Articles
Establish a Branch in Belgium
Updated on Wednesday 31st May 2023 Rate this article
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The branch is an extension of the parent company, a different location of the main office of the company, located in another country where the main company wishes to conduct business. It is not the same as when foreign investors open a company in Belgium as it is not entirely separate from the parent company.
A branch established in Belgium in 2023 must carry the same name as the parent company and it’s not considered a legal entity. The commercial name of the branch may differ from the registered name and can be or not reported at registration. The parent company is carrying full responsibility for the branch’s actions.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | Depending on whether or not bilateral conventions are in place between Belgium and the parent company's country of origin. |
| Best Used For | The same business activities performed by the parent company. Mostly used by banks and other financial institutions. |
| Minimum share capital (YES/NO)
| NO |
| Time frame for the incorporation | 2 weeks
|
| Management (Local/Foreign) | Local representative to manage the Belgian branch, appointed by the parent company. |
| Legal representative required (YES/NO) | YES |
| Local bank account (YES/NO) | YES |
| Independence from the parent company | NO |
| Liability of the parent company | The parent company is fully liable for its Belgian branch. |
| Corporate tax rate | 25% |
| Possibility of hiring local staff (YES/NO) | YES |
The branch and the subsidiary are the two manners in which a foreign company can expand its activities to the Belgian market. they are fundamentally different in terms of liability for the parent company, nevertheless, they each have their set of advantages. The list below highlights some of the most important advantages of the branch in Belgium:
- • Lower incorporation costs: the costs associated with opening a branch are generally lower than in the case of the subsidiary (which can be a Belgian limited liability company).
- • Different annual reporting: the branch, because of its relation to the foreign company, is subject to different annual reporting requirements in Belgium; in general, these can be lighter than in the case of the limited liability company.
- • Control: this type of business entity is preferred in some business sectors because of the high level of control the parent company has over its branch.
- • Double taxation relief: branches are subject to the provisions of the double tax treaties signed between Belgium and other countries; we recommend talking to our agents specialized in company formation in Belgium for more details.
Foreign companies that open a branch will need to conduct the same business activities in Belgium as the parent company conducts in its country of origin.
The procedure of starting a branch in Belgium
The procedure to start a branch in 2023 is not entirely the same as that required to open a company in Belgium because of the fact that the branch does not need to have its own Articles of Association. Instead, as highlighted below in the section offering information on required documents, the foreign company will provide its own Articles, translated as needed. You will also need to open a bank account in Belgium in order to deposit the share capital.
A special business permit is required for the branch in certain business sectors. This is needed before the branch office actually commences the activities and can be required for banking, insurance, medical and pharmaceutical activities and others.
The documents related to the branch must be drafted in one of the official languages of Belgium (Dutch, French or German) depending on the area of registration. The translation of the company’s Articles of Association and the excerpt from the local register will be needed and investors will need to include these translation costs which will vary according to the number of pages.
The legal representative of a branch opened in Belgium doesn’t need to have Belgium’s nationality but is recommended to be based here (as all the branch’s activities take place here).
A branch opened in Belgium has a number of advantages, such as the fact that there is no minimum share capital requested upon registration. Also, there are no taxes on the capital gains.
The process of registering a branch in Belgium was simplified by introducing the one-stop-shop for companies, a centralized organism for applying for company registration, VAT, and for the specific taxes.
The branch will need to perform the VAT registration in Belgium, provided that it engages in the provision of goods or services that are subject to this tax. This tax is also applicable on the provision of digital services, however, many types of activities are subject to exemptions (such as intra-EU supplies of goods). Our company formation experts can give you more details.
Documentation required for opening a branch in Belgium
The following documents must be legalized by a notary from the foreign country and then translated into one of the official languages by an authorized Belgian translator:
- • copy of the registration certificate: a certified copy of the foreign company’s registration certificate, issued by the local registry in its country of origin.
- • the articles of incorporation: belonging to the parent company, as stated above, translated by a sworn translator.
- • the decision of opening a branch: the company’s Board decision to open a branch in Belgium, translated.
- • the appointment of the representative: the decision of appointing the branch’s representative and his personal details.
- • specimen signature: this belongs to the individual appointed as the branch representative, concluded before a notary public.
The previous year’s balance sheet must also be translated and published it into the Belgian Official Journal and register it in the National Bank of Belgium.
