Every year, our analysts publish a statistical note on the business demographics in the Brussels-Capital Region. The report analyses business creations, closures, bankruptcies, relocations and entrepreneurial trends in order to gain a better understanding of the evolution of Brussels’ economic fabric.
Growth in the number of businesses stalling
On 31 December 2023, the Brussels-Capital Region had 119,084 VAT-registered businesses, representing a 0.7% increase compared with 2022. Although positive, this increase represents the lowest growth rate recorded since the health crisis.
This trend contrasts with that seen at national level, where the number of businesses is growing at a faster rate. It is also part of a longer-term trend characterised by a gradual decline in the share of Brussels-based companies in the national total. Several factors are contributing to this slowdown, including a fall in the number of business creations and a continued migration deficit.
Business creations in decline
In 2023, nearly 12,000 new businesses were set up in Brussels, representing a 7.7% decrease compared with the previous year. This decline can be partly explained by the comparison with 2022, a year characterised by a sharp rise in registrations in the healthcare sector following a change in legislation regarding VAT liability.
Aside from this regulatory effect, the number of creations remains lower than it was before the health crisis. Professional, scientific and technical activities nevertheless continue to be a driving force behind entrepreneurship in Brussels, accounting for almost one third of new businesses set up in 2023.
Sharp rise in business closures
Alongside the decline in business creations, the number of business closures continues to rise. More than 10,000 businesses ceased trading in Brussels in 2023, an increase of 11% compared with 2022.
The closure rate has returned to a level close to that seen before the pandemic and is higher than the national average. Certain sectors appear to be particularly vulnerable, notably transportation and storage, education and hospitality, which have the highest closure rates.
Net business creations halved
The combined effect of the fall in business creations and the rise in closures has resulted in a marked decline in the number of net business creations. In 2023, the region recorded just 1,649 net business creations, compared with more than 3,600 one year before.
As a result, the entrepreneurial dynamic – which measures the ratio of net business creations to the average number of active businesses – has fallen to 1.4%, less than half the level recorded in 2022.
This decline is particularly evident in certain sectors. Retail, hospitality, construction, and financial and insurance activities are now showing a negative balance: there are more business closures than creations in these sectors. This situation highlights the difficulties faced by a number of sectors that are highly exposed to fluctuations in costs, interest rates or consumption habits.
Contrasting trends across sectors
The sectoral analysis highlights very different realities across different economic activities.
On the one hand, the healthcare, education, and arts, entertainment and recreation sectors continue to see an increase in the number of businesses and are posting the most sustained growth. These sectors are playing an active role in revitalising Brussels’ business landscape.
On the other hand, several sectors have seen a decline in the total number of businesses. This is particularly true of the retail sector, construction, the manufacturing industry, financial and insurance activities, and the hospitality sector. These developments confirm certain structural weaknesses that had already been observed in previous years.
Bankruptcies remain below pre-crisis levels
In 2023, 1,679 Brussels-based companies were declared bankrupt. This figure is slightly lower than in 2022.
Despite this improvement, bankruptcies are still concentrated in a limited number of sectors. Retail, construction and the hospitality sector still account for the majority of bankruptcies recorded in the capital. Hospitality is also the sector experiencing the greatest number of job losses due to bankruptcies.
It should be noted, however, that the number of bankruptcies remains well below the levels seen before the health crisis. The situation therefore appears to be more favourable than in 2019, although certain pressures remain in several sectors.
Persistent migration deficit
As in previous years, the Brussels-Capital Region remains the only region in Belgium where the number of businesses leaving exceeds the number arriving. Net migration remains negative in 2023.
However, the situation is gradually improving. The migration deficit is decreasing compared with the previous year, as the gap between the number of businesses leaving Brussels and those arriving narrows.
The hospitality and retail sectors are the main exceptions, with more businesses arriving than leaving. Conversely, construction, information and communication, and professional, scientific and technical activities continue to record the largest migration deficits. Despite this negative balance, Brussels remains by far the Belgian region with the most movement among businesses. Business relocations are significantly more frequent here than in Wallonia or Flanders, confirming the capital’s central role in the country’s entrepreneurial dynamic.
