E-commerce

85 million, or 2.7 per second: that’s how many e-commerce transactions were handled in 2019 in Belgium alone, and the future looks blindingly bright.

Keeping pace with the rise in consumer appetite for the convenience of online shopping, e-commerce has been building up steam in Belgium’s northern region of Flanders for the last handful of years. In fact, the local e-commerce market has grown by over 15% per year between 2017 and 2020. This trend is a clear indication that e-commerce in Belgium and Flanders as a region is now a fully-fledged pillar of the economy.

However, there is still huge untapped growth potential here – which leaves plenty of room for smaller companies, local businesses and niche brands to make their mark on the world.

13 new e-commerce players enter the market in Belgium and Flanders as a region every day. The reasons are plentiful: from new tech that makes it easier to start up and plenty of expertise at hand to Flanders’ excellent logistics infrastructure required to support even the most ambitious e-commerce firm. Flanders offers everything businesses need to set their e-commerce sights high.

Even more interesting, 25% of the total value of e-commerce transactions – equal to over EUR 2 billion – comes from abroad (source: SafeShops.be). Clearly, web shops in Belgium and Flanders are more and more appealing to consumers – not only in the neighboring countries of France, the Netherlands, the UK and Germany, but beyond.

This proves that it’s the perfect moment for your business to expand into new markets and diversify your growth opportunities – from Flanders.

The trends are compelling, the opportunities are numerous – but what’s behind Flanders’ growing e-commerce and e-fulfillment success story? The answer has everything to do with technology, people, location and legislation.

Out of 160 countries, Belgium and Flanders as a region come in at #3 in the world for overall logistics performance according to the World Bank’s Logistics Performance Index. When it comes to international shipments, Belgium and Flanders easily outperform Germany, Spain, Sweden, Austria and other leading players, outshining the competition in 2 key areas: the ease of arranging competitively priced shipment and punctual shipment and delivery.

Flanders offers world-leading international freight transport – crucial characteristics for reliable supply chains, production planning and export. Combined with the region’s central location in the heart of Europe’s most prosperous zone and the presence of top 3PL, 4PL and specialized e-fulfillment players, the advantages for e-commerce and e-fulfillment can’t be beat.

Your business will find all the high-quality space it needs to process goods, in close proximity to top ports, in cities of Flanders. Even better: the price is right. Warehouse rental prices in Flanders are some of the lowest in Europe, at EUR 43 to EUR 48 square meters per year (source: Cushman & Wakefield, 2020).

The universities and university colleges of Flanders offer plenty of educational opportunities for people seeking specialized careers relevant to e-commerce and e-fulfilment.

Pairing this strong expertise up with natural language skills and an international, multicultural mindset, the region’s workforce will endow your business with the operational excellence and high-quality customer service capabilities required for e-commerce expansion.

Cross-border expansion is the key to business growth – but it’s important to have a good understanding of relevant requirements, regulations and legislation to pave the way for smooth international commerce.

Belgium, of which Flanders is the northern region, actively seeks to facilitate and simplify import and export, developing the innovative BE-GATE customs platform in the process. This innovative platform is unique in Europe and was specifically designed to meet the import and export needs of e-commerce players, completely free of charge.

It significantly accelerates customs processes for economic operators by:

• supporting an enabling environment that encourages investments in e-commerce;
• digitizing and simplifying business and logistics flows;
• unlocking efficient customs inspections based on risk analysis;
• boosting communication to maximize transaction speed.

Today, foreign businesses must register for and pay VAT when they pass the sales threshold of EUR 35,000 in Belgium. That’s all about to change.

Europe is modernizing the rules pertaining to VAT levied on goods or services sold online. The new rules will enter into force on 1 July 2021 and include:

• the removal of national thresholds;
• one digital VAT registration for shipment to every EU member state;

These new rules mean that online goods and services are taxed in the same way as their physical equivalents in shops, and VAT will be charged in the member state where the EU consumer is based, regardless of where the retailer is based.

In 2017, an exception to Belgian labor laws was introduced for all activities related to e-commerce. Shipping packages at night is fully allowed. This allows companies to more flexibly respond to online demand and delight their customers with even better services.

Thanks to a number of deduction schemes and financial grants, it’s possible to reduce your tax burden to as low as 26.3%! Discover your options:

• Special tax status for foreign executives: companies pay less to attract and hire foreign specialized personnel.
• Tax exemption of regional grants: if Flanders grants money to your business, the funds are not taxable.
• Notional interest deduction: deduct a percentage from your company’s taxable income based on shareholder’s equity (net assets).
• Cost-plus allowance: attain a legal ruling to compensate for distribution activities your company has in Flanders – resulting in a deduction as high as 3 to 8% of your operational costs.

There are two kinds of customs warehouses where you can store your goods: public and private customs warehouses. The first type can be used by any company. However, the latter type can only be used by holders of a Customs Warehousing (CW) authorization.  

As a license-holding importer with a private customs warehouse, your company may be able to: 

• postpone payment of import duties until the final destination of the goods is known; 
• undertake customs-approved, value-adding handling such as repackaging, conservation, testing and marking; 
• make import declarations on a weekly or monthly basis; 
• supply certain types of goods from your warehouse without any need for customs involvement. 
• benefit from a single customs authorization for all of your warehouses across Europe. 

Furthermore, under the Customs Warehousing (CW) procedure, it’s possible for your business to store goods from outside the EU in a public customs warehouse – delaying the payment of import duties, VAT and other charges until the goods are cleared for transportation.  

There are 3 types of public customs warehouses: 

• Type I: responsibility is shared by the authorization holder and the holder of the customs procedure, and approval of the warehouse by the customs authorities is mandatory.
• Type II: only the holder is responsible for the warehouse procedure, and customs approval is mandatory.
• Type III: the customs authorities fully run the warehouse.   

When it comes to private customs warehouses, the authorization holder also acts as the procedure holder, making them solely responsible for the warehouse procedure. 

For more information on customs authorizations and services, visit the website of the Federal Public Service Finance (Customs and Excises).