HomeReportsBureau of Economic and Business Affairs2023 Investment Climate Statements...Belgium

# 					2023 Investment Climate Statements: Belgium			

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													EXECUTIVE SUMMARY											

                -  EXECUTIVE SUMMARY 
                -  1. Openness To, and Restrictions Upon, Foreign Investment                    -  Policies Towards Foreign Direct Investment 
                  -  Limits on Foreign Control and Right to Private Ownership and Establishment 
                  -  Business Facilitation 
                  -  Outward Investment 
                -  2. Bilateral Investment and Taxation Treaties 
                -  3. Legal Regime                    -  Transparency of the Regulatory System 
                  -  International Regulatory Considerations 
                  -  Legal System and Judicial Independence 
                  -  Laws and Regulations on Foreign Direct Investment 
                  -  Competition and Antitrust Laws 
                  -  Expropriation and Compensation 
                  -  Dispute Settlement                      -  ICSID Convention and New York Convention 
                    -  Investor-State Dispute Settlement 
                    -  International Commercial Arbitration and Foreign Courts 
                  -  Bankruptcy Regulations 
                -  4. Industrial Policies                    -  Investment Incentives 
                  -  Foreign Trade Zones/Free Ports/Trade Facilitation 
                  -  Performance and Data Localization Requirements 
                -  5. Protection of Property Rights                    -  Real Property 
                  -  Intellectual Property Rights 
                -  6. Financial Sector                    -  Capital Markets and Portfolio Investment 
                  -  Money and Banking System 
                  -  Foreign Exchange and Remittances                      -  Foreign Exchange 
                    -  Remittance Policies 
                  -  Sovereign Wealth Funds 
                -  7. State-Owned Enterprises                    -  Privatization Program 
                -  8. Responsible Business Conduct                    -  Climate Issues                      - 
                -  9. Corruption   
                -  10. Political and Security Environment 
                -  11. Labor Policies and Practices 
                -  12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs 
                -  13. Foreign Direct Investment Statistics 
                -  14. Contact for More Information 

## EXECUTIVE SUMMARY

Belgium boasts an open market and remains well-connected to the major economies of the world. As a logistical gateway to Europe, host to major EU institutions and NATO, and a central location closely tied to the major European economies, Belgium is a competitive market and location for U.S. investors. Belgium is a highly-developed, long-time economic partner of the United States that benefits from an extremely well-educated workforce, world-renowned research centers, and the infrastructure to support a broad range of economic activities.

Since June 2015, the Belgian government has implemented measures to reduce the tax burden on labor and to increase Belgium’s economic competitiveness and attractiveness to foreign investment.  A July 2017 decision to lower the corporate tax rate from 35% to 25% further improved the investment climate. Belgian Minister of Finance Vincent Van Peteghem announced tentative plans in March 2023 to introduce a new set of tax reforms by January 2024 to further reduce the tax burden on labor; other elements of the plan will likely include implementing a taxation system for equity-based compensation to attract talent in the high technology sector, and creating an environment for sustainable investments and healthy consumption. The specifics, however, have not been agreed upon by the seven-party coalition government. Of note, Belgium will also likely introduce a minimum tax of 15% for multinational corporations with revenue exceeding €750 million ($816 million) on an annual basis by December 31, 2023. This revision would implement an agreement struck in the OECD – and adopted by the European Union – setting a global minimum tax at this rate.

Belgium has a dynamic economy and attracts significant levels of investment in chemicals, petrochemicals, plastics, and composites; environmental technologies; food processing and packaging; health technologies; information and communication; and textiles, apparel and sporting goods, among other sectors.  In 2022, Belgian exports to the U.S. market totaled $32.5 billion, registering the United States as Belgium’s fourth-largest export destination.  Key exports included chemicals and pharmaceutical products (64.0%), machinery and equipment (8.8%), vehicles (7.2%), and precious metals and stones (5.6%). In terms of imports, the United States ranked as Belgium’s fourth-largest supplier of imports, with the value of imported goods totaling $26.0 billion in 2022.  Key imports from the United States included chemicals and pharmaceutical products (43.1%), mineral products (16.2%), and machinery and equipment (10.8%).

