How to Set Up a Subsidiary Company in Belgium?

Venturing into a new market can be a huge step for your business, and setting up a subsidiary company in Belgium positions you at the heart of Europe’s economic hub. Belgium’s strategic location, great infrastructure, and EU membership make it an attractive destination for growth.

Key Takeaways

• Strategic Market Access: Setting up a subsidiary company in Belgium positions your business at the heart of Europe, offering tariff-free access to the EU’s 400 million consumers, enhanced by Belgium’s robust infrastructure, including the port of Antwerp and high-speed rail networks.
• Flexible Legal Structures: Belgium provides versatile subsidiary types, such as the BV/SRL with no capital requirement for small businesses or the NV/SA for larger firms seeking public investment, allowing you to tailor your setup to your goals.
• Competitive Tax Environment: Benefit from a 25% corporate tax rate, innovation, and over 90 double taxation treaties, making Belgium a tax-efficient base for your subsidiary.

This comprehensive guide walks you through how to establish a subsidiary company in Belgium, detailing every aspect from legal structures to compliance. With clear, actionable insights, you’ll have all the information about how to form a subsidiary in Belgium confidently.

What Are the Types of Subsidiaries in Belgium?

Choosing the right subsidiary type is a critical first step when setting up a subsidiary company in Belgium. A subsidiary is a separate legal entity controlled by your parent company, typically through majority ownership. Belgium’s flexible legal framework offers several structures, each with distinct features to suit your business goals. Below, each type is explained in detail to help you select the best fit.

Wholly-Owned Subsidiary

A wholly-owned subsidiary is fully controlled by the parent company, which owns 100% of its shares. This structure allows complete authority over business operations, strategic direction, and financial decisions without input from external partners.

It is ideal for companies seeking full control over their Belgian operations and preferring not to share ownership or decision-making authority. However, this model also means the parent company assumes all financial responsibilities and potential liabilities.

Joint Venture Subsidiary

A joint venture subsidiary involves shared ownership between the parent company and one or more external entities, often including a local Belgian partner. This model allows for the division of financial risk, local knowledge, and operational responsibilities

It is ideal for businesses entering the Belgian market for the first time. This is especially true for those looking to exploit local expertise, distribution channels, or co-investment opportunities. While collaborative, this structure requires clear governance arrangements to avoid conflicts and ensure smooth joint management.

Private Limited Liability Company (BV / SRL)

The Besloten Vennootschap (BV) in Dutch or Société à Responsabilité Limitée (SRL) in French is the most commonly chosen structure due to its flexibility and no capital requirements. Shareholder liability is limited to the amount of capital invested, and the company can be established with a single shareholder and director.

It is ideal for small to medium-sized enterprises and foreign businesses looking for a streamlined, low-risk, and cost-efficient entry into the Belgian market.

Public Limited Company (NV / SA)

The Naamloze Vennootschap (NV) in Dutch or Société Anonyme (SA) in French is suited for larger businesses that require significant capital and may seek to raise funds publicly. This structure requires a minimum capital investment of €61,500 and at least two shareholders.

It involves stricter corporate governance and reporting standards, including the formation of a board of directors. It is ideal for companies planning large-scale operations, long-term investments, or those aiming to attract external investors through the issuance of shares or bonds.

Step-by-Step Guide to Setting Up a Subsidiary in Belgium

If you want to know how to create a subsidiary in Belgium, you must follow a clearly defined legal and administrative process. While the system is efficient, proper preparation and accurate documentation are essential for smooth registration. Below is a detailed breakdown of each step:

Step 1: Choose a Unique Company Name

Begin by selecting a name for your subsidiary that is not already in use. You can verify name availability through the Crossroads Bank for Enterprises (CBE) online portal or with a notary. This process is free and ensures your brand is legally distinguishable from others in the Belgian market. If you need guidance on business incorporation, various services can help streamline the process.

