Country Summary

Brussels, the capital of Belgium, is indeed a significant hub for international organizations like the European Union and NATO, which contributes to its status as an important center for economic activity in Europe. The city's strategic location and comprehensive transportation infrastructure have facilitated the development of a diverse economy, encompassing a wide range of sectors including manufacturing, transportation, high-tech industries, and services.

The incentives provided by the Belgian government, such as financial assistance, investment subsidies, and tax breaks, make the country an attractive destination for businesses. These measures have helped to foster a business-friendly environment that encourages both domestic and international investment.

Belgium's geographical position at the heart of Europe, with borders to four countries, enhances its role as a gateway to the continent. Its membership in key international organizations like the EU, NATO, UN, WTO, OSCE, and OECD underscores its commitment to global cooperation and economic integration.

The double tax treaties Belgium has established with over 150 countries, including the US and Hong Kong, are beneficial for international businesses operating in Belgium. These treaties help to prevent double taxation and can provide clarity and predictability for companies when it comes to tax obligations.

Overall, Belgium's stable political environment, high standard of living, and strong economic ties with other countries make it an appealing place for businesses to establish a presence in Europe.

Legal Structures

The most commonly used forms of legal entities operating in Belgium are as follows:

Public Limited Liability Company (SA/NV):

This is suitable for larger companies and can be established by one or more founding members.

The minimum share capital required is €61,500, which must be fully paid up by the shareholders.

Shareholders can be individuals or legal entities, regardless of their residence or citizenship.

Shareholders' liability is limited to the amount they have contributed.

Private Limited Company (BVBA/SPRL):

Typically used for smaller businesses.

Requires a minimum share capital of €18,550, with at least 20% of each share paid up before incorporation.

Needs at least two shareholders, and their liability is limited to their contributions.

Belgian Branch:

Represents an extension of a foreign parent company operating in Belgium.

Subject to the same tax rules as resident companies and must comply with local management regulations.

Must be registered with the Crossroads Bank for Enterprises to commence operations.

Belgian Partnerships:

A general partnership (VOF/SNC) and a limited partnership (CommV/SComm) are forms of partnerships with legal personality.

They are governed by the same regulations as a partnership without legal personality.

Cooperative Limited Liability Company (CV/SC):

Designed for cooperative purposes, requiring at least three founders.

Follows the rules of a private limited company (BV/SRL) with some specific provisions for cooperatives.

Associations:

ASBL (Association sans but lucratif): A non-profit association for charitable goals, consisting of at least two persons.

AISBL (Association internationale sans but lucratif): An international non-profit association pursuing goals of international benefit.

When setting up a business in Belgium, it's important to consider the specific needs and scale of the operation, as well as the legal and tax implications of each type of entity. Professional advice from a lawyer or consultant familiar with Belgian corporate law is often sought to ensure compliance with local regulations and to choose the most appropriate legal structure.

Incorporation procedures

1. Deposit at least 20% of the initial capital with a Belgian credit institution and obtain a standard certification confirming that the amount is held in a blocked “capital” account.

Agency: Commercial Bank

Time to complete: 1 day

Associated costs: Free of charge

2. Deposit a financial plan with the notary and sign the deed of incorporation and the by-laws in the presence of a notary, who then authenticates the documents and registers the deed of incorporation.

Agency: Notary Office

Time to complete: 1 day

Associated costs: Fees for the publication to the Belgian Official Journal is €247 per page. The fees of the notary public will vary depending on the amount of the capital. The fee rate vary between 0.0114% to 0.570%.

3. Register with the register of legal entities (guichetentreprises/ondernemingsloket) and obtain a company number.

Agency: One-Stop Shop Register

Time to complete: 1 day

Associated costs: Company registration fee (per business entity): €82.50. VAT Registration fee: €55

4. Register With Welfare Agency (payroll, social security funds, etc)

Agency: One-Stop Shop

Time to complete: 1 day (Online procedure)

Associated costs: For the social insurance fund for self-employed persons: EUR 868 (annually)

5. Arrange Workplace Insurance

Agency: Local insurance agency

Time to complete: 1 day

Associated costs: Depending on agency and policy

Board Personnel

In Belgium, the management structures for different types of companies are defined by law and company bylaws.

