Opening a branch in Belgium represents an excellent opportunity for companies looking to expand their presence in the European capital. With its strategic location, open economy, and business-friendly environment, Belgium is an attractive destination for investment.
In this article, we provide a detailed guide on the legal, tax, and practical aspects to consider for successfully establishing a branch in Belgium.
Difference between a branch and a subsidiary
Before starting the process, it is essential to understand the difference between a branch and a subsidiary:
- Branch: It does not have its own legal personality and depends directly on the parent company. The parent company limits its activities and legal liability. Therefore, the branch operates within those boundaries.
- Subsidiary: The parent company controls an independent legal entity, which can make its own decisions. As a result, it limits its liability to the contributed capital.
Consequently, the choice between opening a branch or a subsidiary will depend on the business strategy, tax implications, and desired management flexibility.
Benefits of opening a branch in Belgium
- Strategic location. Belgium is at the heart of Europe and offers easy access to key markets such as the United Kingdom, France, Germany, the Netherlands, and Northern Europe.
- Multilingual environment. The Belgian population is highly multilingual, facilitating international operations (English, French, Dutch, and German).
- Tax incentives. There are incentives and tax exemptions for foreign companies investing in Belgium.
Specific aspects of branches in Belgium
You must register a branch established in Belgium under the same name as the parent company since it does not have independent legal status. Consequently, the parent company assumes responsibility for the branch’s actions.
Additionally, in certain specific sectors you must obtain a business license before starting operations, such as in insurance, banking services, and pharmaceutical products. One advantage of a branch in Belgium is that there is no minimum share capital requirement at the time of registration.
Legal requirements for opening a branch: step-by-step procedure
Appointment of a legal representative
First, you must designate a person to manage the daily operations of the branch. In this case, the legal representative can either be a Belgian national or a foreigner with legal residence in Belgium, where the branch’s activities will take place.
Preparation of documentation
- Copy of the parent company’s statutes.
- Minutes of the board of directors approving the branch opening (branch address, activities, etc.).
- Information about the legal representative in Belgium.
All these documents must be submitted to the Commercial Court and the Crossroad bank for enterprises (BCE).
Languages and sworn translation
Equally important, you must notarize the documents and translate them into one of Belgium’s official languages by a sworn translator. Specifically, depending on the registered office, you must translate the documents into French, Dutch, or German.
Additionally, you must translate and publish the parent company’s balance sheet (previous year) in the Belgian Official Gazette (Moniteur Belge). Furthermore, you must register it with the National Bank of Belgium (BNB).
Registration with the Commercial court and Crossroad bank for enterprises
Further, every branch must be registered with the Crossroad bank for enterprises (Banque-Carrefour des Entreprises), providing information about the parent company and the activities to be carried out in Belgium. Additionally, information about the branch’s representative and personal details must be submitted. After registration with the BCE, the company number (BE…) will be issued.
Publication in the Moniteur Belge
You must publish the branch’s statutes and relevant information in the Moniteur Belge, Belgium’s official gazette. Once its incorporation is published, the new branch can immediately begin commercial activities.
Obtaining a VAT number and Social Security registration
Furthermore, you must request a Belgian VAT number from the Belgian tax authorities to conduct commercial activities. Additionally, if hiring employees, the branch must register with the National Social Security Office (ONSS) and affiliate with a social security fund.
Tax and labor aspects
- Taxation. Branches must pay Belgian corporate tax on profits generated in the country. It is important to evaluate double taxation treaties between Belgium and the home country to avoid double taxation. In addition, a foreign company may deduct the Belgian branch’s losses from its profits for the same fiscal year, up to 7 consecutive years.
- Accounting obligations. The branch must keep its own accounts in compliance with Belgian regulations and submit its annual accounts, along with those of the parent company.
- Labor regulations. If the branch hires employees, it must comply with Belgian labor laws, including social security, minimum wages, and working conditions.
How we can help you
Finally, a branch provides a certain degree of autonomy from the parent company through its legal representative, without requiring a minimum capital. The required documents must be correctly submitted, and the opening process usually takes a few weeks.
At Arthur & Marin, we have a team specialized in corporate and international tax law that will assist you at every step of the process to open your branch in Belgium. From document preparation to compliance with tax and labor obligations, we ensure a fast and secure service.
Contact us for legal assistance at info@arthurmarin.com or by phone at +32 465 345 345.