Step 2: Draft the Articles of Association

Prepare the Articles of Association, which outline the company’s purpose, capital structure, shareholder roles, and governance rules. The document must be written in Dutch, French, or German, depending on the region where the incorporation is being established. It must also be notarized. Accurate details, such as the registered office address, are critical to avoid future legal issues. 

Step 3: Appoint Directors and Shareholders

Assign the necessary directors and shareholders. A BV (private limited liability company) requires only one director, while an NV (public limited company) must have a board of directors. Shareholders can be individuals or legal entities, including the parent company, with no requirement for Belgian residency. Collect identification documents and proof of address for all individuals or entities involved.

Step 4: Register with the Crossroads Bank for Enterprises (CBE)

Submit your notarized Articles of Association, identification documents, and proof of address through a notary to register your company with the CBE. Upon approval, your company receives an official enterprise number, which is required for all tax and legal interactions.

Step 5: Apply for a VAT Number

If your subsidiary will be engaged in economic activities, apply for a VAT number with the Federal Public Service (FPS) Finance. This step is free and typically takes 1–2 weeks. The VAT number allows your company to invoice clients, collect VAT, and comply with tax obligations.

Step 6: Open a Corporate Bank Account

Open a business bank account with a Belgian financial institution such as KBC, ING, or BNP Paribas Fortis. To do so, present your company’s registration number and identification documents. You’ll also need to deposit the required share capital, €61,500 for an NV. The account setup is required for handling all financial operations, including payroll and tax payments.

Step 7: Register with Social Security Authorities

Register your subsidiary with the National Social Security Office (RSZ/ONSS), even if you don’t plan to hire employees immediately. This ensures compliance with Belgium’s labor and social insurance laws. Registration usually takes a few days and is mandatory for any future employment.

Key Benefits of Establishing a Subsidiary in Belgium

The advantages of opening a subsidiary in Belgium are compelling, positioning your business for success in Europe. Here’s why Belgium is a top choice:

• Strategic location: Belgium’s central position connects you to 400 million EU consumers tariff-free. If you’re exporting, this reduces costs and speeds up delivery to major cities like Paris or Amsterdam, enhancing your market reach.
• Competitive tax rates: The 25% corporate tax rate saves you money compared to higher rates elsewhere. Incentives like the innovation income deduction further reduce your tax burden. Also, the 21% VAT is reasonable for a market like Belgium.
• Skilled workforce: Belgium’s 1.5 million students produce multilingual talent in tech, finance, and engineering. Hiring at €20-€35 per hour is cost-effective compared to €50+ in other Western countries, giving you access to top professionals.
• Excellent infrastructure: Ports like Antwerp and high-speed rail networks support your logistics. Efficient transport and communication systems ensure your subsidiary operates seamlessly across Europe.

Essential Documents for Registering a Subsidiary

You might be searching for how to start a parent company in Belgium or how to set up a parent company with subsidiaries in Belgium. Whatever the case, you’ll need precise documentation. Here’s all the paperwork you need to prevent delays:

• Articles of Association: Notarized in a regional language, this outlines your subsidiary’s structure and objectives. 
• Identification documents: Provide passports or IDs for directors and shareholders. Non-EU documents may need certified translations, ensuring legal verification.
• Proof of registered address: A lease agreement or utility bill confirms your Belgian office, even if virtual, meeting CBE requirements.
• Capital deposit certificate: After depositing your capital, your bank issues this to prove that your funds are secured, finalizing registration.

Legal Structures Available for Subsidiaries in Belgium

Selecting a legal structure shapes your subsidiary’s operations. Belgium offers a variety of legal structures that cater to different business needs, from small and medium-sized enterprises (SMEs) to large, publicly traded companies.

Each structure has unique characteristics, advantages, and requirements. Below are the main legal structures available for subsidiaries in Belgium:

• Private limited liability company (BV/SRL): With no capital and limited liability, it’s ideal for SMEs. One director and flexible governance make it easy to manage, perfect for low-risk ventures.
• Public limited company (NV/SA): Requiring €61,500 and two shareholders, it supports public fundraising. Stricter rules suit large firms aiming for scale.
• Cooperative company (CV/SC): Needs three shareholders for shared-profit models. It’s niche but viable for collaborative businesses like social enterprises.

