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For many companies, building a team in Belgium is an advantageous decision. Due to its location in the center of Europe, the country enjoys a prime position in both the European and global economies. Doing business in Belgium opens your company up to a consumer base of 500 million Europeans.
A European Union (EU) member state, Belgium uses the euro as its national currency. The country is also a member of the Schengen Area and is the 10th largest exporting country in the world. While Belgium has three national languages, fluency in English is also common. All of these factors can make the country an excellent place to grow your company abroad.
What to know before hiring in Belgium
Belgium is unique in its cultural makeup, so employers will need to familiarize themselves with the country before beginning the recruitment process. The country has tight regulations on work in order to protect the rights of Belgian citizens. Additionally, Belgium has higher tax rates for both companies and individuals than other European countries.
Even so, investing in Belgian growth can benefit your company in many ways. Keep the following aspects in mind when beginning a move into Belgium.
1. The regions of Belgium
Belgium has three national languages — French, Flemish, and German. Flemish is a variant of Dutch that’s distinct in certain grammar and vocabulary.
The three regions of Belgium are separated primarily by language. Each region also has its own governmental structure, meaning that wage requirements differ slightly:
- Flanders: Located in the north, Flanders is the Flemish-speaking region governed by the Flemish Parliament and Flemish Government.
- Brussels: Belgium’s capital region is Brussels, which is officially a bilingual area. This region is under the legislative power of the Parliament of the Brussels-Capital Region and the governing power of the Government of the Brussels-Capital Region.
- Wallonia: French is the primary language of the southern region of Wallonia, which is under the power of the Walloon Parliament.
Business structures tend to differ between regions as well. For example, Walloon companies tend to follow a more centralized, hierarchical structure, while Flemish companies tend to follow a more open, collaborative model. Understand that your employees may be accustomed to different business practices depending on their home regions.
2. Standard workweek and holidays
Belgian employment law is based on the idea that employees deserve the ability to balance their work with their daily lives. Ensure you stick to the legal working hour limits and provide overtime pay according to the laws if necessary.
While the Belgian government gives the right to a four-day workweek, the five-day workweek of 38 to 40 hours is the current legal standard. Employees working six or more hours per day must have a break of 15 minutes or longer. The time an employee receives for a break does not count toward the working hours for the day.
Shift employees have slightly different requirements when it comes to their workdays. When working consecutive shifts, the hour limit may be extended to 11 hours per day and 50 hours per week as long as certain conditions are met.
Belgium has 10 public holidays, which include:
- New Year’s Day
- Easter Monday
- Labor Day
- Ascension Day
- Independence Day
- Assumption Day
- All Saints’ Day
- Armistice Day
Each region has its own holidays in addition to these 10.
Employees who must work on these days are entitled to compensatory time off. Overtime hours worked on public holidays are paid at double the employee’s hourly rate. Further, employees working four hours or less on a holiday are entitled to half a day of compensatory time off.
3. Belgium’s tax system
All organizations conducting profit-making operations in Belgium must pay an annual corporation tax of 25 percent of their net income, including distributed profits. This rate is a substantial decrease from 2018, when it was at about 40 percent.
The two main deductions from an employee’s paycheck are:
- Social security: Social contributions provide for pensions, family allowances, unemployment benefits, sickness allowances, and other programs. Most employees pay contributions at a rate of 25 percent of their income. These rules vary for students who are employed.
- Personal income taxes: Belgian income tax is progressive, so the rate each employee pays is adjusted based on their income. The scale starts at 25 percent tax for income up to 13,440 EUR and caps at 50 percent tax for income of 42,370 EUR or more. These rates are the same for residents and nonresidents.
Other important taxes you should know about include:
- TVA: Goods and services are subject to a value-added tax, known in Belgium as the TVA. This tax is collected at every transaction at a standard rate of 21 percent. However, lower rates can apply to certain goods and services, such as periodicals, food and water, medicine, books, and social housing.
- Nonresident tax: Individuals who are not Belgian residents or who work in multiple countries must pay a flat rate of 7 percent of their income. If you plan to send employees from other countries to work in Belgium, keep this tax in mind.
- Withholding obligation: In the building, meat, and surveillance sectors, companies must pay 15 percent of their invoice amounts to public authorities.
4. Employment contracts
Best practices for contract writing include using the regional language. For example, if you establish a branch in Wallonia, you should draw out employment contracts in French.
The standard permanent contract is valid for an indefinite amount of time. Several special contract types exist under Belgian employment law as well:
- Fixed-term: The contract will end on a specified date or after a specified event takes place.
- Specific-assignment: This contract will end after the employee has completed a specific task. For example, actors in a movie may be released from their contracts after filming wraps.
- Replacement: This type of contract is for an employee who will temporarily replace another employee who is absent from work for a specified period of time. For example, an employee filling in for another employee on maternity leave would be under a replacement contract.
