Belgium


The medieval history of Belgium is traced back to its accession to the Kingdom of Burgundy. In the course of time the territory of the modern Belgium belonged to the Holy Roman Empire, Spain, France and the Netherlands. Belgium became independent from the Netherlands in 1830 as a result of an uprising known as the Belgian Revolution. At the end of the 19th century Belgium came to be a colonial empire with the Congo annexed under the Belgian rule. Belgium was occupied by Germany during World War I and World War II. A feature of its history is the number of wars between other European powers, which took place on the territory of the modern Belgium, causing it to be nicknamed ‘The Cockpit of Europe’. Belgium was one of the member-signatories to the Treaty of Brussels, signed on 17 March 1948, which is considered the precursor to the NATO agreement. Belgium is also one of the founding members of the EU. Both these organisations are headquartered within its territory.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

22 695 USD

22 695 USD

23 195 USD

I want to order «»

Contact method: and / or

Core Services

18 700 EUR

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

Included

— Annual government fees

Stamp Duty and Registrar Office incorporation fee

5500 EUR

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

150 EUR

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

600 EUR

— Apostilled set of Statutory documents

Basic set of documents

Upon registration, a company publishes an apostilled Articles of Association, also called "Status".

Optional services

Nominee Director

Paid-up “nominee director” set includes the following documents

Related services

Tax Residence Certificate

Company’s tax residence certificate for access to double tax treaties network

Tax Number Certificate

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

250 EUR

Basic

simple company structure with only 1 physical person

50 EUR

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 EUR

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

350 EUR

For client with high risk Status

Cost of incorporation, including first year servicing 22695
Cost of annual service, starting from the second year 6675
Open account in 27420
Incorporation timescale for a turnkey company 4 days
Country 26731

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
30.528 sq.km 10.444.268 (2013) Brussels 8.6% (2013) 16
Location Western Europe
National currency Euro
Conditional reduction of currency EUR
Against USD 0.73
Climate, average max and min t° Temperate; mild winters, cool summers; rainy, humid, cloudy; avg. maximum temperature (July) +20°; avg. minimum temperature (January) -1°
Time difference from Moscow - 2 hours
Dialing code +32
State language Dutch, French and German
Ethnic groups Flemish 58%, Walloon 31%, mixed or other 11%
Literacy rate 99%
Credit rating AA+
Government type federal parliamentary democracy under a constitutional monarchy
Executive branch The Belgian Federal Cabinet (Government) appointed by the monarch with the Prime-Minister as its head
Legislative branch Bicameral Federal Parliament consisting of the Senate (71 senators) and the Chamber of Representatives (150 deputies)
Judicial branch The highest courts are the Constitutional Court, Supreme Court of Justice and five civil and criminal courts of appeal (in Brussels, Ghent, Antwerp, Liege, and Mons).
GDP per capita rank 18 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
Yes civil law 4 days No Yes
Types of entity ordinary limited partnership - SCS/GCV; general partnership - SNC/VOF; partnership limited by shares - SCA/CVA; private limited liability company - SPRL/BVBA; public limited company - SA/NV; сooperative company - CV; cooperative company with unlimited liability - SCRI/CVOA; cooperative company with limited liability - SC/SCRL-CV/CVBA
Incorporation timescale for a new company 7 days
Company suffix private limited liability company (société privée à responsabilité limitée/besloten vennootschap met beperkte aansprakelijkheid) - SPRL/BVBA
Sensitive words identical or similar with registered company’s names; registered trademarks; names of organizations and associations
Local registered agent No
Information to be kept at the registered office accounting books, minutes of board meetings and shareholders meetings
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Directors’ meetings/frequency/location Yes / annually
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 No Yes Yes No
Meetings/frequency/location Yes / annually / registered office
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
18550 6200 No
Issued capital payment deadlines Before incorporation
Standard currency EUR
Standard authorized share capital 18550
Standard par value of shares 1
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
25% Regular rate 21% 30%/30%/30% No
Personal tax 25-50%
Corporate tax (in detail) The standard income tax rate is 25%
Capital gains tax. Details There is no separate tax for capital gains, some kinds of capital gains are taxable within the system of corporate taxation with various tax exemptions.
VAT. Details The standard rate is 21%, but lower rates apply to certain categories of goods and services: 6% (live animals, meat, fish, vegetables, fruit, medicine, water supply, etc.) and 12% (restaurant servicing, phytopharmacology, some kinds of solid fuel, etc.).
Other taxes Inheritance tax; Transfer Duty upon death; Tax on Long-term Savings; Circulation Tax; Betting and Gambling Tax; Tax on credit organizations
Government fee No
Stamp duty 12.5%

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes Yes No No No
Requirement to prepare accounts Yes
Double tax treaties network 102
Tax Exchange Information Agreement network 20
OECD member Yes
Offshore/onshore status according to the RF laws No

GENERAL INFORMATION

General

The Kingdom of Belgium — is a small country in Western Europe, a member of the EU, UN and NATO. It borders with the Netherlands in the north, with Germany – in the east, Luxembourg – in the southeast and France in the south and west. It is washed by the Northern Sea in the northwest.
Belgium covers an area of 30,528 sq. km. and has a population of about 10,444,268 (2013) people. In spite of a relatively few number of people living in Belgium, the population density there is one of the highest in Europe. 58% of the population are Flemish, 31% - Walloon, the rest 11% are the people of other nationalities (Italian, French, Dutch, Spanish, German, etc.).
The capital city is Brussels. Official languages of Belgium are Dutch, spoken by 59% of the population, French, spoken by 40%, and German, spoken by less than 1%.
Official currency is Euro (EUR).
Climate of Belgium is maritime temperate. Winter is mild and rainy, summer is cool and rainy. The weather is usually cloudy. It rains very seldom in Belgium, some years there is no snow in at all. There is frost sometimes. The average temperature of January is +3 °С, the average temperature of July is +18°С.
Time difference with Moscow is -2 hours.
Literacy rate is 99%.
Calling code of Belgium is +32.

History

The medieval history of Belgium is traced back to its accession to the Kingdom of Burgundy. In the course of time the territory of the modern Belgium belonged to the Holy Roman Empire, Spain, France and the Netherlands. Belgium became independent from the Netherlands in 1830 as a result of an uprising known as the Belgian Revolution. At the end of the 19th century Belgium came to be a colonial empire with the Congo annexed under the Belgian rule. Belgium was occupied by Germany during World War I and World War II. A feature of its history is the number of wars between other European powers, which took place on the territory of the modern Belgium, causing it to be nicknamed ‘The Cockpit of Europe’. Belgium was one of the member-signatories to the Treaty of Brussels, signed on 17 March 1948, which is considered the precursor to the NATO agreement. Belgium is also one of the founding members of the EU. Both these organisations are headquartered within its territory.

Government type

Belgium is a constitutional monarchy (since promulgation of independence in 1830) and a federal state (since 1980).
The King is the head of state. The monarch has limited powers but represents an essential symbol of the political unity.
The executive power is held by the King and the Belgian Federal Cabinet (the Government), which is responsible to the Chamber of Representatives. The King designates a Prime-Minister as the head of the Cabinet, ministers and a number of state secretaries representing political parties within the governing coalition. The responsibility for government policy actually came to rest with the ministers. It was decided that no document signed by the King would be legally valid unless it was also signed by a minister. The ministers on their part are accountable to the Parliament.
The legislative power is assigned to the bicameral Federal Parliament consisting of the Senate and the Chamber of Representatives. The Belgian Parliament is elected for a four-year term, where the Senate is composed of 71 senators, and the Chamber of Representatives consists of 150.
The judicial system is formed as a pyramid based on justice courts in every juridical canton and topped by Court of Cassation. Belgium is divided into juridical cantons and juridical districts. Every juridical district has its own court of first instance, labor court and trade court. There are also five courts of appeal in Brussels, Liege, Mons, Ghent and Antwerp, as well as jury court in every province. Except from Control Chamber and State Council there is a Constitutional Court in Belgium, established to regulate conflicts between different institutions of federal power in Belgium. Judges are appointed for life by the Belgian monarch.

Economy

Belgium is a highly developed industrial country with intensive agriculture (about 40% of industrial products are exported). It is one of the leading world exporters of primary metals and European exporters of coal. In machine industry the most developed fields are automobile assembly, electrical engineering and radio electronics. Belgium is famous for its production of wool carpets and synthetic carpeting.
The structure of Belgium’s economy is alike the most progressive postindustrial states of the world. 73% of GDP is produced by service sector, 25.7% - by industry and construction, and 1.3% - by agriculture (2004).
Among the advantages of Belgium’s modern economy are its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the more heavily-populated region of Flanders in the north.
With few natural resources, Belgium imports substantial quantities of raw materials and exports a large volume of manufactures, making its economy vulnerable to volatility in world markets. Roughly three-quarters of Belgium’s trade is with other EU countries, and Belgium has benefited most from its proximity to Germany.
In 2011 Belgian GDP grew by 2.0%, the unemployment rate decreased slightly to 7.7% from 8.3% the previous year, and the government reduced the budget deficit from a peak of 6% of GDP in 2009 to 4.2% in 2011. Despite the relative improvement in Belgium’s budget deficit, public debt hovers near 100% of GDP, a factor that has contributed to investor perceptions that the country is increasingly vulnerable to spillover from the euro-zone crisis. Belgian banks were severely affected by the international financial crisis in 2008 with three major banks receiving capital injections from the government, and the nationalization of the Belgian arm of a Franco-Belgian bank. An ageing population and rising social expenditures are mid- to long-term challenges to public finances.

CORPORATE INFORMATION

Legal system

Belgium law is a part of the civil law tradition of continental European legal systems.
The apex of the legal system is the Constitution of 1831, as well as five French codes, which are the basis of Belgian legislation since promulgation of independence in 1831 and were adopted in 1804-1910 when the territory was under the rule of Napoleon. They are the Civil Code, the Commercial Code, the Penal Code, the Civil Procedure Code, and the Criminal Procedure Code. The all underwent big changes. For example,
Companies Act was added to the Commercial Code as an independent part in 1935.