Taxation Rules and Incentives for Subsidiaries

Belgium’s tax system offers a competitive advantage for businesses, particularly subsidiaries, by combining relatively low rates with incentives to stimulate economic activity and investment.

The country’s tax structure ensures that businesses, especially small and medium-sized enterprises (SMEs), can benefit from significant savings while maintaining compliance with EU regulations. Here’s a detailed look:

• Corporate tax rate: At 25%, it’s lower than many EU peers. Small firms save significantly, boosting reinvestment.
• Value Added Tax (VAT): Rates are 21% standard, 12% as an intermediary slab, 6% as the lowest slab, or 0% for some special goods, with monthly or quarterly filings.
• Double taxation treaties: Over 90 agreements with countries like the U.S. prevent dual taxation, reducing withholding taxes on dividends.

Regulatory and Compliance Requirements

Running a subsidiary means ongoing compliance with Belgian laws. Businesses must comply with various regulatory and compliance requirements, which are essential to maintaining transparency, protecting employees, and safeguarding data.

Below is a detailed overview of the key obligations for subsidiaries in Belgium:

• Annual financial reporting: Submit audited financial statements to the National Bank of Belgium (NBB). Large firms need audits to ensure transparency.
• Tax filings: File corporate tax annually and VAT returns monthly or quarterly. Late filings incur fines that can go into thousands of euros.
• Labor law compliance: Provide contracts, pay at least the minimum wage, and RSZ contributions. 
• Data protection (GDPR): Secure personal data under EU rules, with breaches costing up to €20 million or 4% of turnover.

Do You Need a Physical Address for a Subsidiary in Belgium?

A registered address is a legal requirement for your subsidiary in Belgium. Belgian law mandates that all businesses provide a verifiable address for registration with the Crossroads Bank for Enterprises (CBE) and for official correspondence, such as tax notifications. This address is crucial for maintaining transparency and ensuring that all legal communications are properly received. Additionally, the registered address must align with the regional language of the area where the subsidiary is located.

Operational Setup for a Subsidiary in Belgium

When setting up a subsidiary company in Belgium, you must plan carefully across several operational aspects, starting with hiring local talent. Belgium offers a highly educated, multilingual workforce, with strengths in sectors like technology, finance, healthcare, and logistics. Salaries are competitive but generally more affordable than in neighboring countries like Germany or the Netherlands.

Choosing the right office location and setting up utilities are equally important. Brussels is a prime location for finance, consultancy, and tech companies due to its status as an EU and NATO hub. However, cities like Ghent, Antwerp, and Liège offer lower rental costs while maintaining access to a skilled workforce. Belgium’s infrastructure is well-developed, with reliable internet, telecom, and utilities.

How to Open a Business Bank Account for a Subsidiary?

A corporate bank account is the financial backbone of your subsidiary, enabling transactions, tax payments, and payroll management. When setting up a subsidiary company in Belgium, opening a bank account is a mandatory step that requires careful selection and preparation. Here’s how you can do it:

1. Select a bank: Selecting a business-friendly bank is your first task. Belgium’s banking sector is solid, with options like KBC, ING, Belfius, and BNP Paribas Fortis offering services for subsidiaries. Compare monthly maintenance fees and transaction costs.
2. Submit documents: You must provide your CBE registration certificate, confirming your subsidiary’s legal status, and the notarized Articles of Association, detailing your company’s structure. Shareholder and director IDs, such as passports, are needed, with non-EU documents potentially requiring certified translations.
3. Deposit capital: For a private limited liability company (BV/SRL), you need no minimum capital, while a public limited company (NV/SA) requires €61,500. Deposit these funds into a temporary or permanent account, with banks verifying the transfer within 3-5 days.
4. Enable online banking: Activating online banking enhances operational efficiency. Belgian banks provide secure platforms with two-factor authentication (2FA) for tax payments, payroll, and transaction tracking.
5. Ongoing Account Management: Ongoing account management requires vigilance. Monitor fees for currency conversions to control costs. Maintain a minimum balance to avoid penalties, and schedule quarterly reviews to align with tax filings.

