Belgium - Distribution and Sales Channels

Distribution and Sales Channels

Last published date: 2024-01-11

For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.

Using an Agent or Distributor

Please refer to the European Union Country Commercial Guide’s section on Using an Agent or Distributor to Sell U.S. Products and Services.

Establishing an Office

U.S. companies wishing to start business activities in Belgium can choose to set up either a subsidiary or a branch. A subsidiary is incorporated under foreign law and the branch under Belgian law. The choice between a subsidiary and a branch often depends on the taxation structure in the foreign country from which the investment is made. Incorporation generally takes six weeks. No prior government authorization is required and there is no restriction on the transfer of capital into Belgium, except for industries such as banking, insurance, pharmaceuticals, and broadcasting. When planning to open an office or set up a company in Belgium, U.S. companies should contact the foreign investment offices of the Belgian region where they will be located (Flanders, Wallonia, and Brussels)). These offices will be able to provide support and advice on matters of tax, employment, location and accounting. The Belgian Federal government website also provides general information and steps to take to open an office in the country.

Legal Features

A subsidiary is a separate legal entity; thus, liability is limited to its own assets. However, a branch does not constitute a separate entity and has unlimited liability. The parent company is liable for all obligations and debts of the branch.

Setting up a Subsidiary

Subsidiaries are usually set up either as a public limited liability company (SA/NV) or a private limited liability company (SPRL/BVBA). The private limited liability company is generally suited for smaller companies. Steps for setting up public and private companies are relatively similar.

Deposit initial capital (€62,000 for SA/NV; €19,000 for SPRL/BVBA) with a Belgian bank. A certificate indicating the amount of capital held in a blocked account will be issued by the bank.
File signed financial plan with a notary. A financial plan shows how the initial capital covers the company’s operations for the next two years.
In the presence of a notary, sign the deed of incorporation and the by-laws.
The notary will file the deed of incorporation with the local commercial court and submit the corporate charter for publication in the Belgian Official Gazette. (Cost is approximately €1,000-1,500 for notary, €207 for publication in the Belgian Official Gazette.)
Upon registration, an official corporate registration number is issued.
Register at the “one-stop shop for companies” (guichet d’entreprise / ondernemingsloket) to activate the corporate registration number and register with the Value Added Tax (VAT) administration. (Cost is €71 for registration fee and €61 for VAT registration.)
Register with social security administration for salaried workers (ONSS/RSZ).
Within three months of incorporation, companies must register with the social insurance fund for self-employed persons and begin annual contributions to this fund.

Setting up a Branch

To open a branch office in Belgium, the following documents must be brought to a notary to be legalized and translated:

Articles of incorporation and bylaws of the foreign incorporation with subsequent amendments
Minutes from the Board Meeting when it was decided by the parent company to open a branch office in Belgium
Minutes from the Board Meeting to appoint a legal representative along with a description of powers delegated to him
Consolidated annual accounts of the parent company

The translation of these documents must be done by an official translator in Belgium into French or Dutch, depending on the location in Belgium. The documents must be submitted to the local Court of Commerce and the annual accounts must be filed at the National Bank of Belgium.

Additional Steps:

Register at the “one-stop shop for companies” (guichet d’entreprise / ondernemingsloket) to activate the corporate registration number and register with VAT administration.
Publish the documents in the Belgian Official Gazette. (The costs will be the fee for the translation, registration fee, and publishing fee.)
Register with social security administration for salaried workers (ONSS/RSZ).
Within three months of incorporation, branches must register with social insurance fund for self-employed persons and begin annual contributions to this fund.
A list of notaries in Belgium is available at https://www.notaire.be/.

To modernize and streamline the procedure of setting up a company or an office in Belgium, the Belgian government established the “Crossroads Bank for Enterprises” (Banque Carrefour des Entreprises). It is a repository that assigns business entities a unique identification number that replaces the social security number, its register of commerce number, its VAT number, and the number granted by the national register of legal entities. Data are entered one time only and all government entities share this database. The database tracks relevant identification details, such as name, address, VAT number, and business type. For third parties (including the administration), this number serves as the main identification number of the branch. It must appear on all documents originating from the subsidiary or branch.

Franchising

U.S. businesses looking to franchise within the European Union will likely find that the market is quite robust and friendly to franchise systems in general. There are several laws that govern the operation of franchises within the European Union, but these laws are broad and generally do not constrain the competitive position of U.S. businesses. The potential franchiser should take care to look not only at EU regulations, but also at local laws concerning franchising. According to the Belgian Franchise Federation, Belgium’s franchising system represents 6 percent of the Belgian retail, about 100 franchisors, 3,500 franchisees, 30,000 jobs and a market of €2.4 billion. This places Belgium, along with Denmark and Finland, among the European countries with the lowest number of franchise units per capita. The largest part of the franchise concepts is in D-I-Y, distribution, and confection.

In 2005, Belgium adopted a law on pre-contractual information in the framework of commercial agreements. Franchise agreements fall under this law. In the case of a franchisor–franchisee relationship proposal, the franchisor is obliged to provide a pre-contractual information document (PID) and a draft of the proposed agreement one month before concluding the agreement. This document must contain all the necessary information, as described in the law, to allow the franchisee to accurately evaluate the consequences of the contract. Disrespect for the required “cooling-off” period, of the required content and even of the accuracy of the information provided, result in the nullity of the agreement.

The European Franchise Federation

The European Franchise Federation was founded in 1972 as a not-for-profit association to promote, defend, and speak for the franchise industry in Europe. Based in Belgium, it is now recognized as the leading voice for ethical franchising in the world. The Federation brings together a community of national franchise associations that share the same ethical core values and seek to uphold commitments to promote and operate by a robust set of ethical standards and principles as defined by the Code of Ethics for Franchising, which is available on the organization’s website. This code is mandatory for all Federation members, as well as their respective partners. Furthermore, it serves as an important standard on franchising issues, including for legislators, the judiciary, and other professional organizations.

Direct Marketing

Please refer to the European Union Country Commercial Guide’s section on Direct Marketing.

Joint Ventures/Licensing

There is no specific legislation in relation to joint ventures (JVs) in Belgium. Although legal and corporate literature frequently uses the term “joint venture”, the term is a generic one and is not legally defined. JVs can therefore take various forms at the option of the parties, which can be either purely contractual or in the form of a corporate entity. Belgium has a very sophisticated business community with many potential qualified joint venture and licensing partners. In addition to the U.S. Commercial Service, there are numerous banks, professional organizations, service companies, and financial organizations prepared to advise and assist parties considering joint ventures and licensing within Belgium.

Express Delivery

International and local express delivery services offer reliable courier service in Belgium. Two-day delivery is available from most U.S. cities.

Due Diligence

To assist companies to conduct due diligence prior to entering into a financial or other agreement, the U.S. Commercial Service recommends that the U.S. firm contact a company that offers commercial information reports. US. Commercial Service Belgium also offers a service known as the International Company Profile report. For more information contact us at: office.brussels@trade.gov.