Investors wishing to start business activities in Belgium can choose to set up either a subsidiary or a branch. A subsidiary is incorporated under foreign law and the branch under Belgian law. The choice between a subsidiary and a branch often depends on the taxation structure in the foreign country from which the investment is made. Incorporation generally takes six weeks. No prior government authorization is required and there is no restriction on the transfer of capital into Belgium, with the exception of industries such as banking, insurance, pharmaceuticals, and broadcasting. When planning to open an office or set up a company in Belgium, U.S. companies should contact the Foreign Investment Offices of the Belgian region where they will be located (Flanders, Wallonia, and Brussels). These offices will be able to provide support and advice on matters of tax, employment, location and accounting.
A subsidiary is a separate legal entity; thus, liability is limited to its own assets. However, a branch does not constitute a separate entity and has unlimited liability. The parent company is liable for all obligations and debts of the branch.
Setting up a Subsidiary
Subsidiaries are usually set up either as a public limited liability company (SA/NV) or a private limited liability company (SPRL/BVBA). The private limited liability company is generally suited for smaller companies. Steps for setting up public and private companies are relatively similar.
Deposit initial capital (€62,000 for SA/NV; €19,000 for SPRL/BVBA) with a Belgian bank. A certificate indicating the amount of capital held in blocked account will be issued by the bank.
File signed financial plan with a notary. A financial plan shows how the initial capital covers the company’s operations for the next two years.
In the presence of a notary, sign the deed of incorporation and the by-laws.
The notary will file the deed of incorporation with the local commercial court and submit the corporate charter for publishing in the Belgian Official Gazette. (Cost is approximately €1,000-1,500 for notary, €207 for publication the Belgian Official Gazette.) Upon registration, an official corporate registration number is issued.
Register at the “one-shop stop for companies” (guichet d’entreprise / ondernemingsloket) to activate the corporate registration number and register with VAT administration. (Cost is €71 for registration fee and €61 for VAT registration)
Register with social security administration for salaried workers (ONSS/RSZ).
Within three months of incorporation, companies must register with social insurance fund for self-employed persons and begin annual contributions to this fund.
Setting up a Branch
To open a branch office in Belgium, the following documents must be brought to a notary to be legalized and translated:
• Articles of incorporation and bylaws of the foreign incorporation with subsequent amendments.
• Minutes from the Board Meeting when it was decided by the parent company to open a branch office in Belgium.
• Minutes from the Board Meeting to appoint a legal representative along with a description of powers delegated to him.
• Consolidated annual accounts of the parent company.
• The translation of these documents must be done by an official translator in Belgium into French or Dutch, depending on the location in Belgium.
• The documents must be submitted to the local Court of Commerce and the annual accounts must be filed at the National Bank of Belgium.
• Register at the “one-shop stop for companies” (guichet d’entreprise / ondernemingsloket) to activate the corporate registration number and register with VAT administration.
• Publish the documents in the Belgian Official Gazette. (The costs will be the fee for the translation, registration fee, and publishing fee)
• Register with social security administration for salaried workers (ONSS/RSZ).
• Within three months of incorporation, branches must register with social insurance fund for self-employed persons and begin annual contributions to this fund.
A list of notaries in Belgium is available at http://www.brunot.be/
In an effort to modernize and streamline the procedure of setting up a company or an office in Belgium, the Belgian Government established the "Crossroads Bank for Enterprises" (Banque Carrefour des Entreprises). It is a repository that assigns business entities a unique identification number that replaces the social security number, its register of commerce number, its VAT number, and the number granted by the national register of legal entities. Data are entered one time only and all government entities share this database. The database tracks relevant identification details, such as name, address, VAT number, and business type. For third parties (including the administration), this number serves as the main identification number of the branch. It must appear on all documents originating from the subsidiary or branch.
By granting the notional interest deduction, Belgium’s attractiveness is improving for capital intensive companies, equity funded headquarters, and treasury centers of multinationals. Both Belgian and foreign companies with a Belgian permanent establishment or real estate may be granted a tax deduction equal to a percentage of the “capital at risk.” See Chapter 6 for more details concerning the notional interest deduction.
Read the complete guide to Doing Business in Belgium