The above documents must be submitted to the Registrar office of the Commercial Court and then in the Crossroads Bank for Enterprises. The registration in the Crossroads bank is possible by submitting the documentation to a one-stop-shop for companies. One of our agents who specialize in company formation in Belgium can provide more details on the submission process and can assist foreign company representatives interested in opening a branch.
The Crossroads Bank for Enterprises will issue a registration number, a VAT number and the connection with a payroll agency.
The new 2023 branch may begin its commercial activities as soon as it receives the registration number and the incorporation of it must be published in the Annex to the Belgian Official Gazette.
The branch registration process will generally take no more than a week if all the requested documents are delivered in time and properly. Please remember that this is only an estimated timeframe and the actual time may vary. Foreign company representatives can reach out to our Belgian company formation agents for an analysis depending on their particular conditions.
The branch vs. the subsidiary in 2023
Foreign companies may choose to open either a branch or a subsidiary in Belgium and the choice will depend on the level of liability the foreign corporation is ready to undertake. As stated before, the branch is merely an extension of another existing company and the subsidiary is a separate business form. The latter is treated and incorporated as a local company. This is also reflected in the taxation of the business forms: the subsidiary is subject to tax on its worldwide income while the branch is subject on its Belgium-derived income. The subsidiary is subject to the EU Parent-Subsidiary Directive. This states that the profits distributed by the subsidiary located in one member state to the parent company located in another are exempt from withholding tax when the parent company holds at least 10% of the company making the payment.
The subsidiary will be incorporated most often as a private limited liability company and the foreign parent company will own part of its shares. Because the branch does not need to go through all of these steps, namely the preparation of its own incorporation documents, the general registration process is faster than in the case of the subsidiary. Both the branch and the subsidiary will need to have a registered office in a Belgian city – a mandatory requirement for the registration of all types of companies.
One of our agents who specialize in company registration in Belgium can provide investors with more details about this Directive as well as the regime for subsidiaries, for those who are also interested in knowing more about this alternative option.
If you wish to open a branch in Belgium in 2023, or a subsidiary if this business form better suits your needs, our company formation agents can help you incorporate. The pro-investment regime as well as the bilingual workforce are important advantages for investors, among other key aspects. Those who cannot travel to Belgium for the time being can still send us the main documents required for drafting the constitutive papers and our team will handle the process.
We invite you to watch the following short video on branches:
Foreign investments in Belgium
Belgium is a country that attracts many foreign investments, as reflected by the following figures:
- - in 2018, there were 278 investment projects;
- - this was a 29% increase compared to 2017;
- - between them these projects created approximately 7,360 jobs;
- - the United States was one of the main investors, with 51 of the 278 projects.
- - the second-largest investor was France, with 44 projects and the third largest investor was the Netherlands, with 32 investment projects in Belgium.
The statistical data released by the country’s statistical institute (StatBel) reveals that the number of VAT-registered companies grew in 2021, compared to 2022. The growth was of 4.2%, meaning that there were 1.094.607 VAT-registered companies in Belgium at the end of December 2021.
As far as the turnover recorded by Belgian companies in the fourth quarter of 2022, this was higher than that registered in the fourth quarter of 2021: the increase was of 12.7%, to a total of 456 billion euros, excluding financial and agricultural companies. Companies in the accommodation and food services industries recorded some of the highest increases in their turnover, explained by the fact that in 2022 they were not dealing with the same restrictions.
Foreign investors from any of the aforementioned countries can reach out to our agents if they wish to know more about how to open a company in Belgium as well as how to expand their business in the form of a branch. As mentioned, the branch can be an advantageous business form and indeed it is the preferred manner of expansion for companies in certain business sectors, such as the financial sector. The branch is the manner of entering other markets for banks but also for insurance services providers and other types of companies.
For step-by-step assistance in opening a branch in Belgium, our company formation experts remain at your disposal.
Meet us in Antwerp
Karel Mul is a Doctor of Laws and Master of Roman Notarial Law (Ghent University). He is an experienced corporate lawyer and an active member of numerous international organizations. He will help you establish your company in Belgium and assist you in all business related issues you may encounter.
Call us now at (+32) (0)3 2373426 to set up an appointment with our consultants in Antwerp , Belgium. Alternatively you can incorporate your company without traveling to Belgium.
As our client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Belgium.
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