Do you have a company abroad and do you want to set up in Brussels? Subsidiary, branch, business unit... several options are available to you if you wish to set up your business in Brussels. However, each option requires that certain rules and restrictions be met based on the form best-suited to your needs. Here is a brief overview.
You operate as a natural person/sole proprietorship abroad
Would you like to trade in Brussels? Go to an enterprise counter with your identity card/passport, your bank account number, the details of your activity (date of creation, type of activity, etc.) and the documents needed to prove your entrepreneurial capacities (basic knowledge of business management/licence for profession). The counter will be able to provide you with a business number and register your address (unit of establishment) and activities with the Crossroads Bank for Enterprises.
You practice as a company abroad
Several solutions are available to you.
a) set up a subsidiary in Brussels
To operate in Belgium, a subsidiary consists in creating a company under Belgian law whose parent company is established in another country. The latter holds a majority of the subsidiary’s shares (a company is said to be a "parent" when it holds more than 50% of the shares in the daughter company).
In order to comply with the law, the subsidiary must carry out a regular activity on Belgian territory, and therefore have an address in Belgium and respect the rules set in the Belgian Code of Companies and Associations.
It is therefore a company under Belgian law (e.g. SRL or SA) whose shares are primarily held by the foreign parent company. Therefore, the formalities to create a subsidiary are identical to those for any other form of business which does not have a foreign parent company. The advantage of opting for the creation of a subsidiary is that the risk for the foreign company is limited given that it is a separate entity.
Administratively, the incorporation of a subsidiary follows the same pattern as the incorporation of a simple company under Belgian law. A notarial deed is required for company creation and the articles of association must be filed with the commercial court and published in the Belgian Official Journal. The subsidiary must then be registered with the Crossroads Bank for Enterprises (CBE), via a certified Enterprise Counter which will first confirm the management qualifications of the directors. Lastly, the company must identify itself to the VAT office and submit a request to the tax office before starting up the business (formalities for setting up a company).
The average fee for these formalities is about €1,500.
From a tax point of view, the subsidiary is liable for Belgian corporation tax. The profits generated can be passed on to the parent company, in particular through dividends and interest. There are mechanisms to eliminate economic double taxation (e.g. exemption from withholding tax).
b) set up a branch in brussels
This option is available if you don’t want to open a company under Belgian law, but the foreign company carries out all or part of its business in Belgium. In this case you must choose an operating address and appoint a representative for Belgium.
You must have a regular business activity in Belgium, an address in the country and have appointed a person who has the authority to commit to third parties on behalf of the foreign company when required.
The branch office is simply an extension of its parent company and therefore does not have its own legal personality. It is a permanent operating centre which is an integral part of the parent company. The person appointed as representative by the general meeting is able to bind the parent company to third parties, who may conclude business with the branch itself. It is therefore only an economic entity without its own assets separate from those of the parent company.
Administratively, you must first file a series of documents with the registry of the Commercial Court in whose jurisdiction the branch is located in order to register it as a legal entity:
- The certificate of incorporation and the consolidated version of the articles of association of the foreign company.
- The place where the company record can be consulted and its registration number in the register, as well as a certificate from the register establishing the existence of the company.
- the decision to open the branch taken by the body authorised to take such a decision in the foreign company, in accordance with the law of its State. It must include: the address of the branch, the activities of the branch, the name of the company and the name of the branch if it does not match that of the company, the appointment and the identity of the persons who are authorised to represent the company in dealings with third parties and to represent it in legal proceedings.
- The annual accounts must be filed with the National Bank of Belgium.
In certain cases these documents must be legalised.
The branch will also have to be registered with an enterprise counter, which will assign it a company number and verify entrepreneurial skills.
For tax purposes, although the branch does not have its own legal personality, it is subject to non-resident tax in Belgium. For tax purposes, the branch will therefore be considered as a separate entity, independent of the parent company. The tax is levied exclusively on income earned or received in Belgium. It is calculated according to the same rules as for corporate tax.
Profits and losses of the branch are automatically integrated into the parent company (with recapture mechanisms to avoid double deduction of losses for tax purposes at the level of the branch and the parent company).
c) set up a business unit in brussels
This last option allows you to carry out a business activity in Belgium without creating a company under Belgian law or appointing a representative for your foreign company in the country.
Creating a business unit allows you to open a point of sale, a production workshop, an office, administrative headquarters, etc. The unit is managed from the company's head office located in another country (outside of Belgium). It is a “fixed place of business via which the foreign company carries out all or part of its business activities”.
Belgian tax law defines permanent establishment as follows: "the provision of services, for the same or related projects, through one or more natural persons who are present and perform those services in Belgium for a period or periods exceeding in the aggregate 30 days in any twelve month period"
It is more of a tax structure than a true legal organisation. As a result, the business unit has no legal personality of its own and cannot conclude any legal business in its own name. However, it can sign commercial agreements, provide services, carry out work, etc. The business unit depends on the foreign parent company for all of its decisions.
However, it must have operations in Belgium and an address in the country. Other formalities are required, including confirming management's qualifications and employment requirements and registering the unit with the tax authority.
In each case above, you are required to open a bank account at a financial institution established in Belgium. The account number must appear on all invoices, documents and correspondence.
Do not hesitate to seek the help of a professional accountant or lawyer to make the most appropriate choice for your set-up!