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Belgium is a nation in Northwestern Europe, formally known as the Kingdom of Belgium. The nation is bounded to the north by the Netherlands, to the east by Germany, to the southeast by Luxembourg, to the southwest by France, and to the northwest by the North Sea. It has a population of more than 11.5 million people on a land area of 30,689 km2 (11,849 sq mi), making it the 22nd most densely populated country in the world and the 6th most densely populated country in Europe, with a population density of 376 per square kilometer (970/sq mi). Brussels is the capital and biggest city; other notable cities include Antwerp, Ghent, Charleroi, Liège, Bruges, Namur, and Leuven.
Belgium is a sovereign state with a parliamentary system and a federal constitutional monarchy. Its institutional framework is complicated, with regional and language divisions. The country is split into three largely autonomous regions: the Flemish Region (Flanders) in the north, the Walloon Region (Wallonia) in the south, and the Brussels-Capital Region in the center. Brussels is the smallest, most densely inhabited, and wealthiest area in terms of GDP per capita.
Belgium has two major linguistic communities: the Dutch-speaking Flemish Community, which accounts for about 60% of the population, and the French-speaking Community, which accounts for approximately 40% of the population. In the East Cantons, there is a tiny German-speaking community of around 1%. Although French is the prevalent language in the Brussels-Capital Region, the region is legally multilingual in both French and Dutch. Belgium's linguistic variety and concomitant political disputes are mirrored in its complicated governance structure, which is comprised of six separate administrations.
The nation as it exists now was formed during the Belgian Revolution of 1830 when it seceded from the Netherlands, which had only existed since 1815. The name selected for the new state is taken from the Latin term Belgium, which was used to denote a neighboring territory in Julius Caesar's "Gallic Wars" about 55 BCE. Belgium is part of the Low Countries, which was historically a wider territory than the Benelux group of nations since it covered sections of northern France. Since the Middle Ages, the area's center position near multiple important rivers has meant that it has been reasonably rich, financially and politically tied to its larger neighbors. Belgium has also served as a battlefield for European nations, gaining the title "Battlefield of Europe," a reputation that was bolstered in the twentieth century by both world wars.
Belgium took part in the Industrial Revolution and controlled a number of African colonies throughout the twentieth century. The Congo Free State, which was privately controlled by King Leopold II of Belgium from 1885 and 1908, was marked by extensive atrocities and a population fall of millions, prompting Belgium to take over the area as a colony.
The second half of the twentieth century saw increased tensions between Dutch-speaking and French-speaking populations, fueled by linguistic and cultural disparities, as well as the uneven economic growth of Flanders and Wallonia. This ongoing rivalry has resulted in a series of far-reaching changes, culminating in a move from a unitary to a federal setup between 1970 and 1993. Despite the reforms, tensions between the groups have remained, if not increased; there is significant separatism, particularly among the Flemish; controversial language laws exist, such as municipalities with language facilities; and the formation of a coalition government took 18 months, a world record, following the June 2010 federal election. Wallonia's unemployment rate is more than twice that of Flanders, which surged following WWII.
Belgium is one of the six founding nations of the European Union, and its city, Brussels, serves as the official headquarters of the European Commission, the Council of the European Union, and the European Council, as well as one of the two seats of the European Parliament (the other being Strasbourg). Belgium is also a founding member of the Eurozone, NATO, the OECD, and the World Trade Organization, as well as a member of the trilateral Benelux Union and the Schengen Area. Many significant international organizations, like NATO, have their headquarters in Brussels.
Belgium is a developed nation with a high-income sophisticated economy. It boasts extremely good living standards, quality of life, healthcare, and education, and is ranked "very high" on the Human Development Index. It is also one of the world's safest or most peaceful nations.
Employees who work five days a week are entitled to 20 days of vacation, and those who work six days a week are entitled to 24 days.
There are ten public holidays in the year. According to the Joint Labour Committee, an additional holiday can be granted.
The employer must pay the employee's entire wages for the first 30 days of sick leave. Upon the employer's order, the employee must have a medical certificate.
