Characteristics of a BVBA Company in Belgium - 2023 Guide
Characteristics of a BVBA Company in BelgiumUpdated on Thursday 13th April 2023
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The BVBA company in Belgium is, in essence, a private limited liability company. The two used names for this business form, BVBA or SPRL come from the Dutch name and, respectively, the French name. This type of legal entity can be incorporated by one or more individuals and their liability is limited to their contribution to the share capital. This company can issue shares and bonds.
Investors who wish to open this type of legal entity in Belgium in 2023 can rely on our complete assistance during the pre-registration steps, the registration with the Crossroads Bank for Enterprises, as well as during any needed post-registration steps, such as licensing.
The list below highlights the four main characteristics of the BVBA company:
- unlimited duration: the company can be incorporated for a limited time only, however, most investors who choose this business form will set an unlimited duration for the company and the legal entity can also survive the death of its founders.
- transferability: the partners can, in some conditions, transfer their rights; one of our attorneys in Belgium can give you more information.
- liability: one particular advantage, and one of the main reasons why this business form is popular, is that the partners are only liable to the extent of their contributions to the company capital.
- single partner: this type of company is the only one (except for the sole trader which is not perceived as a separate legal entity) that can be formed by a single individual; in this case, he is the only one liable.
- the SPRL/BVBA is just one of the available business forms and our attorneys in Belgium can give you detailed information about all of the available types of companies and their characteristics.
Investors should note that the main distinction between the SPRL and the SA is that the SPRL cannot be publicly held. Only the SA, or public limited company, may offer its shares to the public.
The SPRL/BVBA is just one of the available business forms and our attorneys in Belgium can give you detailed information about all of the available types of companies and their characteristics.
What are the key features of a BVBA company in Belgium?
The BVBA company requires a minimum share capital: 18,550€ fully subscribed at the time of the incorporation. The business partners who found a company like this must make sure that the required capital is available for the company when it is founded. Out of the total amount, at least 6,200€ must be transferred to the bank account belonging to the company.
Any limited liability company in Belgium must have a set of documents known as the articles of incorporation. They are drawn up before a Belgian notary and they include the following information:
- data about the company: name, legal form, registered office;
- the identity of the founding members;
- the capital and the nominal value of the shares as well as the share transfer conditions;
- details about how the general meetings will take place;
- details about the appointing method for company directors (managers);
- the appointment of auditors.
Part of the incorporation process, after the Articles are drawn up, also includes the execution of a notarial deed.
The consultants at our Belgian law firm can help you incorporate a BVBA company and buy a property in Belgium that will serve as the company headquarters.
When opening a SPRL, investors should note that the general start-up costs will involve those related to the minimum share capital, as stated above, and also the ones referring to the lawyer’s fees, the notarial fees, and the Gazette publication fees. Moreover, the costs will also include those for special equipment, office premises, and others, as per the industry requirements for the business.
What are the administrative requirements for a Belgian BVBA?
The contributions to the share capital of a BVBA company can be made in cash or in kind. In case of cash contributions that must be deposited in a bank account opened for the company. In-kind contributions must be verified by an auditor who will issue a report.
After the company founders draw up the articles of association the existence of the company will be attested by publication in the Belgian Official Gazette. All legal entities in Belgium must be registered and have a company enterprise number. Companies that wish to perform commercial activities must also register as traders at the Crossroads Bank for Enterprises.
This company requires at least one manager or director are there are no mandatory requirements or limitations as to his residency. The company management principles for an SPRL is handled by the director who also acts as a statutory manager in most cases. Only in some situations, he will have a non-statutory role. The distinction between these two types of managers is the following: the statutory one is appointed in the company’s Articles of Association and he can only be dismissed by a decision of the partners, with well-motivated reasons. The non-statutory one is appointed by a simple majority during a general meeting. In both cases, the company’s Articles of Association are the governing law for these matters and they can specify alternative solutions and arrangements for the appointment of the removal of these managers.