Public Limited Liability Company (SA/NV):

   - Directors serve a maximum term of six years and can choose from three management models:

     - A collegiate board of directors without a specific arrangement in the deed of incorporation.

     - A single director managing the company.

     - A dual system comprising a supervisory board and an executive board.

Limited Liability Company (BVBA/SPRL):

   - Directors can serve indefinitely and the company can be managed by one or more directors, each with individual decision-making authority. The company's articles of association can provide deviations from this structure.

Belgian Branch Office of a Foreign Company:

   - Branches do not have directors but must appoint at least one legal representative.

   - Branches do not have shareholders and benefit from a legal cap on director liability, which can range from €125,000 to €12,000,000 based on the company's average turnover and balance sheet over three years. This cap does not apply in cases of repeated negligence, serious misconduct, fraud, or fiscal fraud.

For recruitment, Belgian companies can utilize professional search firms or government agencies like the Employment Agency, which provides a candidate database at no cost. This approach ensures a regulated and supportive environment for business operations and human resource management in Belgium.

Ongoing obligations

In Belgium, companies are governed by a set of clear regulations regarding shareholder meetings, auditing, and documentation.

1. Annual Shareholders' Meeting:

   - Companies, whether they are SRL/BV or SA/NV, are mandated to conduct an annual shareholders' meeting within six months following the close of their financial year.

   - This meeting focuses on reviewing the annual report and the auditor's report, if an auditor is appointed.

   - The financial statements, including any consolidated accounts that are relevant, must be presented at this meeting.

2. Convening the Meeting:

   - For SRL/BV companies, it's required that shareholders and bondholders receive written notification of the meeting at least 15 days in advance. For listed companies, this period extends to 30 days.

3. Document Review:

   - Shareholders are entitled to examine specific documents related to the company's financial health at least 15 days prior to the meeting. This includes annual and consolidated accounts.

4. Resolutions:

   - The shareholders' meeting is also where decisions on the company's financial statements, distribution of profits, and the release of directors and auditors from liability are made.

5. Extraordinary and Special General Meetings:

   - These meetings can be convened by the board, auditors, or shareholders who hold at least 10% of the company's capital. They are used to address significant corporate actions such as mergers, dissolutions, changes in capital, and amendments to the company's statutes.

These regulations ensure that company governance in Belgium is transparent, and that all stakeholders have the opportunity to engage in the company's decision-making processes.

Audit Requirements

1. Appointment of Statutory Auditor:

   - Large companies and those listed on a stock exchange are required to appoint a statutory auditor.

   - Companies with an average of 50 employees, an annual turnover of €9 million, or a balance sheet total of €4.5 million must also appoint an auditor.

   - For group companies, these criteria are assessed on a consolidated basis.

2. Auditor's Report:

   - The auditor's report must be available to shareholders at least 15 days prior to the Annual General Meeting (AGM) and is to be filed with the annual accounts.

3. Appointment and Termination:

   - Auditors are appointed for a term of three years and can only be dismissed under specific circumstances. Any early termination of an auditor's mandate must be reported to the Hoge Raad voor de Economische Beroepen.

Filing Requirements

1. Annual Filing:

   - Companies are required to file their financial statements with the National Bank of Belgium (NBB) within 30 days following the AGM's approval and no later than seven months after the end of the financial year.

2. Foreign Companies:

   - Foreign companies operating in Belgium must deposit their annual and consolidated accounts, along with the social balance sheet of their Belgian establishment, if applicable.

3. Accounting Standards:

   - Annual accounts should adhere to Belgian Generally Accepted Accounting Principles (GAAP), while International Financial Reporting Standards (IFRS) are mandatory for the consolidated accounts of listed companies and optional for others.

4. Financial Statements:

   - The financial statements must include a balance sheet, income statement, annexes, and a social balance sheet.

5. Financial Year:

   - The financial year for companies must not exceed 12 months. The statements must be prepared in an official language of Belgium and in euros, except in cases where other arrangements are authorized.

6. Consolidated Financial Statements:

   - Companies with subsidiaries must file consolidated financial statements unless they are below certain size thresholds or if the parent company already publishes consolidated accounts.

These regulations are designed to maintain a high standard of financial reporting and to ensure that all companies operating in Belgium comply with international and domestic financial standards.