How do I set up a business in Belgium?
The first decision you need to make concerns your company’s legal registration as there is a surprisingly large choice of business incorporation models in Belgium.
How you incorporate your business depends on:
1. Your personal situation
2. Your level of ambition
3. The degree of risk and therefore potential liability to which you will be exposed.
If you are setting up a business alone and you want to work in a company structure you will need to set up an “SPRL(U)” (BVBA in Dutch). This is a limited liability structure with one shareholder. Depending on your expected level of revenue, it is often tax advantageous to establish an SPRL rather than working as a freelancer. In an SPRL you will pay corporate tax whereas as a freelancer you pay personal tax on your entire income. Personal tax rates are much higher than corporate tax rates. For the vast majority of smaller businesses, an SPRL is the most tax efficient and therefore the most common structure. However there are other legal forms that might be more appropriate to your needs, so do not discount them out of hand.
These other legal forms are partnerships of some sort so you can’t set them up alone. They include cooperative structures (SCRLs) and a number of unlimited liability partnership arrangements. The extent to which you want to limit your personal liability will also be an important factor for you to consider. If you are linked to a company in another country, you may also want to consider setting up a branch office.
It is worth noting that the Belgian government is also currently considering a “starter” company version of the classic SPRL that would be established without any initial investment (unlike an SPRL currently) but still provide limited liability protection for the owner. The law is however yet to come into force.
Whatever you do, you should seek expert legal advice before you make your final decision because consulting an expert can save you time and money. An expert can help you weigh up the pros and cons of different legal entities depending on your personal situation, your type of business and your level of ambition. An expert can also help you set up your business more quickly, saving you time.