• Legal entity
  • Procedure: how to create a company
  • Human resources
  • Taxes
  • Create a company in Belgian » Legal entity

    a. A representation office or a subsidiary?

    A branch or representation office is not considered as a legal corporate entity separate from the foreign company, but merely as an extension of the parent company. A branch does not have its own stock or its own board of directors and fewer formalities are required when establishing a brand. Profit distribution and shareholders’ meetings are not demanded by law. Setting up a branch in Belgium has certain tax advantages, e.g. no capital duties and no dividend withholding tax on branch profits.

    A subsidiary is considered a separate Belgian company with its own legal entity. Because of the separation of legal identities, the mother company is not liable for the subsidiary, it is only the foreign investor who is liable for his activities in Belgium. The creation of a subsidiary does require more formalities, but it can also benefit from several tax advantages, e.g. repatriation or distribution of net profits with little or no dividend withholding tax, the advantages of the Hong Kong Belgium double taxation agreement.

    If you decide to establish a subsidiary you can choose between several types, the three must important ones are explained on our site.

    b. Types of subsidiaries

    • A company limited by shares (Société Anonyme)

    • This is mostly chosen for large enterprises. In this company type the shareholders remain anonymous. The stock corporation is selected mainly for larger enterprises. Its capital must amount to at least € 61,500. This amount must be fully paid in at the time of constitution by the founders (at least two) and there must be at least three administrators

      The SA is represented by a board of directors, the members of which are appointed at the time of the constitution of the company or during a general assembly. The board of directors administrates and represents the company.

    • A private limited liability company (SPRL)

    • This is more interesting for small and privately held companies. The minimum capital is set at € 18,550. The shares, by nature nominative, are less easily transferable. All the same, the owners of a SPRL have the liability protection of a corporation. An SPRL is managed by one or more administrators, appointed by the founders

    • A cooperative company with limited liability

    • The cooperative company with limited liability is a very flexible company form destined for a corporation having a variable number of shareholders with variable contributions. Three partners are needed in order to constitute such a company. The capital of a cooperative company with limited liability consists out of two parts:

      • A fixed amount, established in the articles of association, which must represent at least € 18,550 of the issued capital

      • A variable portion, which varies with the entry and exit of partners, capital increases or the taking back of shares. One quarter of all capital contributions must be paid in. Its shares are always registered. The transfer of shares takes the form of a declaration of transfer in the shareholders’ register. A cooperative company with limited liability is managed by one or more managers.
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