The Health Insurance Fund accounts for the rest of the sick leave after the first 30 days.
Maternity leave lasts 15 weeks and is divided into two stages:
Prenatal leave is required to be taken at least one week prior to the scheduled due date and can be taken up to six weeks prior to the due date.
Postnatal leave is a mandatory 9-week period that begins on the day of the child's birth.
The mother is entitled to an extra two weeks of maternity leave if she has several children.
Indicated below is how the Health Insurance Fund accounts for maternity leave:
For the first 30 days of the break, 82 percent of the wage is paid.
From the 31st day onwards, 75 percent of the wage (capped at 106.9, EUR a day) is paid.
Paternity leave is compensated for 15 days for the father. The 15 days can be taken individually or consecutively, and they can be divided into up to 30 half-days.
The contractor pays for the first three days of vacation, and the Health Insurance Fund pays for the remaining days at a rate of 82 percent of daily salary.
Parental leave can begin at any point after the post-natal maternity leave has ended and can be taken in the following ways:
Four months in a row
There are several cycles, each of which is divided into at least one month.
Service hours will be reduced by up to 80% for a period of 20 months. This time span can also be split into two-month increments.
Reducing working hours by half for a period of eight months. This time span can also be split into two-month increments.
Taking half a day off every week or one whole day every two weeks for a total of 40 months or split into multiple cycles of ten months each. The boss, on the other hand, has the right to reject this plan.
Leave can be granted for the employee's or a family member's marriage, depending on the different Joint Labour Committees.
The procedure for terminating a work relationship differs according to the terms of the employment agreement. Dismissal with notice is the most severe type of dismissal. Employees who have worked for the company for at least six months have a right to know why they were terminated.
The notice period is determined by the length of employment. Employees who have worked less than three months will be given a two-week notice period. After 3-6 months of employment, there will be a 4-week notice period. After six to nine months of employment, there will be a six-week notice period. After nine to twelve months of employment, there will be a seven-week notice period. After 12-15 months of employment, there will be an eight-week notice period. After 15-18 months of employment, there will be a 9-week notice period. After 18-21 months of work, a 10-week notice period will apply. After 21-24 months of employment, there will be an 11-week notice period. After 24–36 weeks of employment, a 12-week notice period will be required. After 36-48 months of employment, there will be a 13-week notice period. After 48-60 months of employment, a 15-week notice period will be required. For employment of 60 months to 19 years, a 60-week notice period will apply, plus three weeks for each year beyond the fifth year of employment. For people who have worked for 20-21 years, there will be a 62-week notice period plus one week for each year of employment. Additionally, there is an option for payment in lieu of notification.
The probation period is fixed at six months.
Severance pay is only applicable when an employer unilaterally terminates an employment relationship. Severance pay would be equal to the amount the employee would earn if given notice.
In Belgium, the standard work week is 38 hours, or eight hours per day. Employees who work no more than 5.5 days per week may work 9.5 hours per day. If an employee lives in a home with a significant distance from the workplace and is away from home for more than 14 hours during a workday, they may work up to ten hours. Employees may work up to 12 hours per day in certain circumstances, such as shift work. Employees may also work an alternate schedule, such as a 39-hour week with six paid days off per year, or a 40-hour week with 12 paid days off per year. Collective bargaining agreements may stipulate a shorter workweek.
Generally, employees work between the hours of 6:00 a.m. and 8:00 p.m. Exceptions may be made for jobs that require nighttime work, such as those in hotels and restaurants. By royal decree, certain sectors, companies, or occupations may also be permitted to work at night if a pressing need exists. While work is generally prohibited on Sundays as well, there are numerous exceptions for businesses that are required to operate on Sundays to keep the country running.
Overtime is normally permitted only in exceptional circumstances and is limited to 78 hours per three-month period or 91 hours per year. Employees may also elect to work up to 100 hours of "voluntary overtime" per year, subject to certain restrictions. A collective bargaining agreement may provide for voluntary overtime of up to 350 hours per year. Overtime and working hours regulations do not apply to certain jobs, such as sales, managerial positions, and positions of trust. Voluntary overtime arrangements should be documented in writing.
