Incorporation in Belgium: Legal aspects and advice
If you are thinking about setting up a successful business in Europe, we recommend that you consider a powerful country like Belgium. The country boasts a stable political and economic system over a long historical period, a respectable international status, a favorable business environment, and a comfortable tax system. The Manimama team has conducted in-depth research, analyzed the main subtleties of registering a company in Belgium, and is ready to share its results and help you choose the right jurisdiction.
What are the main advantages of incorporating a company (business) in Belgium?
Belgium can undoubtedly be called a country with a favorable business environment in terms of the following aspects:
1. Promising location:
Belgium is a potential attractor for foreign investors and entrepreneurs. This is not least due to its unique location at the very center of the European market, which gives it direct access to the EU’s large and rich customer base. This jurisdiction provides numerous business opportunities in European markets. And makes it an ideal location for companies planning to trade internationally. In general, this location opens up wide opportunities for business development, searching for new markets, and establishing partnerships with companies from different countries.
2. Stable political and economic system:
Belgium has a long history of economic stability, which indicates its correct and successful approach to building not only a favorable living environment but also a solid platform for the development of the business sector. Belgium has strong and independent institutions such as the judiciary, central bank, and regulatory authorities. This ensures that the laws are applied fairly and consistently, thus the economy is managed competently and transparently. The banking system in Belgium is developed and reliable, offering a wide range of financial services for businesses.
3. Highly developed infrastructure:
Belgium could boast a well-developed infrastructure, which plays a crucial role in maintaining its economic competitiveness and facilitating international trade. A particularly important component of Belgium’s infrastructure is the port of Antwerp. It is a transit hub for trade between Europe and other parts of the world.
4. High living standards:
Belgium provides its citizens with a high standard of living, including quality health care, social services, and security. That contributes to the well-being of the population and makes the country an attractive place to work and live. Belgium is also a multilingual country, with Dutch, French, and German as official languages, and a large percentage of the population also speaks English. That makes the country attractive to international companies, as it is easy to find employees who can communicate in several languages and work in the global market.
The country has a developed system of professional development support. Companies and the government are actively investing in training and professional development. It contributes to the continuous improvement of skills and allows employees to keep abreast of the latest technological and business trends.
5. Favorable tax system:
Belgium offers a competitive tax system with a variety of business benefits. That includes tax rebates for new businesses and innovative companies. In addition, the country has concluded numerous double taxation treaties, which minimize tax liabilities for international companies.
6. Supporting and encouraging the development of entrepreneurial activity:
Belgium has numerous government programs aimed at supporting entrepreneurship, as well as tax incentives to facilitate the initial development of a company. It includes grants, subsidies, and loans for new and existing businesses. The country also has a well-developed startup system, including numerous startup hubs, technology parks, and cooperation with universities, as well as financial support for innovative projects. It creates favorable conditions for the development of innovative companies, providing them with access to the most advanced technologies and research, which helps them to start their business faster and develop them successfully.
7. Ease of registration and administration:
The process of company registration in Belgium is relatively simple and fast, on average a business will be registered within 2 weeks, which is a significant advantage if you plan to start your activity as soon as possible. In addition, the government is constantly actively working to simplify procedures and reduce bureaucratic obstacles for new businesses.
8. Strong international cooperation:
Belgium has an international status that makes it a respectable jurisdiction for company incorporation. Belgium is a member of numerous international organizations, including the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD) and NATO headquarters. As a member of the European Union, Belgium provides access to a single European market with millions of consumers. This provides Belgian companies with access to international trade agreements and markets and contributes to a favorable environment for international trade.
How to register a company in Belgium and what are the main requirements for such registration?
Step 1. Initial setup
- Initiating a preliminary project assessment, assessing risks, choosing the type of company, preparing the necessary documents and obtaining the necessary permits, determining the time frame, budget, and resources required to complete the process.
- Preparation and filing of the package of documents.
Step 2. Selecting and registering the company name
- Choose a name that will exclusively represent your company. It is this name that will be used to brand and register the company. If no existing business operates under the same name, the choice of company name is not restricted in Belgium.
Step 3. Choosing a business address
- You must choose an official address where your business will be registered. After registration, this address will become the so-called “seat” of the company.
Step 4. Drawing up company documentation
- It is necessary to draft and obtain notarized articles of incorporation.
Step 5. Opening a bank account
- It is a mandatory step for all Belgian companies and this account will be used to deposit the share capital.
Step 6. Creating a business plan
- The business plan is a document in which you detail your short- and long-term goals and your strategy for achieving those goals. The financial plan is the numerical part of the business plan. The submission of a business and financial plan is required by law.
