Think Globally Take Your Place in Belgium Market
Belgium, the European Union’s political center, ranks first in international transportation according to the World Bank index. Being a stable market, geographically close to the major economies of the EU Union, and with legal legislation that facilitates foreign investments, it offers significant income opportunities for entrepreneurs. If you want to grow your business, brand, connections, vision, and income, we recommend that you consider the option of establishing a company in Belgium.
Types of Companies in Belgium
On March 23, 2019, the Belgian Parliament made significant changes to the old companies’ law to increase the investment attractiveness of Belgium for both local and foreign companies. It enacted the law called “The new Belgian Code on Companies and Associations (the ‘BCCA’)”. Company establishment processes and rules have been simplified. The flexibility of companies to make decisions has been increased. According to this new law, Belgium has four main types of companies. These are:
a) Public limited liability company – NV – (Naamloze vennootschap)
b) Limited liability company – BV – (Besloten vennootschap)
c) Cooperative Company – CV – (Coöperatieve vennootschap)
d) Partnerships (Maatschap)
Let’s look at the most common types of companies we will consider under these parent company headings.
1) NV (Public Joint Stock Company)
It is similar to the joint-stock company structure in Turkey. It is a type of company that companies of a certain size prefer both to reach more comprehensive financial resources and to go public. It can be established with one single legal entity or individual. A minimum capital of 61.500 EUR in kind or cash is required for the establishment. Its capital is divided into shares. One fourth of the cash or in-kind contributions represented by shares must be paid in full at the time of establishment. Given the minimum initial capital, less stringent rules apply for dividend distributions and repurchases of shares than for a private limited company. Such companies have a high degree of corporate and prestigious perception.
The liability of the partners is limited to the capital they have invested. As a separate legal entity independent of the partners, the company may engage in all lawful activities (taking loans, lending, litigation, property acquisition, etc.).
2) BV (Limited Private Company)
It is the most common type of company in Belgium. Small and medium corporate companies prefer it. It can be established with a single natural or legal person. The minimum capital amount is 18,550 EUR. 20% of the capital divided into shares must have been paid before the establishment. It can be established with a single natural or legal person. It is managed by one or more directors (individuals or companies) who do not have to reside in Belgium. Strict rules apply in distributions (dividend distributions, share buybacks, etc.) to protect creditors.
The liability of the partners is limited to the capital they have invested. As a separate legal entity independent of the partners, the company may engage in all kinds of legal activities (taking loans, lending, litigation, property acquisition, etc.).
3) Limited Partnership Company – Commanditaire vennootschap (CommV)
This type of company has multiple partner profiles, such as director and silent partner. Managing partners are in the company’s management and are responsible for all company debts with their personal assets. Silent partners, on the other hand, are not included in the direction, and their responsibilities towards the company’s activities are limited to the capital they have invested. All decisions are in the partnership agreement; unless there is a clause approving decisions based on a majority, it is taken unanimously. There is no minimum capital requirement for establishment.
4) Collective Company – Vennootschap onder firm (VOF)
It is a type of partnership between shareholders who are guarantors of each other with unlimited liability. All decisions; Unless a clause in the partnership agreement approves the decisions to be taken based on a majority, it is taken unanimously. There is no minimum capital requirement for establishment.
5) Sole Proprietorship – Sole proprietorship
It is the simplest form of doing business. There is no legal personality. It is a company established by a single natural human being. There is no legal distinction between the company and the founder person. The founding person is responsible for all company debts with his personal assets. There is no company contract. There is no minimum capital investment requirement. The installation process is extremely simple and fast. The tax rate is high as the earnings from the company’s operations are subject to income tax. It is a one-person administration, and the rules for keeping accounting records are simple.
What Kind of Company Should I Establish?
As can be understood from the detailed explanations above, there are many different types of companies in Belgium. You can decide the most suitable company type for your business with professional consultancy by evaluating these options: the nature of the work, the amount of capital, estimated sales volume, and tax advantages. It is also possible to switch from one kind of company to another as needed.
Requirements to Start a Company in Belgium
How to Establish BV (The Private Limited Liability Company) in Belgium?
It is the most common type of company in Belgium. It corresponds to the limited company type in Turkey. BV is formed by the registration of the articles of association of the company in the trade registry. BV can also be established with a single person. When it is established with more than one shareholder, one or all of the partners may be a legal person. The company may perform any activity that is legally permitted. Establishing a company in Belgium takes place in the presence of a notary public, and the establishment procedures are followed by a notary public.
The necessary procedures for the establishment of the company are as follows:
- Identifying a unique, unused name for the company
- A business plan – a financial plan, which explains the company’s financial adequacy and its 2-year activities, is prepared by the founders.
- The company’s main contract is prepared.
- By opening a bank account, the cash capital required to be deposited is blocked.
- A valuation report is obtained from an audit company in case of capital in kind.
- The company’s articles of association and financial plan are signed in the presence of a notary public.
- The notary applies to the local commercial court for registration with the relevant documents. It provides a document showing the company’s management scheme and publishes in the Belgian Official Journal. It also receives the company number, ie the company-specific identification number, from the Companies Desk (Guichet d’Enterprises). In this way, the legal personality of the company is officially established.
- An application is made to the relevant tax administration for Value Added Tax.
- Within 90 days, company employees are required to register with the Belgian Social system.
- Finance, food, contracting etc. It is necessary to obtain a special permit from the relevant legal organizations and institutions to operate in some sectors.
