Investment Belgium | positive change in the landscape of the social security for Belgian employers

The law of December 26^th 2015 concerning the social security contribution for employers comprehends several reductions.

There are two types that can be specified:

1. General reduction of employer contributions

The contributions will be decreased to 25%. This decrease starts in April 2016 (from 32.4% to 30%) and will end in 2018 (final decrease to 25%).

The employer social security is, however, not calculated with one fixed rate, but is based on the activity sector of the employer and the type of employee and the income level of the employee.

The 30% rate is composed of two elements:

base rate: 22.65%

salary moderation rate: 7.35%

At the final decrease, the base rate drops to 19.88% and the salary moderation rate to 5.12%.

For employers with regular commercial activities, the deductions be simplified:

The standard quarterly deduction of  462,60 euro will be lowered to 438 euro on April 1^st 2016 and is waved in 2018.

Also waved in 2018 are the additional deduction for low salaries and increase for high salaries.

For employers in non-profit activities, the general reduction of social security will not apply.

 

2. First employees – high reductions

As of January 1^st 2016, an increased reduction of social security for the first employee will be effective and more employees qualify for such reduction.

Small employers can benefit from long term exemption from social security when hiring a first employee between January 1^st 2016 and December 31^st 2020.

For the second up to the sixth employee there are also reductions, but not as extensive as for the 1^st.

First employee

For one employee there is a full exemption from employer social security contributions for an indefinite period of time. This applies to employees, hired between 2016 and the end of 2020.

The exemption is for employers who never employed staff in Belgium before, or who did not employ staff during the four quarters before the recruitment of a first employee.

The exemption is not related to a specific individual. Each quarter, the employer can choose the individual, for whom exemption is taken. In case an employee leaves the organization, the exemption can be shifted to another individual.

If an employee is hired with a higher salary in a later stage, the employer can select this employee to benefit from the exemption, there is no income ceiling to the salary.

Subsequent hires

A smaller reduction of social security also is granted for the second up to the sixth employee. These reductions are however only granted for a limited time.

 

CONCLUSION

The new Belgian landscape of social security clearly indicates the competitiveness of Belgium.  

The creation of employment is seen as the major parameter for the assessment of economic benefits to a region and with the social security exemption for the first employee in place an important leverage has been created for foreign investors seeking to invest in Belgium.

The demonstration of economic benefits is a legal condition for foreign investors investing in one of the regions of Belgium and in need of obtaining a residency permit in order to develop their Belgian investment or business, also called investment immigration 

Together with the ranking of Belgium on the 1th spot of the European innovative scoreboard for innovative networks and innovative collaborations, Belgium is the ideal destination to start your European investment strategy as afterall business is about cooperation and developing the network !

This leading role means that companies in Belgium often link their internal innovations to those of other companies or public organizations.

The various industry-oriented research centers in Belgium only add to this trend, as reported by the European Innovation scoreboard.

 (source http://www.investinflanders.be/appl/persarchief.nsf/investZoekArtikels?openform&Query=EN~~N50~&Count=5&selectedSector=N50&selectedTime=Recent&language=EN)

Please contact Managing Partner Patricia Leers, head of the international department for your plans of investment in or trade with Belgium 

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