Is an Operating Agreement Necessary for a Subsidiary?

When setting up a subsidiary company in Belgium, you might wonder whether an operating agreement is necessary. While not legally required under Belgian law, this document can be a valuable tool for clarifying governance and preventing disputes, particularly for subsidiaries with multiple shareholders or complex structures.

Belgian law does not mandate an operating agreement for subsidiaries like BV/SRL or NV/SA, as the notarized Articles of Association cover basic governance, such as share structure and company purpose. However, an operating agreement goes further, detailing internal rules like shareholder voting rights, profit distribution, and decision-making processes.

Opening a Branch vs. a Subsidiary: What’s the Difference?

Deciding between a branch and a subsidiary is a strategic choice when opening a subsidiary in Belgium or exploring simpler alternatives. A subsidiary is a separate legal entity with limited liability, while a branch is an extension of your parent company. Here’s a detailed comparison:

How Commenda Can Help You Expand in Belgium

Expanding your business into Belgium can be a complex and time-consuming process, with challenges in dealing with legal, financial, and regulatory requirements. That’s where Commenda steps in to simplify the entire process. Here’s how.

• Expert connections: Links you to Belgian notaries and accountants for seamless setup. 
• Streamlined registration: Guides you through CBE and VAT processes via user-friendly tools. 
• Compliance tracking: Sends alerts for NBB filings and tax deadlines, avoiding fines.
• Local insights: Provides market strategies and regulatory advice to ensure success.

Reach out today and see how Commenda helps you set up your dream business.

FAQ

Q. How much does it cost to set up a subsidiary in Belgium?
Setting up a subsidiary in Belgium typically costs between €1,350 and €1,650. This includes notary fees (€900–€1,100 incl. VAT), registration rights (€50), publication fees (€191.50–€237.10 + VAT), business registration (€92.50), and optional VAT activation (€55–€60 + VAT). Costs may vary slightly each year due to indexation.

Q. How long does it take to register a subsidiary in Belgium?
The process takes around 10-15 days. Getting a VAT number may add another 1–2 weeks. Using a notary helps avoid delays and ensures faster setup.

Q. Can a foreigner fully own a subsidiary in Belgium?
Yes, foreigners can fully own a Belgian subsidiary. There are no restrictions on shareholding or directorship. However, you’ll need a local registered address and must comply with tax and registration rules.

Q. What are the common challenges when opening a subsidiary in Belgium?
Challenges include language requirements, documents must be in Dutch, French, or German, and understanding different regional rules in Flanders, Wallonia, and Brussels. Understanding VAT and labor regulations can be complex. Hiring local advisors or platforms like Commenda can help avoid costly mistakes.

Q. Do subsidiaries in Belgium need a local director or representative?
No, a local director isn’t required. Foreign directors are allowed, and remote management is possible. Still, having a local contact (e.g., an accountant) can ease communication with Belgian authorities and improve compliance.

Q. What are the annual compliance requirements for subsidiaries in Belgium?
Subsidiaries must file audited financial statements, submit annual corporate tax returns, and report VAT monthly or quarterly. You also need to update the CBE with any company changes and comply with GDPR and RSZ regulations. Non-compliance can result in fines or legal action.

Q. Can a subsidiary hire employees directly in Belgium?
Yes, subsidiaries can hire employees directly by registering with RSZ. You must follow labor laws, including minimum wage, employer contributions, and leave policies. Compliance checks are routine, and HR services can help manage hiring legally.

Q. What happens if a subsidiary fails to meet compliance rules in Belgium?
Non-compliance can result in fines, GDPR penalties, or even court-ordered closure. Consistent accounting, timely filings, and local support help keep your business compliant and operational.