According to its most recent report, the Belgian central bank expects the gross domestic product (GDP) growth rate to fall temporarily to 0.6% in 2023. Growth, however, is projected to rebound to 1.7% in 2024 and to 1.8% in 2025 as inflation moderates. The labor market remains strong. Despite the expectation that job creation will slow in the coming months, the unemployment rate is projected to remain comparatively low at 6%. As anticipated, inflation has risen in Belgium and Europe due to mounting energy prices and second-round inflation effects, but in November 2022 it declined in Belgium for the first time since March 2022. Headline inflation should gradually fall, according to Belgian banking experts, from an average of over 10% in 2022 to 1.1% by 2025 as energy prices decline and settle at normal levels. Belgium’s budget deficit reached 5.8% of GDP in 2022, ranking the highest in the eurozone. While some experts forecast the deficit will improve slightly due to the unwinding of temporary COVID-19 and energy support measures, most believe it will remain structurally high, around 5 percent, in 2024 and 2025. Meanwhile, the government’s debt ratio is expected to increase from 105% in 2022 to 112% of GDP by 2025.

*Table 1: Key Metrics and Rankings*

 

							1. Openness To, and Restrictions Upon, Foreign Investment					

### Policies Towards Foreign Direct Investment

Belgium maintains an open economy, and its prosperity is highly dependent on international trade.  Since WWII, making Belgium more competitive to foreign investors has been the cornerstone of successive Belgian governments’ foreign and commercial policy.  Competence over relevant policies lies predominantly with the federal government, which is responsible for developing domestic competition policy, wage policies, labor law, and most of the energy and fiscal policies.  Attracting foreign direct investment (FDI), however, is the responsibility of Belgium’s three regional governments in Flanders, Wallonia, and the Brussels-Capital Region.  Flanders Investment and Trade (FIT), Wallonia Foreign Trade and Investment Agency (AWEX), and Brussels Invest and Export (BIE) are the three investment promotion agencies responsible for facilitating FDI to Belgium.  One of their most visible activities is organizing Royal Trade Missions, which are led by Princess Astrid (the king’s sister), as well as the economic portions of state visits by King Philippe.  In June 2022, Princess Astrid led a Royal Trade Mission to Atlanta, New York City, and Boston with more than 500 Belgian participants. Neither the federal nor the regional governments currently maintain a formal dialogue with investors.

There are no laws in place that discriminate against foreign investors, and U.S. companies continue to play key, longstanding roles in the development of the Belgian economy.

### Limits on Foreign Control and Right to Private Ownership and Establishment

Belgian authorities are preparing to implement a national security-based investment screening law that will establish restrictions based on potential risks to national security.  The federal and regional governments approved the draft law on November 30, 2022, and sent the text to federal, regional, and linguistic parliaments with a request for ratification by March 31, 2023. Implementation of the law is scheduled for July 1, 2023.

Other Investment Policy Reviews

In July 2019 the OECD published an in-depth productivity review of Belgium:https://www.oecd.org/belgium/in-depth-productivity-review-of-belgium-88aefcd5-en.htm.  Belgium was included in the WTO Trade Policy Review of the European Union which took place February 18-20, 2020: https://www.wto.org/english/tratop_e/tpr_e/tp495_e.htm. In June 2021, Belgium was subject of an IMF Article IV mission: https://www.imf.org/en/News/Articles/2021/06/29/mcs062921-belgium-staff-concluding-statement-of-the-2021-article-iv-mission.

### Business Facilitation

To set up a business in Belgium, one must:

1. Deposit at least 20% 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; 

2. Deposit a financial plan with a notary and 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 French, Dutch, or German (Belgium’s three official languages); and

3. Register with one of the Registers of legal entities, VAT and social security at a centralized company docket and obtain a company number.

In most cases, the business registration process can be completed within one week. https://www.business.belgium.be/en/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 terms of the Promotion of Independent Enterprise Act of February 10, 1998. For a small or medium-sized enterprise, registration is possible once a certificate of competence has been obtained. The person in charge of the daily management of the company must prove his or her knowledge of business management with diplomas and/or practical experience. A company is expected to allow trade union delegations when employing 20 or more full-time equivalents (FTEs).

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

- Flanders: Flanders Investment & Trade,  https://www.flandersinvestmentandtrade.com/en
- Wallonia: Invest in Wallonia,  http://www.investinwallonia.be/home
- Brussels: Why Brussels,  http://why.brussels/

### Outward Investment

Belgium does not actively promote outward investment.  There are no restrictions for domestic investors to invest in certain countries, other than those that fall under UN or EU sanction regimes.  In June 2022, the Belgian government led a Royal Trade Mission to Atlanta, New York City, and Boston with more than 500 participants. The mission promoted both Belgian investment into the United States and encouraged foreign direct investment into Belgium.

