A subsidiary established in Belgium is considered a legal entity separate from its parent company, due to having its own capital and independent administration. There are many advantages for companies expanding by this route – the chance to explore a new market, enhancing their international credibility and, particularly in regards to Belgium, opening a gateway to mainland Europe.
But the route to setting up a subsidiary in Belgium is complex for foreign companies determined to handle the process themselves. Moving staff across the globe or sourcing them in a foreign country is just the beginning.
Human resources consultation, payroll tax processing and filing, workforce management and compliance with every aspect of Belgian employment law will all have to be managed, and it is clear that establishing a foreign subsidiary eats up time and builds up costs. Hours or days spent online will not be the best use of your resources.
All of these administration concerns can be removed by partnering with an Employer of Record (EOR) business such Bradford Jacobs. Initially we will source your new staff through our Professional Employer Organisation (PEO) international recruitment and then our EOR experts will handle all legal and compliance requirements. Instead of the cost and inevitable delays in going solo, companies can be up-and-running with a presence in their new territory within days rather than months.
Belgian Subsidiary Laws
Different company types can be formed in Belgium:
- A company limited by shares S.A/N.V.
- An S.P.R.L. or B.V.B.A., which is a private limited liability company
- A subsidiary of a foreign company (incorporated under Belgian law)
- A branch of a foreign-based company (incorporated under the law of the country where the parent company is based)
The steps for forming a company in Belgium depend on company type. The procedure includes:
- Incorporation through a notary
- Articles of Association for a company limited by shares must be published in the Belgian Official Gazette, and official documents have to be translated into Dutch, French or German depending on the region of incorporation
- A two-year preliminary financial plan is required
- When setting up a branch the parent company’s accounts must be filed with National Bank of Belgium
- Belgium is open to foreign investors wishing to move their company and funds to the country.
- No prior authorization is needed and foreign capital can be taken into Belgium without restrictions in most cases
- Takeovers or joint ventures do not require primary authorization
In general, Belgium sets the following requirements for a company formation:
- At least one shareholder/director is required, with two in case of an S.A / N.V (public limited company)
- For an S.P.R.L. / B.V.B.A. (private limited liability company) minimum share capital is €18,600, depending on the number of shareholders. With one shareholder, the liability is not limited; with two shareholders, the liability is restricted to the share capital.
- A financial plan must be submitted, with a degree or high school diploma for one of the directors of the new company
Benefits of setting up a Subsidiary in Belgium
Among the legal advantages of setting up a subsidiary is that shareholders and directors of the parent company have limited liability for the activities of the Belgian subsidiary. The subsidiary also has the freedom to engage in more types of business than the parent company.
Flanders offers financial aid to small and medium-sized businesses (SMEs) starting in industrial development zones or in established industrial zones.
In Wallonia, a company can receive help with the purchase of land, buildings, equipment and project-related investment costs, with added support for product research.
The Brussels-Capital region offers investment grants, initial exemption from withholding taxes in some instances, interest-free loans for industrial research and possible employment grants.
Companies are taxed based on their net income, and the corporate tax rate is calculated accordingly and is set at 25 % in 2021.
Belgium is a popular target for expansion with its internationally-focused economy, quality of life and geographical location as a gateway to the rest of mainland Europe.
Setting up a Belgian subsidiary is also a way to assess the potential of the market without capital expenditure. Using a global Professional Employer Organization (PEO) such as Bradford Jacobs means staff can be sourced, placed in their roles and be up-and-running within days, rather than months, and with all the difficulties of payroll, taxation and compliance under control thanks to our Employer of Record (EOR) services.
What you need to set up a Belgian Subsidiary
As a guide, the following apply to Flanders.
1: Choose a business entity type for the new company – the most popular choices are a corporation or limited liability company as they have independent legal status to establish separate liability.
2: Open a bank account – in the company’s name with a financial institution established in Belgium.
3: Establish a corporate entity.
- Draw up articles of association
- Apply for a bank certificate. A minimum amount of capital is required to incorporate a public limited liability company. The bank certificate acknowledges the minimum capital has been deposited in the company’s current account
- Draw up a memorandum of association including the financial plan, bank certificate, company audit and company founders’ report
- Produce financial plan
- Register the memorandum of association within 15 days and submit an extract, signed by a notary if applicable, at the commercial court registry in the jurisdiction where the head office is based
Working with Bradford Jacobs
The cost-efficient and time-saving route to take when establishing a subsidiary in Belgium is alongside a Professional Employer Organization (PEO) such as Bradford Jacobs. Our global recruitment outsourcing know-how will have employees in place within days – avoiding penalties or fines for non-compliance with tax regulations and employment laws. Our Human Resources’ experts will also ensure a smooth transition into the new culture for your onboarded employees, alongside Employer of Record (EOR) services to handle every aspect of employment compliance. There is no reason for international borders to stand in the way of your international expansion – call us.