Belgium Company Incorporation
Belgium officially the Kingdom of Belgium, is a sovereign state in Western Europe bordered by France, the Netherlands, Germany, Luxembourg, and the North Sea. It is a small, densely populated country which covers an area of 30,528 square kilometers and has a population of about 11 million people. Straddling the cultural boundary between Germanic and Latin Europe.
Belgium is home to two main linguistic groups: the Dutch-speaking, mostly Flemish community, which constitutes about 59% of the population, and the French-speaking, mostly Walloon population, which comprises 41% of all Belgians. Additionally, there is a small group of German-speakers who live in the East Cantons located around the High Fens area, and bordering Germany.
The economy of Belgium is among the highest rated in Europe. The standard of life and the process of development in the business environment are the main reasons that qualify this jurisdiction as one of the most competitive economies in the European Union, very appealing for those entrepreneurs willing to start a company in Belgium. The international trading relationships between Belgium and other member states are flourishing and provide great advantages for new companies that are established in Belgium.
As far as the foreign investments are concerned, the Belgian government encourages investors from abroad to come and set up in Belgium and offers incentives for promoting employment. Anyway, there is a continuous flow of entrepreneurs that come to Belgium in order to invest and establish new companies.
Business Entities and Formation of Company in Belgium
The main forms of companies in Belgium are: Limited Liability Company, unlimited liability company, and sole proprietorship.
Public Limited Company
A Public Limited Company (Société Anonyme, SA/naamloze vennootschap, NV) must be set up by at least two people. They must contribute a fixed amount of capital in return for shares in the company. Public Limited companies must have at least three directors who represent the company in dealings with third parties.
This kind of company is suitable for large businesses.
One Person Private Limited Company
One-person Private Limited Companies (Société d’une personne à Responsabilité Limitée, SPRLU/eenpersoons beslotenvennootschap met beperkte aansprakelijkheid, EBVA) can be set up by one person and have one shareholder. The company’s shareholder must be an individual, not a legal person.
One-person Private Limited companies are suitable for family businesses and small and medium enterprises (SME).
Limited Liability Company
A Limited Liability Company (Société privée à Responsabilité limité, SPRL/besloten vennootschap met beperkte aansprakelijkheid, BVBA) must be set up by at least two shareholders (private or legal persons). A married couple that invests together count as two shareholders, even if they invest from their joint estate. Shareholders must contribute a fixed amount of money in return for shares, and their liability is limited to the amount they contribute. Limited Liability companies are run by one or more managers, who don’t have to be shareholders.
This kind of company is suitable for family businesses and SMEs.
General Partnerships (Société en nom colectif, SNC/comanditari vennootschap op aandelen, Comm VA) have at least two partners, who are indefinitely liable for the partnership’s debts. General partnerships have no restrictions on organization, as long as the partners are still liable and the shares can’t be transferred without limitations.
General partnerships are a cooperative partnership, and are suitable for members of the liberal professions who cannot limit their liability.
Limited Partnerships (Société en comanditari simple, SCS/gewone commanditaire vennootschap, Comm V) can have general partners as well as limited partners. General partners direct and manage the company, and are jointly liable for the partnership’s debts. On the other hand, limited partners’ liability depends on the amount of capital they contributed towards the partnership. Limited partners cannot be involved in the company’s management, and if they do, they become general partners.
Limited partnerships are the best choice for people who don’t have enough capital to start their own business.
Cooperative Companies with Limited Liability (Société cooperative à Responsabilité Limitée, SCRL/cooperative vennootschap met beperkte aansprakelijkheid, CVBA) must have at least three shareholders (private and legal persons), who contribute a fixed amount of money. The shareholders’ liability is limited to the amount they contributed.
Cooperative Companies with Limited Liability are run by one or more managers (shareholders or not). These companies suit SMEs and family businesses.
Cooperative Companies with Unlimited Liability (Société cooperative à Responsabilité limité, SCRI/cooperative vennootschap metb onbeperkte aansprakelijkheid, CVOA) have at least three shareholders (private and legal persons), who have unlimited liability for the company’s debts. Cooperative Companies with Unlimited Liability are managed by one or more people.
Company Formation of Belgium
The first step when deciding to start a business in Belgium is to select three company names for your future firm.
The chosen names must be submitted with the Belgian competent authorities and after that you should wait for the confirmation. In order to benefit from a fast and simple incorporation procedure of a Belgian company, there are a few requirements foreign investors must fulfill:
The client must present identification documents such as passport copies, identification cards or driver license of both shareholders and directors and a recent utility bill or a bank statement as proof of residential address;
In order to open a bank account, the above mentioned documents are required together with the application forms from the bank where the share capital will be deposited;
The minimum share capital for incorporating a company in Belgium is 18,550 euros from which, if the company has one shareholder, two thirds must be paid upon incorporation and one third must be paid if there are two shareholders. The amount of the share capital will be retained in a blocked “capital” account once the bank has analyzed and approved the clients’ request.
The shareholders must create a financial plan that proves the share capital will sustain the company’s activities for a period of two years and present it to a Belgian public notary.
Appointing a director has some restrictions when opening a company in Belgium. For EU-investors there are specific regulations that require a company’s director to have a certain educational level.
For non-EU investors who want to open a company in Belgium, the director must satisfy three conditions:
If the shareholder appoints him or herself as director, the director will be self-employed, therefore he/she will require a professional card;
If the director is appointed by the shareholder, the director will require a work permit as a proof of employment in the company
If a non-EU citizen is married to an EU-citizen, a member of the family can vouch for the director.
Once all the above conditions are met, the investor or a representative invested with a power of attorney will sign the required documents in front of a Belgian public notary.
As a final step, the company will be registered with the Register of Legal Entities and obtain a tax ID. Once all the required documents have been notarized, they will be submitted with the Trade Register for approval.