Belgium is one of the most strategically positioned jurisdictions in Europe for companies operating across several European markets. It holds the seat of the European Commission and of the Council, and hosts the European Parliament’s committee meetings and additional plenary sessions, the Parliament’s own seat being Strasbourg under the Protocol on the location of the seats of the institutions of the European Union.
For many international entrepreneurs it is an attractive entry point into the EU market, though establishing a Belgian company requires planning in legal, tax and substance terms.
Set up correctly, it is a reliable operational hub. Set up carelessly, it is a liability: a bank that will not open the account, a reduced rate that does not apply, and founders personally exposed for three years.
Why Belgium Is Attractive for International Businesses
Belgium sits between several of the continent’s largest economies, including France, Germany and the Netherlands, with strong logistics connections through ports such as Antwerp.
Its workforce is highly skilled and multilingual, which matters in practice because corporate documents and filings are handled in Dutch, French or German depending on the region of the company’s seat.
Underneath the local ecosystem of banks and advisers sits an extensive treaty network. The administration publishes the conventions in force and those signed but not yet ratified, the document to consult before assuming a flow of dividends, interest or royalties will be relieved.
Choosing the Right Legal Structure in Belgium
The Code des societes et des associations, the companies and associations code of 23 March 2019, in force since 1 May 2019 and binding on existing companies from 1 January 2020, cut back the catalogue of company forms.
The BV (Besloten Vennootschap), in French SRL (Societe a Responsabilite Limitee), is the usual form for small and medium-sized companies, and it has no fixed minimum share capital. The code replaced that requirement with an obligation on the founders to ensure the company has at incorporation, taking account of its other sources of finance, equity sufficient in the light of the projected activity. Liability is limited to what the shareholders contribute, and share classes, governance and transfer restrictions are arranged freely.
The NV (Naamloze Vennootschap), in French SA (Societe Anonyme), kept the classical capital model: the same code provides that its capital may not be less than €61,500. It suits larger businesses and groups wanting freely transferable shares. The choice is not purely legal: the shareholding pattern a group adopts for ordinary commercial reasons can remove access to the reduced tax rate altogether.
Capital, the Financial Plan and What Happens If the Figures Are Wrong
The abolition of minimum capital is a transfer of responsibility, not a simplification. Solvency is tested not once against a fixed number but repeatedly against the actual business, with the founders and directors behind that test.
The first test is the financial plan. Before incorporation the founders hand the officiating notary a plan justifying the initial equity in the light of the projected activity over at least two years. The code prescribes its contents: a description of the activity, an overview of every source of finance, an opening balance sheet, projected balance sheets and profit and loss accounts after twelve and twenty-four months, and the assumptions behind the turnover forecast. It is not filed with the deed; the notary keeps it.
That matters if the company fails. Where bankruptcy is declared within three years of the company acquiring legal personality and the initial equity was manifestly insufficient to carry on the projected activity normally for two years, the founders are jointly liable for its commitments in the proportion fixed by the judge, and the notary sends the plan to the court. The same logic governs distributions: a BV may distribute nothing if its net assets are or would become negative, and the decision takes effect only once the administrative body has confirmed the company can pay its debts as they fall due for twelve months.
Step-by-Step Process to Set Up a Company in Belgium
The process begins by defining the business activity and preparing the financial plan, then drafting the articles of association, whose objects and representation clauses are published and relied on by counterparties.
The company is then incorporated before a Belgian notary, and this cannot be waived for speed: the code provides that limited liability, cooperative and public limited companies are constituted by authentic deed on pain of nullity. Where the deed passes through the notarial profession’s electronic platform, completion is fixed at ten working days from receipt of the deed and payment of the publication costs, or five where the founders are exclusively natural persons using the platform’s model.
Legal personality is acquired on the day the constitutive documents are filed. The company is then registered, through the registry of the enterprise court, with the Crossroads Bank for Enterprises, the Banque-Carrefour des Entreprises or Kruispuntbank van Ondernemingen, which allocates the enterprise number used in every later dealing with the administration.
VAT comes next, and the sequence matters. The Federal Public Service Finance instructs businesses to obtain the enterprise number first and to file the application for VAT identification, form 604A, at least two days after registration in the Crossroads Bank and before the economic activity begins. The administration then activates the enterprise number as the VAT identification number, and later changes to the tax address, VAT regime or bank account must be reported within one month on form 604B.
Corporate Taxes in Belgium
Belgium’s corporate tax framework was reshaped by the law of 25 December 2017 reforming corporate income tax, which rewrote article 215 of the Code des impots sur les revenus 1992. The standard rate is 25 per cent. For companies qualifying as small companies, the rate on the first tranche of profit from zero to €100,000 is 20 per cent.
