Belgian Startup Manifesto is already paying off! Alexander de Croo, Minister of Digital Agenda, has recently announced a plan to give young entrepreneurs some extra benefits to grow their new venture. The policies will focus on making crowdfunding easier and keeping lower labor costs for start ups. This committment to innovation is an opening move and is expected to impact upon the local entrepreneurial scene.

A Startup Plan to Stimulate Growth for Newly-Formed Companies

The Start-up Plan initiated by the Government is a concrete first step to encourage young and beginning entrepreneurs to set up new businesses in innovative sectors. The plan provides more accessible financing, such a tax shelter for startups, tax incentives for crowdfunding, and lower labor costs for newly formed companies. SMEs and micro-enterprises investing in digital will also receive incentives. The Government is committed to formulating a proposal by the summer that will enable work during evening hours in the field of e-commerce.

  1. Tax Shelter for Startups

A tax incentive will be implemented to stimulate investment in Belgian startups to facilitate easier access to finance by activating savings in bank accounts and creating new capital. The measure is similar to the law Cooreman-De Clercq, but focuses instead on startup companies.

This tax incentive will take the form of a tax reduction through personal income tax given to investors and individuals who invest in a young entrepreneur.

Specifically, the tax shelter provides (1) a tax reduction of 45% in the personal income tax for new shares with a start-up (EU definition of micro-society) and (2) a tax reduction of 30% on new shares to be issued by newly-formed SMEs. To benefit from the tax reduction, shares must be held for four years.

  1. Make Crowdfunding More Attractive

To make crowdfunding more attractive as a funding option, there will be tax incentives to support it. Specifically, capital grants up to €7,500 and loans up to €15,000 via regulated crowdfunding platforms will lead to a tax reduction in the personal income tax and an exemption from withholding tax on interest on loans.

  1. Lower Labor Costs for New Enterprises

Startup labor costs will also be decreased. During their first years of operation, startups will be exempted from payment of part of the withholding tax applied to wages. During the first four years of operations, the micro-enterprises will be exempted from 20%, and SME companies 10%, of their payroll tax.

  1. Capital Investments in Digital

To encourage investment in the digital field, the Government has decided to allow a one-time deduction for single investment on digital goods, such as payment systems and cyber-security.

Aimed at SMEs and micro-enterprises that invest in digital equipment, this incentive allows a tax advantage of 13.5% of the invested amount to be deducted one time only from taxable profits.

  1. Nighttime Labor in the e-Commerce Sector

E-commerce is a flourishing industry. Increasingly businesses and consumers discover each other online. For retail suppliers and sellers, e-commerce offers new outlets for their products. Likewise, customers are attracted by the wide range of items online and the speed of delivery.

However, this sector is facing obstacles towards growth in our country. One of the main challenges for Belgian digital companies is the prohibition of nighttime work. In Belgium, an order placed after 8:00 p.m. cannot be processed until the following day (picking & packing), while in neighboring countries such as the Netherlands the order can leave the same evening.

With nighttime work not allowed for e-commerce in our country, many online businesses outsource their logistics to companies in the Netherlands, who can assure the customer that the order will be shipped the next day. This kills jobs and growth in Belgium.

How Many Jobs Have Already Been Lost?

According to the 2014 survey on e-commerce Comeos, the Belgian Federation of Trade and Services, the speed of delivery is the decisive factor when making a purchase online, next to price and satisfaction. The market for online shopping is the most promising in terms of growth in the upcoming years. The same federation has calculated that in 2014, 42% of Belgian online purchases were made from foreign traders. This would represent a total loss of € 2.4 billion or 8,302 jobs in 2014. Ultimately, 36,197 jobs would be threatened.

What Has Been Decided?

The Government has therefore decided that the Minister of Labor must prepare by this summer a statutory amendment authorizing nighttime work in the e-commerce sector in prior consultation with the sector. The bill must allow the Belgian e-commerce sector to remain competitive with neighboring countries.

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