- Temporary: Contracts between an employee and a temp agency are valid for a maximum of six months.
- Part-time: A part-time employee is anyone who works fewer than 38 hours a week. Part-time employees still receive certain protections under Belgian employment law.
Belgian employment law provides further specifications for students. Both students and employers pay social security contributions to the National Social Security Office (NSSO). Students are allowed to work up to 475 hours per year as long as they pay solidarity contributions, which constitute 2.71 percent for students and 5.42 percent for their employers. Normal social security payments for students are 13.07 percent for students and 32 percent for employers.
Costs of hiring an employee in Belgium
In the country’s private sector, most wages are determined through a collective bargaining agreement (CBA), also known as a collective labor agreement (CLA). CBAs apply to specific industries, sectors, and labor unions.
These agreements outline the minimum wages for each industry and type of employee. Certain industry CBAs also obligate employers to provide an end-of-year bonus known as a 13th-month payment.
When calculating expenses, you also need to consider the benefits you’ll give to your employees. Some benefits you can provide for your Belgian team include:
- Insurance plans
- Health insurance
- Stock options
- Company cars
- Meal vouchers
Generally, these benefits count as part of an employee’s yearly salary. Some provisions may be subject to certain taxes.
Hiring practices in Belgium
Belgium has strict labor and hiring laws in place to protect employees. Before you begin hiring, you’ll need to conduct thorough research to ensure compliance.
Some important aspects of hiring you should keep in mind are:
- Background checks: Belgian employment law restricts employers from conducting extensive background checks on job candidates. If you must perform background checks, you may only gather information that is relevant to the functions of the position you’re hiring for. You must also notify candidates before performing background checks.
- Employee categories: Belgian employment law contains various regulations for different types of employees. Blue-collar employees, white-collar employees, sales representatives, and domestic employees make up the main categories. One notable distinction is that the probationary period for blue-collar employees is shorter than the one for white-collar employees. Additional rules apply to students and remote employees.
- Wages: In the private sector, wages are determined through a CLA rather than by law. Certain industries within the public sector currently have a legal minimum wage of 1625.72 EUR per month; however, Belgium does not have a national minimum wage.
- Regional tensions: The regions of Belgium have different cultural norms that can result in a division between team members.
- Interview restrictions: During job interviews, employers may only ask questions that directly relate to the job and its functions. For example, the interviewer may ask what qualifications and industry experience the candidate has, but they cannot ask the candidate’s political opinions.
What does a company need to hire employees in Belgium?
Before hiring, you will need to establish your company’s presence in Belgium. If you plan to hire through your own entity, your options include:
- A branch office: This type of entity is essentially an extension of your company’s main office in the host country. There is no minimum capital required to establish a branch office, but your parent company will be fully liable for any issues that occur within its branch.
- A subsidiary: Unlike a branch, a subsidiary is an entirely new business within the host country. A Belgian subsidiary must be incorporated as a public limited liability company (PLC), private limited liability company (PLLC), or a starter-private limited liability company (S-PLLC).
Each type of company has its advantages, but it’s necessary to establish and register all companies with the appropriate authorities to ensure compliance.
Regardless of the company type you choose to establish, you will need to take the following steps before hiring new employees in Belgium:
- Register your company with the NSSO.
- Register with the tax collector’s office.
- Enroll in industrial injuries insurance, if necessary.
- Appoint an authorized individual to manage documentation and correspondence with national officials.
- Apply for a company number from the Central Register of Companies.
- If you plan to trade with non-EU members, register with customs for an EORI number. This number will be based on your company number.
- Get in touch with a business counter, which will be your main point of contact for administrative functions.
Hiring remote employees in Belgium
Depending on how far your company’s home country is from Belgium, you may need to take extra steps in recruiting and hiring team members. If travel is not an option and you need to hire remotely, these tips can facilitate the process:
- Schedule accordingly: Companies located far from Belgium should make sure to take candidates’ time zones into consideration when scheduling interviews and meetings. If possible, allow your candidate to choose a time that works for them. It’s also a good idea to send an automated reminder before your meeting.
- Exhibit professionalism: Be punctual and formal in your meetings with candidates, as your company’s reputation can strongly benefit from a polished image. Make sure your technology is working beforehand, and maintain constant communication to ensure everyone is on the same page.
- Utilize a global employment platform: Working with a global Employer of Record like Globalization Partners is an excellent way to build a team abroad without establishing a branch office or subsidiary. Your Employer of Record can hire and onboard your employees in a matter of days while you continue business as usual from your home country.
Streamline international hiring with Globalization Partners
As a global Employer of Record with an established presence in Belgium, Globalization Partners can help you hire an international team. Through our AI-driven global employment platform, you can hire, onboard, and manage your employees from anywhere in the world with a few clicks. Our legal and human resources experts will handle compliance and tax concerns so you can focus on other areas of your operations.