Belgian Holding Company
Belgian Holding CompanyUpdated on Thursday 07th May 2020
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Foreign investors are allowed to open holding companies in Belgium according to the country’s Commercial Code. There are no special requirements or limitations for investors wanting to set up holding companies. Belgian holdings are subject to the normal corporate tax rate and they can also benefit from the country’s double tax treaties or EU directives.
Types of Belgian holding companies
The most employed types of Belgian holding companies are the public limited company (Société Anonyme, SA, naamloze vennootschap NV) and the private limited company (Société Privé à Responsabilité Limitée, SPRL, besloten vennootschap met beperkte aansprakelijkheid , BVBA). The minimum share capital required for registering a public limited company (SA) is 61,500 EUR and minimum a quarter of the initial share capital must be paid upon incorporation , while the minimum share capital for a private limited company (SPRL) is 18,550 EUR and at least one third (6,200 EUR) must be paid upon incorporation.
Taxation of Belgian holding companies
Belgian companies are subject to corporate tax of 33.99% which includes a 3% crisis charge and the same rate applies for holding companies, as well. As mentioned above, if tax treaties are enforced between the tax rate will decrease. The taxation of dividends sent by a Belgian holding to a parent company in another country is subject to a 21 or 25% tax rate.
Reduced rates apply for Belgian holdings receiving dividends from another country if the EU Directive Parent-Subsidiary applies, an EU subsidiary will be exempt from the corporate tax if the Belgian company hold at least 10% of the foreign company’s shares for at least one year.
For a non-EU subsidiary only 5% of the received dividends will be subject to the corporate tax if:
- - the Belgian holding holds at least 10% of a company’s shares or at least a 1.2 million shareholding acquisition for at least one year;
- - the profits of the company have been subject to a minimum tax rate of 15%;
- - the subsidiary is not registered in a country with lower corporate taxes.
Capital gains are exempt from taxation in Belgium if the dividends qualify for participation exemption, while the withholding tax for interests is set at 21%.
Advantages of holding companies in Belgium
Some of the most important benefits of holding companies in Belgium are:
- - holding companies engaged in liquidation procedures benefit from a withholding tax of 10%;
- - exemption from dividend taxation provided some requirements are met;
- - exemption from interests taxation if some requirements are satisfied;
- - the notional interest deduction (NID) that allows companies that pay the corporate tax in Belgium to deduct a part of their equity capital.