Types of entity

Under the legislation of Belgium, the following types of commercial entities may be established in Belgium to carry on business:
  • ordinary limited partnership - SCS/GCV;
  • general partnership - SNC/VOF;
  • partnership limited by shares - SCA/CVA;
  • private limited liability company - SPRL/BVBA;
  • public limited company - SA/NV;
  • сooperative company - CV;
  • cooperative company with unlimited liability - SCRI/CVOA;
  • cooperative company with limited liability - SC/SCRL-CV/CVBA.

The most common form of business vehicles for foreign companies wishing to carry on business is private limited liability company - SPRL/BVBA). The most important features of BVBA are liability of shareholders according to their capital contributions and limited transfer of shares.

Registration

  1. Draft an incorporation deed: The incorporation deed will be drafted by a Belgian public notary based on the specifications of the shareholders. The incorporation deed must among other things state the details (name and address) of the shareholders who incorporate the company and specify the amount of the capital contribution made by each shareholder. The incorporation deed also includes the company’s articles of association (“statuten”), which determine the rules governing the company. The language of the incorporation documents depends on the location of the company’s registered office: Dutch in Flanders and either Dutch or French in the Brussels Capital Region. The directors will be appointed on incorporation of the company.
  2. Draft a business plan: New legal entities must prepare a business plan covering the first two years of operation. A Belgian accountant can help to draft the business plan. The business plan must include a summary balance sheet that justifies the amount of capital made available by the shareholders in order to run the business. The business plan is not public but remains in the files of the notary who enacted the incorporation deed. If the business goes bankrupt within three years of the date of incorporation, the court at that time may decide to look at the business plan to check whether or not the founders can be found liable for failure to fund the company with sufficient start-up capital. In certain cases, the founders can be held liable for the debts of the bankrupt company. Branches are not required to draw up a business plan.
  3. Deposit of the share capital in a blocked bank account: In the case of a contribution in cash, a bank account must be opened in the name of the company “to be incorporated” with a bank in Belgium and each shareholder must deposit the amount to be paid - up on its shares in this account, prior to the execution of the incorporation deed. This account remains temporarily “blocked” until the incorporation of the company, or failing such incorporation, for a period of three months, after which the funds are reimbursed to the candidate-founders who request this. The bank will issue a certificate, which must be delivered to the notary on the date of execution of the incorporation deed, confirming that the paid-up amount of the capital is in the bank account. After the incorporation, the Belgian public notary will give his consent for unblocking the deposited funds (via a certificate sent to the Bank and confirming the execution of the notarial deed). The notarial deed is deposited at the Registrar Office of the Commercial Court. Belgian banks are familiar with the procedure.
  4. Draw up the appraisal reports (only in the event of a contribution in kind): The shareholders may also make a contribution in kind to the company consisting of assets other than cash, provided that such assets have an economic value (e.g. real estate, shares in another company, a claim for the payment of an amount of money etc). In such cases, an appraisal report must be issued by an auditor (save certain exceptions). This report must describe the assets and the valuation methods applied. In addition, the founding shareholders must prepare a report stating the reasons why the asset contribution is in the interest of the company and, as the case may be, the reasons why they do not agree with the findings of the auditor’s report. Both reports must be delivered to the notary on the date of execution of the incorporation deed. They, together with the incorporation deed, must be filed at the Registrar Office of the Commercial Court by the notary.
  5. Notarize the incorporation deed: The incorporation deed must be recorded in a notarial deed to be executed by the founders and a Belgian public notary. The founding shareholders must be present or represented when the corporate deed is enacted before the public notary. To be represented, a power of attorney must be provided and attached to the incorporation deed. The signature on such a power of attorney need not be legalized.
  6. Register the incorporation deed: A corporation obtains a legal personality separate from that of its shareholders as of the date of filing of the incorporation deed at the Registrar Office of the Commercial Court in the judicial district where the company has its registered office. This filing is handled by the Belgian notary who executed the incorporation deed. The notary is required by law to file the incorporation deed within 15 days. In principle, a company may not enter into any transaction (e.g. lease of premises, purchase of assets etc) until it has a legal identity. However, it is possible for one or several persons to carry out a transaction on behalf of a company “in incorporation” prior to the moment when it acquires a legal identity.
  7. File for publication in Belgium’s Official Gazette: The company’s incorporation deed must be filed for publication in the Annexes to the Belgian Official Gazette - Belgish Sttatsblad Moniteur Belge.
  8. Obtain a corporate registration number: A company may not commence business activities prior to its registration at the Crossroads Bank for Enterprises (CBE). It must be registered at the CBE in the judicial district where it has its registered office. Apart from the fulfillment of other conditions, a company cannot be registered at the CBE unless people having management powers (typically the managing director) give proof of good management skills. Consequently, a certificate of basic knowledge of managerial skills needs to be obtained, based on either a diploma or the experience of the manager. This formality might sometimes prove to be time consuming but can be avoided if the company can prove that it (or its parent) does not qualify as a small or medium sized company (i.e. has more than 50 employees, a turnover above EUR 7,000,000 or a balance sheet exceeding EUR 5,000,000 during two consecutive years). In this respect, a declaration of honour (“affidavit”) by the foreign corporation or its parent is sufficient.
  9. Apply for a VAT identification number
  10. Affiliate with a social insurance fund.

Thanks to access to notarial system www.e-notariat.be, notaries are able to register articles of incorporation electronically with the Central Enterprise Databank (BCE/KBO), the commercial court and the Belgian Official Gazette (Moniteur belge/Belgisch Staatsblad) in a single operation.

Company name

The name of an associate, the corporate purpose or any other name can be chosen as a company name. It should also contain a legal name either in full – société privée à responsabilité limitée/besloten vennootschap met beperkte aansprakelijkheid, or in shortened form SPRL/BVBA.
In order to avoid confusion or unfair competition (so that one company is not mistaken for another), you must ensure that you choose a name which is not already used by another company or which would resemble another company’s name. Similarly, it is also important to verify that the name is not a registered trademark or is not already the name of an organization or association.
In general, a notary public will verify these aspects before the company’s incorporation. Among others, you can search for active registered companies via the Enterprise Crossroads Bank or check the section of the Belgian Official Gazette website which is reserved for commercial companies.

Restriction of activities

In Belgium additional licensing is required for trust, insurance and banking services. In the meantime BVBA are not allowed to distribute funds and carry on insurance activities. There are also some restrictions for foreign investors in such fields as post, energetics, broadcasting, public transport and telecommunications.

Local registered office

Belgian companies must maintain a registered office in Belgium. It should be a real address, not a PO Box.
Accounting books, minutes of Board meetings and Shareholders meetings should be kept at the registered office.

Office lease

A new company developing activities can rent (lease), buy or build premises. Most small and medium sized businesses start by renting space according to their particular needs. Local authorities can assist in finding appropriate premises. For example, in Flanders it would be Flanders Investment & Trade, in co-operation with local development authorities and/or real estate advisers who will prepare an overview of potential locations in the different areas of Flanders, according to the specifications of the potential investor.
One of the typical features of a so-called commercial lease is that the lease is contracted for a nine-year period but can, under certain conditions, be terminated by either party after any three-year period, albeit it under specific conditions for the lessor.
Leases must be registered for tax purposes only and therefore must be in writing, stipulating the duties and obligations of the respective parties. Under Belgian Law, registering a lease also gives more protection to the tenant when the premises are sold by the landlord to a new owner during the execution of the lease.
Generally, a landlord will require a deposit which usually equals three to six months rent. This can be provided by a deposit in cash with a bank or by a bank guarantee. In the latter case, the bank will charge the tenant a small fee.

Seal

It is not required from Belgian companies to have a seal.

Redomiciliation

The redomiciliation of companies either to or from Belgium is not permitted.

COMPANY STRUCTURE

Directors

A Belgian company is required to have a minimum of one director. Director should be properly qualified what should be confirmed by educational diploma or certificate on practical experience. Directors can be residents and non-residents, individuals and corporates. Directors are not bound to be shareholders.
Board of Directors can pass its powers to the managing director. Board meetings are held according to the procedure adopted in the Articles of Association.

Secretary

Secretary is not required in Belgian companies.

Shareholders

Belgian companies may have at least one shareholder. Shareholders can be individuals and corporates, residents and non-residents. Nominee shareholders are permitted.
General Meetings are to be held annually according to the Articles of Association following the end of each accounting. Place of meeting should be at the registered office or at another place specified in the minutes of the meeting.
Information on the company shareholders is disclosed to the local agent and filed on public record.

Beneficiary

Information on beneficiary is not disclosed.

Share capital and shares

The capital must be fully subscribed at the time the company is incorporated, to the amount of €18,550.
Each share subscribed in cash must be at least one-fifth paid up. Shares corresponding to contributions in kind must be fully subscribed at the time of the incorporation. Of the total capital, a minimum of €6,200 must be paid up in the account of the SPRL/BVBA. If the company has only one founder a minimum of €12,400 needs to be paid-up.
All shares are nominative shares and have to be registered in a share register. Bearer shares cannot be subscribed. The transfer of shares takes the form of a declaration of transfer in the share register and is subject to certain transfer restrictions. The shares cannot be transferred unless the transfer is approved by a special majority of partners.

Public access to company information

In Belgium there is an open register of companies - Crossroads Bank for Enterprises (BCE/KBO). It includes the following information on companies:
  • Registered capital amount
  • Credit debt;
  • Registered address;
  • Information on shareholders;
  • Information on directors.

