Company Formations: A jurisdictional guide to setting up a business


QUESTION ONE – What are the most common structures used when international clients want to form a company in your jurisdiction? Any examples?


The BV or SRL requires a minimum of one shareholder and no share capital. Owners must guarantee all activities for at least three years and a financial plan covering the activity for a minimum of two years.

Shareholders must prove the validity of the figures based on a marketing study, or other objective resources that prove the reality of the plan. The certified accountant will be personally liable as well as the shareholders and the management where it is clear that one of these professionals did not provide professional advice. Where dividends are linked to a proportion of the share capital, it is possible to link vot­ing rights to dividend distribution, and in allow full control of the company by its management.

As an example, a father could give 95 per cent of its shares to the children, and keep 5 per cent of the shares, but can specify that with 5 per cent of his shares he has 80 per cent of the voting rights and has 100 per cent of the dividends.

Furthermore, he could define that he is the general manager for life. Dividend distribu­tion may not put the company in difficulties for the next 12 months, otherwise, the general manager must re-call the dividend and can be personally liable if his plan doesn’t settle the matter.

The BV or SRL has good transparency but creates significant responsibility for the managers and the certified accountants. The management is personally liable and the certified account must prove his positive intervention as a professional, in order to influence the management.

NV or SA

This company type is a limited liability company where the share capital is a central element in the structure.

The Board can be composed of one director, who has a real veto right, even on his own dismissal. It is possible to set up a management dynasty which means the bylaws can specify who will be the heir, family or not, of the director.

The manager is jointly and severally liable for all actions of the company so that in case of dispute, the company must be convicted first before any liability can be apportioned to the director. The power of the director is not really unlimited. It is possible to provide exceptions in the bylaws, with some powers reserved for the shareholders meeting.

QUESTION TWO – Please detail some of the favourable and unfavourable legislation that businesses considering establishing a presence in your jurisdiction should be aware of? How can you help them to streamline the process?

The Belgian Parliament decided in February 2019, to adopt a new company law and association law that has the aim to answer the needs of modern society and focus on the real economic actions of the entrepreneurs, rather than putting in place an old fashion structure that doesn’t answer any more on the actual needs. The new Companies and Associations Code enters into force on May 1, 2019, for new companies and January 1, 2020, for existing companies.

The new law states explicitly, the definition of a company, an association and trust (a special form of association). The number of different types of structures has been reduced to four and Belgium recognises two official languages – Dutch and French.

The new code reduces the number of different forms of companies from more than fifteen to four basic forms. These are, partnership, private company (PC), the limited company (LC) and the cooperative company (CC).

These new forms of a company should simplify the attraction of foreign investments. This code modernizes the law in various ways, including providing a choice for the principle of the registered office instead of the real seat principle (the company is governed by the law indicated in the article of association). It also offers the introduction of double voting rights in listed companies and multiple voting rights in non-listed companies and the limitation of liability of the director.

The limited company (LC), is a company type for very big companies with legal personality and limited liability. As from now on, a single director can be appointed, with possible protection against resignation. An LC will have the choice between the current monastic governance system and a full-fledged dual governance system (with an executive committee and a supervisory board). A listed LC can provide for double voting rights for loyal shareholders in the articles of association.

The private company (PC) is a company type with legal personality and limited liability. The PC is presented as the basic company type, is a very flexible company vehicle, and can be listed. The legal minimum capital is no longer necessary, however, sufficient means to perform the activities of the company should be in place. Shares with multiple voting rights are possible, however, there is no longer a capital condition. The founder should take a net asset and liquidity test.

The European company, the European cooperative company and the European economic interest grouping, remain intact after the reform.

The old company law and association law is applicable to structures, until 31st December 2019. The new law has two types of obligations; the mandatory obli­gations and the forced obligations, until 1st January 2024 when the old law is replaced by the new law and old structures will be replaced by the new ones. If a company wants to change its bylaws after 1st January 2020, it must automati­cally move to the new law.

In this instance, the first job is to analyse the bylaws of the company, discuss with the shareholders what they really want, and propose new bylaws, with the help of the certified accountant.