Financial Crime World

Belgium’s Fintech Regulatory Landscape Evolves Amidst Innovation

As one of Europe’s key financial hubs, Belgium has become a magnet for fintech companies. The country is home to prominent players like Clear2Pay, CashForce, and Swift. However, navigating the complex regulatory landscape can be challenging for new entrants.

European Directives Shape Fintech Regulation

The majority of fintech regulations in Belgium stem from European initiatives:

Key EU Directives

  • Directive (EU) 2015/2366 on Payment Services: Regulates payment services, including online payments and e-money.
  • Directive (EU) 2015/849 on Anti-Money Laundering and Combating the Financing of Terrorism: Requires financial institutions to implement anti-money laundering measures.
  • Directive 2014/65/EU on Markets in Financial Instruments (MiFID II): Regulates financial markets, including trading and investment services.
  • The General Data Protection Regulation (GDPR): Ensures data protection for EU citizens.

Belgian Legislation Targets Alternative Financing Platforms

On November 10, 2021, the first regulation on crowdfunding services at a European level entered into force. This legislation is particularly relevant to crowdfunding platforms, offering a framework for their operations in Belgium.

Key Regulatory Aspects

  • Crowdfunding Regulations: Provide rules for crowdfunding platforms, including requirements for registration and licensing.
  • Investor Protection: Ensure that investors are protected from potential risks associated with crowdfunding investments.

Financial Regulators Launch FinTech Contact Point

Belgium’s financial regulators have identified fintech as an important area of focus. In 2016, they launched a joint FinTech Contact Point, serving as a single point of contact for companies seeking guidance on providing new and innovative financial products or services.

Benefits

  • Streamlined Guidance: Companies can access guidance from a single point of contact.
  • Improved Compliance: Regulators provide clarity on regulatory requirements.

FinTech-Friendly Jurisdiction

Belgium is generally considered a fintech-friendly jurisdiction, with various initiatives aimed at supporting the sector’s growth. These include conferences, seminars, and events organized by FinTech Belgium, a community promoting the Belgian fintech sector.

Key Initiatives

  • FinTech Conferences: Provide a platform for industry professionals to network and share knowledge.
  • Industry Events: Offer opportunities for companies to showcase their products and services.
  • Community Support: FinTech Belgium provides resources and support for fintech companies in Belgium.

Tax Incentives for Fintech Companies

While Belgian tax law does not provide specific incentives for fintech companies, there are several general measures that benefit the sector:

Key Tax Incentives

  • Innovation Income Deduction: Allows companies to deduct 85% of net income from qualified intellectual property.
  • Exemption for Remittance of Professional Withholding Tax: Grants exemption for certain companies with a limited balance sheet and employees.
  • Tax Credit for R&D Activities: Provides a 25% tax credit for investments in R&D.
  • Tax Shelter Startups and Scale-ups: Allows individuals to recover up to 45% of invested amounts through a tax reduction.