Type of structures Belgium
Type of structures BelgiumUpdated on Monday 21st November 2022
Rate this article
based on 2 reviews
based on 2 reviews
The types of structures in Belgium are suited for a wide array of business needs and foreign investors in the country can choose the legal entity that complies best with their business requirements. Those who register a company in Belgium will enjoy the straightforward procedure and the relatively speedy process.
Our Belgian lawyers can guide you through the company incorporation procedure and can also assist you in selecting the right type of legal entity.
What are the main types of companies in Belgium?
Belgium has several types of companies, each with its own characteristics and advantages. While some business entities are best suited for large companies, investors who want to start a small or medium sized company will benefit from choosing simpler business forms, especially if they do not want to list the company on the stock exchange.
In order to make the right choice, investors will need to consider how much capital they are willing to invest in the early stages of the company and the obligations for shareholders associated with each company type.
The table below highlights the main characteristics of the available types of business entities in Belgium:
|Type of company||Liability||Other details|
|Private limited company (SPRL/BVBA)||The founders are only liable to the extent of the invested capital.||Can be established by one or more individuals. Another version exists, the SPRL-S, sited natural persons who do not have sufficient means to open a SPRL.|
|Public limited company (SA/NV)||The shareholders are only liable as per the amount of capital they have invested.||Suited for large corporations as the share capital is larger and the shares can be traded publicly.|
|General Partnership||The founders are jointly liable.||The partners take every decision unanimously and they run the partnership by uniting their business goals and expertise.|
|Limited Partnership||Only the general partner bears full liability while the other partner or partners are not involved in management and have limited liability.||The sleeping partners will only contribute with the financial means to run the partnership but do not take management decisions.|
|Partnership Limited by Share||Also includes partners with general liability and the limited liability partners.||Unlike the limited partnership, this type has a share capital.|
|Sole Proprietorship||The simplest business form and also the one in which the founder is fully liable with all of his assets.||Can be successfully be used by consultants and other individuals engaging in liberal trades, however, they must be well aware of the unlimited liability.|
The most popular types of companies in Belgium are the public and private limited liability companies. These two business forms will have different requirements for the minimum share capital, the number of shareholders and the management of the company.
Branches and subsidiaries are a good choice for foreign companies that want to establish their presence on the Belgian market. The main difference between these two is the liability of the mother company abroad to which investors should pay close attention. In this respect, the branch is the one for which the parent company bears liability while the subsidiary is an independent company form the foreign one (although the foreign company can still control the subsidiary through shareholdings).
The consultants at our law firm in Belgium can give you detailed information about the requirements for each type of company. We can also offer you advice if you are interested in starting your own one-man business as a sole proprietor in Belgium.
How to choose a business form?
Choosing a suitable business form is the first and most important decision when starting a business in Belgium. Each of the available business forms, sole trader, partnership or corporation, has obvious advantages that may be important to investors. However, some of their other characteristics, such as the liability described in the table above, should also be carefully taken into consideration. Our lawyers in Belgium recommend that investors answer the following questions for the purpose of choosing a suitable business form:
- what are the types of activities the business will engage in?
- how many founders will the business have? Will only one individual incorporate it? Or by two or more partners?
- what is the available capital for the company? what are the contributions of each partner?
- will the company develop over type so as to require a change of business form?
Answering these questions can be a good start for determining the needs according to the business type. The incorporation procedure will also depend on the chosen type of company, for example, it is much easier to incorporate a sole trader compared to a private limited liability company, however, only the investors can answer the question if the easier incorporation justifies the amount of liability for the sole trader. In short, here are the main incorporation requirements, presented by our lawyers in Belgium:
The sole trader: no Articles of Association need to be drafted for this business form and the costs for incorporation and the lowest compared to all of the other business forms; likewise, the management and operational costs are lower in this case. The founder is the only one who takes business decisions and the accounting requirements are simplified for this business form. No minimum share capital is required. There is no separation between the assets of the company and those of the founder.
The corporation: this business form has a separate legal personality, a trait that offers both advantages but also requires a more extensive incorporation procedure. The company needs to have a business plan and the founders need to be prepared with the minimum share capital and also for the drafting of the company’s constitutive documents with the help of a notary public and when needed the team of experts at our law firm in Belgium. The company will require a number of administrative procedures and well as more complex accounting and reporting, especially in the case of the SA; in some cases, auditing also needs to be prepared. Unlike in the case of the sole trader, the company will have a complex organizational structure including a board of directors (depending on size and whether or not it is a SPRL or SA).
Requirements for the share capital in Belgium
The minimum share capital requirements differ from one company to another and this can be a key factor when selecting the type of company in Belgium. The following requirements for capital and shareholders apply for the most popular business forms in Belgium:
- Private limited liability company: at least 1 shareholder and 18,550 EUR minimum share capital fully subscribed at the time of the incorporation
- Public limited liability company: at least 2 shareholders and 61,500 EUR fully subscribed upon incorporation;
- General partnership: no minimum share capital is needed in this case.
Regardless of the chosen business form, all companies in Belgium are subject to taxation and annual filing requirements according to the IFRS or the Belgian GAAP. When working with our accountants in Belgium you will have access to complete bookkeeping services, the preparation of the company’s annual accounts, tax and VAT payments and submissions, and audit as needed.
Company structure and management in Belgium
The private limited liability company is the only type of company that can be incorporated by a single individual. This type of company must appoint a company director and has several legal and administrative obligations.
In most cases, the liability of the shareholders is limited to the amount of their investment to the share capital. Our attorneys in Belgium can give you complete details about the duties and responsibilities of company shareholders and directors in the country.
Our agents can also help you comply with corporate taxation in Belgium and observe the regulations for financial reporting and auditing. We can also help you with tax minimization strategies.
Opening a company in Belgium is a straightforward process that starts with choosing the most suitable business form for the desired type of activity as well as an original business name. The SPRL and the SPRL-S are two commonly used business form, however, investors can benefit from discussing with our team of attorneys in Belgium for more information about the exact requirements as well as preparing the company documents. Our lawyers can also assist foreign investors who cannot be present in the country throughout all of the company incorporation procedure.
Apart from the requirements described herein, any type of Belgian company that engages in trading within the EU is required to observe certain customs laws and the rules for EORI registration.
You can contact our law firm in Belgium for details about investing in the country and the commercial code.