry of the Interior through the Belgian federal police, which has jurisdiction in all criminal cases. A special unit, the Central Service for Combating Corruption, has been created for enforcement purposes but continues to lack the necessary staff.

The Belgian Employers Federation encourages its members to establish internal codes of conduct aimed at prohibiting bribery. To date, U.S. firms have not identified corruption as an obstacle to FDI.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Belgium has signed and ratified the UN Anticorruption Convention of 1998, and is also party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Office of the Federal Prosecutor of Belgium
Quatre Brasstraat 4, 1000 Brussels
tel: +32 2 508 7111
fax: +32 2 508 7097

Transparency International Belgium
Emile Jacqmainlaan 135, 1000 Brussels
tel: +32 479 239490
email: infoa@transparencybelgium.be

Belgium is a peaceful, democratic nation comprised of federal, regional, and municipal political units: the Belgian federal government, the regional governments of Flanders, Wallonia, and the Brussels capital region, and 589 communes (municipalities). Political divisions do exist between the Flemish and the Walloons, but they are addressed in democratic institutions and generally resolved through compromise. The Federal Council of Ministers, headed by the prime minister, remains in office as long as it retains the confidence of the lower house (Chamber of Representatives) of the bicameral parliament. Observers considered federal parliamentary elections held in 2014 to be free and fair.

On March 22, 2016, terrorists conducted three coordinated suicide bombing attacks in the country: two at the Brussels airport in Zaventem and one at the Maalbeek metro station in central Brussels. The bombings killed 32 civilians and three perpetrators and injured more than 300 persons. Authorities found another bomb during a search of the airport. Since then, Belgian authorities are operating under what is called threat level 3, level 4 being the highest possible level.

The Belgian labor force is generally well trained, highly motivated and very productive. Workers have an excellent command of foreign languages, particularly in Flanders. There is a low unemployment rate among skilled workers, such as local managers. Enlargement of the EU in May 2004 and January 2007 facilitated the entry of skilled workers into Belgium from new member states. However, registration procedures were required until mid-2009 for entrants from some new EU member states. Non-EU nationals must apply for work permits before they can be employed. Minimum wages vary according to the age and responsibility level of the employee and are adjusted for the cost of living.

In 2015, the Belgian government eliminated the differential contractual treatment between blue collar and white collar employees. The main result of this streamlining will be a substantial reduction in the cost of firing employees. The government also increased the retirement age from the current age of 65 to 66 as of 2027 and 67 as of 2030. Under the plan various schemes of early retirement before the age of 65 will be gradually phased out, and unemployment benefits will decrease over time as an incentive for the unemployed to regain employment. Historically, unemployment benefits do not expire and some unemployed lived off the benefits indefinitely. Finally, during the 2015 budget negotiations the government and labor agreed to skip the 2015 automatic wage adjustment, but the process of automatic wage indexation resumed in 2016.

Wage increases are negotiated by sector within the parameters set by automatic wage indexation and the 1996 Law on Competitiveness. The purpose of automatic wage indexation is to establish a bottom margin that protects employees against inflation: for every increase in consumer price index above 2 percent, wages must be increased by (at least) 2 percent as well. The top margin is determined by the competitiveness law, which requires the Central Economic Council (CCE) to study wage projections in neighboring countries and make a recommendation on the maximum margin that will ensure Belgian competitiveness. The CCE is made up of civil society organizations, primarily representatives from employer and employee organizations, and its mission is to promote a socio-economic compromise in Belgium by providing informed recommendations to the government. The CCE’s projected increases in neighboring countries have historically been higher than their real increases, however, and have caused Belgium’s wages to increase more rapidly than its neighbors. Since 2016 however, that wage gap has decreased substantially.

Belgian’s comprehensive social security package is composed of five major elements: family allowance, unemployment insurance, retirement, medical benefits and a sick leave program that guarantees salary in event of illness. Currently, average employer payments to the social security system stand at 35 percent of salary while employee contributions comprise 13 percent. In addition, many private companies offer supplemental programs for medical benefits and retirement.