Personal data protection

The European Union directive on data protection sets a number of requirements with which companies processing personal data in any EU country must comply. Belgian law has implemented this directive. When a company established in Belgium undertakes activities that involve (directly or indirectly) the processing of personal information about, for instance, its employees or customers as individuals, it must abide by the Belgian data protection regulations.
The processing of data includes any business operations performed upon personal data such as the collection, recording, storage, use, dissemination or destruction of data. The data protection rules apply to the manual processing of personal data (provided the personal data is, or will be, included in a filing system) and to the processing of personal data by automatic means (e.g. by computer), regardless of whether this is done routinely or only once for a specific purpose.
The processing of personal data is permitted if certain conditions are met - for example, when the individuals concerned have given their consent or when processing is necessary for a company to perform a contractual obligation towards the data subject.
The manner of processing is also subject to specific legal requirements. In particular, data can be collected only for legitimate, specific and explicit purposes. If there is further processing for other reasons, the data subjects must, in principle, give their consent to the new processing. There should also be a relevance between the data collected and the purpose of the processing. In addition, the processed data must be accurate and, where necessary, be kept up to date.
Companies are permitted to transfer personal data to third (non-EEA) countries only if the third country in question ensures an adequate level of protection. These processing operations will also have to be notified to the Commission for the Protection of Privacy, except in case of exemptions based on the applicable rules regarding notifications.

TAXES

Personal income tax

Income tax is levied on the income of Belgian residents received in and outside Belgium, and the income of nonresidents from sources in Belgium.
Income tax is levied at progressive rates:
  • 25% for income up to EUR 13,440
  • 40% for income from EUR 13,441 to 23,720
  • 45% for income from EUR 23,721 to 41,060
  • 50% for income over EUR 41,060

Investment income is taxed under special rules. Interest and dividend income earned through Belgian financial institutions is taxed at the rate of 30%.
Interest on ordinary savings accounts is taxed at the rate of 15%. There are non-taxable sums of interest and dividend income.
Belgian residents pay municipal taxes on income at the rates ranging from 0% to 9%, with an average rate of 7%. Nonresidents pay the tax at the 7% rate.

Corporate income tax

The standard corporate income tax rate is 25%.
A reduced rate of 20% applies to small and medium-sized businesses.
A surcharge of 6.75% is paid on top of corporate income tax, which surcharge can be avoided if sufficient payments of advance quarterly corporate income tax were made.
Subject to certain conditions, dividends and profits from the sale of shares are not subject to corporate income tax. These conditions include at least one-year ownership period of at least 10% of shares or of at least EUR 2.5 million worth of shares. In addition, the subsidiary must be subject to corporate income tax on a similar basis to Belgian conditions.

VAT

The standard VAT rate is 21%.
The rate can be 12% or 6% for certain goods and services.

Social cecurity contributions

The employer’s social security contributions are calculated at the rate of 25%. There are additional contributions to various funds, depending on the sector of economy. The overall rate is usually 27.5%.
Employees pay social security contributions at the rate of 13.07%.
A special social security contribution is also payable at various rates, but not exceeding EUR 731.28 per family per year.

Withholding tax

Withholding tax is levied on dividends, interest, royalties, service fees and certain rental payments.
The usual tax rate for dividends, interest and royalties is 30%.
The tax may be withheld on certain other income payments.
The rate can be reduced under double tax treaties or EU directives, as well as in accordance with domestic law.

Property tax

The basis for annual property tax is a deemed rental value calculated according to special rules.
The tax rate depends on the location of the property and is a combination of regional, provincial, and municipal taxes.

Property transfer tax

The purchase and transfer of Belgian property (except new buildings, the transfer of which is subject to VAT) is subject to a 12.5% registration fee (the Flemish region has lower rates).
The tax base is the price of the transaction or the market value, if higher.

Inheritance and gift taxes

Heirs to the estate must pay inheritance tax (a family home is usually exempted).
Gifts must be made by way of a Belgian notary deed, with tax payable on them.
The tax rate varies depending on the region.

Stamp duty

Stamp duty is payable on transactions related to public funds in certain cases.

CFC Rules

A controlled foreign company is a foreign company taxed at a low tax rate (less than half of the Belgian rate), in which a Belgian company owns, directly or indirectly, individually or together with related parties, more than 50% of the capital, 50% of voting rights or rights to more than 50% of profit.
CFC rules will not apply in a number of cases, including when the CFC’s transactions are not aimed at tax evasion.

Withholding tax rates agreed upon by Belgium in the double taxation treaties

Belgium has entered into various agreements with foreign jurisdictions designed to avoid and eliminate double taxation. Among them are:
  • 102 DTC: Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belarus, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Chinese Taipei, Congo (Republic of the), Croatia, Cyprus, Czech Republic, Côte d'Ivoire, Denmark, Ecuador, Egypt, Estonia, Finland, Former Yugoslav Republic of Macedonia, France, Gabon, Georgia, Germany, Ghana, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Kazakhstan, Korea (Republic of), Kosovo, Kuwait, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Macao (China), Malaysia, Malta, Mauritius, Mexico, Moldova (Republic of), Mongolia, Montenegro, Morocco, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Rwanda, San Marino, Senegal, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Venezuela, Viet Nam.
  • 20 TIEA: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Belize, Bermuda, Cayman Islands, Cook Islands, Dominica, Gibraltar, Grenada, Guernsey, Jersey, Liechtenstein, Monaco, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines.

Foreign exchange control

There are no exchange controls in Belgium. However, the national bank compiles information on cross-border transactions, and transactions with non-residents (including direct investments, security trades and commercial credits) solely for balance-of-payment reporting purposes.

ACCOUNTS

Annual return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.

As for Belgium, there are no requirements for filing Annual Return.

Financial accounts

The financial accounts of Belgian companies must be filed annually and drafted in accordance with Belgian GAAP (Generally Accepted Accounting Rules). Financial statements must be submitted annually with the central bank.
Large companies must publish full annual financial statements (balance sheet and income statements), complying with accounting rules in the EU Fourth Directive or with International Accounting Standards (IAS). Small companies may publish accounts in simplified forms.
Foreign companies with a permanent establishment in Belgium are required to deposit each year (within one month after the general meeting of shareholders and seven months following the closing of the financial year at the latest) a copy of the annual accounts of the head office and consolidated accounts (together with a social balance sheet of the Belgian permanent establishment if it employs personnel in Belgium) with the central bank. This copy of the (consolidated) annual accounts must be drawn up in one of the three languages of Belgium (Dutch, French or German) depending on the jurisdiction of the company.
The financial statements must be audited by a statuary auditor only in case if it is a large company.

Tax returns

The tax period is the same as the financial year, which can be a calendar year or another period of 12 months.
In general, the tax return must be filed no earlier than one month after the approval of financial statements at the AGM and no later than six months after the end of the financial year. Upon request, the tax authorities can extend the filing deadline.
Typically, corporate income tax is paid in advance on a quarterly basis. If the payment based on an estimated income in the current year is not made or is insufficient, a surcharge will be added. The final tax is payable within two months of the tax assessment date.

BUSINESS INCENTIVES IN BELGIUM

Business incentives

In order to stimulate economic growth the federal and the regional governments have implemented certain incentives for businesses that establish operations in Belgium.
The incentives include:

Cash grants

Cash grants are available for investments in tangible fixed assets such as buildings and equipment and in some cases additionally for investment in some intangible assets. Cash grants are calculated as a percentage of the approved investment budget. The maximum level of cash grant available depends on the size of the company and the amount of money the company plans to invest. Subsidies for strategic investments can range from 7.5% to 10% depending on different criteria with a maximum of 1 million EUR.
Besides, there is a number of business development zones where regions can provide more substantial business incentive grants. For example, in Flanders the following cities are classified as development zones:
Diksmuide – Lo-Reninge – Ieper – Middelkerke – Oostende – Wervik – Ronse – Herstappe – Tongeren – As – Beringen – Genk – Leopoldsburg – Heusden-Zolder – Bree – Lommel – Maaseik – Hechtel-Eksel – Helchteren – Dilsen-Stokkem– Lanaken – Maasmechelen – Balen – Dessel – Mol.
From January 2009, an ecological subsidy of 20% (for large companies) or 40% (for SMEs) can be obtained (with a maximum of 1,75 million EUR) for that part of the investment that qualifies as “ecologically friendly”.

Employment incentives

The Belgian Government offers several opportunities to reduce social security contributions for employers. In general, in addition to the so-called “structural reduction” there are also different programs targeted at specific groups.
In particular, the Belgian social security distinguishes between the following six target groups:
  • Older employees;
  • The long-term unemployed;
  • First new hires;
  • Young hires;
  • Employees involved in the reduction of working hours (below 38 hours/week) and the introduction of a four-day week;
  • Employees affected within the context of a re-organisation.

Contributions vary from a reduction to a lump sum.

