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Characteristics

GENERAL
Type of entity
Public Limited Company (NV/SA),
Private Limited Liability Company (BVBA/SPRL)
Type of law
Civil Law System
Our time to establish a new company
14-21 days
Migration of Domicile permitted
Yes
VAT
21 % (reduced rates 6%,12%)
Corporate taxation
34 %
Thin capitalization
Yes
Controlled foreign company
No
Double taxation treaty access
More than 90 countries
SHARE CAPITAL OR EQUIVALENT
Standard currency
EUR
Permitted currencies
Any
Minimum paid up
SA – 61,500 EUR
SPRL – 18,550 EUR (Should be paid 12,400 EUR if 1 shareholder, or 6,200 EUR if 2 or more shareholders)
DIRECTORS OR MANAGERS
Minimum number
SA – 3 directors (2 directors if there are only 2 shareholders)
1 director
Local required
No
Corporate directors permitted
Yes
Publicly accessible records
Yes
Location of meetings
Anywhere
SHAREHOLDERS OR MEMBERS
Minimum number
2 shareholders for SA, 1 – for SPRL
Publicly accessible records
Yes
Location of meetings
Anywhere
COMPANY SECRETARY
Required
No
Local or qualified
No
ACCOUNTS
Requirement to prepare
Yes
Audit requirements
Yes
Requirement to file accounts
Yes
Publicly accessible accounts
No
OTHERS
Language
French, Dutch, German
Exchange control
No
Change in domicile permitted
Yes

INTEREST OF THE JURISDICTION

Advantages of a company in Belgium

  • A Belgian company can operate in the whole territory of the European Union;
  • Belgian companies enjoy a high level of reputation;
  • Belgium has a developed market economy, a favorable conditions for business and investment;
  • It has no capital gains tax on the sale of shares;
  • Shareholders and directors of companies can be both individual and legal persons.

Possible disadvantages of a company in Belgium

  • A relatively high corporate tax, but there are many opportunities to use tax credits

Main info

The Kingdom of Belgium is located in the heart of Western Europe, has a small area, which is slightly more than 30.5 thousands km². Belgium borders on France, Germany, Luxembourg and the Netherlands. Due to its favorable geographical position, Belgium is an important member of the EU and NATO. In the capital of the country, Brussels, there are major international decision-making centers and institutions such as the European Commission, the European Parliament and NATO headquarters.

Belgium is also a member of BENELUX, a regional free trade agreement between Belgium, the Netherlands and Luxembourg.

Belgium is a federal constitutional monarchy, the head of state is the king. Legislative power is represented by the federal bicameral parliament – the House of Representatives and the Senate. Executive power belongs to the government headed by the Prime Minister. The government is appointed by the king and approved by the parliament. The prime minister, as a rule, is the representative of the party, which collects the majority of votes in the parliamentary elections.

The Belgian federal government retains important competences, such as foreign affairs, national defense, justice, finance, social security, public health, police, etc.

The territory of Belgium is divided into regions (Flemish, Walloon and Brussels) and in parallel to three language communities (Flemish, French and German-speaking), each of which has its own legislative and executive bodies. Communities are competent on all issues that concern the internal development of the region, in the field of culture and education.

The Belgian judicial system is represented by local magistrates, police courts, courts of first instance, commercial, labor courts, appellate courts (there are only 5) and the Supreme Court. Belgium is divided into judicial cantons and judicial districts. Each judicial district has a court of first instance consisting of a chamber for civil matters, a criminal chamber and a chamber for youth affairs, labor courts and commercial courts.

Types of companies and incorporation procedure

The most common forms chosen by foreign investors to manage a subsidiary in Belgium are either a public limited liability company (NV / SA) or a private limited liability company (BVBA / SPRL). Recently, foreign investors are also considering the creation of the SE, which means Societas Europaea or a European company.

01. Limited Liability Company

Companies with limited liability in Belgium can be included in the following forms:

  • Private Limited Liability Company (besloten vennootschap met beperkte aansprakelijkheid / société privée à responsabilité limitée (BVBA / SPRL)
  • Cooperative Limited Liability Company (coaperatieve vennootschap met beerkte aansprakelijkheid / société coopérative à responsabilité limitée (CVBA / SCRL)

NV / SA and BVBA / SPRL are the most widely used forms. SPRL can issue shares and bonds, which are registered, SA – can issue bearer shares.

A Limited Liability Company must be created by a notarial deed, which means that the founders must sign the constituent documents before the notary, including the presentation of the business plan and registration in the Central Register of Commerce. The founders must provide the notary with proof that the minimum capital was paid into the company’s special bank account.

