So you've got some capital or a reliable source of funding.
You obviously want to use it in the most impactful, profitable, and sustainable way.
Belgium's on your radar, and for good reasons.
The 2020 Doing Business: Belgium Economy Profile gave the high-income OECD country a score of 75.0 out of 100 after considering factors like getting credit, trading across borders, registering property, procuring permits, employing workers, and doing business.
Belgium is an attractive option to invest, set up shop, or enter new markets thanks to:
- Its central location within the EU and access to 500+ million consumers
- World-class research facilities and a commitment to quality education
- A flourishing globalized economy in a business-friendly environment
- Hosting numerous international organizations and corporate entities
- Its welcoming stance on foreign investments and business
- Advanced infrastructure and multifaceted transport system
- A favorable corporate tax regime with deductions available
- A highly qualified, versatile, and productive workforce
- High quality of life and standard of living
- Double tax treaties with over 90 countries
- Affordable real estate
Belgium's business environment may be favorable, but establishing a new company still comes with risks and challenges—which begs the question:
Is it better to buy an existing business in Belgium or start one from the ground up?
Ultimately, it depends on what you want and whether the benefits offset the risks.
Discover the advantages of buying a business in Belgium and decide for yourself.
7 Reasons Buying a Belgian Business is Better
Business expansion is about growth.
But growth strategies aren't linear.
What makes sense for one company may be ludicrous for another.
There's no single formula for successful market expansion.
Still, buying an existing business is a worthy consideration—especially in investor-friendly countries like Belgium.
Here are seven reasons why.
Income From the Get-Go
Belgium is known for attracting startups with its forward-thinking stance on innovation projects, ease of doing business, and welcoming investment environment.
Still, a brand new business—even under the most favorable conditions—typically won't generate an income during its initial phases.
It's not uncommon for unforeseen expenses to crop up, either. So cash flow is crucial but often stagnant with new businesses.
On the other hand, buying an existing business means you'll generate an income right from the start.
It's more expensive but justified—provided you purchase an established and profitable business. You'll generate revenue, have ongoing cash flow, and make your capital back.
Easier Access to Finance
One of the biggest advantages of buying a business is access to credit.
Belgium scored 65.0 out of 100 in the 2020 Doing Business Index for "Getting Credit," so local lenders are more stringent in their requirements.
Lenders are far more likely to approve funds for an existing entity with a proven track record of generating income than a startup with no prior history.
It all boils down to risk. Banks or private individuals aren't about to part with their money unless you have convincing reasons why they should.
Employees With Expert Knowledge
Don't underestimate the value of already having trained and knowledgeable employees vs. going through the recruitment process.
Finding suitable staff members can be a costly and drawn-out process for a new business.
After that, employees must still be trained on company protocols, which you also have to create.
Buying an existing business doesn't come with these obstacles.
With a trusted team taking care of day-to-day operations and established processes in place, you'll have more freedom to design and implement new development and growth strategies.
You'll also save time and resources on recruitment costs while harvesting market knowledge of your employees.
Direct Market Entry
Entry into a new region is a crucial component of any international marketing strategy.
When you acquire an existing business in Belgium, you'll have instant access to your chosen market with an established foothold and market share.
Instead of using resources to hopefully enter the market with a new business, you can concentrate on further expansion with an existing business.
An Established Local Brand and Customer Base
Entering a new geographic market in Belgium's bustling economy takes time, effort, and the right strategic approach.
While not impossible, a new business must convince a fair amount of customers to buy its products or services.
Conversely, an existing business has a track record, an established brand, trademarks, and a website locals have confidence in and are familiar with.
It's often easier to introduce new products or services to an established customer base while also focusing on expanding it instead of building up your clientele from scratch.
Existing Business Connections
Established business relationships are another advantage of buying a business in Belgium.
The country is a leader in various industries, from logistics and export to cleantech, agrifood, software development, and various others.
Whatever your niche, you need reliable manufacturers, suppliers, and vendors offering the best value for money.
It's hard to find and build such business connections without a few hurdles, particularly as a new company.
An existing entity typically has a repertoire with a network of B2B businesses, often resulting in better rates, too.
Less Risk and More Growth
Arguably one of the greatest advantages of buying an existing business in Belgium is the reduced risk factor.
Compared to starting a new company, an established entity represents a reasonably safe investment with solid returns potential.
Belgium's fierce and thriving economy is a double-edged sword, at least for startups.
The barriers to entry may be minimal, but actually establishing a market presence and earning profit are Herculean tasks for a new company.
With a non-existent track record and no customer base, a new business is a riskier investment with limited initial growth.
Meanwhile, an existing business has a sales history, a customer base, and financial records, meaning less risk and more potential growth opportunities.
Before Buying a Business in Belgium
Of course, the above benefits aren't a given. Not every business on the market is worth buying, and the ones that are can be hard to find.
That's why a market-specific global expansion strategy developed by experts on Belgian business, law, and acquisitions is your best bet for success.
In-depth due diligence is also paramount for every potential acquisition. Here are a few preliminary queries to keep in mind when you're looking to buy a business in Belgium:
- Why is the business for sale?
- What is the company's reputation?
- Are any required raw materials in abundant supply?
- What is the business's outlook for the next financial year?
- What strengths and weaknesses does the business have?
- Does the business control sufficient market share to remain profitable?
- What is the general perception of the industry and business in question?
You'll need to look for, review, or analyze countless documents, including any legal disputes, liens, new or proposed industry regulations or restrictions, and pending patents.
What About Belgian Residency?
You've decided to take the business acquisition route, but you need permission to work and reside in Belgium legally.
So, now what?
Belgium doesn't offer a golden visa program. Rather, it has a business residency program and a professional card.
Belgium's business residency program is geared towards investors and entrepreneurs who want to launch a new business in the country. It requires a minimum capital amount, and applications are reviewed on a case-by-case basis.
The Belgian professional card is ideal for foreigners (Non-EU nationals) who want to buy an existing business in Belgium.
All self-employed or freelancing foreigners (either as natural persons or as part of an association or partnership) must have a professional card to work and stay in Belgium.
Criteria for applications include:
- Job creation
- Response to economic need
- Economic impact on Belgian businesses
You can apply for a professional card whether you're already living in Belgium or not.
The valid duration varies from 3—5 years and depends on economic factors like business growth, capital investment, turnover, and employment rates.
More Than Beer, Waffles, and Chocolates
Belgium has a lot to offer. It's a highly globalized country with world-class infrastructure, a thriving economy, and a welcoming stance on outside investment.
It's also home to hundreds of global organizations and corporate entities.
While it's quite possible to launch a new company successfully, the advantages of buying an existing business in Belgium are clear.
Instant income, easier access to finance, and direct market entry are some of the top benefits. Other perks include trained employees, an established market presence, and an existing business network.
Business acquisition means less risk and faster growth—provided you do your due diligence and buy the right business.
Implement your approach carefully, and you could be basking in the Belgian sunshine, content—nay exhilarated—with the payoff.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.