Tax incentives

1) Foreign Expatriates Taxation Regime
In order to reduce the employment cost for foreign expatriates the Belgian tax authorities introduced a special tax regime for executives and specialists. Provided that both the employer and the employee meet the qualifying conditions for the special tax regime, certain beneficial tax rules will apply.
Given the fact that qualifying expatriates will be considered Belgian non-residents, they are only taxed on their Belgian source income. They will be exempt from taxation in Belgium on foreign passive sources of income such as dividends and real estate. Although expatriates are obliged to declare their worldwide earned group income in Belgium, they will not be taxed on the part of their remuneration corresponding to the number of days worked abroad (travel exclusion).
In addition, expatriates will not be taxed on significant allowances and reimbursed expenses paid to cover the cost of the assignment to Belgium (costs proper to the employer). Tax-free reimbursement of school fees and non-recurring costs such as moving and installation costs are unlimited. Reimbursement of recurring expenses such as cost of living allowance, cost of housing allowance, tax equalization and home leave is limited to EUR 11,250 or EUR 29,750 (depending on the nature of the assignment).
2) Notional Interest Deduction
Under the notional interest deduction, a company will be able to make a deduction from its taxable profits depending on the portion of equity financing. The regime is applicable to all Belgian companies and to Belgian establishments of foreign companies, whatever their size may be.
The notional interest deduction will be calculated by multiplying the total equity by the interest rate for 10-year government bonds (OLOs). The rate is 3.8% (2010). The percentage is equal to the average of the interest rate for 10-year government bonds for the penultimate calendar year preceding the tax year.
3) Investment deduction
Companies acquiring new tangible or intangible fixed assets used in Belgium for business purposes can (under certain circumstances) claim a deduction from their taxable profit amounting to a percentage of the acquisition or investment value of those investments.
The investment deduction does not affect the depreciation base. It is treated as a tax credit in the tax return and (when the profit is insufficient) can be carried forward indefinitely but with certain limits as to the amount.
Either a one-time or a spread investment deduction may be taken at the option of the taxpayer. The onetime investment deduction regime is equal to a certain percentage of the cost price of the investment.
The following investments (amongst others) are not eligible for the investment deduction: inventory, cars, land, real estate to be sold by real-estate companies, assets depreciated over less than three years, assets not used solely for business purposes and assets leased under an operational lease contract.
4) Tax credit for research and development
Companies investing in fixed assets that qualify for the increased investment deduction for patents or for research and development will have the option to apply for a tax credit instead of an investment deduction. The choice for a tax credit will be irrevocable. The tax credit for research and development can be carried over to the four subsequent assessment years. The unused part of the tax credit carry over is fully refundable after five assessment years (including the investment year).
5) Tax deduction for patent income
The Belgian government has introduced a new tax deduction for companies in relation to specific patent income. The deduction is designed to stimulate technical innovations by Belgian companies through R&D activities in relation to patents. In principle, it reduces the effective tax rate on patent income to a maximum of 6.8%.
The tax deduction will apply to all Belgian companies and Belgian branches of foreign companies, as well as to the following types of income:
• Income derived from the licensing of patents by a Belgian company or branch;
• Income derived from the use of patents in the production of patented products by a Belgian company or branch or on its behalf.
The deduction in respect of licensed patents will be equal to 80% of the arm’s length patent income received. For patents used in the production process, the Belgian company or branch will be able to deduct from its taxable profits an amount equal to 80% of the arm’s length royalty the Belgian company or branch would have received had it licensed the patents to unrelated parties.
In the case of patents licensed or acquired from third parties, the basis on which the 80% exemption is applied must be reduced by:
  • Any license payments made to third parties and
  • Any amortization charges on those patents.

6) Tax-free investment reserve
Within certain restrictions, companies qualifying for reduced corporate tax rates (certain small and medium-sized enterprises) can build up a tax-free investment reserve amounting to 50% of their taxable results allocated to the reserves, reduced by:
  • The tax exempt capital gains on shares;
  • 25% of capital gains realized on cars;
  • The reduction of share capital compared to the share capital of the previous income year during which a tax-free investment reserve was built up or increased.

Furthermore, there are some other restrictions related to the tax exemption of the investment reserve (e.g. reinvestment requirement, a time limitation, a limit on the amount that may be exempted etc).
Small and medium-sized companies will have to make the choice between the current system of an investment reserve and the notional interest deduction. They will not be allowed to apply both incentives. Companies applying the investment reserve cannot benefit from the notional interest deduction in a two year period following the relevant financial year.
7) Tax losses carried forward
Prior and current year tax losses incurred by a Belgian company can be carried forward without any limits in time and amount in order to offset future taxable income. However, restrictions apply if there is a change in the control of the company, a merger, a contribution or a disallowed transfer pricing.
8) Depreciation
Depreciation can be applied to formation expenses and to intangible and tangible fixed assets with a limited economic lifetime. It must be taken every year, irrespective of the amount of corporate income, starting from the financial year in which the asset was acquired, produced or received as a contribution.
Depreciation is calculated on the basis of the acquisition value and the useful life of the asset.

ACCOUNTS

Annual return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.

As for Belgium, there are no requirements for filing Annual Return.

Financial accounts

The financial accounts of Belgian companies must be filed annually and drafted in accordance with Belgian GAAP (Generally Accepted Accounting Rules). Financial statements must be submitted annually with the central bank.
Large companies must publish full annual financial statements (balance sheet and income statements), complying with accounting rules in the EU Fourth Directive or with International Accounting Standards (IAS). Small companies may publish accounts in simplified forms.
Foreign companies with a permanent establishment in Belgium are required to deposit each year (within one month after the general meeting of shareholders and seven months following the closing of the financial year at the latest) a copy of the annual accounts of the head office and consolidated accounts (together with a social balance sheet of the Belgian permanent establishment if it employs personnel in Belgium) with the central bank. This copy of the (consolidated) annual accounts must be drawn up in one of the three languages of Belgium (Dutch, French or German) depending on the jurisdiction of the company.
The financial statements must be audited by a statuary auditor only in case if it is a large company.

Tax returns

The taxable period coincides with the accounting year, which may be the calendar year or another period of 12 months.
Generally, the tax return must be submitted at least one month after the date the financial statements are approved by the annual general meeting of the shareholders, but no later than six months after the end of the financial year. Upon request, the tax authorities can grant an extension of the filing date.
Corporate tax is prepaid on a quarterly basis. Penalties are imposed if advance payments based on estimates of the current year’s income are not made or if they are insufficient.
A corporate tax file remains open for audit, assessment and collection for three years, starting form the day following the closing of the accounting year.
As from tax year 2015, companies, legal entities and non-residents will in principle be obliged to file their tax return electronically.

WORKFORCE ISSUES

Recruiting

The simplest and least expensive method to fine local employees is to contact the local government employment agency, e.g. if you are in Flanders, it is Flemish Employment Agency (VDAB). The agency can contact individuals listed on its extensive database and refer candidates for potential employment. There is no charge for these services. It can also assist with training candidates to acquire skills for which there is a shortage in the labor market or with training those who are unemployed.

Employment contracts

Written employment contracts are not required but they are usually recommended. For specific employment conditions to apply, the contracts must be in writing. For example, a written contract will be required if the parties wish to conclude an employment contract for a limited duration, for a specific project or for a part-time job.

Wages

In Belgium there are minimum wages for specific occupations.
To obtain a work permit the following minimum earnings are required:
  • An employee with a “leading function” must earn a gross annual salary in excess of EUR 59,460 (as of 1 January 2009);
  • A “highly qualified” employee (for a maximum term of employment of four years) must earn more than EUR 35,638 (as of 1 January 2009).

Vacations

The number of vacation days to which the employee is entitled is determined by the number of days or months during which services were performed in the previous year. As a rule, employees who are full-time and employed five days a week (the usual arrangement in Belgium) throughout a year are entitled to 20 days of vacation in the subsequent year.

Social security

All persons employed in Belgium by a Belgian employer or by the Belgian branch of a foreign employer are subject to Belgian social security unless agreed otherwise by an international treaty. For instance, workers originating from Member States of the European Economic Area assigned to work in Belgium may remain subjected to their own social security system if they work in Belgium for a limited period of time (up to a maximum of 24 months). Belgium has also concluded bilateral treaties with several other countries such as Algeria, Canada, Chile, Croatia, the Philippines, Israel, Morocco, San Marino, Turkey, Tunisia, Yugoslavia, Japan and the United States.
All employers are required to register with the Federal Social Security Institution (RSZ in Dutch). The employer must pay social security contributions on a quarterly basis. The employer is also responsible for withholding the social security due by employees and for making the necessary payments to the Social Security Administration.
The social security system is mainly financed by contributions from both employers and employees. Employers pay approximately 32% to 35% of the gross salary of white-collar employees and 38% to 41% of the gross salary of blue-collar employees. Employees contribute 13.07% of their salary.
The social security system covers healthcare, sick leave, unemployment benefits, family allowances, maternity leave and statutory pensions. This package provides for much broader coverage than in most English-speaking countries.
Contributions into the system for self-employed persons are limited and therefore, the system for self-employed persons is less generous and it provides for fewer benefits. Self-employed persons are required to join specific social security funds to ensure payment of their contributions and to receive benefits. Directors of companies are considered as self-employed persons and are therefore obliged to pay contributions on the basis of their remuneration as director.

FOREIGN WORKERS

Temporary secondment and expatriation

Belgium classifies a foreign employee’s relationship with his or her employer in one of two ways: temporary secondment or expatriation.
In the case of temporary secondment, the employment relationship is maintained with the foreign company which assigns the employee on a temporary basis to Belgium with regard to organizing, reorganizing or controlling its activities. The employee is subordinate to the foreign employer — he or she continues to receive instructions from, and is required to report to, the foreign management. He or she cannot become an employee of the Belgian company. The seconded employee remains on the payroll of the foreign company which continues to pay his or her salary. In addition, the seconded employee continues to be covered by the foreign company’s social security scheme.
In the case of expatriation, the foreign employee becomes the employee of the Belgian business and is listed on its payroll. The employee receives instructions from the local Belgian business and performs his or her duties under the authority of the Belgian management. The employee is also subject to the Belgian social security system.

Work permit for foreign workers

Foreign workers must hold a work permit to be legally employed in Belgium. For this the application is made with the competent regional immigration authority, if you are in Flanders, it is the VDAB. The Flanders Investment & Trade agency will provide assistance in this matter.
There are two types of work permit in Belgium:
  • type B work permit: the employee will receive a type B work permit which is valid for a maximum of one year (and for employment with one employer) and is renewable. The employer is responsible for obtaining and renewing the permit.
  • type A work permit: an employee can apply for a type A work permit if he or she can prove at the time the application is filed that he or she was employed in Belgium for 4 years (in some cases 2 or 3 years) on a type B work permit (except for some types of work/functions) over a period of 10 years, during which he or she resided legally and uninterruptedly in Belgium. A type A work permit is valid for an indefinite period and for any wage-earning employment.

Certain categories of employees are exempt from the requirement to hold a work permit, such as:
  • Nationals of a Member State of the European Economic Area (EEA) and their spouses, their descendants aged under 21 years or who are still dependent on them, their dependent relatives in the ascending line and their spouses (with the exception of nationals of Bulgaria and Romania).
  • The spouse of a Belgian national and their descendants aged under 21 or who are dependent on them, their dependent relatives in the ascending line and their spouses.
  • Managers and executives who are employed through a local employment contract with a European Headquarter in Belgium.
  • Foreign nationals authorized or admitted to live in Belgium for an unlimited period of time.
  • Some categories of trainees who are assigned intra-group for a period of no more than three (3) months.
  • Students who are staying legally in Belgium can work without a work permit during school holidays (the Christmas holidays, the Easter holidays and the summer holidays).
  • Students on training courses that are mandatory as part of their studies in Belgium.

