In Belgium, the administrative burden on start-ups is above the OECD median. In 2017, the Federal government introduced a plan to ease the regulatory burden for SMEs, totalling 120 measures. Every 6 months, a service within the Prime Ministers’ office will monitor implementation, progress and impact. In addition, the administration operated a “tax shift” in 2016 with a view to alleviating corporate and labour tax burden on SMEs. Central to this plan is a gradual reduction in employers’ social security contributions (SSC) from an average 33% in 2015 to 25% by 2019, an SSC exemption for SME first hire, and SSC reductions for the second to sixth hire, as well as for the recruitment of low-wage and underrepresented workers. Corporate income tax will also be gradually lowered with reduced rates for SMEs. In addition Easybrussels was set up in 2015 as Brussels administrative simplification agency. Its role is to disseminate the policy of administrative simplification within all the institutions of the Brussels-Capital Region. It sets out its actions for the coming years in the Administrative Simplification Plan (2015-20)
OECD SME and Entrepreneurship Outlook 2019
Chapter 11. Belgium
Figure 11.1. Structure and performance of the SME sector in Belgium
Sources: Charts A, C, D, E: OECD Structural and Demographic Business Statistics database, http://dx.doi.org/10.1787/sdbs-data-en; Chart B: OECD Timely Indicators of Entrepreneurship Database 2018, http://dx.doi.org/10.1787/sdbs-data-en.
SME business conditions and access to strategic resources
Institutional and regulatory framework
Market conditions
Belgium is a very open economy and attracts significant amounts of investments from multinationals. Its inward FDI stock accounted for 2.6% of OECD total in 2015, i.e. almost three times more than its share of OECD GDP. There are, however, some services (e.g. engineering) where trade restrictions remain high as compared to neighbouring countries. Finexpo, the federal SME export agency, developed a new instrument for Belgian SMEs that are first-time exporters of innovative goods, reimbursing between 80% and 100% of the incurred costs under certain conditions.
Infrastructure
The levels of public investment in infrastructure is below the OECD median, having fallen steadily from close to 6% of GDP in the early 1970s to just above 2% since 1990. The federal government has increased infrastructure investment in 2016 while regions also approved important infrastructure projects. Wallonia adopted a pluri-annual investment plan with main priorities on mobility, energy and digital investments (2018). ICT investments are high by OECD standards and Belgium joined EU cooperation on high-performance computing in 2017 with a view to building a pan-European digital infrastructure.
Access to finance
In Belgium, SME loans stock expanded steadily in recent years. In Flanders, the SME support mechanisms by PMV, a government body, were adjusted in 2016, accommodating crowdfunding activities. Flanders also set up the Spinn-off SOFI Fund in 2015 to invest in innovative growing spin-off companies. The ARKimedes II Fund supports start-ups and fast-growing SMEs with mezzanine, seed and early-stage funding. The Walloon region introduced a new fund in 2017 for digital start-ups providing convertible loans up to EUR 50 000 and co-investments with private actors up to EUR 250 000. The government of Brussels introduced crisis loans for sectors that were hit by the 2016 terror attacks.
Access to skills
Labour participation is below the EU average in Belgium, especially among youths, migrants and 55-64-year olds. At the same time, in 2017 vacancy rates were among the highest among EU countries suggesting a pronounced skills mismatch between labour demand and supply. The 2017 Law on ''workable and flexible work'' allows for more flexible worktime arrangements and aims to promote in-company training. The 2015 pension reform raised the statutory retirement age gradually and made early retirement conditions more stringent. A reform to unemployment benefits is under discussion, with the aim to strengthen incentives to enter the labour force.
Access to innovation assets
In 2017, the Federal government introduced a tax allowance on innovation income, whereby Belgian companies and foreign affiliates established in Belgium are entitled to an 85% deduction of their intellectual property income from their corporate tax base. Regional authorities have also adopted their own innovation plan. The Green Impulse Fund was created under the Walloon Marshall Plan 4.0 (2015-19), to provide support to “eco-innovation.” In addition, two investment companies (Invests, Novallia) were created and networks (Be Angels) supported to invest in spin-offs, start-ups and SMEs. The Smart Specialisation Strategy of Flanders, adopted in 2014, aims to provide more targeted support to leading clusters and eco-systems in the region. In July 2016, the government of the Brussels-Capital Region approved the new Regional Innovation Plan (PRI) (2016-20). In the plan, particular attention is paid to three strategic areas that reflect the strengths of the region: i) Health: personalised medicine, ii) Environment: green economy and iii) ICT: Digital economy.
The full country profile is available at https://doi.org/10.1787/34907e9c-en