							2. Bilateral Investment and Taxation Treaties					

Belgium historically concludes its investment treaties with Luxembourg within the framework of the Belgian-Luxembourg Economic Union. Belgium, however, has no specific investment agreement with the United States. A list of the countries with which Belgium has signed investment agreements can be found at: https://diplomatie.belgium.be/nl/Beleid/economische_diplomatie/bilaterale_investeringsverdragen

Belgium shares a bilateral tax treaty with the United States.  A list of the countries with which Belgium has signed tax agreements can be found at: https://financien.belgium.be/nl/particulieren/internationaal/internationale-akkoorden#q1

Belgium is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting, as well as party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

							3. Legal Regime					

### 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. U.S. companies continue to play key and long-standing roles in the development of the Belgian economy. .

Political competences in Belgium are shared between the federal government, the three regions – Flanders, Wallonia, and Brussels-Capital – and the French and German linguistic communities. (Note. Flanders merged the Flemish linguistic community into its regional government. End Note.) Notwithstanding the fact that the regions in Belgium are responsible for attracting foreign investors, most regulations impacting the business environment (taxes, labor market, energy) are controlled at the federal level. In contrast, environmental regulations are developed mostly at the regional level. A regulatory impact assessment (RIA) is mandatory for all primary and some subordinate legislation submitted to the Cabinet of Ministers at the federal level and is usually shared with social partners as a basis for consultation. Belgium publishes all its relevant legislation and administrative guidelines in an official Gazette, called Het Staatsblad/Le Moniteur Belge (https://www.ejustice.just.fgov.be/cgi/welcome.pl).

Recognizing the need to streamline administrative procedures in many areas, in 2015 the federal government set up a special task force to simplify official procedures.  Traditionally, scientific studies or quantitative analysis conducted on the impact of regulations are made publicly available for comment. However, not all stakeholder comments received by regulators are made public.

Accounting standards are regulated by the Belgian law of January 30, 2001, and balance sheet and profit and loss statements are in line 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.

Regarding Environmental, Social and Governance Impacts reporting (ESG), the EU’s Non-Financial Reporting Directive (NFRD) was transposed into Belgian law in 2017. The NFRD requires very large public interest entities (PIEs) to report environmental, social and employee, human rights, anti-bribery, and corruption information on an annual basis. On April 21, 2021, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD), which will update the NFRD. The CSRD aims to be applicable as of fiscal year 2023 and will significantly extend the scope of reporting requirements to all large companies and all companies listed on regulated markets (except listed micro-enterprises).

Regarding oversight or enforcement mechanisms to ensure governments follow administrative processes, local courts are expected to enforce foreign arbitral awards issued against the government.  Recourse to the courts is available if necessary.

Public finances and debt obligations are generally transparent. Details on government budgets are available online, and the debt agency (https://www.debtagency.be/en) publishes all relevant data concerning government debt.

### International Regulatory Considerations

Belgium is a founding member of the EU, whose directives and regulations are enforced.  On May 25, 2018, Belgium implemented the General Data Protection Regulation (GDPR) (EU) 2016/679, an EU regulation on data protection and privacy for all individuals within the European Union.

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).  Belgium 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 law system since 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 ongoing budget cuts causing backlogs and 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.

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.

Belgian authorities are developing a national security-based investment screening law that will establish certain restrictions based on the potential risk of an investor’s operations to national security.  The government approved the draft law on November 30, 2022, and sent the text to federal, regional, and linguistic parliaments with a request for ratification by March 31, 2023. Implementation of the law is tentatively scheduled for July 1, 2023.

There are three different regional Investment Authorities:

Flanders: www.flandersinvestmentandtrade.comWallonia; www.awex.beBrussels: https://be.brussels/brussels

### Competition and Antitrust Laws

The contact address for competition-related concerns:

Federal Competition AuthorityCity Atrium, 6th floorVooruitgangsstraat 501210 Brusselstel: +32 2 277 5272fax: +32 2 277 5323email: info@bma-abc.be

EU member states are responsible for competition and anti-trust regulations if there are cross-border dimensions. If cross-border effects are present, EU law applies, and European institutions are competent.

### 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, current market value 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 expansions, roads, and railroads.

### Dispute Settlement

#### ICSID Convention and New York Convention

**Belgium is a member of the International Centre for the Settlement of Investment Disputes (ICSID) and regularly includes provision for ICSID arbitration in investment agreements.

