An introduction to Belgium Legal entities

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Belgium, a country renowned for its strong economy, strategic location, and multicultural population, offers a favourable environment for entrepreneurs looking to expand their business ventures overseas. If you’re considering to start a business in Belgium, this comprehensive guide provides an in-depth overview of the main company types under the Belgian Companies and Associations Code (BCAC) and the processes involved in incorporating a Belgian company.

Understanding the Belgian Business Landscape

Belgium’s international character, geographical location, and historical background make it an ideal hub for foreign investors. The country guarantees freedom to establish a company or branch without any restriction on foreign capital. This allows for income and operation profits to be repatriated without limit, providing a business-friendly environment for investors.

Key Company Types in Belgium

The BCAC has significantly simplified the Belgian company landscape by reducing the number of existing company forms. The main types to consider when you plan to incorporate a Belgian company include:

Public Limited Company (NV/SA)

A Public Limited Company (NV/SA) is a separate and distinct legal entity. It can be managed by a collegial board of directors or a sole director. The board is responsible for making significant business decisions and managing the general affairs of the company. The NV/SA is a common choice for larger businesses due to its ability to raise capital through public and private investments.

Private Limited Company (BV/SPRL)

A Private Limited Company (BV/SPRL) is also a separate legal entity. It provides limited liability to its shareholders, making it a popular choice for small to medium-sized businesses. The BV/SPRL can be managed by either a sole director or a non-collegial board of directors.

Belgian Branch Office

A Belgian branch office is not a separate legal entity from the foreign company. Instead, it acts as an extension of the foreign company in Belgium, with the legal representative of the foreign company being responsible for the activities of the branch.

Incorporation Process in Belgium

The incorporation process in Belgium is straightforward and involves the following steps:

Step 1: Drafting the Articles of Association

The first step in the incorporation process is drafting the Articles of Association. These documents include critical information about the company such as its name, registered office, corporate object, capital, shares, and the identity of the directors.

Step 2: Opening a Bank Account

Before the incorporation of the company, a bank account must be opened in the name of the company. For cash contributions, a bank certificate is required, proving the deposit of the capital in the company’s account.

Step 3: Notarization of the Incorporation Deed

The Incorporation Deed, which includes the Articles of Association, must be notarized. This process involves a meeting with a notary public.

Step 4: Registration with the Crossroads Bank for Enterprises

After the notarization, the company must be registered with the Crossroads Bank for Enterprises. This registration process provides the company with a unique enterprise number.

Step 5: Publication in the Belgian Official Gazette

The final step in the incorporation process is the publication of the incorporation deed in the Belgian Official Gazette. This creates the company as a legal entity.

Minimum Capital Requirement

The minimum capital requirement for a Public Limited Company (NV/SA) is EUR 61,500, which must be fully paid up at the time of incorporation. On the other hand, a Private Limited Company (BV/SPRL) does not have a capital requirement, but must have a net equity that is sufficient in the light of the envisioned activities.

Legal Liability of Belgian Companies

Shareholders of Belgian companies enjoy limited liability, which means they are not personally liable for the company’s debts beyond their financial contribution to the company. However, for a Belgian branch office, the foreign company is liable for all the obligations entered into by the branch office.

Tax Presence of Belgian Companies

Belgian companies are in principle taxable on their worldwide income, less allowable deductions. The standard corporate income tax rate is 25 percent. Companies are also subject to Value-Added Tax (VAT) and must file VAT returns on a monthly or quarterly basis depending on their turnover.

Business Recognition in Belgium

The Public Limited Company (NV/SA) and Private Limited Company (BV/SPRL) are well-regarded and widely used business forms in Belgium. They offer a high degree of flexibility and are easily recognized by stakeholders. A Belgian branch office is also regularly used and well-accepted.

Conclusion

Starting a business in Belgium involves a series of steps, from selecting the right company type to understanding the tax implications. The country’s strong economy and strategic location make it an attractive destination for foreign investors. To simplify the process, the Belgian House of Companies provides a self-governance portal that allows you to start a business in Belgium without a physical visit and at a fixed yearly fee. Start your company formation in Belgium now and embark on your entrepreneurial journey in the heart of Europe.

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