In general, work permits are only issued if it is absolutely impossible to find a suitable local employee in the labor market within a reasonable time. In addition, such permits are only issued to nationals of countries that have signed international treaties about the employment of employees. However, these rules do not apply to employees who can be considered highly qualified employees and to executives.
The request to employ a foreign citizen and to obtain a work permit for him or her must be made by the employer in Belgium. If the employer is not established in Belgium, they should appoint a person or company domiciled in Belgium who will make the application on their behalf and will carry out all steps and formalities.
A work permit will normally be issued after about four (4) weeks (although it can take longer depending on the region and the time - holidays etc).
Please note that permission to employ a foreign national will be granted by the authorities by returning a special form to the employer. The issuing of permission to employ a foreign employee automatically entails the issuing of a type B work permit to the foreign employee. The type B work permit is always linked to a specific job with one employer. If the foreign employee gets another job within the same company or starts working for another company, a new type B work permit needs to be applied for.
The documents that need to be attached to the work permit application file are determined by the employment status of the employee in Belgium (whether he or she is a seconded employee, exempt from Belgian social security or a local employee and subject to Belgian social security).

Minimum salary requirements

In order to obtain a work permit an employee will need to earn the following minimum wage:
  • Executives fulfilling a leading function in a Belgian company must earn a gross annual salary in excess of EUR 65,771;
  • A “highly qualified” employee (for a maximum duration of four years employment) must earn more than EUR 39,422.

Note that these amounts are adjusted annually for inflation.

Visa

Once in possession of the work permit, the foreign national should apply for a visa with the competent Belgian consular authorities of the place of residence abroad. For a period of stay of less than 90 days in Belgium, a type C visa is generally required (although citizens of some countries are visa exempted for such short periods). For a period of stay of more than 90 days, a type D visa should be applied for.
Generally, the hereafter mentioned documents are required by the Belgian Embassy/Consulate to issue a type D visa:
  • A work permit;
  • An original certificate of good conduct covering the last five (5) years issued by the police department of the applicant’s place of residence;
  • A valid passport;
  • A medical certificate;
  • 3 identity photographs;
  • 2 or 3 visa application forms duly completed and signed (these forms can be obtained at the Embassy and can also be completed there).

The person should check with the relevant Embassy/Consulate whether supplementary documents are required in order to obtain the visa. The processing of the visa application takes approximately two weeks if the application file is complete.
Instead of applying for the type D visa, the holders of a work permit can apply for a type C visa and submit a number of additional documents upon arrival in Belgium.

Residence permit

Upon arrival in Belgium, the foreign national should report to the city authorities in his or her place of residence in Belgium (usually within 8 days after his or her arrival) in order to be entered in the register of foreigners of the municipality and toobtain a Belgian residence card (the so-called Electronic ID card).
To this end the city authorities will ask for the passport with visa stamp, the work permit and lease contract in Belgium (and a certificate of good conduct if the foreign national came over on the basis of a type C visa). Depending on the municipality, supplementary documents may be requested.
In principle, the Belgian residence card is valid for a period of one (1) year and can be renewed each year on the basis of an extended work permit.
The family members of a worker who holds a residence permit will receive authorization to stay in Belgium from the Federal Ministry of Internal Affairs through the Aliens Department.

Limosa declaration

For all employees coming to work in Belgium temporarily or partially and who, in principle, are not subject to the Belgian social security system, a specific declaration - the so-called Limosa declaration must be made before they actually start their work. This declaration can be made via the Internet at www.limosa.be.
When filing the Limosa declaration, the employee’s name, contract details, place of employment, type of employment (full or part time), the period of assignment and other information will need to be provided.
As a consequence of the declaration, foreign employers are exempted, for a period of 12 months (as from the employment of the first employee on the work place where the employment activities are performed) from drafting and maintaining work rules (i.e., a mandatory document containing further information on the working schedules, holidays, notice periods, etc.), the employees’ pay slips and individual accounts (as long as such documentation is provided for in the country of origin) and from the compliance with the regulations on controlling part-time employees.
Exemptions are created for, amongst others, short term assignees (business trips in limited circles up to 20 consecutive days with a limit of 60 activity days per calendar year) and certain categories of trainees.
The Limosa declaration is a legal requirement. In case of non-compliance with the registration requirement, both foreign employer and the Belgian end-user can be sanctioned with criminal and/or administrative penalties.
In order to demonstrate the affiliation to the social security regime of the sending state, the employees need to obtain an official document from the social security institutions of the sending state certifying which social security regime applies prior to their employment in Belgium.

CUSTOMS LEGISLATION

EU customs legislation

EU customs legislation relates to the international trade of goods between the EU and non-EU countries. The customs authorities are responsible for collecting and safeguarding customs duties and for the enforcement of compliance with EU customs legislation.
Customs legislation not only relates to tariff measures such as customs (and equivalent) duties, but also to non-tariff measures such as import quotas as well as other measures to safeguard public health.
Belgium is part of the European Union (EU), which consists of 28 Member States. The EU is built on a customs union between its member states, which implies that:
  1. no duties or other trade-barriers are imposed on trade between the member states (intra-community trade);
  2. a common external tariff (customs duty) is imposed on trade with third countries (import and export transactions).

Consequently, internal and external trade of the EU member states as well as the main customs procedures are governed by European legislation. The main EU legislation is set out in the Community Customs Code (CCC) and its Implementing Provisions (CCIP). The CC and CCIP will be replaced by the Union Customs Code and its implementing acts and delegated acts as of May 1, 2016. However, some aspects such as enforcement law are still organized on a national (Belgian) level.

Import and distribution

Import and/or distribute via Belgium is one of the options. Because of its central location in Europe and its logistics infrastructure, Belgium is a major player in importing goods in the EU and a gateway for distribution within the wider European market. Consequently, the region has developed a flexible system of law and tax treatments related to imported goods (whether they are ultimately destined for other EU countries or for countries outside the EU). In particular, various indirect tax incentives need to be mentioned when importing and distributing products via Belgium:
  • The business-orientated approach of the Belgian customs authorities, who are very approachable to companies wishing to discuss and resolve possible customs-related issues;
  • The pro-active approach of the Belgian customs authorities to introduce new trade facilitations, such as, extended gateways, centralized clearance light, entry into the records, self-assessment and so on;
  • Continuous efforts to grant more benefits to AEO accredited companies focusing on system-based controls in lieu of transaction-based controls;
  • Implementing by Belgian Customs of new IT-applications to fully automate export procedures and to enable single window and on-stop-shop controls as well as striving towards fault tolerance customs IT systems;
  • Introducing, in the short term, of new risk assessment based control tools;
  • Various VAT incentives, which are of particular benefit to companies importing and distributing via Belgium.

In 2008 the Authorized Economic Operator (AEO) accreditation has been implemented in Belgium and the other EU Member States. The AEO status (which is valid in the entire EU and is recognized by all the Member States) is a must to apply for simplified customs procedures and to benefit from guarantee waivers and less controls. In future, “secured trade lanes” with none (or very little) customs control will be created between countries (regions) with similar AEO accreditation programmes.

Importation of goods

The rules for determining the customs value of imported goods are based on European legislation. The basic customs valuation method for determining the customs value of imported goods is the transaction value of the imported goods, i.e. the price actually paid or payable for the goods when sold for export to the EU (sales transaction). In case there is no sale transaction upon import, the customs value shall be determined using another customs value method, in sequential order.
There are two types of origin of the imported product, namely:
  1. Non-preferential origin rules are used to various commercial policy measures (such as anti-dumping measures, quantitative restrictions or tariff quotas), as well as for statistical purposes. All goods have a non-preferential origin status;
  2. Preferential origin rules are set out in (autonomous or bilateral) preferential arrangements and are used to determine whether a good is originating in a certain country (or group of countries) in order to benefit from a preferential duty treatment upon importation. Goods have only preferential origin status provided that a preferential arrangement is in place and that the goods meet the origin criteria laid down in the preferential arrangement.

Customs procedures

From the moment goods are introduced into the customs territory of the EU they shall be covered by a summary declaration and a notification of arrival and are subject to customs supervision, and must be taken to a customs office or to a customs-approved location to be submitted to customs authorities. Goods transported by a sea vessel can be temporary stored for 45 days. All incoming goods transported by another means of transportation (airplane, inland marine vessel or truck) can be temporary stored for 20 days. Within this timeframe, the goods must be declared for an approved treatment by customs (either a customs procedure, entry in a free zone/warehouse, re-exportation or destruction/abandonment to the Exchequer).
Goods which enter the customs territory of the EU can be placed under the following customs procedures:
  1. Release for free circulation (importation): confers on non-EU goods the status of EU goods. It aims at fulfilling all import formalities so that the goods can be placed on the EU market like EU goods. Release for free circulation will entail the payment of duties (if any) and the application of commercial policy measures and in principle requires lodging an import declaration.
  2. Transit: The external Community transit system allows the movement of non-EU goods within the EU under suspension of import duties and other taxes and the non-application of commercial policy measures. The internal Community transit system allows the movement of EU goods within the EU passing a third country (e.g. goods shipped from Belgium to Italy passing through Switzerland) without any change in their customs status (EU goods) and the movement of EU goods to or from or place which does not belong to the EU VAT territory. The transit system requires a transit declaration, which will be lodged (and discharged) electronically via the New Computerized Transit System (NCTS).
  3. Temporary admission: When goods are temporarily imported, they can be granted a partial or total exemption of import duties and import VAT (provided the goods are subsequently re-exported without having undergone any transformation).
  4. Customs warehousing: This procedure allows the storage of non-EU goods to postpone (final destination of the goods within the EU) or to avoid (final destination outside the EU) the payment of import duties, import-VAT and other charges and the application of commercial policy measures, until the final destination of the goods is known.
  5. Inward processing relief: The IPR procedure allows non-EU goods to be processed whereby the processed goods are to be re-exported outside the EU. Processing operations can comprise the working (assembly), processing and repairing operations.
  6. Processing under customs control: The PCC procedure allows non-EU goods subject to (high) import duty rates to be processed under suspension of import duties and other charges and commercial policy measures whereby the processed goods are released for free circulation at the more favorable (lower or nil) import duty rate (raw materials to process pharmaceutical products are subject to import duties but pharmaceutical products aren’t, therefore the PCC procedure is used to avoid the payment of duties on the raw materials).