#### Investor-State Dispute Settlement

****The government accepts binding international arbitration of disputes between foreign investors and the state. There have been no public investment disputes involving a U.S. citizen 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.  There are no reports or complaints targeting court proceedings involving State Owned Enterprises (SOEs) or alleged favoritism for them.

### Bankruptcy Regulations

Belgian bankruptcy law falls under the jurisdiction of the commercial courts.  The commercial court appoints a judge-auditor to preside over the bankruptcy proceeding 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.  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 Chapter 11 as the aim is to facilitate business recovery.  In the World Bank’s 2020 Doing Business Index, Belgium ranks number 9 (out of 190) for the ease of resolving insolvency.

							4. Industrial Policies					

### Investment Incentives

In Belgium, investment incentives and subsidies are the responsibility of Belgian’s three regions: Flanders, Wallonia, and Brussels-Capital.  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.  The government does not have a practice of issuing guarantees or jointly financing foreign direct investment projects.

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 their investment policies, the regional governments emphasize innovation promotion, research and development, energy savings, environmental protection, exports, and employment. In order to achieve this, a wide variety of tax benefits and incentives is available at both the federal and regional levels. The three regional agencies have staff specializing on specific regions of the world, including the United States, and have representation offices in different countries.  In addition, the Finance Ministry has a foreign investment tax unit to provide assistance and to make the tax administration more “user friendly” to foreign investors.

More information about investing in Belgium, the Belgian tax system, tax benefits and incentives can be found at: https://business.belgium.be/en.

*Tax advice and support can be requested, free of charge at the Foreign Investment Tax Unit of the Federal Public Service Finance (taxinvest@minfin.fed.be).***

### 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 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.  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.

							5. Protection of Property Rights					

### 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. Industrial spaces that are unused and neglected can be subject to levies. Owners of building plots are not required to build on them within a certain period. However, exceptions exist for plots that retain construction obligations. On those plots, owners are obliged to build within a certain timeframe.

### Intellectual Property Rights

Belgium is not included in USTR’s Special 301 Report.

Belgium generally meets very high standards for the protection of intellectual property rights (IPR). The EU has issued several directives to promote the protection and enforcement of IPR, which EU Member States are required to implement.  National laws  do not conflict with those of the EU .  Belgium is a member of the World Trade Organization (WTO) and therefore is party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  Belgium is also a member of the World Intellectual Property Organization (WIPO) and party to many of its treaties, including the Berne Convention, the Paris Convention, the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty.

IPR is administered by the Belgian Office of Intellectual Property (OPRI), which is part of the Directorate-General for Economic Regulation  in the Ministry for Economic Affairs: https://economie.fgov.be/en/themes/intellectual-property/institutions-and-actors/belgian-office-intellectual.  This office manages and provides Belgian IPR titles, oversees public awareness campaigns, drafts legislation, and advises Belgian authorities with regard to national and international issues.  The Belgian Ministry of Justice is responsible for enforcement of IPR.  Belgium experiences a small? rate of commercial and digital infringement – particularly internet music piracy and illegal copying of software – similar to most EU Member States.

For additional information about treaty obligations and points of contact at local IP offices, please see the WIPO’s country profiles at http://www.wipo.int/directory/en/.

In June 2022, Belgium enacted a law implementing the European Union (EU) Directive 2019/790 on copyright and related rights in the Digital Single Market (DSM Copyright Directive). In addition to the provisions of the Directive, Belgium also introduced a non-waivable remuneration right for right holders if their work is used on content-sharing platforms, i.e., in the context of Article 17 of the Directive, as well as on streaming platforms. A legal challenge has been filed against this additional provision, but the Belgian courts have not yet issued any final ruling on the matter.

							6. Financial Sector					

### 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.

Bruges established the world’s first stock market almost 600 years ago, and the Belgian stock exchange is well-established today. On Euronext, a company may 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. Belgium’s currency is the euro and its central bank is the National Bank of Belgium (NBB), whose governor is a member of the Governing Council of the European Central Bank (ECB).  The NBB is part of the eurosystem, meaning that it has transferred the sovereignty over monetary policy to the ECB.

Since 2017, the supervision of systemically important Belgian banks lies with the ECB. The country has not lost any correspondent banking relationships in the past three years, nor are there any correspondent banking relationships currently in jeopardy.  The Belgian non-performing Loan Ratio stood at 0.7% in the third quarter of 2022.

