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Belgian Holding Company

Belgian Holding Company

A foreign investor can open a holding company in Belgium according to the country’s Commercial Code. There are no special requirements or limitations for investors wanting to set up holding companies. Belgian holdings are subject to the normal corporate tax rate and they can also benefit from the country’s double tax treaties or EU directives.

When registering a Belgian holding company, the primary objective is not the production of goods but rather the acquisition, management, and control of shares in other companies. Holdings play a crucial role in structuring and maintaining the organization and financing of a group of companies.

Stay with us as we take you through what you need to set up a holding company in Belgium. If you have more questions, our lawyers in Belgium will gladly answer them.

Types of Belgian holding companies

The most employed types of Belgian holding companies are the public limited company (Société Anonyme, SA, naamloze vennootschap NV) and the private limited company (Société à responsabilitélimitée (SRL)/Beslotenvennootschap (BV).

The significant differences between public and private companies include share ownership and transferability, minimum capital requirements, governance and decision-making, and disclosure and reporting requirements.

According to the Belgian Companies and Associations Code (BCCA) of 2019, there are specific differences between a public limited company (SA/NV) and a private limited company (SRL/BV) when you setup a holding company in Belgium. Our Belgian lawyers highlight some key distinctions:

  1. Transferability of shares: in a public limited company shares are generally freely transferable. However, the articles of association may include restrictions on share transfers. In a private limited company, share transfers are subject to certain limits as defined in the articles of association.
  2. Governance: a public limited company has a more formal governance structure with a two-tier system comprising a management board and a supervisory board in Belgium. Private limited companies typically have a more straightforward governance structure, often managed by one or more directors.
  3. Financial reporting: if you open a holding company in Belgium as aPublic limited company, it will have a stricter financial reporting requirement, including appointing auditors and publishing annual financial statements. Private limited companies have less onerous reporting obligations, especially if they meet specific size criteria.
  4. Shareholders:  When you set up a holding company in Belgium as a public limited company, it can have unlimited shareholders. In contrast, a private limited company is limited to a maximum of 499 shareholders.
  5. Share capital: the minimum share capital required for a public limited company is €61,500, of which at least 25% must be paid upon incorporation. In contrast, a private limited company requires a minimum share capital of €18,550, with no specific percentage required to be paid upon incorporation.

Taxation of Belgian holding companies

If you open a holding company in Belgium, it must follow these taxation guidelines under the Belgian Companies and Associations Code (BCCA) of 2019 and the Federal Public Service Finance.

  1. Corporate Tax Rate: Belgian companies are subject to a corporate tax of 33.99% which includes a 3% crisis charge, and the same rate applies to holding companies, as well. However, it’s worth noting that the corporate tax rate can vary based on regional authorities and specific tax incentives.
  2. Tax Treaties:when you set up a holding company in Belgium, and a tax treaty is in force between Belgium and the country where the parent company is located, it may provide for a reduced withholding tax rate on dividends sent by a Belgian holding company to its parent company. The reduced rate can vary depending on the specific provisions of the tax treaty.
  3. Taxation of Dividends: The taxation of dividends sent by a Belgian holding to a parent company in another country is subject to a 21 or 25% tax rate.The specific rate depends on various factors, including the domestic tax regulations of the receiving country and any applicable tax treaty provisions.

Reduced rates apply for Belgian holdings receiving dividends from another country if the EU Directive Parent-Subsidiary applies, an EU subsidiary will be exempt from the corporate tax if the Belgian company hold at least 10% of the foreign company’s shares for at least one year.

For a non-EU subsidiary only 5% of the received dividends will be subject to the corporate tax if:

  • the Belgian holding holds at least 10% of a company’s shares or at least a 1.2 million shareholding acquisition for at least one year;
  • the profits of the company have been subject to a minimum tax rate of 15%;
  • the subsidiary is not registered in a country with lower corporate taxes.

Capital gains are exempt from taxation in Belgium if the dividends qualify for participation exemption, while the withholding tax for interests is set at 21%.

Our accountants in Belgium provide complete accounting services to all types of businesses in the country. While a holding company is not essentially involved in commercial activities, our team will help clarify its status for reporting purposes, so that as a foreign investor in Belgium you can rest assured that the business is fully compliant. You can reach out to us for more information about our services.

Our attorneys in Belgium provide complete services to all types of businesses in the country. While a holding company is not essentially involved in commercial activities, our law firm in Belgium will help clarify its status for reporting purposes so that, as a foreign investor in Belgium, you can rest assured that the business is fully compliant. You can reach out to us for more information about our services.

Advantages of holding companies in Belgium

Open a holding company in Belgium, andyou will gain access to many invaluable benefits associated with Belgian holding companies. Here are a couple of examples:

  • holding companies engaged in liquidation procedures benefit from a withholding tax of 10%;
  • exemption from dividend taxation provided some requirements are met;
  • exemption from interests taxation if some requirements are satisfied;
  • the notional interest deduction (NID) that allows companies that pay the corporate tax in Belgium to deduct a part of their equity capital.

If you want to set up a holding company in Belgium and want details about the advantages of investments you can contact our Belgian law firm. Our firm is part of an international network of law firms and company formation firms and clients who need legal services in Montenegro can receive assistance from our partners.