The tax types that legal entity companies are liable for are as follows:
- Corporate Tax (Standard 29%, starting from 20% for low-volume businesses)
- Tax paid in case of withdrawal of profit from the company (Standard 27%)
- Value Added Tax (Standard 21%, lower VAT applies to some types of goods and services.)
Business Establishment of Foreign Companies in Belgium
Can Foreigners Establish a Company in Belgium?
The basic requirements for a foreign company or person to establish a company in Belgium are as follows.
- Be over 18 years old
- Preparation of a financial plan showing that the company’s activities can be carried out safely and submitting it to the approval of the competent legal authorities.
- Having a temporary residence permit for more than three months at the initial stage
No reason to prevent the company from being registered, registered with the Belgian social security services and the Belgian VAT system
People who want to establish a company in Belgium can obtain a residence permit. Company owners can get a temporary residence permit in Belgium in the first year, then a permanent residence permit, and within seven years, without losing their citizenship in the country of origin, they can obtain Belgian citizenship.
No special permission is required for establishing a company with foreign capital or opening a branch or representative office of a company headquartered in another country. There is a special permission of the authorized bodies only in the financial sector and in some other fields. There is no difference between the principles that domestic and foreign companies are subject to in terms of their commercial activities. Companies with foreign capital can also work in any field where domestic capital can work. There is no domestic partner requirement for the companies to be established. There is a double taxation agreement between Turkey and Belgium. The profit must be taxed where it is obtained. The company to be started in Belgium will also benefit from this agreement.
Sometimes, entrepreneurs prefer not to establish a new company but to operate by opening a branch. Apart from the alternatives of establishing a company or opening a branch, Turkish companies may also engage in commercial activities through agency assignment, distribution agreements, partnership undertakings, or commercial agreements with companies in Belgium.
How do foreign companies open branches in Belgium?
Foreign companies can open branches in Belgium. The branch they will open will be subordinate to the parent company abroad. The branch structure is the same as the establishment and partnership structure of the parent company. It has to register the branch established by a foreign company to carry out commercial activities with The Crossroads Bank for Enterprises by applying together with the parent company’s information in its own country. The parent company abroad has to appoint a legal representative to manage the branch it will open in Belgium. There is no minimum capital requirement for branch opening. Since the branch does not have a separate legal personality independent of the parent company, the parent company is legally liable for all debts and obligations of the branch in Belgium.
In Belgium, dividend withholding tax is not charged on branch profits. The losses made by the branches can be compensated with the profits of their headquarters. Tax exemption is applied for profit transfers made from the branch to the parent company abroad.
Investment Incentives in Belgium
There are different fiscal, semi-financial and financial incentives in Belgium. Regional or federal governments administer these incentives. Incentive programs in Belgium are given depending on conditions such as the employment that the said investment will bring, its contribution to development and exports, and information technology infrastructure development. There are many incentive packages such as incentives given to new companies, tax advantages for SME-type companies, export incentives, and incentives for research and development activities. Since the incentive programs are comprehensive, we recommend making the necessary examinations and applications through an investment consultant in line with your business plans.
Our Services
Establishing Business in Belgium
- Starting New Company
- Acquisition
- Open Branch
- Open Representative Office
- Obtain Residency Permit
- Finding Loans
- Accounting Services
- Auditing
- Tax Consultancy
- Financial Consultancy
- Investment Consultancy
- Management Consultancy
- Incentives Consultancy
- Market Research
- Real Estate Investment Consultancy
Where should I start to do business in Belgium?
First of all, you should create a business plan. For this purpose, visiting Belgium, making business contacts, and establishing connections with local partner is very useful.
It is imperative to determine your vision, the sector in which you will operate, and your business details to clarify your goals and objectives and to extract your investment budget and capital in your business plan for at least three years.
The next step after the research and planning phase is to take action. The lowest risk and cost strategy in an unfamiliar market is to proceed through partners or consultants who know the Belgium market well.
As MHR & Partners, we established our own company in Germany and opened a physical office in Mannheim. Germany serves as the focal point for our global operations. As an end-to-end consultancy service provider with local partners in the Netherlands, the UK, Belgium, Romania, Montenegro and Bulgaria, we help you set up a business from scratch safely and quickly, as well as manage all the processes you’ll need once it’s established.
You can contact Sworn-in Certified Public Accountant Mehmet Akif Özmen directly (+90 542 830 3408 or akif.ozmen@mhrpartner.com) to set up a business in Belgium.
What Can We Do For You?
10+
Years of Experience
As MHR & Partners, we are directly and indirectly active in more than 20 countries worldwide. We aim to operate with 10 branches in 100 countries in 10 years. We offer you end-to-end consultancy and support services in establishing a company, obtaining a residence permit, and in all operational processes abroad, primarily financial issues.
Our priority is to provide consultancy services to companies with a growth vision and business strategy abroad. We attach particular importance to the uninterrupted continuation of our services with the assurance of MHR & Partners (Mühür YMM AŞ) after the company establishment stages. Our core mission is to be a safe harbor and provide sustainable services.
We want to be a bridge to our customers’ business plans for growth and development, even in the most remote parts of the world.
To establish a business in Belgium, you can contact Sworn-in Certified Public Accountant Mehmet Akif Özmen directly (+90 542 830 3408 or akif.ozmen@mhrpartner.com). If you wish, you can reserve a meeting by filling out the form below.
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