Belgium is considered a good place to establish an existing company or setting up a new one owing to the entrepreneurial culture of its citizens especially those from Brussels and some other bigger cities. Moreover, it is important to scrutinize the economic conditions and business regulations of the country before starting a business. Also, there is a need to do careful research on the local market to be sure whether business objectives can be actualized.
Whatever the kind of company you are about to set up, be ready to adjust to a few strict measures that might be imposed by the government or the presiding business committees in that location.
Similarly, there are some business factors that must be considered to be sure that your business goals are realizable. These factors are:
- The industry and type of business
- Nationality of the headquarters/individual(s) and
- Presence of existing trade agreements or relationships
Location
Location is an important factor to consider in business because the law binding industrial practices at different locations are totally not the same. Some might impose restrictions or limitations on a kind of products manufactured. The cultural practices of the communities around your company location might not favour enough flexibility in production. Therefore, you have to be familiar with various locations before you choose where to establish your company.
Dual languages
Belgium is a bilingual nation, with a good grip of Dutch and French. These are the two official languages in this country. This, however, makes collating data and information a bit confusing. In view of this, you can know which method to employ in mitigating these language complications.
Visa and Residency
Please be informed that foreign citizens excluding those from the EU will need a work permit and visa to legally work in Belgium. Other personnel on transfer to Belgium or re-appointed may require a special ‘Professional Card’ tied to their visa and residency status in order to work in Belgium.
Your Options
The most common types of companies that can be set up in Belgium are:
- Foreign Branch Company
- Public Limited Company (PLC)
- Private Limited Liability Company (PLLC)
- Starter-Private Limited Liability Company (S-PLLC)
Foreign Branch Company
To set up a foreign branch company in Belgium, it is necessary to prepare a set of documents which must to be timely deposited at the commercial court before any activities. This includes:
- The coordinated version of the Statutes of the company, and its memorandum of association.
- The registered number of the company with a certificate from the registry of commerce which confirms the existence of the company.
- A written statement for the decision to open the branch taken by the authorized body of the society which should reflect:
- The address of the branch;
- The activities of the branch;
- The company name; and
- The appointment and identity of the persons who are authorized to bind the company legally or financially and represent the company in the service of justice.
- Both the annual accounts and the consolidated accounts of the company, relating to the previous fiscal year in which these statements were drawn, audited and published in accordance with the applicable law.
- A document issued by the commercial register or the central register in which the company file is held in accordance with article 3 of the First Council Directive 68/151/CEE of 9 March 1968, certifying the existence of the company.
- The amount of subscribed capital if not mentioned in the documents previously referred;
- The branch address, the activities of the branch, and its name if different from the name of the company.
- The appointment and identity of the persons authorized to represent the company as its permanent representatives. The extension of the powers of these representatives must also be determined.
- During registration, evidence for the legal existence of the parent company must also be provided.
PLC – Public Limited Company
A public limited company is a company which involves the reunion of two or more shareholders which are willing to invest their capital and to share returns at an agreed rate. Each investor has a liability which is limited to the amount contributed.
The conditions of this business structure are:
- There must be at least two shareholders
- Minimum of three functional directors
- A minimum amount of 61,500 Euros from the time the company is incorporated
- A minimum amount of paid-up capital is 6,200 Euros
PLLC – Private Limited Liability Company
Belgium company law regulates all operations relating to the international business of the private limited liability company (“besloten vennootschap met beperkte aansprakelijkheid”, abbreviated to “BVBA”) takes high priority. Moreover, the legal steps for establishing a company or business organizations are the same. This include:
Prepare your incorporation deed: The incorporation deed must have been prepared in collaboration with the Belgian public notary, based on the specifications of the shareholders and must state the details (name and address) of all shareholders who incorporate the company. The amount of the capital contribution made by each shareholder must as well be specified.
Design your business plan: prepare a business plan that covers the activities of the first two years of operation. If the business goes bankrupt within three years of the date of incorporation, the court may decide to review the business plan to know if the founders are responsible for the failure of the company.
Deposit the share capital in a blocked bank account: when contribution is to be made in cash, do ensure to open a bank account in the name of the company which is incorporated with a bank in Belgium and each shareholder must deposit the assigned amount to be paid upon its shares in this account, prior to the execution of the incorporation deed.
Compose an appraisal report (in case of a contribution in kind): contribution may be made in kind to the company consisting of assets other than cash when such assets have an economic value. The company auditor must then issue an appraisal report for this purpose. This report clearly describes the assets and valuation methods applied.
Authenticate the incorporation deed: This is to ensure that the corporation deed is recorded in a notarial deed to be executed by the founders and a Belgian public notary. These shareholders must be present or represented while a power of attorney must be provided and attached to the incorporation deed with a legalized signature.
Register the incorporation deed: a legal personality different from the shareholders as of the date of filing of the incorporation deed is submitted to the corporation at the Registrar office of the Commercial Court in the judicial district of the company.
File for publication in Belgium’s Official Gazette: the incorporation deed will thereafter file for publication with the Belgian Official Gazette.
Request for a corporate registration number: seek corporate registration at the Crossroads Bank for Enterprises (CBE). Ensure to registered at the CBE in the judicial district where it has its registered office.
Obtain a VAT identification number: before the commencement of business operations, you must be registered with the local VAT Administration.
Begin your business activities: After taking the aforementioned steps, you can begin your business.
In addition, note that the PLLC is set up by a minimum of two people, who may only give up their interest in the business under certain conditions.
Starter Limited Liability Company (S-PLLC / SPRL)
S-PLLC has the advantage of starting a business as a single Shareholder with very low capital. The operation is similar to that of a private Limited Liability company but differs in just a few areas. To set up a Starter Limited Liability company in Belgium, you must meet some conditions such as;
- Ability to meet up a minimum capital set between 1 and 18,550 Euros (minimum capital requirements for an SPRL).
- Ability to remit a capital of 12,400 Euros
- Only a single Shareholder and not a legal entity can run this kind of company.
Outsourcing Employment Through a GEO Employer of Record Service
The Global Employment Organisation (GEO), Shield GEO acts as the Employer of Record (EOR). The organization aimed at providing outsourced employment and payroll services to companies who have staff in a country where they are unable to employ them directly.
The GEO provides employment solution that makes foreign employment simple for any company size. Both local residents and expats are eligible for their services since it is in full compliance with the host country laws. Business organizations, therefore, have no reason to risk violating labor, tax and employment regulations when an EOR solution is available in almost any country.