The shareholders’ meeting is usually held at least once a year for the approval of financial statements, decisions on the distribution of profits, the appointment of lawful auditors.

All large entities, whether joint stock companies, private limited companies, limited partnerships and cooperative societies, should appoint an external auditor.

For this purpose, the entity is large if it exceeds two or more of the following criteria:

  • Average annual number of registered employees: 50;
  • Annual turnover without VAT: EUR 7 300 000;
  • Total balance: € 3,650,000.

Investors may also consider structuring their business as Societas Europaea (SE) under Belgian law, a corporate legal form created by Council Regulation (EC) 2517/2001 of 8 October 2001 on the Statute of a European Company (SE). The main objective of SE is to allow companies included in various European jurisdictions to unite or form a holding company or a joint subsidiary in another European jurisdiction. The subscribed capital of the SE can be at least 120,000 EUR. SE is controlled by either a two-tier or one-tier board system. According to Belgian law, SEs are mainly governed by the provisions applicable to NV / SA.

Taxation

  • Corporate tax is levied on resident companies of Belgium on their worldwide income.

    A resident company has legal force, is engaged in business or profitable activity and has its tax place of residence in Belgium.

  • The company’s taxable income consists of gross income received from its business activities, net of its business expenses and an increase or decrease in the net worth of its assets for a certain tax period.

    The tax base determined in this way is then reduced by:

    – Foreign income exempted in accordance with double taxation avoidance treaties and gifts granted by the company to 5% of its net taxable income, up to a maximum of 500,000 EUR;
    – Paid dividends;
    – Deduction for patent income;
    – A conditional interest deduction;
    – Previous losses;
    – Deduction of investments.

  • Realized gains from capital gains are treated as ordinary profits and are therefore taxed at the normal corporate tax rate.

    The standard corporate tax rate is 34%, however, progressive rates may apply. Independent non-financial companies with taxable income of less than EUR 322,500 pay 24.25% on that part of taxable income up to EUR 25,000; 31% on the band of income between EUR 25,000 and EUR 90,000; 34.5% on profits between EUR 90,000 and EUR 322,500.

    Belgian companies which pay dividends, interest or royalties taxed on withholding tax. WHT on dividends is, as a rule, 25%. This WHT can be reduced under the double taxation treaties. Dividends distributed by SMEs may, under certain conditions, be subject to a reduced rate of income tax of 15%.

    No tax is levied on dividends paid by a Belgian subsidiary of a Belgian or European company (in accordance with the Directive of Parent Subsidiary Companies of the EU) or paid to beneficiaries in the country of an agreement with the exchange of information. This exemption applies to an equity participation of 10% for at least one year.

    WHT interest and royalties is generally 25% and can also be reduced in accordance with the tax agreements. On the other hand there are many exceptions, especially for payments between related companies provided by the EU Directive on interest and royalty.

  • The standard VAT rate is 21% and is applied until a preferential rate (6% or 12%) is levied on certain listed goods and services.

  • Transfer pricing legislation in Belgium includes OECD definitions for cross-border transactions with associates when they are part of a multinational group, as well as between parent companies and their subsidiaries, as well as subsidiaries and their parent companies.

Banking system and economy overview

In Belgium, a highly developed market economy, which belongs to the Organization for Economic Cooperation and Development (OECD), a group of leading industrialized democracies. In recent years, Belgium’s GDP has placed it in the top ten for all countries in the world.

The basis of Belgium’s economy is the services sector (primarily transport and trade) and industry. The economy of Belgium is strongly oriented to the international market. Belgian (regional) authorities are favorable for foreign investment: there are various attractive tax regimes and investment incentives to facilitate and attract foreign investment in Belgium. As a rule, there are no restrictions on creating a business in Belgium. This does not require special government approval. The government has created a favorable climate for private initiatives and has taken steps to stimulate investment.

There is no foreign exchange control and restrictions on imports and exports of goods.

Belgium is an international center where large financial institutions can provide a full range of financial services. In Belgium, there are more than a hundred commercial banks. The main one is the National Bank of Belgium. It is part of the European system of central banks, its main task is the implementation of monetary policy, ensuring Belgium’s financial stability, and issuing currency.

HOW TO
PROCEED

To incorporate or purchase a company the following documentation should be provided:

01

A completed application form signed by the company or by the representative

03

A personal bill, which is less than 3 months old from the date of the application

02

Copy of valid passport

04

Payment of our fees

Note: additional documents may be required depending on the certain offshore bank.

Set-up time: From the moment, we are in possession of all required documents:

3 days

Incorporation of
a company or purchase
of an existing company

15 days

Delivery of the original
company documents

3 weeks

Offshore Bank: offshore
bank account opening