How is a SPRL/BVBA taxed?
The SPRL is subject to corporate taxation in Belgium as well as the other taxes applicable to corporations. The standard corporate income tax rate in Belgium in 2023 is 21%. Small and medium companies are subject to a reduced tax of 20% on the first 100,000 euros of taxable income. Small and medium companies are subject to a reduced tax of 20% on the first 100,000 euros of taxable income. However, this special regime for small or medium SPRL companies can only apply in some cases, when certain conditions are met. One of our tax lawyers in Belgium can provide investors with more details.
Other taxes include the payroll tax, the transfer tax, insurance premium tax, regional or local taxes (depending on whether the company is based in Wallonia, Flanders or the Brussels-Capital Region) and the value-added tax. This is an indirect tax applied to the delivery of services and goods and, depending on the chosen business field, many SPRL companies will be subject to VAT. It is useful to know that there is no applicable VAT registration threshold and the standard rates of 21% with reduced rates of 0%, 6% and 12% for some types of goods and services. The only applicable exception for the VAT threshold applies in the case of distance sales by foreign mail-order companies to Belgian individuals. In this situation, the registration threshold is 35,000 euros. One of our attorneys in Belgium who specialize in taxation can provide investors with more information. We can offer complete, ongoing assistance for compliance with the requirements set forth by SPF Finances.
The annual accounts are drafted annually according to the Belgian Generally Accepted Accounting Principles and the company’s financial statements are submitted each year to the National Bank.
Our attorneys in Belgium can help you with VAT registration and other requirements for companies. We can also provide assistance for EORI registration in case of economic operators.
Because of the fact that it has lower incorporation costs (smaller capital value compared to the SA/NV), this business form is the preferred one in case of small or medium-sized companies. Moreover, the SPRL or BVBA has many other advantages, particularly in terms of liability for shareholders, as seen in this article. Investors who need more details about the traits of this company can reach out to our agents.
Investments in Belgium
Belgium welcomes foreign investment and the private limited liability company, the SPRL/BVBA, is a preferred business form by both local and foreign entrepreneurs. The ease of incorporation and the fact that it has lower capital requirements makes it suitable for businesses in all types of industries. Therefore, it is a suitable legal entity type for those who wish to open a company in the services industry an IT company, a construction firm or a logistics/transport company. Of course, investors will need to keep in mind that the sole registration of the SPRL with the Banque-Carrefour des Entreprises is not enough; they will also need to apply for additional permits and licenses as required in their particular business field. One of our lawyers in Belgium can assist investors during this step.
Entrepreneurs interested in investing in Belgium and opening a SPRL company for this purpose should also know that there are several tax incentives available to companies. These are awarded for research and development activities, investment in capital goods as well as for hiring expatriate employees. For research and development activities, company owners can benefit from generally lower costs, when certain conditions are met. This is possible through refundable tax credits or tax deductions.
According to statistics per business sector, 2018 has seen a rise in the number of companies in the services sector. The following lists the number of new companies in 2018 in the top business sectors:
- services: 26,609;
- liberal professions: 15,369;
- construction: 10,753;
- retail: 8,144.
The overall total number of new businesses across many business sectors was 100,113. Investors who are interested in the particular conditions for opening a company in one of these fields can reach out to our specialists for more sector-specific information.
According to more recent data provided by Statistics Belgium, the country had 1.094.607 VAT-registered companies at the end of 2021. This is a 4.2% year-on-year growth in the number of such companies, a slightly higher growth than In previous years.
As far as the incorporation of new companies was concerned, in 2021 saw the registration of 114,559 entities, 9.7% more than in 2020. The professional scientific and technical activities sector is the one with the highest number of companies.
For more information about the requirements for this business form, as well as other details about setting up a business in Belgium in 2023, the conditions for investments and special laws, please do not hesitate to contact our law firm in Belgium.