Sales operations

Several options are available for setting up sales operations through third parties in Belgium. The most important options are: the agency agreement, the distribution agreement and the franchise agreement.
Agency agreement
An agency agreement (handelsagentuurovereenkomst) is a contract between an agent and a principal. The agent is an independent commercial intermediary who acts on a permanent basis for a principal to promote and sell the principal’s products. The agent (handelsagent) reveals that he acts on behalf of the principal. He merely passes orders to the supplier of the goods and is not the contracting sales entity. He cannot act as the importer of the goods. The principal/owner of the goods will have to act as the importer of the goods. An undisclosed agent (“commissionnair”) does not reveal his principal - he acts in his own name, but on behalf of the principal/owner of the goods. He contracts with the customers and can act as an importer of the goods.
The status of the agency agreement (“handelsagentuurovereenkomst”) is regulated in a flexible manner by European legislation. This legislation was transposed in Belgium by the law of 13 april 1995 regarding the agency agreement.
Distribution agreement
A distribution agreement is a contract between a distributor of goods and a manufacturer or supplier. A distributor is a commercial intermediary who sells to customers (in his own name and on his own behalf), products acquired from the manufacturer or a supplier. The distributor can act as importer of the goods. Distributors with limited functions and risks are entitled to small sales margins.
Belgian law does not regulate distribution contracts as such, but provides several very specific rules with regard to their termination. Parties are still entitled (as they deem appropriate), to agree the terms and conditions of their relationship within the usual limits of the general principles of law and public order. The law of 27 July 1961 regarding the unilateral termination of the exclusive concession agreements granted for an indefinite period of time, grants distributors specific protection from termination of the contract by the principal only when the distribution agreements are exclusive, semi-exclusive or impose such substantial obligations on the distributor that he would suffer considerable hardship in the event of termination.
Franchise agreement
There is no legal definition of a franchising agreement. Generally speaking, under a franchising agreement for sales operations the “franchisor” makes available to the “franchisee” his knowhow and his trademarks and trade name, as well as other differentiating elements of his business in order to make sales, in return for a fee/percentage of gross monthly sales.
Under Belgian law there are no specific rules governing franchising. Parties are thus free, within the framework of the general principles of contract law and public policy, to enter into contracts as they wish.

COMPETITION LAW

Overview

Competition policy falls within the jurisdiction of the Belgian Federal Government. Belgian Parliament has lately promulgated the Act of 3 April 2013, entered into force on 28 May 2013, thereby replacing the competition Act of 10 June 2006. Under the new Act, the authority responsible for enforcing competition law is the Belgian Competition Authority (“Belgische Mededingingsautoriteit”). It receives complaints and notifications, conducts investigations and has the decision making power in competition matters.

Mergers and acquisitions

The law does not change the former system of mandatory notification and prior approval for concentrations involving businesses with a turnover exceeding a defined threshold. If the combined turnover of the businesses involved in a merger or acquisition (not necessarily restricted to the parties) exceeds EUR 100 million in Belgium and the turnover of each of at least two of the participating businesses exceeds EUR 40 million in Belgium, the transaction is subject to mandatory pre-merger filing. However, the transaction is not subject to control in Belgium if the merger or acquisition has an EU Community dimension and is therefore subject to EU jurisdiction (unless the merger or acquisition is referred back to the Belgian authorities by the EU Commission pursuant to Regulation (EC) 139/2004). As a rule, mergers or acquisitions have an EU dimension if the combined aggregate worldwide turnover of all entities involved is more than EUR 5 billion and the aggregate EU turnover of at least two of those entities is more than EUR 250 million, unless each of the entities involved derives more than two-thirds of its aggregate EU turnover within one member state. However, in some specific circumstances a transaction that does not meet these criteria will nonetheless be considered as having an EU Community dimension.
Mergers or acquisitions will be declared inadmissible if, as a consequence, they hinder significantly effective competition in the Belgian market or a substantial part of it, for instance by creating or strengthening a dominant position. Any merger or acquisition where the undertakings involved have a combined Belgian market share of less than 25% must automatically be approved by the Competition College.
Decisions with respect to concentrations will take into account the need to maintain and develop effective competition in the national market in view of the structure of all markets involved and the existing or potential competition from within or outside Belgian territory. Further, factors such as the market position of the companies involved, their economical and financial power, options with respect to the suppliers and customers, legal constraints for accessing the market, development of supply and demand of the products and services involved, technical and economical progress, etc., are taken into consideration in so far they benefit the customer and do not hamper competition.
A merger or acquisition must be notified to the general auditor with a view to the transaction being submitted for the prior approval of the Competition College. The notification must take place before implementation of the transaction and after signing of the transaction, publication of the takeover or acquisition of a controlling interest. It is also possible to notify on the basis of a draft agreement provided that the parties intend to conclude an agreement that does not differ from the draft that was notified. Notification is mandatory. The transaction may not be implemented before a decision has been made by the College.

Procedure of merger and acquisition

First phase
Examination: The first-phase investigation period starts running from the next business day after receipt of the notification with the general auditor. No later than 25 working days after day of receipt of the notification, a draft decision is submitted by the appointed auditor to the general auditor, provided that the application contains all required information. A copy of the draft decision is provided to the notifying parties by the auditor. The parties have access to the file’s non-confidential documents (including Competition Service correspondence with clients, competitors and third parties). The parties may also submit comments. When the auditor considers that the admissibility of a transaction is questionable, he shall inform the parties at least 5 days prior to filing his report. The undertakings then have a 5 working days period during which they may underwrite commitments with a view to the transaction being declared admissible.
Decision of the Competition College: Within 40 working days after day of receipt, the College can decide either: (i) that the transaction does not fall within the scope of the law, or else (ii) that the transaction falls within the scope of the law and in that case conclude (a) that the transaction is admissible subject to compliance with the commitments underwritten, or (b) if it considers that there are serious doubts as regards the admissibility of the proposed transaction that a second-phase investigation must be initiated. In that case, the auditor will be required to provide a second report no later than 30 working days following the decision of the College, or even (iii) not to take a decision (in which case the transaction will be deemed to be approved once the 40 days period has expired). The period will be extended with 15 working days if the parties underwrote commitments with a view to the transaction being declared admissible.
Second phase
In the event the Competition College decides to initiate further investigations, the auditor examines the matter and provides a reviewed draft decision. Parties have up to 20 working days after such a decision to provide the auditor with suggested commitments in view of obtaining the admissibility of the transaction. The revised proposal must be submitted to the Competition Council within 20 working days after its decision to initiate further investigation. When parties submit commitment proposals, this term is prolonged with the time required for parties to submit them. The Competition College is required to decide with respect to the admissibility of the transaction within 60 days after initiating procedure, unless parties submitted commitment proposals. The decision is deemed favorable in the absence of a decision within this time period.
Simplified procedure
The parties may apply for a simplified procedure. The auditor will confirm no later than 15 working days after a full application has been filed, whether or not he considers that the conditions for the application of the simplified procedure are met and whether the concentration is admissible.
Appeal
Notifying parties and third parties who appeared before the Competition College may appeal the decision of the College before the Court of Appeal of Brussels within 30 days of notice of the decision.

Restrictive Practices

All agreements, decisions and concerted business practices that have as their objective or effect the distortion, prevention or restriction of competition to an appreciable extent, as well as abuse of a dominant position, are prohibited and may result in fines. Following the modernization of EU competition law, Belgium has abolished the prior notification system that was previously in place. Companies will now need to make a self-assessment and national courts (if called upon in the course of litigation) will be competent to rule whether an agreement merits exemption. The Belgian Competition Authority may publish guidelines to define the policy conducted as regards the definition of the various concepts included in the legal definitions.
Companies in a dominant position must not abuse this position. Dominant position is legally defined as the position that enables a company to hinder actual competition, thereby allowing it to behave independently of its competitors, suppliers and customers. There is no market-share threshold to determine this dominance of the market. Examples of abuses include refusal to supply as well as discriminatory, predatory or tying practices. Tying practices are practices in which the dominant seller refuses to sell its products unless the buyer also purchases another product. No exemption from the ban on abusing a dominant position may be obtained from the College.

Fines

Fines of up to 10% of the Belgian turnover can be imposed on companies that engage in restrictive practices (including abuse of a dominant position) or that have implemented a merger or acquisition without prior approval. A fine of up to 1% of the same turnover can be imposed in the event that a company willfully, or by negligence, provides incorrect or incomplete information in reply to a request for information from the authorities or if it proceeds with a merger or acquisition without prior notification even if the concentration is later deemed admissible.