Opening a bank account in the country is linked to residency status.  The U.S. 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.  Belgium implemented a basic banking service law in 2021 which aims to give entrepreneurs otherwise unable to open a bank account the right to do so. For example, companies that have been refused the ability to open a bank account by three credit institutions are entitled to a basic banking service. According to the law, a basic banking service room – administered by the government – will confirm evidence of three refusals and designate a credit institution in Belgium that must offer the basic banking service to the company.

### Foreign Exchange and Remittances

#### Foreign Exchange

**Payments and transfers within Belgium and with foreign countries require no prior authorization. Transactions may be executed in a broad range of currencies.  There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment, other than those that fall under UN or EU sanction regimes.

As a member of the eurozone, Belgium’s currency rate is subject to ECB policy.**

#### 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 (SWF) in the form of the Federal Holding and Investment Company (FPIM-SFPI), a quasi-independent entity created in 2006 and now mainly used as a vehicle to manage the banking assets which were taken on board during the 2008 banking crisis. The SWF 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 2021, its total assets amounted to €2.41 billion ($2.62 billion).  Most of the funds are invested domestically. Its role is to allow public entities to recoup their investments and support Belgian banks. The SWF is required by law to publish an annual report and is subject to the same domestic and international accounting standards and rules. The SWF routinely fulfills all legal obligations. However, it is not a member of the International Forum of Sovereign Wealth Funds.

							7. State-Owned Enterprises					

Belgium has around 90,000 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.  Private enterprises are allowed to compete with SOEs under the same terms and conditions, but 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 now market leaders due mainly to their incumbent status with legacy networks that were fully amortized years ago and the ability to charge high access costs to new entrants.

### Privatization Program

Belgium currently has no scheduled privatizations. There are no indications that foreign investors would be excluded from potential privatizations.

							8. Responsible Business Conduct					

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.

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 pay attention to corporate social responsibility in the 2009 Belgian Code on corporate governance. This Code, also known as the ‘Code Buysse II’ 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 into public procurement decisions. For listed companies, far stricter guidelines apply, which are monitored by the Financial Services and Markets Authority.

Belgium is part of the Extractive Industries Transparency Initiative.  There are currently no alleged or reported human or labor rights concerns relating to responsible business conduct (RBC) that foreign businesses should be aware of. In cases of violations, the Belgian government generally enforces domestic laws effectively and fairly. NGOs and unions that promote or monitor RBC can do so freely.

Department of State
                    - Country Reports on Human Rights Practices ( https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/ );
                    - Trafficking in Persons Report ( https://www.state.gov/trafficking-in-persons-report/ ); and
                    - Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities (https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/)
                    - U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises (https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/)
                    - Xinjiang Supply Chain Business Advisory ( https://www.state.gov/xinjiang-supply-chain-business-advisory/ ).

Department of the Treasury
                    - OFAC Recent Actions ( https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions ).

Department of Labor
                    - Findings on the Worst Forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  );
                    - List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods );
                    - Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab ) and;
                    - Comply Chain ( https://www.dol.gov/ilab/complychain/ ).

 

### Climate Issues

Due to the federal state structure of Belgium and the different areas of competence and responsibility, climate policy is divided between the regions and the federal state.  More information about Belgian climate policies, as well as the implementation of EU and UN climate-related agreements and guidelines, can be found here: https://klimaat.be/klimaatbeleid/belgisch/nationaal/langetermijnstrategie#:~:text=De%20Belgische%20langetermijnstrategie&text=Deze%20strategie%20omvat%20streefdoelen%20voor,om%20deze%20streefdoelen%20te%20bereiken.

 

As a member of the EU, Belgium subscribes to the system of emissions trading (the European Emissions Trading System or EU ETS) for industrial installations.  The system is applicable to large installations (with a thermal input of more than 20 MW) in industries such as electricity production and aviation, among others.  Depending on the concrete activities and characteristics of a company, different environmental permits may be required.  Being a regional matter, these requirements can differ depending on the region in which a company is active:

- Flanders:  https://www.vlaanderen.be/omgevingsvergunning
- Wallonia:  https://www.wallonie.be/fr/demarches/demander-un-permis-denvironnement-ou-un-permis-unique-pour-un-etablissement-de-classe-1-ou-2 Brussels-Capital:  https://urbanisme.irisnet.be/lepermisdurbanisme/autres-premis-et-certificats/le-permis-unique?set_language=fr

 