Belgian workers are highly unionized and usually enjoy good salaries and benefits. Belgian wage and social security contributions, along with those in Germany, are among the highest in Western Europe. For 2016, Belgium’s harmonized unemployment figure was 8 percent, below the EU28 average of 8.5 percent (OECD). High wage levels and pockets of high unemployment coexist, reflecting both strong productivity in new technology sector investments and weak skills of Belgium’s long-term unemployed, whose overall education level is significantly lower than that of the general population. There are also significant differences in regional unemployment levels: 7.15 percent in Flanders, against 15 percent in Wallonia and 17.4 percent in Brussels. As a consequence of high wage costs, employers have tended to invest more in capital than in labor. At the same time, a shortage exists of workers with training in computer hardware and software, automation and marketing, increasing wage pressures in these sectors.

Belgian labor unions, while maintaining a national superstructure, are, in effect, divided along linguistic lines. The two main confederations, the Confederation of Christian Unions and the General Labor Federation of Belgium, maintain close relationships with the Christian Democratic and Socialist political parties, respectively. They exert a strong influence in the country, politically and socially. A national bargaining process covers inter-professional agreements that the trade union confederations negotiate biennially with the government and the employers’ associations. In addition to these negotiations, bargaining on wages and working conditions takes place in the various industrial sectors and at the plant level. About 51 percent of employees from the public service and private sector are labor union members. A cause for concern in labor negotiation tactics is isolated cases where union members in Wallonia have resorted to physically forcing management to stay in their offices until an agreement can be reached. In 2015 and again in 2016, the employee organizations and the trade unions failed to reach an agreement on preventing aggressive tactics such as blockading entrances to business parks and setting up roadblocks.

Firing a Belgian employee can be very expensive. An employee may be dismissed immediately for cause, such as embezzlement or other illegal activity, but when a reduction in force occurs, the procedure is far more complicated. In those instances where the employer and employee cannot agree on the amount of severance pay or indemnity, the case is referred to the labor courts for a decision. To avoid these complications, some firms include a “trial period” (of up to one year) in any employer-employee contract. Belgium is a strict adherent to ILO labor conventions.

Belgian labor law provides for dispute settlement procedures, with the labor minister appointing an official as mediator between the employers and employee representatives.

Belgium was one of the first countries in the EU to harmonize its legislation with the EU Works Council Directive of December 1994. Its flexible approach to the consultation and information requirements specified in the Directive compares favorably with that of other EU member states.

Belgium, as a developed country, does not qualify for OPIC programs. No other countries operate investment insurance programs in Belgium.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) (USD) 2014 $531.5bn 2015 $455.1bn www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2014 $47,515 2015 $45,087 BEA data available at http://bea.gov/international/direct_investment_
Host country’s FDI in the United States ($M USD, stock positions) 2014 $87,571 2015 $80,134 BEA data available at http://bea.gov/international/direct_investment_
Total inbound stock of FDI as % host GDP 2014 92.7% 2015 82% N/A

* Source: National Bank of Belgium
Table 3: Sources and Destination of FDI

Note: National data on FDI are unavailable because of the different statistical treatment of the data in each of the three regions.

Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 455,366 100% Total Outward 446,237 100%
Luxembourg 160,004 35.1% Luxembourg 125,055 28%
France 136,675 30% Netherlands 120,185 26.9%
Netherlands 92,270 20.3% France 36,706 8.2%
Switzerland 49,413 10.9% United Kingdom 34,875 7.8%
Japan 12,716 2.8% United States 18,962 4.2%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 698,518 100% All Countries 283,449 100% All Countries 415,069 100%
Luxembourg 188,780 27% Luxembourg 157,172 55.4% France 75,178 18.1%
France 112,922 16,2% France 37,743 13.3% U.S. 69,555 16.8%
U.S. 88,117 12,6% Germany 20,099 7.1% Netherlands 35,986 8.7%
Germany 46,345 6.6% U.S. 18,562 6.5% Luxembourg 31,607 7.6%
Netherlands 44,121 6.3% Ireland 12,464 4.4% Italy 28,710 6.9%

Most of the portfolio investment that comes from Luxembourg is related to the repatriation of Belgian capital from Luxembourg banks as a result of successive rounds of fiscal amnesty, whereby Belgian nationals could obtain lenient treatment from the tax authorities if they repatriated their undeclared capital from Luxembourg.

Michele Dastin-Van Rijn
Political-Economic Counselor
U.S. Embassy Brussels
+32 2 811 5178

2017 Investment Climate Statements: Belgium
Build a Custom Report

01 / Select a Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future