INTELLECTUAL PROPERTY

Trademarks

Trademarks are defined as any name, drawing, symbol, stamp, letter, figure, shape of products or packaging and any other sign or any combination of these adopted and used by a manufacturer or merchant to identify and distinguish his goods from those manufactured or sold by others.
Trademarks may cover products or services. Most trademarks are individual, but labels (or collective trademarks) are regulated too. Trademark rights in the Benelux countries are generally conferred by the first registration and not by the first use of the trademark. However, in order to avoid abuses several exceptions are stipulated which grant a priority right to the first user.
The application for registration is submitted to either the Belgian administration or to the Benelux Office for Intellectual Property at The Hague. The authorities who receive the application will, upon the explicit request of the applicant, conduct an anteriority search that will enable the applicant to determine whether the proposed trademark is or is not in conflict with an existing trademark.
As soon as the formalities are fulfilled, the authorities will publish the application. Within 2 months, starting from the first day of the month following the publication of the application, the owners of earlier trademarks can object (under specific conditions) to the registration of a new trademark by filing an opposition.
Any trademark protection sought in Belgium will apply to all three Benelux countries: the Netherlands, Belgium and The Grand Duchy of Luxembourg. The cost of Benelux protection (in maximum three classes) amounts to about EUR 600 (including agent fees and official taxes, excluding VAT).
Any trademark protection sought in Belgium will apply to all three Benelux countries: the Netherlands, Belgium and Luxembourg.
The cost of Benelux protection amounts to about EUR 600 (including agent fees and official taxes, excluding VAT).
Apart from a Benelux Trademark, there is also the possibility of obtaining a Community Trademark that grants protection in all 27 Member States of the European Union. A Community Trademark application must be filed with, and is granted by, the Office for Harmonization in the Internal Market (OHIM) in Alicante.
The cost of protection across the entire European Union amounts to some EUR 2,500 (including agent fees and official taxes, excluding VAT).
Once the registration procedure is completed, the holder is granted protection. This protection lasts for ten years and can be renewed without limitation. Loss of protection can occur if the genuine use of the trademark has been suspended for an uninterrupted period of five years. With limited exceptions, the trademark may not be modified after it has been registered or at the time of renewal. A holder of a trademark can oppose its unlicensed use (i.e. if the distinctive or advertising function of the trademark is under attack, which generally occurs when the trademark or a similar sign is used abusively by another business in respect of identical or substantially similar products or services). The holder can go to court to obtain an injunction against its use. Monetary damages or fines can, as the case may be, be imposed.

Copyright

Copyright protection in Belgium exists from the moment that the original created expression or presentation is produced, without any registration being required. Copyright can only be created by natural persons. However, copyright, with the exception of the moral rights it includes, is freely transferable to corporate entities. In a situation where there is more than one creator of a work, each creator can separately exploit his or her own contribution to the work, provided such exploitation does not compromise the exploitation of the common work. Alternatively, the better solution is that all of the creators settle the exercise of their rights contractually. However, even if it is not possible to split the contributions and the authors did not enter into an agreement, each creator is entitled:
  • To pursue (in his or her own name and without any intervention of the other creators) any infringement upon the copyright;
  • To demand compensation for his or her part;
  • Where the creator of the work is unknown, the editor holds the rights until authorship is determined.

Copyright is valid for up to 70 years after the death of the author. In cases of multiple authorships, this period is calculated from the time of death of the last survivor. Where the author is unknown, the original publication date is used.
Belgian copyright law makes certain distinctions in respect of the legal protection of copyright. Pecuniary rights (i.e. the right to control whether and how the work will be reproduced and the right to prevent the work from being made available to the public) are typically associated with property rights and may be transferred or licensed. In turn, moral rights (i.e. the right to have the authorship known, to decide when the work will be disclosed and to oppose any modification of the work) are included in the copyright definition as artistic integrity. In principle, moral rights as opposed to pecuniary rights are inalienable.
Copyright protection mainly includes:
  • The right to control the method of reproduction and the method of communication of the work;
  • The right to have the authorship known;
  • The right to decide when the work will be disclosed;
  • The right to oppose any modification of the work.

Patents

Patent protection is available to inventions which are new, which involve an inventive step and which are used for industrial applications. The Belgian Patent Act clearly states that inventions are patentable even if they concern a product consisting of or containing biological material (i.e. any material containing genetic information and capable of reproducing itself or being reproduced in a biological system) or a process by means of which biological material is produced, processed or used. To qualify as an invention, an item may not belong to the current status of technology. Patents can be obtained for a new product, a new process, a new application of known means or a new combination of known means.
Applications for a Belgian patent may be filed by the inventor or his assignee (such as his employer). The patent application is filed with the Ministry of Economic Affairs. The above-mentioned application is submitted on a form provided by the National Patent Office. The filing procedure involves the submission of technical drawings and specifications that must be sufficiently detailed to allow an individual, who possesses minimum qualifications in the relevant field, to create and assemble the device without too many problems.
Patent protection lasts for 20 years. To be granted protection, a search is required. Once a patent is registered, the holder must pay annual taxes on the patent that accrue from the third year after the granting of the patent. The tax on a Belgian patent starts at EUR 35 for the third year and amounts to EUR 545 in the 20th and final year. Patent protection includes the exclusive right to exploit the invention and to grant licenses or to assign the patent. However, there are several exceptions relating to patent protection. Where the holder fails to make the technology available to the public, protection is not granted.

Software

Within the Member States of the EU, computer programs may be protected by copyright and by patent, provided, of course, that the protection conditions of both protection means are met.
Copyright protection applies to the expression in any form (the source or object code) of a computer program (i.e. the software as such), its interfaces and the preparatory design material. As a general principle of copyright law, the ideas and principles that underlie any element of a computer program, including those that underlie its interfaces, are not protected by copyright. The computer program must be original in the sense that it is the author’s own intellectual creation. The copyright protection of a computer program that meets the aforementioned protection conditions is not subject to any formalities. The owner of the copyright of a computer program is the natural person (or group of natural persons) who created the software. However, it is important to note that under Belgian law the employer has been designated as the copyright holder with respect to computer programs made by one or more employees in the exercise of their tasks or following instructions given by the employer, unless otherwise provided in the employment agreement. If the software is developed by independent contractors, a transfer of the intellectual property rights to that software will have to be provided for contractually, if the company having ordered the computer program wishes to acquire copyright title to the given software. However it is important to note that in accordance to Belgian copyright law, only pecuniary rights are transferrable. Moral rights are in principle inalienable. To avoid controversy, a clear contractual agreement is always advisable, even in the employer/employee relationship. With respect to the duration of copyright protection, the general rule applies.
In principle, computer programs as such (and methods of doing business) are excluded from patentability in Europe (as opposed to the USA and Japan). The European Patent Office has accepted that a computer program will not be excluded from patentability under the European Patent Convention if, when it is run on a computer, it produces a further technical effect that goes beyond the ‘normal’ physical interactions between the program (software) and the computer (hardware). Merely running software is not sufficient. Anything using technical means can be considered an invention, however the inventive step must be found in the technical solution. E.g. production process control software could be patentable if the result is a change in the production process that enhances production capacity like for example the speed, resources, power, security etc. In order to be patentable, the computer program must in any case meet the conditions that apply for all types of inventions.

Designs and models

As in the case of trademarks, there is a Benelux system that co-exists with a European Community system. The Benelux law involves the same criteria for validity and infringement and the same lifetime as those for Registered Community Designs. Under those rules, protection is granted to the appearance of the whole or a part of a product resulting from the features, particularly the lines, contours, colors, shape, texture and/or materials of the product itself and/or its ornamentation.
In order to be protected, the design must be new and have an individual character. A design is considered new if no identical sign has been made available to the public before the date of application for registration. A design has an individual character if the overall impression it produces on informed users differs from the overall impression produced on such users by another design that has been previously made available to the public. No protection is granted to the features of appearance of a product that are solely dictated by its technical function, or to the features of appearance of a product that must necessarily be reproduced in their exact form in order to permit the product, in which the design is incorporated (or to which it is applied to be mechanically connected to, or placed in, around, or against another product), so that either product may perform its function. Benelux designs and models must be registered in order to be protected. Community models do not necessarily have to be registered, but there are two major differences between a Registered and an Unregistered Community design. The first difference is the duration of protection: an Unregistered Community Design is granted protection for three years, whereas Benelux models and a Registered Community Design are granted protection for a term of five years, renewable up to a maximum of 25 years. The second difference is that the Registered Community Design will protect the owner against copying, as well as against the independent development of an identical or similar design, whereas the Unregistered Community Design will only protect the owner against the copying of his design. It is possible to combine copyright protection with the protection granted by the Laws on Designs and Models.
Costs for registering a Benelux Design or Model amount to some EUR 400 (including agent fees and official taxes, excluding VAT). Costs for the registration of a Community Design amount to some EUR 730 (including agent fees and official taxes, excluding VAT).

Database protection

A database is a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means.
Within the EU, double protection is possible, provided of course, that the protection conditions are met for each protection regulation.
  • In EU Member States, databases that, by reason of the selection or arrangement of their contents, constitute the author’s own intellectual creation are protected as such by copyright. To be protected under copyright regulations the selection and/or the arrangement of the contents must show a certain originality (there is no protection of the selection and/ or the arrangement that is logical and therefore the obvious choice). The owner of the copyright relating to a database is the natural person, or group of natural persons, who created the database. However, it is important to note that where the legislation of the EU Member States permits, another legal person may be designated as the database right holder. Under Belgian law, the employer has been designated as the database right holder with respect to databases that are made in the non-cultural sector by one, or more, employees during the exercise of their work or following instructions given by the employer.
  • All of the EU Member States provide rights for the maker of a database, which shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents, to prevent extraction and/or re-utilization of the whole, or of a substantial part (evaluated qualitatively and/or quantitatively), of the contents of that database. This sui generis right applies irrespective of the eligibility of the database (structure) for protection by copyright or by other rights. Moreover, it applies irrespective of eligibility of the contents (e.g. pictures) of that database, for protection by copyright or by other rights. The proprietor of the sui generis right is the maker of a database (i.e. the person who takes the initiative and the risk of investing). This excludes employees and subcontractors as holders of the given right. No formalities are required for a database to become eligible for the given protection. With respect to the duration of the sui generis protection, the right runs from the date of completion of the making of the database and expires 15 years from January 1 of the year following the date of completion. Any substantial change (evaluated qualitatively or quantitatively) to the contents of a database, including any substantial change resulting from the accumulation of successive additions, deletions or alterations which would result in the database being considered a substantial new investment (again evaluated qualitatively or quantitatively), shall qualify the database resulting from that investment for its own 15-year term of protection. The proprietor of the sui generis right can therefore organize some kind of eternal protection for the database.