Of note, Belgium aimsto establish itself as the “hydrogen backbone” of Europe by linking its energy and logistics infrastructure with hydrogen producers throughout the globe, according to a recent revision of its Federal Hydrogen Strategy (October 2022).  Moreover, to drive its transformation into a key distributor of hydrogen in Europe, the government has announced several projects throughout 2022 for the import of green hydrogen from North Africa and the Middle East, among other locales.  The Green Hydrogen Forum, jointly announced by co-founders Belgium and Egypt at COP27, will play a central role in this transition, as Belgium’s plan will create a rules-making consortium that combines governments, investors, international institutions, and producers active in the hydrogen market.  Belgium is also committed to increasing its green energy production, aiming to quadruple its wind energy output by 2040 through increased offshore wind production.  Part of the increased green energy will be transmitted into hydrogen in plants in Belgium.  The final pillar of the strategy is the investment in R&D by increasing the collaboration of renowned research hubs and companies active in the hydrogen sector.

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							9. Corruption					

Belgian has extensive anti-bribery laws in place. Bribing foreign officials is a criminal offense in Belgium. Belgium has been a signatory to the OECD Anti-Bribery Convention and is a participating member of the OECD Working Group on Bribery.

Anti-bribery legislation 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 Belgian law bribery is considered passive 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.

Corruption by public officials carries heavy fines and/or imprisonment between 5 (five) 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. Recent court cases in Belgium suggest that corruption is most prevalent 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 over 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. Belgium is also an active participant in the Global Forum on Asset Recovery.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**

 

#### Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Office of the Federal Prosecutor of Belgium Transparency International BelgiumResources to Report CorruptionWolstraat 66-1 – 1000 BrusselsT 02 55 777 64F 02 55 777 94

Transparency BelgiumNijverheidsstraat 10, 1000 Brusselstel: +32 (0)2 893 2584email: info@transparencybelgium.be

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							10. Political and Security Environment					

Belgium is a peaceful, democratic nation comprised of federal, regional, and municipal political units: the Belgian federal government, the regional governments of Flanders, Wallonia, the Brussels-Capital region, and communes (municipalities). Cultural and 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.

In 2021, a seven-year-long investigation into an attempted sabotage of the Doel nuclear power plant – perpetrated in 2014 – ended inconclusively in 2021. Investigators concluded that the incident was likely carried out by a plant employee or subcontractor who had a legitimate reason to be in the area where the sabotage occurred.

							11. Labor Policies and Practices					

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. EU Enlargement facilitated the entry of skilled workers into Belgium from newer 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.

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 December 2022, Belgium’s harmonized unemployment figure was 5.7 percent, below the EU27 average of 6.1 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 (December 2022 figures): 3.3 percent in Flanders, against 8.5 percent in Wallonia and 11.5 percent in Brussels.  At the same time, shortages exist, mainly of workers with a degree in the sciences, mathematics, ICT, and engineering.

Given the nature of the informal economy, relatively little reliable data is available. However, according to the IMF, the importance of the Belgian informal sector stood at around 17% of GDP at the end of 2015. This relatively high percentage can be attributed mainly to the high Belgian personal income tax rates that often make it financially worthwhile to avoid the payment of such taxes through formalized employers. The Belgian central bank states the informal economy is mainly based in the construction, catering, and household services sectors.

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 25% of salary while employee contributions comprise 13%. In addition, many private companies offer supplemental programs for medical benefits and retirement.

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 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% of employees from the public service and private sector are labor union members. Wage negotiations in Belgium often lead to large protests and strikes, which sometimes force public transport and major roads to close temporarily.

Firing a Belgian employee can be expensive. An employee may be dismissed immediately for cause, such an illegal activity, but when a reduction in force occurs, the procedure is 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.

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.

In 2015, the Belgian government increased the retirement age from the current age of 65 to 66 as of 2027 and 67 as of 2030.  Under the 2015 retirement plan, various schemes for 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.

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, resulting in Belgium’s wages to increase more rapidly than its neighbors. Since 2016, however, that wage gap has decreased substantially.

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

In February 2022, the federal government reached an agreement on a plan to reform aspects of the labor market, including the introduction of a voluntary four-day work week, relaxed rules allowing employees to work longer into the night (8:00 p.m. – 12:00 a.m.) and the right to “disconnect,” a privilege already afforded to civil servants who are no longer obliged to respond to work-related messages during off-hours.

 

							12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs					

Belgium, as a high-income country, does not qualify for DFC support.  

							13. Foreign Direct Investment Statistics					

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