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Information on key security and political risks which UK businesses may face when operating in Belgium.
1. General overview
Important and longstanding relationships exist between the UK and Belgium. Belgium is the UK’s seventh largest export market.
The Kingdom of Belgium is a founding member of both NATO and the European Union and one of the first-wave countries to adopt the Euro. Belgium also hosts the headquarters of the Council and Commission of the EU, NATO, and many other international organisations.
Often referred to as the crossroads of Europe, Belgium consists of two very distinct cultural regions, Flanders (Dutch speaking northern half, around 6.4million inhabitants in 2014) and Wallonia (French speaking southern half, with a population of around 3.5 million), and an officially bilingual capital, Brussels (over 1.1million inhabitants). There is also a small German-speaking community (70,000) in the south-east of Wallonia.
Belgium is a constitutional monarchy governed by a multi-party coalition, comprised of both Flemish and francophone parties. Following a number of state reforms, Belgium is now a federal state divided into three regions (Flanders, Wallonia and the Brussels Capital Region) and three language-based Communities (Flemish, French and German). There are also 10 provinces and almost 600 local authorities (municipalities).
The Federal Government is responsible for some major issues like defence, foreign affairs, justice and home affairs, the national budget, including setting and collecting most taxes, and social security.
Responsibility for education and culture rests with the language communities, while the regions’ responsibilities include environment, transport, energy, agriculture, public works and some elements of unemployment support. Some issues are divided between the different levels, e.g. health.
Regional and community governments are entirely autonomous and their ministers have equal status with federal ones. Their powers are not therefore devolved as in the UK model.
This complex model can lead to complications when working with the public sector. Different parts of the Belgian governmental system often need to coordinate with one another to reach agreement.
Federal, regional and community elections are held every five years and local elections every 6 years. Voting is compulsory at all levels. All the major political parties split along linguistic lines in the 1970s.
Following the May 2014 elections and 135 days of coalition talks, a centre-right coalition was installed in October 2014. The coalition government is led by Prime Minister Charles Michel (from the Francophone liberals, MR) and consists of four parties: three Flemish (N-VA, CD&V and Open VLD) and one French-speaking party (MR). It is the first time that the Flemish pro-devolution party N-VA is part of the federal government in Belgium.
Belgium is a developed, modern, private-enterprise economy which has capitalised on its central geographic location in Western Europe, highly developed transport network, and diversified industrial and commercial base.
Belgium’s main imports are raw materials, machinery and equipment, chemicals, raw diamonds, pharmaceuticals, foodstuffs, transportation equipment and oil products. Its main exports are machinery and equipment, chemicals, finished diamonds, metals and metal products and foodstuffs. Industry is concentrated mainly in the populous Flemish area in the north. With few natural resources, Belgium must import substantial quantities of raw materials and export a large volume of manufactured goods, making its economy unusually dependent on the state of world markets.
Trade focuses very much on the European market. Half the goods exported by Belgium are sold in neighbouring countries (Germany, France and the Netherlands), while one quarter go to other EU member states. Imports follow more or less the same pattern. This situation reflects Belgium’s role as a hub within the EU.
Competitiveness of Belgian businesses is under pressure: Belgium has the second highest tax level in the EU (45.4%) and ranks second on labour taxation (42.8%). This centre-right government is shifting tax from labour to capital, consumption and environment, with a ‘tax shift’ announced in July 2015 reducing employers’ contributions and increasing taxation on short-term stockmarket speculation. Flagship reforms for the new government include raising the retirement age from 65 to 67 by 2030 (the first change since 1956) and the suspension of the automatic indexation of wages.
GDP: $US 534.7bn
GDP Per Capita: $US 47,722
GDP Growth 2014 and 2015: 1.1%
Public debt: 107% of GDP
Budget deficit 2015: 2.8% (expected)
4. Business and Human Rights
Belgium was a founding member of the European Union and the Council of Europe and a signatory to the European Convention on Human Rights. According to international observers, human rights in Belgium are generally respected and the law and the judiciary provided effective means of addressing individual instances of abuse. However, some sporadic concerns have been reported over prison and detention conditions, and occasional instances of racial and ethnic discrimination in the job market.
Please see the Office of the Commissioner for Human Rights’ report for more information.
5. Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
Corruption is not an obstacle for doing business in Belgium, and incidents of corruption are relatively rare. However, corruption prevention efforts vary between the country’s regional governments. Belgium has a well-developed legal framework, and the Criminal Code criminalises public and private bribery, passive and active bribery, and bribery of national and foreign public officials.
In 2014 Belgium was ranked 15th of 175 countries in the Transparency International’s corruption perception index (CPI).
6. Terrorism and Security
There is an increased threat from terrorism following the incident in Verviers, eastern Belgium in January 2015, when police intercepted a suspected terrorist cell.
Read the information provided in our Terrorism section on FCO Travel Advice.
Crime levels are generally low in Belgium but there are significant levels of petty crime in big city centres. Take care at railway and bus stations, on public transport and in crowded areas where pickpockets and bag snatchers can operate. Do not leave valuables unattended. British citizens who lose their passports should contact the British Consulate for advice. They should report the loss of passport to the local police initially and obtain a copy of the police report. Other general advice about living and working in Belgium can be found on the consular pages of the British Embassy’s website.
7. Cyber Security
As host to NATO and the European institutions, Belgium is a prominent target for cyber attacks. A series of high-profile incidents have hit Belgian government, military and the country’s biggest telecom operator in recent years.
The Belgian government has agreed to the creation of a Belgian Cyber Security Centre which is due to be operational by 2016. The new centre will be charged with the task of monitoring internet security in Belgium and advising business and the general public on issues related to online security and cybercrime.
8. Intellectual Property
Belgium adheres to all EU laws regarding copyright and intellectual property and the local branches of international watchdogs monitor breaches that may occur, including downloading of illegal software which mostly concerns the music/film industry.
Contact the UKTI team in Belgium for more information on opportunities for doing business in Belgium.