Opening a subsidiary in Belgium is a strategy for foreign companies wishing to establish themselves in the Belgian and European markets. This process requires a thorough understanding of the legal framework and administrative obligations.
This article outlines the key steps and legal considerations for creating a subsidiary in Belgium.
Choosing the legal structure
A subsidiary is a legal entity distinct from its parent company, with its own legal personality. In Belgium, several corporate forms are available:
- Private Limited Company (SRL). It offers limited liability to shareholders and flexible management.
- Public Limited Company (SA). Suitable for large businesses, it facilitates fundraising.
- Cooperative Company (SC). Ideal for cooperative projects.
The choice of structure depends on the parent company’s strategic and financial objectives, as well as governance and liability requirements. For an in-depth analysis of each corporate form, consult our article on company formation.
Specificities about the subsidiary
Legal and tax autonomy
A Belgian subsidiary is a legally independent entity from its parent company, meaning it has its own share capital and its own tax and legal responsibilities. It is subject to Belgian laws, including the Companies and Associations Code (CSA), as well as Belgian tax obligations.
Parent company liability
Unlike a branch, the parent company does not directly bear the debts of its subsidiary, except in cases of explicit guarantees or proven mismanagement. However, a subsidiary may be included in a consolidated accounting scope if the parent company holds the majority of its capital.
Non-resident parent company and directors
Setting up a subsidiary in Belgium is possible even if the parent company and directors are not Belgian residents. However, certain conditions must be met:
- Registered Office in Belgium. The subsidiary must have a registered address in Belgium.
- Tax Representation. If the company carries out VAT-liable operations, a certified tax representative may be required for non-EU companies.
- Banking Requirements. Opening a Belgian professional bank account may be required for local transactions.
- Appointment of a Local Representative. If no director resides in Belgium, it is advisable to appoint a local representative to facilitate the management of legal and administrative obligations.
Incorporation formalities for societies
Drafting the articles of association
To establish a subsidiary in Belgium, its articles of association must be drafted and signed before a notary in Belgium. These documents define the legal form, corporate purpose, share capital, share distribution, and governance rules.
Registration with the Crossroads Bank for Enterprises (BCE)
Once notarized, the company must be registered with the Crossroads Bank for Enterprises (BCE). This registration assigns the subsidiary a unique company number, necessary for its administrative and tax identification.
This company number serves as a legal identifier in all commercial transactions and for legal obligations.
Publication in the Belgian Official Gazette
The incorporation deed, meaning the notarized document containing the subsidiary’s articles of association, must be published in the Belgian Official Gazette. This ensures the legal enforceability of the company’s establishment to third parties, in accordance with the principle of publicity of legal acts under Belgian law.
This formality is a public act and is essential for the company’s validation vis-à-vis third parties.
Obtaining a VAT number
To operate a subsidiary in Belgium, it must register for VAT with the Belgian Tax Administration to obtain a VAT number. Once registered, the subsidiary will receive a unique VAT number, enabling it to carry out VAT-liable transactions.
This registration is mandatory for businesses engaging in economic activities in Belgium, even if these activities are secondary. The VAT number is required for invoicing VAT and managing periodic tax declarations related to this tax.
Tax obligations for subsidiaries in Belgium
Corporate tax
A Belgian subsidiary is subject to corporate tax on its profits earned in Belgium. The applicable tax rates are:
- 25% for most businesses (current standard rate).
- 20% on the first €100,000 of profit for small businesses, under certain conditions.
Additionally, corporate tax returns must be filed annually.
Value added tax (VAT)
If the subsidiary conducts economic activities in Belgium, it must register for VAT and comply with the following obligations:
- Periodic VAT declarations (monthly or quarterly, depending on turnover).
- Maintaining accounting records in compliance with Belgian tax requirements.
Failure to comply with VAT obligations may result in fines and late payment interest.
How to open a subsidiary in Belgium
In conclusion, opening a subsidiary in Belgium offers many opportunities for foreign companies but requires careful planning and strict compliance with local regulations.
At Arthur & Marin, we assist you at every stage of your establishment, providing tailored legal and tax expertise. Our specialists guide you in choosing the legal structure, managing administrative formalities, and ensuring compliance with tax and social obligations.
Contact us today for personalized support and to secure and optimize your establishment in Belgium.
