Formation of Private Limited Company in Belgium
Belgium offers to its international investors a flexible taxation system, pro-business environment, extended network of double taxation agreements and a highly-qualified workforce.
The Belgium SPRL company is the most popular type of companies owned by foreign investors due to reduces tax burden on shareholders.
FACTS & INFO
The Belgian Company Act regulates the process of incorporation for all types of companies as well as supervising the legal activity of the businesses. There are mainly four types of company formation choices in Belgium:
- Belgian Private Limited Company (BeslotenVennootschap met BeperkteAansprakelijkheid/ Société Privée à Responsabilité Limitée, BVBA/SPRL);
- Belgian Public Limited Liability Company (NaamlozeVennootschap/Société Anonyme, NV/SA);
- Belgian one-person Private Limited Company (EenpersoonsBeslotenvennootschap met BeperkteAansprakelijkheid/Société d'Une Personne à Responsabilité Limitée, EBVBA/SPRLU), and
- Belgian Cooperative Company with Limited Liability (CooperatieveVennootschap met BeperkteAansprakelijkheid /Société Coopérative à Responsabilité Limitée, CVBA/SCRL).
The BVBA/SPRL and NV/SA company types are the most commonly used type of companies.
Three names must be submitted at the Belgian Register of Companies (KBO/BCE). A name may be rejected if it is considered as similar or lead to confusion with a name of an already registered legal entity. The suffix will depend on the choice of legal entity.
ARTICLES OF ASSOCIATION
The existence of the Articles of Association for a BVBA/SPRL company is an essential requirement. As with all Belgium legal entities, writing and signing the Articles of Association must be made at the notary’s office. Essential information such as the legal form of the entity, the full name of the entity, the registered address, the particulars of any individual authorized to act on behalf of the company, the amount of the capital, the financial year’s start and end, as well as the details of the director or manager for the legal entity’s day to day administration, must be included in the Articles of Association.
The BVBA/SPRL may have one or more shareholders who need not be nationals or residents of Belgium. Unless otherwise indicated by law, any individual or legal entity in the world has the legal right to invest in Belgium. Initial shareholders are recorded in a public register, and nominees are not allowed under Belgian law. Of course, a parent company can be formed in a jurisdiction allowing nominees and be used as a shareholder of the Belgian company.
The minimum capital is EUR 18.550, half of which has to be paid in at the company's creation, with a minimum paid in capital of EUR 6.200 when there are two or more shareholders and EUR 12.400 when there is only one shareholder. Capital may also be paid in kind, assets however must be valued first by a legal auditor.
DIRECTORS AND SECRETARY
A BVBA/SPRL may have one or more directors, however it is highly recommended that at least one director is resident and/or a national of the European Union, but need not live in Belgium. Full details of the identity of the directors will be disclosed. According to the requirements set out, the director must prove professional ability to hold their position, either by passing an examination, or by holding a college degree, or by professional background.
There is currently no requirement to appoint a local corporate secretary.
Any legal entity incorporated in Belgium must have its registered offices in Belgium in order to benefit from the tax treaties. A PO Box or similar is not acceptable, and as the tax administration visits newly formed companies, there is a danger of being sued with termination of the company as being fictitious.
Certain business activities are regulated in Belgium and require a license or special permit in order to start doing business. It is advisable that prior to proceeding with the purchase to advise regarding the activities in order to comply with the necessary requirements.
At least one meeting of the board of directors must take place (where more than one director is appointed), in order to approve the annual accounts and the management report, whilst written resolutions may not be utilized for a meeting of the board of directors.
It usually takes about two to three weeks to incorporate a BVBA/SPRL company.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
- Provision of Registered office.
Belgium has a corporate income tax of 33.99% and it includes a 3% 'crisis surcharge', which was introduced by the Belgian government in 1993, as a crisis complementary tax contributing to social security funding. However, Belgian corporations with a taxable income of under EUR 322,500 are subject to reduced rates, if the company pays an annual taxable income of at least EUR 36,000, the company is not a holding company, nor does 50% of the company belong to one or more companies. Payroll taxes, real property taxes and social security taxes and a transfer tax are also among the taxes for companies in Belgium. Accounting services are needed for new businesses in Belgium, the dividend tax is set at 25%, but a 15% reduced rate applies to residential real estate investment companies.
Belgium is particularly attractive as a location for a holding company because of the possibility of deducting interest expenses (including notional interest expenses), combined with a 95% deduction for dividends received and a tax exemption for capital gains realized on shares.
Based on the dividend received deduction, 95% of the dividends received are deducted from the taxable income. This deduction is only applicable to the extent that there is sufficient taxable income available, from whichever source or nature, from which the deduction can be made. Thus, if the holding company has losses, or insufficient taxable income, all or part of the 95% deduction may be lost. In addition, dividends are not deductible from a number of non-deductible expenses.
AUDIT AND FINANCIAL STATEMENTS
A BVBA/SPRL company must file tax returns on an annual basis. The said entity may also be subject to corporate tax on its profits, as well as be subject to VAT and other possible taxes (i.e. registration taxes on the purchase of real estate property). The BVBA/SPRL may have to be registered in the Crossroads Bank of Enterprises and VAT administration.
It is mandatory to appoint an auditor for a Belgian company in case two of the following criteria are exceeded:
- Average personnel: 50.
- Annual turnover before tax: EUR 7,300,000
- Balance total: EUR 3,650,000.
If the company employs more than 100 persons it will automatically need to appoint an auditor. If a company is part of a group that has the obligation to publish consolidated accounts, these criteria need to be calculated on a consolidated basis. For a company that is to be incorporated, these criteria need to be estimated. It is possible to incorporate the company without an auditor. If the company however estimates that the criteria will be exceeded, the auditor has to be appointed before the end of the first financial year.
OUR SERVICES & REQUIREMENTS
OUR SERVICES FOR THE COMPANY FORMATION IN BELGIUM INCLUDE:
- Name check and approval
- Drafting Notarial Deed and presentation to local Commercial Court
- Registration of company with Trade Register
- A standard set of apostilled originals of corporate documents consisting of:
- Payment of the government fee
- Provision of registered address for one year
- Opening of a bank account for depositing of share capital
- Rubber stamp
- Certificate of Registration / Certificat D'Inscription
- Company Extract
- Company Articles / Statutes
DOCUMENTS REQUIRED FOR THE COMPANY FORMATION
Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorized Signatories:
- Notarized copy of valid passport.
- Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
- Original or certified copy of Banker’s reference letter (dated within 3 months).
- In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).
- Copy of Higher Education/University Diploma in the English Language (must be verified).
IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES
If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, STARTING BUSINESS will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.
Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.
Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.
Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to the invoice during checkout. Shipping costs for international courier services are set automatically and will be USD 130. Please be advised that there will be some exceptions where the fee might be higher.