Allianz

Trade
Contact us
Search
business-in-belgie

Doing business in Belgium: the most important strengths and weaknesses

AA1

low risk for businesses

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financial risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financial risk

Belgium is an attractive country to do business in for a variety of reasons. The country is located in the heart of Europe, with direct access to important markets such as the Netherlands, Germany, France and the United Kingdom. This strategic location is ideal for international companies that want to expand their European activities.

Belgium has a stable economic climate and a highly educated, multilingual workforce. The country also has a well-developed infrastructure (including modern ports in Antwerp and Zeebrugge and various airports). All this makes Belgium a country ideally suited for industry, transport and distribution. Furthermore, Belgium has a favourable tax system with low corporate taxes and a wide range of tax deductions.

Economic regions & Points of attention

The economic heart of Belgium is the so-called 'Flemish Diamond': a lot of economic activity takes place in this area between Antwerp, Ghent, Brussels and Leuven. Other economically interesting regions include Walloon Brabant (Louvain-la-Neuve), Charleroi and Liège. Companies that want to conquer the whole of Belgium can best operate from Flanders. That's where most of the SMEs are to work with. Flanders is ideal as a springboard to Wallonia.

Like the Netherlands, Belgium has a relatively small domestic market compared to surrounding countries such as France and Germany. Belgium is therefore highly dependent on international trade for growth, which brings both opportunities and challenges.

Businesses must also take Belgium's complex regulations and administrative requirements into account. In addition, Belgium is politically fragmented. Due in part to this, political decision-making in Belgium can be slow.

Strengths and weaknesses

  • Resilient economy (as evidenced during the pandemic and energy crisis)
  • Solid labour market and job creation
  • Private consumption has remained stable in recent years thanks to government measures and wage protection
  • The financial sector is strong and has proven itself to be resilient in recent years (and in the more distant past). This helped the banks improve their profitability and capital position
  • Strategically located in the heart of Europe, home to many international organisations (such as EU institutions and numerous multinational headquarters)
  • High national debt
  • The manufacturing sector is going through a difficult period
  • Belgium has automatic wage indexation. This can deter businesses (wage-price spiral, possibly affecting competitiveness)
  • Like many other countries, Belgium is also struggling with the persistent dip in world trade
  • Political fragmentation

Import & Export 

The total value of Belgian exports in 2023 amounted to €415.4 billion, imports €447.7 billion. Both imports (-10.3%) and exports (-6.2%) shrank as a result of the war in Ukraine, rising energy prices and the global economic slowdown.

Main countries for imports and exports are:

(% of total, 2023)

Export Position Import
Germany 20.2%
1
20.5% Netherlands
Netherlands 14.1%
2
12.5% Germany
France 12.4%
3
10.4% France
United States 6.8%
4
6.3% United Kingdom
United Kingdom 5.1%
5
5.3% United States

Main exported/imported products

Export

  1. Chemical products: medicines, plastics, rubber
  2. Machines and means of transport: cars, planes, computers
  3. Mineral fuels: petroleum, natural gas
  4. Foods: chocolate, beer, meat
  5. Metal products: iron, steel, aluminium

Import

  1. Mineral fuels: petroleum, natural gas, coal
  2. Chemical products: medicines, plastics, rubber
  3. Machines and means of transport: cars, planes, computers
  4. Foods: grains, meat, fish
  5. Metal products: iron, steel, aluminium
business-in-belgium

Economic prospects Belgium

Like other European economies, the Belgian economy is currently facing challenges. Belgium has many energy-intensive companies that are suffering from higher energy prices and rising wage costs. The crucial pharmaceutical sector (accounting for 20% of total production) fell sharply after the 'artificially' high growth in 2021 due to the enormous production of Covid-19 vaccines. Production in several other industrial sectors also lost ground.  The metal sector, for example, whose production was 15% lower in 2023.

GDP growth in Belgium reflects a downward trend. In 2022, growth was +3%, after strong growth of 6.9% in 2021 (the year of economic recovery after the Corona crisis). Allianz Trade expects GDP to grow by +0.8% in 2024, after 1.4% in 2023. This makes us slightly more pessimistic than the Federal Planning Bureau, which predicts +1.3% for 2024.

Government finances are a concern

Belgium continues to struggle with high government debt and structural budget deficits. Allianz Trade expects the deficit to remain around 5.0% and the national debt to reach 107% of GDP, also in 2024-2025.

Recovery only expected in 2025

Private consumption and investments remain reasonably stable. Falling inflation and a recovery in consumer confidence should support the private sector in 2024/2025. That is not enough to get the economy going in 2024. The trade slowdown will continue due to weak global demand. The labour market also remains very tight. The low unemployment rate is expected to remain around 5.6%. The Belgian vacancy rate is almost the highest in Europe, 4.7% at the end of 2023.

According to Allianz Trade, recovery is only to be expected in 2025. Until then, the Eurozone - and therefore Belgium as well - will continue to face economic headwinds. One positive forecast is that the growth in the number of bankruptcies in 2024 will be limited (+6%). Bankruptcies are expected to decrease markedly in 2025 (-5%).

How to deal with Belgian entrepreneurs?

Given the different regions in Belgium, it seems as if you are dealing with four worlds instead of one. These are indeed different worlds. Not only is the language different in each region, there are also differences in (purchasing) behaviour and preferences. For example, Walloons are more likely than Flemings to buy a private label in the supermarket rather than an A-brand. A Flemish person spends noticeably more money on hotels and catering than a Walloon. German-speaking Belgians work hard but also really enjoy life (just like the French). Quality comes first.

The word 'innovative' has a positive connotation in the Netherlands. Belgians are more wary when hearing it. Belgians are generally more suspicious and risk-averse when it comes to new products. Whereas in the Netherlands you can easily launch a semi-finished product as the new product and gradually improve it, in Belgium it only makes sense if you enter the market with a fully developed product and a well-thought-out plan.

Provide evidence

Belgians first like to see proof that something new is also good. Dutch people are more apt to think: A new, unfamiliar product? Bring it on! It also takes some time before you win over the Belgians. Convince them with numbers, evidence, statistics. And: build a relationship, make follow-up appointments, go to a football match with the potential customer. In short: gain trust.

The director is still the director

Belgium remains traditionally hierarchical. The director is still the director: he has the final say and maps out the strategy. Therefore, always contact a decision-making authority within a Belgian company, preferably as high up as possible in the organisation. Using first names? Don't do it!

Need help with your export plans to the Belgium?

If you want to do business in Belgium, the country offers plenty of opportunities, although you must take numerous considerations into account when making decisions. What conditions do you apply to the agreements you make? You need thorough insight into markets, customers and local economic developments. And that is exactly where trade credit insurer Allianz Trade can help you.

With over 100 years of international expertise, we help you (further) develop your business abroad. We specifically focus on companies that do business internationally, including in Belgium. We owe our unique knowledge of the local market to our extensive database of financial data and the expertise of our analysts. With our offices and colleagues in Belgium we will provide you with the necessary expertise to securely develop your business in Belgium.