Corporations planning to extend operations in Northwestern Europe have the option of a subsidiary entity set up in Belgium to test the market. This can be a risky business venture, costly in time and money, with no guarantee of success from the effort and financial investment. A subsidiary established in Belgium is considered a legal entity separate from its parent company due to having its capital and independent administration. Foreign companies typically choose a limited liability company, an SRL in French or a BV in Dutch.
The Belgian Companies and Associations Code (BCAC) simplified the number of company structures to four. The SRL/BV is the default option, flexible for both large and small companies and especially suitable for foreign-owned subsidiaries. But setting up a subsidiary in Belgium is complex for foreign companies determined to handle the process themselves. Belgium has three legislative regions, each offering different potential and challenges and three official languages.
Expanding overseas is a significant step. If the move fails, companies face the added costs and bureaucracy of closing their operation, selling property and paying off employees. The sensible alternative is to use a Professional Employer Organisation (PEO) and Employer of Record (EOR), such as Bradford Jacobs, to find the best local talent and administer your payroll in Belgium. Your company will be up-and-running in days rather than weeks or months without any risks.
Before taking the first steps into the Belgian economy, foreign companies must decide which business structure best suits their plans. The Belgian Companies and Associations Code (BCAC) simplified the number of company structures to four. The limited liability company SRL, in French, or a BV in Dutch, is the default option. This corporate structure has flexibility for both large and small companies and is especially suitable for foreign-owned subsidiaries.
Belgium has three legislative regions, Flanders, Wallonia and Brussels-Capital, and although specific differences may apply to each, there are general requirements. These include notarising certain documents such as the deed of incorporation, providing a business plan projecting activity for the next two years, offering goods and services, and proposing human and financial resources. The program must be signed in the presence of a notary.
Other incorporation formalities include:
Generally, a limited liability subsidiary protects the foreign parent company and the shareholders from liabilities. The subsidiary can ‘test the market’ by following its business ideas and entering into different areas of operation for the owning company. The subsidiary can also draw up its contracts and agreements with clients.
Potential direct benefits depend on where the subsidiary is established. Flanders offers financial aid to small and medium-sized businesses (SMEs) starting in development or established industrial zones. Also, larger companies can apply for funding in the biotech and environmental control sectors.
In Wallonia, a company can receive support for purchasing land, buildings, and equipment and with project-related investment costs and product research. The Brussels-Capital region offers investment grants, initial exemption from withholding taxes in some instances, interest-free loans for industrial research and possible employment grants.
Other benefits for a subsidiary:
The Belgian Companies and Associations Code (BCAC) simplified the number of company structures to four – the partnership, the limited liability company, the cooperative company and the public liability company. The limited liability company is the preferred option for foreign companies opening a subsidiary.
Belgium has three legislative regions, Flanders, Wallonia and Brussels-Capital, and although specific differences may apply, there are general considerations between the three. These include providing a business plan projecting activity for the next two years, the goods and services to be offered and proposed human and financial resources. The plan must be signed in the presence of a notary.
Other requirements, responsibilities and formalities apply.
Registration and Documentation:
Accounts and Taxation: