In January 2022, 647 bankruptcies were registered by the business courts. This is a 8.4% decrease compared to December 2021.
Statbel, the Belgian statistical office, also publishes a detailed report with the major developments of the monthly figures on bankruptcies. This report is available here (NL - FR).
The number of bankruptcies registered in January 2022 is higher than in the same month in 2021 (+45.4%) but is lower than in 2020 (-30.4%).
At regional level, only the number of bankruptcies in the Brussels-Capital Region increased compared to December 2021 (+11.2%) while remaining, however, below the level of January 2020 (-36.1%).
If, however, the number of bankruptcies increased in four economic sectors compared to December 2021, only the sectors ‘Agriculture and fisheries’ and ‘Transportation and storage’ have registered a higher number than in January 2020 and January 2019. In fact, you have to go back to April 2021 to see an equal number of bankruptcies in agriculture and fisheries sector and to October 2018 to find a greater number of bankruptcies in the transportation and storage sector.
As regards the number of job losses registered in January 2021, it amounts to 1,690, i.e. a decrease of 12.7% compared to December 2021. It is also an increase compared to January 2021 (+28.0%) and a decrease compared to January 2020 (-29.6%).
At regional level, the number of job losses increased compared to December 2021 in the Walloon Region (+29.7%) and in the Brussels-Capital Region (+7.1%). In both regions, this is an increase compared to January 2021, but a decrease compared to January 2020.
Finally, the number of job losses registered in January 2022 increased in five economic sectors compared to the previous month. Among these sectors, only the sectors ‘Agriculture and fisheries’ and ‘Transportation and storage’ have also registered a higher number than in January 2020 and January 2019. For both sectors, we have to go back to June 2019 and June 2020, respectively, to find a higher number of job losses.
Remark
The new Code of Companies and Associations (the ‘Code’) entered into force on 1 May 2019. If from that date onwards new companies can only be set up under the most recent provisions, a transitional regime applies to existing companies until 2024. During this transitional period, both old and new forms of companies are used.
Public statistics have to incorporate these new forms of companies, but during the transitional period the old legal forms also remain applicable. It was therefore preferable to apply the new company forms at a time when many enterprises had already brought their statutes into line with the Code.
Therefore, the new company forms are introduced in the bankruptcy statistics on 17 February 2022. In order to ensure time series comparability, we apply this measure retroactively. This update has no impact on the total number of bankruptcies, but it brings two major changes to the time series from 2019 onwards. These changes are briefly explained below:
- the number of bankruptcies among the self-employed decreases compared to the old method. Some enterprises that were part of the ‘self-employed’ category are classified under the new method as ‘Public limited company’, ‘Private limited company’, ‘ Limited partnership’ or ‘Other’:
Comparison of the total number of bankruptcies by legal form according to the method used
Self-employed Public limited company Private limited company Limited partnership Others Year Old method New method Old method New method Old method New method Old method New method Old method New method 2019 2,202 2,186 1,494 1,494 6,273 6,289 330 330 299 299 2020 1,784 1,601 1,011 1,021 4,067 4,239 143 143 198 199 2021 2,120 1,566 834 879 3,320 3,827 127 128 132 133 2022 331 196 95 103 426 553 11 11 19 19 - for salaried employers, Statbel uses an internationally recognised estimation rule which is recommended by Eurostat and depends on the legal form of the enterprise. The above redistribution of the number of bankruptcies by legal form leads to an increase in the total number of jobs lost. Indeed, the estimation rule stipulates that there is only one salaried employer in the case of the self-employed, whereas this number can rise up to three jobs in the case of limited liability companies. Nevertheless, the table below shows a similar ratio between the annual number of jobs lost and the total figures for the period 2019-2022 in the old and new methods;
Comparison of the total number of job losses according to the method used
Year Old method Proportions New method Proportions Difference (in percentage points) 2019 20,379 38,4% 28,107 39,5% +1.1 pp 2020 17,882 33,7% 23,022 32,4% -1.4 pp 2021 13,183 24,9% 17,786 25,0% +0.1 pp 2022 1,565 3,0% 2,203 3,1% +0.1 pp 2019-2022 53,009 100,0% 71,118 100%
Finally, it should be noted that Statbel has opted for a uniform method for the implementation of the Code and the calculation of job losses. Our other statistics broken down by legal form, such as business demography and VAT statistics, apply an identical methodology.
In addition to this press release and the supplementary report (NL - FR), Statbel also publishes more detailed monthly figures which can be broken down by municipality, by NACEBEL 2008 class or even dated back to the year 2009. These figures are available on be.STAT via the tab ‘Figures’ of this publication.
When interpreting the figures, account should be taken of the fact that there is a certain delay between the termination of the economic activity and the notification of bankruptcy by the business court. As a result, the economic impact is only reflected in the figures after a certain period of time.
Moreover, because of the Covid-19 crisis, many business courts and registries operated at reduced capacity and limited their activities until 18 May 2020. Furthermore, a Royal Decree leading to the freezing of bankruptcy proceedings before the courts was in force until 17 June 2020, in order to protect the enterprises that were healthy before 18 March 2020 from the effects of the Covid-19 crisis.
Then, on Friday 6 November 2020, the government approved a new moratorium on bankruptcies until 31 January 2021 in order to protect enterprises that were obliged to temporarily close their doors following the ministerial decree published on 1 November 2020 amending the ministerial decree of 28 October 2020 on emergency measures to limit the spread of the coronavirus (Covid-19).
As compensation for the end of this second moratorium, the government implemented a reform based on 3 pillars in order to make the access to the procedure for judicial reorganisation more flexible. First, the procedure was simplified, by no longer requiring enterprises to give immediately 11 documents, but only 3. The other documents can be delivered during the procedure. Second, the procedure no longer requires a publication in the Belgian Official Journal, which allows the mediator to meet with creditors in complete discretion and thus prevent them from demanding the rapid repayment of their claims before an agreement has been reached. Third, the procedure for judicial reorganisation by amicable agreement are encouraged by a tax exemption that was until then only applied to procedures for judicial reorganisation by court order. The provisions relating to the first two pillars of the reform would initially be in force up to and including 30 June 2021, but were extended until 16 July 2022 by the Royal Decree of 24 June 2021 extending Articles 2, 4 and 12 of the law of 21 March 2021 amending Book XX of the Code of Economic Law and the Income Tax Code 1992.
Between these two moratoriums, the tax administration and the NSSO spared, by a de facto moratorium, enterprises by not declaring them bankrupt due to tax and social debts. This system also remained in force after 1 February 2021 until October 2021 as far as the NSSO is concerned, while it is still in force for the tax administration.
Moreover, there is the judicial recess in July and August. Courts remain open during this period but the number of hearings is reduced. This is why our figures on bankruptcies are usually lower during this period.
Finally, many measures are also currently in force - at federal, regional and local level - to support enterprises in these times of crisis. For example the NSSO grants voluntary payment plans for a maximum duration of 24 months for the payment of all contributions and sums due for the year 2020. At the level of the National Employment Office, the entire temporary unemployment due to the coronavirus can be considered as temporary unemployment due to force majeure ‘corona’ until 31.03.2022.
All these public measures described above have had a moderating impact on the number of bankruptcies declared since March 2020.