Belgium Entity Set Up

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Belgium Subsidiary Entity Set Up

Global expansion into Belgium generally means that you need to set up an in-country entity. However, by partnering with us you create the possibility to bypass this process and utilize our Belgian entity. By using our PEO-service we take care of the complicated paperwork.

Expanding into a new country is always an adventure, but we believe this adventure should be exciting instead of just frustrating and time-consuming. Therefore, we have been supporting companies in over 100 countries with their expansion plans.

In this guide, we will share which documents you need to establish an entity in Belgium, but also where you will need to register your business address and company’s name. We will also break down the advantages and disadvantages of setting up an entity in Belgium.

How to set up a Belgium Subsidiary

In 2020, the new Belgian Companies and Associations Code (BCAC) rationalized the permitted number of company types. They are:

  • the Partnership
  • the Limited Liability Company
  • the Cooperative Company
  • the Public Limited Liability Company

The BCAC intends the limited liability company (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL) to be the default company choice as it can be smoothly customized through its Articles of Association. Typically, foreign enterprises establishing subsidiaries in Belgium take this option.

Belgium has three legislative regions - Flanders, Wallonia, and Brussels-Capital - although specific differences may apply to each there are general requirements. These include notarizing certain documents such as the deed of incorporation, providing a business plan projecting activity for the next two years, the goods and services to be offered, proposed human and financial resources. The plan must be signed in presence of a notary. 

Setting up a subsidiary also includes:

  • A bank account to deposit any share capital, although under the BCAC minimum share capital is not required for a BV/SRL
  • Registering the subsidiary with the Register of Legal Entities and for VAT and social security
  • Obtain enterprise number from the Central Enterprise Databank (BCE / KBO)

What you need to set up a Belgium Subsidiary

Belgium has three legislative areas – Flanders, Wallonia, and Brussels-Capital. Using Flanders as an example, requirements feature:

  1. Choose a business entity type – the most popular choice is a limited liability subsidiary (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL). Under the 2020 Belgium Companies and Associations Code (BCAC), this company form replaced the former private limited liability company.
  2. Open a business bank account for the company.
  3. Incorporate a corporate entity with the following steps:

    - Draw up Articles of Association
    - Apply for a bank certificate. Under the new BCAC, a minimum amount of capital is not required to incorporate a limited liability company. The bank certificate acknowledges any capital has been deposited in the company’s current account
    - Shareholders are still required to show they have sufficient funds for the incorporation
    - 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

Benefits of setting up a Belgium Subsidiary

Depending on the city and region, setting up a company in Belgium might bring some financial benefits.

Flanders, for example, offers financial aid to small and medium-sized businesses (SMEs) starting in industrial development zones or in established industrial zones. Larger companies can also apply for funding, especially if they are in the biotech sector or dealing with environmental control.

In Wallonia, benefits include receiving help with the purchase of land, buildings, equipment, and project-related investment costs, as well as support for product research.

The Brussels-Capital region offers investment grants, with an initial exemption from withholding taxes in some instances, as well as interest-free loans for industrial research and possible employment grants.

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. Further benefits include:

  • The subsidiary is a separate legal entity to the parent company
  • The subsidiary has the flexibility to operate under its own business name and pursue independent business activities once it has obtained any necessary licenses
  • The subsidiary will boost the international profile of the parent company
  • The subsidiary has the same legal standing as local companies and can be eligible for government tax incentives and benefits
  • The parent company is not liable for the obligations and debts of the subsidiary
  • Companies are taxed based on their net income, and the corporate tax rate is calculated accordingly and is set at 25 % in 2021

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.

Belgium Subsidiary Laws

The Belgium Companies and Associations Code (BCAC) rationalized company formation in Belgium and significantly replaced the former private limited liability company (BVBA/SPRL) with the limited liability company (Besloten vennootschap / Société à responsabilité limiteé, BV/SRL). This is the preferred company type for foreign corporations establishing subsidiaries in Belgium and no longer needs minimum share capital at start-up, alongside more flexibility in distribution of profits and management.

Registration and Documentation

  • Incorporation through a notary
  • Articles of Association for a company limited by shares must be published in the Belgian Official Gazette
  • 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

Accounts and Taxation

  • Under the BCAC rules a BV/SRL no longer needs minimum deposited share capital
  • The BV/SRL can distribute dividends based on the profits of a current year
  • The subsidiary, unlike a branch, need not supply accounts of the parent company
  • Subsidiaries are subject to the same tax laws as resident Belgian companies and are taxed on their Belgium-earned income and worldwide income. It must comply with laws on corporate taxes, VAT, withholding taxes and social security taxes
  • Companies may also be liable for payroll tax, real property tax if they derive rental or own land, buildings, and industrial equipment

Management

  • The subsidiary is allowed to have only one shareholder, whether an individual or entity
  • One or more individuals can be directors, operating individually or as a board
  • If a legal entity is the director, the subsidiary must appoint a permanent representative who is not a director, shareholder, manager, or employee
  • One or more individuals can be responsible for daily operations without the need to convene a board of directors

Take a faster route into the Belgian economy

The cost-effective and time-saving alternative to the expensive and lengthy process of establishing your subsidiary in Belgium is to work alongside a Professional Employer Organization (PEO) and Employer of Record (EOR) such as Bradford Jacobs.

We have over 20 years of global experience and our in-country specialists will steer you through the complexities of setting up operations by locating and onboarding new employees, then ensuring compliance with all employment and tax regulations.

You retain day-to-day control of your staff – who are in place and operational within days rather than the months it could take to incorporate a legal entity. There is no reason for international borders to stand in the way of your international expansion. Contact us today!