Overtime is paid at a rate of 150 percent of the regular rate, or 200 percent on Sundays and bank holidays. Workdays are limited to 11 hours and weeks to 50 hours, and each employee is required to take at least one 24-hour rest period per week.
The minimum wage in Belgium varies and is agreed upon in national collective agreements and is overseen by the Joint Labor Committee.
Minimum salary levels in Flanders are set increase by 1.94%. The new minimum salary level for executives which includes those in the upcoming EU IC Permit is EUR 69,638 or USD 82,772. For the EU Blue Card applicants, the minimum salary is EUR 52,229 or USD 62,079. For specialists and trainees (EU ICT Permit/Highly-skilled permit applicants), the minimum salary is EUR 43, 524 or USD 51,733.06. For locally hired staff under 30 years old, the minimum salary is EUR 34,819.20 or USD 41,386.
Since the start of 2021, the minimum salary in the Brussels has increased by 1.23 percent. Currently, the minimum salary for executives is EUR 72,399 or USD 86,054.18. EU Blue Card applicants/managers with the EU ICT Permit have a minimum salary of EUR 56,111 or USD 66,694.10. Specialists (EU ICT Permit) have a minimum salary of EUR 44,889 or USD 53,355.51. Trainees (EU ICT Permit) have a minimum salary of EUR 28,056 or USD 33,347.64. Highly-skilled permit applicants have a minimum salary of EUR 43,395 or USD 51,536.94.
Minimum salary levels in Wallonia have increased by 1.23% since the start of 2021. Executives have a minimum salary of EUR 72,399 or USD 86,054.18.
EU Blue Card applicants have a minimum salary of EUR 56,112 or USD 66,695.28. Highly-skilled permit applicants have a minimum salary of EUR 43,395 or USD 51,579.73.
The national system provides health insurance. Employees must register with a health insurance fund in order to be eligible for this health insurance.
Some companies also provide a variable profit sharing or performance-related incentive, in which the business pays a lump amount each year (usually at the end of the year). The amount of the bonus is determined by the overall success of the business and may be computed as a percentage of each employee's yearly or monthly pay during the time.
Some employers provide perks such as private school tuition or vehicle allowances. These extra perks are typically taxed and should be included into an employee's net take-home pay.
Executives working with US technology firms in Belgium often seek stock options. Unlike other nations, Belgium taxes the grant of an option or the communication of the offer to the employee. After then, the employee has 60 days to accept or reject the choice. Employee stock options are complicated to issue in Belgium, and they are taxed; most US businesses prefer to give cash incentives linked to profitability rather than stock options.
The standard corporate tax rate is 25%. Small businesses that satisfy certain criteria may be eligible for a lower 20% rate on taxable revenue of up to 100,000€.
There are many taxes associated with business in Belgium, including corporate income tax, payroll taxes on compensation given to workers and directors, VAT, transfer tax, and insurance premium tax. Certain regional or municipal taxes may emerge on occasion, depending on the location in which the company works.
Taxes can vary depending on whether a business is a resident or a nonresident. Corporate income tax is paid on capital gains, global earnings, and income in the event of a resident business. Non-resident corporations must pay tax on income earned in Belgium.
Income tax is calculated by applying a progressive tax rate schedule to taxable income, with rates that go from 25% to a maximum rate 50%. The rates, since 2015, are as follows.
Individuals with an annual income from 0 to €10,860 are imposed a tax rate of 25 percent.
Individuals with an annual income from €10,860 to €12,470 are imposed an income tax rate of 30 percent.
Individuals with an annual income from €12,470 to €20,780 are imposed an income tax rate of 40 percent.
Individuals with an annual income from €20,780 to €38,080 are imposed an income tax rate of 45 percent.
Individuals with an annual income over €38,080 are imposed an income tax rate of 50 percent.