Step 7. Definition of the economic activities of your business
- The types of economic activities your business will engage in are determined on the basis of a specific list of codes, called NACE codes, and are an important part of registering your business with the Crossroads Bank for Enterprises.
Step 8. Registration at the Crossroad Bank for Enterprises
- Registering your company in the Crossroads Bank for Enterprises and obtaining your company number is one of the most important steps in the process. After registration you will get a company number that can function as social security and VAT number.
Step 9. Registering the company in the General Administration of Taxes
- A business established in Belgium must register for VAT at Federal Public Service Finance if it is subject to VAT.
Step 10. Registering with the social insurance fund
- You must join it to pay social security contributions.
Requirements for registering a company in Belgium on the example of a Limited Liability Company (LLC) / Besloten Vennootschap (BV) or Société Privée à Responsabilité Limitée (SPRL):
- Shareholders: at least one shareholder who may be a foreigner and do not have to be permanently resident in Belgium to complete the registration procedure.
- Director: at least one director who may be a foreigner and do not have to be permanently resident in Belgium to complete the registration procedure.
- Company Secretary: not required.
- Minimum Share Capital: minimum capital of €18,550 is required.
- Registered Office: your company requires an official office in Belgium and must be provided for company registration in Belgium.
- Liability: the shareholders are only liable up to the amount of their contribution.
What do you have to know about taxes when registering a company in Belgium?
Corporate income tax (CIT):
Business is subject to CIT if it:
- is a company from a legal point of view, under Belgian or foreign law;
- engages in business or transactions of a profit-making nature (in Belgium or abroad);
- has its registered office or principal place of business in Belgium;
- is not expressly exempt from CIT;
- is not expressly liable to pay the tax on legal persons.
The CIT rate is 25%. Certain business sectors benefit from reduced rates.
Businesses exercising in certain specific categories of business (for example, the voluntary sector, education, personal assistance, etc.) are exempt from corporation tax (and may be subject to tax on legal persons).
Personal income tax (PIT):
The PIT has progressive tax rates. This means that the higher your income is, the higher the rate of tax you pay. The PIT is calculated on all taxable income, even if some of it was realized or received abroad.
The progressive tax rates (tax year 2024, income 2023) are:
- from € 0,01 to € 15,200 – 25%
- from € 15,200 to € 26,830 – 40%
- from € 26,830 to € 46,440 – 45%
- more than € 46,440 – 50%
For a Belgian resident:
Anyone subject to the PIT is entitled to a “tax-free allowance”. This means that part of the taxable income is not taxed. The tax-free allowance is € 10,160 (tax year 2024, income 2023). This tax-free allowance may increase depending on personal circumstances (for example, if dependent children).
The amount of tax you pay is also reduced if you have:
- certain types of income (e.g. foreign income, pensions and substitute income, etc.)
- certain expenses (e.g. childcare, pension savings, etc.)
For a non-resident:
If the earned income that is taxable in Belgium amounts to at least 75% of the total earned income (both the Belgian and foreign earned income), a non-resident is entitled to a ‘tax-free allowance’. This means that a portion of your taxable income is not taxed. The tax-free allowance is EUR 10,160 (for 2023 income). It may be higher depending on your personal situation (e.g. if you have any dependent children).
The amount of tax you pay is also reduced if you have:
- certain types of income (e.g. pensions and substitute income)
- certain expenses (e.g. childcare, pension savings, etc.)
Numerous tax benefits are also subject to the condition that the earned income that is taxable in Belgium accounts for at least 75% of the total earned income.
Value-added tax (VAT):
The standard rated VAT in Belgium is 21%, and applies to all supplies of goods and services not specified as being subject to any of the other rates.
Reduced rates:
- 6% rate applies to the goods and services outlined in Royal Decree no. 20.
- an intermediate 12% rate is applicable to a limited number of transactions
- the 0% rate can only be applied to a very limited number of goods, periodicals (based on certain conditions), and waste products; it is also applicable to pro bono services of lawyers and bailiffs
For readers
Manimama provides services to help you choose the right jurisdiction for your company’s incorporation, as well as to register your business in Belgium and create a strategic framework for its successful operation and development in the long term. We have a good understanding of the tax and legal peculiarities of specific jurisdictions, which helps our clients make an informed choice based on their unique needs and development strategies. In our work, we take into account factors affecting the business environment, such as the level of competition, access to financial and human resources, as well as opportunities for further growth and development in different jurisdictions.
By choosing our company formation service in Belgium, you are working with a law firm that values integrity, competence, and client satisfaction. Let us help you set up a company in Austria and pave the way for your business success!
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The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.