The economy of Belgium is open, and there are many investment opportunities available to both inhabitants and non-residents. With a strong economy, an open market, and a high degree of investor freedom, the nation ranks 48th in the world in terms of economic freedom. However, income tax rates are high, so if you want to get the most out of investing in Belgium, you must make wise plans.
Savings account investments in Belgium
In Belgium, savings accounts are a common kind of investment. Nevertheless, as with other nations, they often give lesser profits due to the far lower risks. The majority of Belgian banks provide a free selection of savings account alternatives; however, some may demand a minimum deposit. Non-residents can frequently open accounts as well. Savings account holders can make money by accumulating interest, which in Belgium is presently up to 0.35% with a predetermined tax-free allowance.
Belfius Bank, ING Belgium, and KBC Brussels are some of the Belgian banks that provide choices for savings accounts.
Pensions investments in Belgium
The three-pillar pension system in Belgium consists of an obligatory state pension and optional private and occupational pensions. Banks and life insurance companies in Belgium provide private pension plans. They frequently provide larger returns and interest rates than savings accounts. Although there are typically annual fees, they have tax advantages on investments of between 25 and 30 percent. In the event of bankruptcy or non-payment on returns, plans are protected by the government up to a value of €100,000.
You can choose when and how much to contribute to a pension savings plan. Tax credits of 30% are available on investments up to €980 annually and 25% are available on investments up to €1,260 annually. In Belgium, there are two varieties of private pension investment plans:
Pension savings fund
Contributions are put into mutual funds that hold stocks, bonds, and cash. Although there is no protection or assurance, these funds have higher long-term gains but also carry higher risks.
Pension savings insurance plan
For every dollar you deposit, you’ll earn interest through a savings insurance policy of the “branch 21” kind. With some policies, if the business does well, you also get a cut of the earnings.
Business investments in Belgium
A fantastic place to establish a business or make an investment in Belgium. More than 500 million consumers are located within an 800 km radius, there are no trade restrictions, decent connections to the rest of Europe, and the region is teeming with business activity. The procedure for establishing a firm in Belgium is not too difficult. The Belgian government maintains a corporate investment portal providing details and connections to the local investment organizations for larger-scale investments.
Investing in stocks and shares in Belgium
You can purchase and sell shares directly through the Belgian stock market in addition to investing in stocks and shares through third-party investment funds. On the Belgian Stock Exchange, anyone can purchase shares in publicly traded companies. Euronext Brussels, Belgium’s primary stock exchange, is where you can learn about the most recent share values for Belgian corporations. The National Bank of Belgium and the Financial Services and Markets Authority oversee the Belgian stock market. The BEL20, the stock market index for Belgium, has gained by 19.13% from the year’s beginning.
By creating an online account with MeDirect or through a service like a Belgian bank, you can buy and sell shares in Belgium. Check this upfront with the supplier as trading in stocks and shares may incur transaction costs, monthly account fees, and taxes.
Offshore investing in Belgium
Both foreigners and businesses based in Belgium have access to a variety of offshore banking alternatives. Offshore banks provide flexible payment options, services not provided by domestic banks and tax benefits on savings. However, they are typically more expensive and demand bigger investments than conventional banks.
How to make savvy investments in Belgium
Here are some of the guides on how to invest wisely in Belgium.
Diversify your investments
It pays to look around and consider creating a portfolio if you want to invest in Belgium as profitably as possible. According to the investment portfolio theory, diversifying your investments should, over time, not only increase your portfolio’s return but also lower your risk profile, according to Dave Deruytter, head of expatriates at ING Belgium. Therefore, investing all of your funds in a single asset might not be the wisest move. This also holds for real estate investment. In comparison to a real estate investment fund, which invests in a variety of real estate assets, direct investment in a single real estate asset, like an apartment, is less liquid and less diversified.
Measure your investment opportunities
We caution against accepting financial proposals that seem too good to be true. Either you failed to see the catch in the dream deal’s fine print, or someone is attempting to take your money.
Because of this, it always pays to investigate investment prospects in-depth, to utilize only services that are governed by regulations, and to get professional counsel if you are unsure.
Don’t borrow to invest
Like anywhere else, investing in Belgium should be about attempting to increase your excess income rather than getting into debt. Investing involves risk, thus taking out loans to buy risky assets should be strongly discouraged.