VAT is not charged on exports, and the normal VAT rate is 21%. However, in certain instances, the rates may be somewhat different — a 0% charge for daily and weekly publications and certain recycled products, a 6% charge for most essential commodities (water and food), and a 12% charge for social housing and restaurant services.
A value added tax return must be submitted either monthly or quarterly. In terms of payments, generally, tax owed must be paid at the time the VAT return is submitted, and advance payments may be needed in certain cases. Belgian VAT is a component of the European Union's value-added tax system. As of January 1, 2016, most smaller companies with a turnover of less than €25000 may seek an exemption.
EU nationals who want to stay in Belgium for less than three months should register with the appropriate municipal government upon arrival. If you want to remain for more than three months, you must get a registration certificate from your local authorities.
After three years in Belgium, EU residents must transfer their health and social security coverage to their host country in order to seek for permanent residency.
Non-EU citizens must get a visa and/or a work permit. Short-term visas are issued to those staying in Belgium for less than 90 days, whereas long-term visas are issued to individuals staying in Belgium for more than 90 days. The latter also necessitates the acquisition of a work visa, which the potential employer must typically apply for, ideally several months in advance. The requirements and procedures for the application process are determined by the type of employment. Applications must be submitted in accordance with the region in which an employer will be functioning. To renew a work permit, an application must be filed to the Economic Migration Department at least two months before the expiry date.
It is legally obligatory and best practice in Belgium to have a solid employment contract in place that specifies out the conditions of the employee's remuneration, benefits, and termination obligations. In Belgium, an offer letter and job contract should always mention the salary and any other remuneration amounts in Euros rather than foreign currencies.
There are many distinct forms of work contracts in Belgium. The most frequent variety is an indefinite, or open-ended contract. Fixed-term contracts may be formed for almost any purpose and for any length of time agreed upon by the employer and employee. Fixed-term contracts expire on a certain date or when a predetermined event happens (generally the completion of a task, e.g., when the construction of a particular building is complete.)
If the employer and employee continue to work together after the fixed-term contract has ended, the deal will be changed to an indefinite contract.
Euro (EUR)
Before beginning the Belgium subsidiary establishment procedure, you should think about your company objectives, target location, language proficiency, and other aspects. Costs, availability, and restrictions may vary depending on the city or area in which your office space is located. If you are unfamiliar with the various locations of Belgium, you should speak with a consultant who can advise you on the simplest city to incorporate in.
Belgium is the only country in the world with two official languages, Dutch and French. When engaging with workers or other local companies, most businesses need contracts in both French and Dutch. If your organization does not have someone who is proficient in both languages, you will need to employ some extra help or a translator.
Your company's aims will also influence how you establish a subsidiary in Belgium. A public limited liability company (PLC), a foreign branch business, a private limited liability company (PLLC), and a starter-private limited liability company are all permitted subsidiary forms in the nation (S-PLLC). Every organization in Belgium provides for a varied amount of activity and operation, so you must choose the structure that best meets your objectives.
Many companies prefer to form as a PLLC. The following actions are required to establish a Belgium subsidiary as a PLLC:
Opening an account with a Belgian financial institution
Placing at least 20% of your starting money in a credit institution account
Obtaining a standard certification showing that your funds are in a blocked capital account.
1. A financial plan is deposited with a notary.
2. Signing the incorporation document and by-laws in the presence of a notary
3. All paperwork must be notarized, and the deed of incorporation must be registered.
4. Obtaining and registering a business number and a VAT number
5. Registering with a welfare agency for wages, social security payments, and other benefits
6. Getting Workplace Insurance
7. Obtaining professional visas for employees as needed
Belgium's subsidiary rules are also affected by the kind of entity you choose, whether it's a PLLC, PLC, S-PLLC, or overseas branch company. A PLLC must be formed by two or more persons. Shareholders invest capital in exchange for business shares, and their liability is limited to the amount contributed. You must have at least two shareholders and a minimum capital of 18,500 EUR. The minimum paid-up capital for a PLLC is 6,200 EUR.
