Open a Belgian Holding Company

A foreign investor can open a holding company in Belgium according to the country’s Code of Companies and Associations. 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 responsabilité limitée (SRL)/besloten vennootschap (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 open 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 in which the articles may provide for a sole director, a board of directors or 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 a public 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. Likewise, a private limited company has no maximum number of shareholders.
5. Share capital: the minimum share capital required for a public limited company is €61,500, which must be fully paid up upon incorporation. In contrast, a private limited company has no minimum share capital since 2019 (but needs sufficient initial equity and a financial plan), 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 Income Tax Code 1992, as applied by the Federal Public Service Finance.

1. Corporate Tax Rate: Belgian companies are subject to a corporate tax of 25% (20% on the first EUR 100,000 for qualifying SMEs); the crisis surcharge was abolished from tax year 2021, and the same rate applies to holding companies, as well. However, it’s worth noting that the effective tax burden can vary based on specific tax incentives (corporate income tax is federal and does not vary by region).
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 30% withholding tax rate (0% for qualifying EU parent companies holding at least 10% for one year, or a reduced treaty 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: dividends from an EU subsidiary are exempt from corporate tax if the Belgian company holds at least 10% of the foreign company’s shares for at least one year.

For a non-EU subsidiary 100% of the received dividends are also deductible (dividends-received deduction, so none is taxed) if:

• the Belgian holding holds at least 10% of a company’s shares or an acquisition value of at least EUR 2.5 million for at least one year;
• the profits of the company have been subject to a minimum tax rate of 15%;
• the subsidiary is not established in a country whose tax regime is notably more advantageous than the Belgian one.

Capital gains are exempt from taxation in Belgium if the dividends qualify for participation exemption, while the withholding tax for interests is set at 30%.

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, and you will gain access to many invaluable benefits associated with Belgian holding companies. Here are a couple of examples:

• small companies can set up a liquidation reserve (10% upfront levy) that can later be paid out on liquidation without further withholding tax (liquidation distributions are otherwise subject to 30% withholding tax);
• exemption from dividend taxation provided some requirements are met;
• exemption from interests taxation if some requirements are satisfied;
• carried-forward notional interest deduction (NID) from earlier years (the NID itself was repealed for tax periods ending on or after 31 December 2023), which still 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.