The companies code treats a company as small where, at the balance sheet date of the last closed financial year, it does not exceed more than one of three criteria: 50 employees on annual average, net annual turnover excluding VAT of €11,250,000 and a balance sheet total of €6,000,000, a line that counts as crossed or abandoned only when that happens in two consecutive financial years. A law of 17 March 2019 aligning federal tax provisions with the new companies code redirected article 215 to that definition.
Belgium retains targeted incentives rather than general ones. The innovation income deduction of article 205/1 of the income tax code remains available for qualifying intellectual property income, and an investment deduction still applies, both set out in the administration’s explanatory notes to the corporate income tax return. What no longer exists is the notional interest deduction: the programme law of 26 December 2022 repealed articles 205bis to 205octies for taxable periods closing from 31 December 2023, leaving only amounts carried forward.
When the Twenty Per Cent Rate Does Not Apply
Quoting the 20 per cent rate without its conditions is the commonest error in commentary on Belgium, because the exclusions in the third paragraph of article 215 catch the arrangements international groups set up as a matter of routine. They are disqualifications, not adjustments: a company caught by one pays 25 per cent on the whole of its profit.
The first is the financial holding test: a company is excluded where it holds shares whose investment value exceeds 50 per cent of either the revalued paid-up capital or the paid-up capital increased by taxed reserves and booked capital gains. In testing that 50 per cent limit, shares representing at least 75 per cent of the paid-up capital of the issuing company are left out of account, so a genuine majority subsidiary does not by itself cost the parent the reduced rate. The second bites more often: a company is excluded where the shares representing its capital are held, to the extent of at least half, by one or more other companies. An ordinary structure in which a foreign parent holds the Belgian subsidiary therefore loses the reduced rate outright, whatever the subsidiary’s size or profit. Approved cooperative companies sit outside both tests; certain investment and regulated real estate companies are excluded separately.
The third condition, the director’s remuneration requirement, has just changed. Up to assessment year 2026 the company had to charge to the result of the period a remuneration of at least €45,000 to at least one director, or, if lower, one at least equal to its taxable income. The law of 15 July 2026 reforming personal income tax replaced it. The threshold is now €25,000, indexed annually and rounded to the nearest €1,000, it applies only from the fifth taxable period following incorporation, and a company paying less keeps the reduced rate provided its taxable income does not exceed that remuneration. The same law added an exclusion for companies allocating an excessive portion of benefits in kind to their directors. Both changes apply from assessment year 2027. The relief is therefore worth at most €5,000 a year, it is unavailable to a normal subsidiary of a foreign parent, and it is conditional on a remuneration carrying its own personal tax and social security cost.
Substance, Compliance and What a Bank or an Inspector Looks At
Belgium expects companies to show genuine economic activity and proper governance, and the expectation is expressed through documents that are filed or producible on request. The most visible are the annual accounts, which the administrative body must file with the National Bank of Belgium within thirty days of their approval and at the latest seven months after the financial year end. Where they are not filed, damage suffered by third parties is presumed, unless proved otherwise, to result from that omission.
Alongside them sit the corporate income tax return, the periodic VAT returns and the companies code obligation to hold adequate, accurate and current information on the beneficial owners.
A bank reviewing an account application reads the deed and the published articles to see who represents the company, checks the enterprise number and the VAT identification, tests the beneficial ownership declaration against what the group tells it, and asks where the directors take decisions. A tax inspector asks a narrower question: whether the profit reported in Belgium matches the functions performed, the assets used and the risks borne there. Late filings, or directors who cannot say where decisions are taken, damage the banking relationship long before any assessment.
Typical Use Cases for Belgian Companies
Belgium is frequently used as an operational hub for companies serving several European markets at once. Its central location suits logistics, distribution and consulting businesses operating across borders, and the treaty network makes it workable for cross-border payments.
It is also a common base for professional services firms, technology companies and businesses working closely with the European institutions, and a poor one for holding arrangements assembled purely for rate reasons, which the exclusions in article 215 tend to catch.
Final Considerations
Setting up a company in Belgium is relatively accessible, but structuring it correctly from the beginning remains essential. Shareholder structure, tax residency, governance and strategy should be decided together, because the shareholding decision drives the tax rate, the remuneration decision drives the rate and the personal cost, and the financial plan drives the founders’ exposure for the first three years.
When these elements are properly aligned, Belgium can serve as a strong platform for companies looking to expand within Europe, providing access to major markets while operating within a stable and well-regulated business environment.
This article is informational and does not constitute tax advice. Each engagement is subject to scope and applicable regulation.