Trade secrets, confidential information and special know-how

Generally speaking, trade secrets, confidential information and special know-how are not considered intellectual property. However, they are granted some protection. A party seeking to protect such information must look at other areas of legislation: contract and labor law, fair trade practices legislation and criminal law. The protection available to the holder of such information is determined by the nature of the infringement. An employee who violates the obligation of confidentiality, included in labor law, risks immediate dismissal, paying damages to his employer and, if it involves fraud, criminal prosecution. When the beneficiary of the know-how is a third party, a disclosure of the know-how can be avoided with a confidentiality agreement. If there is no contractual provision to protect the rights, the damaged party can seek remedy under either the Fair Trade Practices Act or the Civil Code. The harmful activity can be stopped by court order and/or monetary damages can be awarded.

Enforcement of intellectual property rights in Belgium

The various Belgian Intellectual Property Laws, the International Treaties, valid in Belgium, and the Belgian Code of Civil Procedure, all contain provisions allowing the proprietor of an intellectual property right to request the Belgian Court to grant various enforcement measures. Examples are:
  • Measures relating to the gathering and protection of evidence (such as the unilateral appointment by the Court of an expert with a mission to ((amongst others)) describe the alleged infringing goods);
  • Provisional and precautionary measures (such as a Court order to provisionally stop the commercialization of the alleged infringing goods, under a penalty);
  • Corrective measures (such as a recall from the channels of commerce);
  • Damages.

Apart from those (civil) measures, the Belgian laws also provide for penal sanctions (fines and even imprisonment) for certain specific infringements (e.g. malicious or fraudulent copyright infringement).

ENVIRONMENTAL LAW

Environmental regulation

Investors setting up a business in Belgium need to obtain the necessary permits and ensure compliance with environmental law. Environmental regulation in Belgium is primarily the responsibility of each region, although the Federal Government does retain authority over certain areas such as product standards, waste shipments, protection of the marine environment and ionizing radiation.
It is important to know that the Belgian Federal Government must comply with EU regulations and standards on this subject.

Environmental permits

An environmental permit is required for a number of specified activities. A classification has been established, based on how the activity affects the environment.
  • Category I: This category includes truly hazardous activities such as the production of pesticides with a yearly capacity of more than 30,000 tons. For these activities you must obtain a permit from the provincial authorities. After an approval procedure involving advice from several specialist government agencies, the provincial authorities with jurisdiction over the operation site will decide if, and under what conditions, the permit can be authorized. The approval procedure does involve a prior investigation of the environmental impact of the activity.
  • Category II: This category includes activities that are deemed less harmful to the environment. For these activities a permit must be obtained prior to the start of operations. The approval procedure is similar to that applying to category I activities. Example: abattoirs and privately-owned slaughterhouses for poultry and rabbits that can handle 100 to 1,000 animals a day; storage facilities for liquids with a flash point above 100°C, holding capacity of over 50,000 liters up to 5,000,000 liters.
  • Category III: This category includes activities deemed to have “limited” effects on the environment. Such activities require only prior notification to the municipal authorities of the site where the activities will be carried out. Example: storage facilities for textile goods with a capacity of over 10 tons; storage facilities for liquids with a flash point above 100°C, except those meant for seaport areas and ports with a holding capacity of over 200 liters up to 50,000 liters.
  • The approval procedure contains an assessment of the potential impact on the environment such as noise, air and water pollution, waste disposal and prevention of major accidents. Strict time limits are set for the different steps of the approval procedure. A similar or simplified procedure must be followed should you wish to change activities already permitted.

Obtaining environmental permits

A Category I permit determines:
  • The specific operating conditions;
  • The period of validity (up to 20 years);
  • The period of time in which the activities will be started (maximum of three years).

Obtaining a Category I permit involves, generally speaking, the following seven stages:
  1. The applicant files a request for an environmental permit with the provincial authorities. Important: For certain listed categories of activities the request needs to be accompanied by an environmental impact assessment or a “safety report”, which can take at least two months.
  2. The applicant receives notification that the request is accepted and complete. This notification starts the approval procedure. The applicant may also receive notification that the request is not accepted or not complete. Max. 30 days
  3. The request is published.
  4. The appropriate authorities give their advice.
  5. The provincial authorities decide whether the permit is granted. The absence of a decision within the required time limit equals a negative decision. Important: An extension by two months of the 4 months term is possible. Max. 4 months
  6. The decision is published. Max.10 days
  7. All interested parties can lodge an appeal with the regional Minister of the Environment. Max. 30 days

A Category II permit determines:
  • The specific operating conditions;
  • The period of validity (up to 20 years);
  • The period of time in which the activities will be started (maximum of three years).

Obtaining a Category II permit involves, generally speaking, the following seven stages:
  1. The applicant files a request for an environmental permit with the provincial authorities.
  2. The applicant receives notification that the request is accepted and complete. This notification starts the approval procedure. Max. 30 days
  3. The request is published.
  4. The appropriate authorities give their advice.
  5. The municipal authorities decide whether the permit is granted. The absence of a decision within the required time limit equals a negative decision. Max. 105 days.
  6. All interested parties can lodge an appeal with the provincial authorities. Max. 30 days

A Category III permit
This procedure is limited to notification of the intended activities to the municipal authorities prior to the start of the activities.

Building permits

Most construction, reconstruction, demolition and renovation works relating to buildings require a building permit. This is also true for building parking lots, changing the function of a building or cutting down trees. Minor changes to existing buildings and minor construction projects are generally exempt. If the proposed activity also requires an environmental permit (or the reporting of it), the validity of the building permit/reporting will be suspended until an environmental permit has been obtained or the activity has been reported. The opposite is also true.
The official name of a building permit in Dutch is “stedenbouwkundige vergunning”, but it is also known as a “bouwvergunning”. You must apply for the building permit/reporting at the city or town hall of your property investment location. Due to its rather complex nature, the application will be best prepared by the architect.
There are two procedures for obtaining a building permit, a regular procedure and a special procedure (for permits of general importance or permits requested by public legal entities).
Generally speaking, the regular procedure is as follows:
1. At city/town level:
  • The request for a building permit is addressed to the college of mayor and aldermen of the municipality where the object of the building permit is situated. Within 30 days (term of order), the requestor shall receive a notice whether the request for the building permit is accepted and complete.
  • If necessary, a public enquiry will be held, as well as a consultation with other public authorities. In certain circumstances, an environmental effect report shall be required.
  • The mayor and aldermen will consider the request and decide within 75, 105 or 150 days, depending on the procedure and the type of permit requested. If no decision is taken within the term mentioned hereabove, the permit is to be considered as refused.
  • Upon receipt of the permit (normally within 10 days after the decision has been taken), the requestor should display the information that the permit was granted. The requestor can make use of the building permit in case he was not informed within 35 days as from the day of display that an appeal was lodged.
  • Appeals can be lodged against the decision with the Provincial Council of Deputies (Bestendige Deputatie).

2. At provincial level (appeal level):
  • Within 30 days after receiving the decision you have the right to lodge an appeal with the Provincial Council of Deputies (Bestendige Deputatie), after which you will receive a reply within 75 or 105 days (depending on whether use is made of the hearing right). Third parties also have the right to appeal this decision.
  • If there is no answer within the applicable term (75 or 105) days then the appeal is rejected. A building permit delivered by the Provincial Council of Deputies can be used as from the 36th day of display (“aanplakking”). The same goes for the building permit, delivered by the college of mayor and aldermen, for which a lodged appeal was silently rejected by the Provincial Council of Deputies.

3. At regional level (control level):
In a third phase, each interested party can lodge an appeal for annulment with the Council for permit litigation (“Raad voor Vergunningenbetwistingen”) within 45 days. This council checks the legality of the decision. A suspension of the permit can also be asked for (in case of serious harm which is difficult to repair (“moeilijk te herstellen ernstig nadeel”). The Council shall in principle decide within 60 days (term of order).

4. At the level of the State Council:
An appeal to the highest instance (“cassatieberoep”) is possible with the State Council against the decisions taken by the Council for permit litigation.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
Yes civil law 102 Yes No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Act on the Protection of Economic Competition protection of economic competition
Community Customs Code customs
Tax treaties entered Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belarus, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Chile, China, Chinese Taipei, Congo (Republic of the), Croatia, Cyprus, Czech Republic, Côte d'Ivoire, Denmark, Ecuador, Egypt, Estonia, Finland, Former Yugoslav Republic of Macedonia, France, Gabon, Georgia, Germany, Ghana, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Kazakhstan, Korea (Republic of), Kosovo, Kuwait, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Macao (China), Malaysia, Malta, Mauritius, Mexico, Moldova (Republic of), Mongolia, Montenegro, Morocco, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Rwanda, San Marino, Senegal, Serbia, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Tajikistan, Thailand, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Venezuela, Viet Nam
Tax Exchange Information Agreement (TEIA) Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Belize, Bermuda, Cayman Islands, Cook Islands, Dominica, Gibraltar, Grenada, Guernsey, Jersey, Liechtenstein, Monaco, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines
List of state regulatory authorities
Belgian Government http://www.belgium.be/en/
Federal Public Service Finance https://financien.belgium.be/nl
Federation of Belgian Chambers of Commerce http://www.belgianchambers.be/en/
FPS Foreign Affairs, Foreign Trade and Development Cooperation http://diplomatie.belgium.be/en/
Business in Belgium http://business.belgium.be/en/
Belgian VAT Desk http://www.vatdesk.be/en/
Social Security https://www.socialsecurity.be/
Official Gazette http://www.ejustice.just.fgov.be/cgi/welcome.pl
Brussels Invest and Export http://www.investinbrussels.com/en/
Flanders Investment and Trade http://www.investinflanders.be/
Invest in Wallonia http://www.investinwallonia.be/?lang=en
The Belgian Portal for Research and Innovation http://www.research.be/

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