Even in the business world, things can get spooky. Beware of these ghouls!
It’s not only in dark alleys or old castles that ghosts appear — the Belgian business world is increasingly haunted too. Not real ghosts, but ghost companies: empty corporations without activity that nonetheless rack up debts and flood the commercial courts.
The commercial courts of Antwerp and Limburg are sounding the alarm. Together, they have already identified more than 25,000 suspected ghost companies. These include hair salons without clients, online shops without products, or buildings where dozens of companies are supposedly registered — but are actually abandoned.
Court president Tijs Laurens calls it a pressing problem: “The water is at the edge of the dike.” In one warehouse in Wilrijk, for example, more than 300 companies have a mailing address, without a real mailbox in sight.
Ghost companies undermine the economy
Ghost companies, the first ghoul on our list, recently made headlines. They are usually hard to locate and unreachable because they are registered at fictitious addresses. These companies are often set up to bypass regulations and hide illegal activities.
Behind many of these empty corporations lie fraudulent structures or organized crime groups. They use these entities to hide debts, launder money, or defraud suppliers.
The Chamber for Companies in Difficulty tries to bring order to the chaos. They handle 6,800 cases annually — but that’s just the tip of the iceberg. The increase has two causes: the growth of organized crime and the relaxation of rules to set up a company.
You’re probably wondering how to detect these invisible entities. There are several indicators that may point to a ghost company:
- Check whether the company files its annual accounts on time with the National Bank. Failure to do so, or repeatedly filing the same accounts, may indicate inactivity.
- Lack of an active email address, phone number, or website is another, subtler warning sign.
- Payment behavior and invoice receipt: if the company doesn’t receive invoices, it is likely inactive.
- Staff: if the company has few or no employees, this may also indicate inactivity and a potential ghost company.
Ghost companies aren’t the only threats
Ghost companies aren’t the only ghouls haunting our economy. Zombie companies pose a hidden danger as well. These are businesses that have existed for at least ten years but have been unable to cover their operational costs for three consecutive years.
The Walking Dead of businesses
Zombie companies survive only thanks to refinancing or external support, but contribute little to innovation or productivity. Their presence distorts the market because healthy companies carry the burden of the weak. The main issue is that these companies tie up capital and resources, slowing economic growth.
Today, Belgium has over 40,000 zombie companies. In addition, 65,000 companies have negative equity, meaning they are effectively worthless on paper.
Beyond zombie companies, there is also a zombie economy, where economic growth is effectively financed through debt.
Entrepreneurial Halloween greetings
Now that you know these ghouls, you’ll know what signals to watch for to avoid hidden risks. Trends Business Information helps you detect these signals in time — so you can do business with confidence, even when the corporate world gets spooky.