The legal structure of your business is among the most important factors that will greatly affect you and your business throughout its existence. Therefore, it is important to carefully weigh all the pros and cons before starting the business, as your choice of business structure will have a major impact on how you run the business, how you pay taxes, and who controls your business. The key is to understand which legal form offers your company the greatest advantages on your way to achieving organizational and personal goals. In general, there are four main factors to consider before the company formation process: limitation of personal liability, taxes, ease of transferability of shares and registration of new owners, and finally – investor expectations.

When setting up a company in Belgium, you have many options to choose from when it comes to the legal form of your company. Different types of business structures in Belgium suit a variety of business needs. Both domestic and foreign investors can choose the legal form that best suits the needs of a particular company. In addition, those who choose to register a company in Belgium can benefit from a relatively quick and straightforward process.

Belgium has a wide range of possible business forms, each with their own advantages and characteristics. While certain business types are more suited to large corporations, other types are being developed to meet the needs of small and medium-sized businesses. In general, small and medium-sized companies can benefit from choosing a simpler legal form, especially if the company does not plan to be listed on the stock exchange. To make the right choice, entrepreneurs should consider the amount of capital they wish to invest in the early stages of the business and the shareholder responsibilities associated with each type of business.

Limited Liability Company (BVBA/SPRL)
This type of structure is one of the most popular legal entities and is generally used for small and medium-sized businesses that are privately owned. Before choosing this type of corporate structure, investors should consider that there are certain aspects that make them less flexible compared to a public company. For example, it is not possible not to issue either convertible bonds or participation certificates, nor is it possible to pay interim dividends. In general, the main advantages of PLLC are as follows:

Only two people required for installation (there is also an exception when only one person is needed);
Owners of the business are only liable for the amount actually contributed;
Relatively low minimum capital.
The required minimum capital is EUR 18,550; it must be paid by the founders of the company, who may be individuals or companies, Belgian citizens or non-citizens, residents or non-residents of the country. Each issued share must be paid up at least 20% before incorporation and the minimum amount is EUR 6,200. If a company has only one founder, at least EUR 12,400 must be paid in. All shares in this company are registered shares and must be entered in the share register. Certain restrictions apply to the transfer of Shares.

Public limited company (NV/SA)
This form of business is usually chosen for larger companies, since the minimum capital is significantly higher than for a limited liability company. It is also advantageous to choose this type of structure for a company that needs a lot of capital, since the company can attract external capital. The minimum capital is at least EUR 61,500 and at incorporation at least 25% of each share must be paid up with a minimum aggregate amount of EUR 61,500.

Unlike PLLC, Public Limited Liability Company shareholders do not play a significant role as at least three directors must be appointed to run the company. If there are only one or two shareholders, it is sufficient to appoint only two directors. According to Belgian company law, when a company is appointed director, a permanent representative must be appointed.

Following documents and other information are required upon incorporation of Public and Private Limited Liability Companies:

Full details of the founders’ identities;
A financial plan for the first two years;
Bank certificate approving the capital;
Founders’ powers of attorney;
Letter of acceptance from the directors;
Passport copies of the of the directors;
Articles of Association;
Act of incorporation;
Minutes of the first general meeting to appoint directors;
Minutes of the first board meeting for certain business decisions;
Registration with the tax administration;
Registration with the trade registry or filing with the commercial court;
Publication in the Official Journal;
Registration with the social security and VAT administrations.
Limited Partnership (SCS/GCV)
Limited Partnerships have two types of partners with different legal regimes. General partners are jointly responsible for the partnership’s liabilities. General partners are also the ones who manage the company. Meanwhile, limited partners are only responsible for the capital they have contributed towards the Limited Partnership. They also do not acquire a trader’s status and are not involved in the management of the business. There is no requirement for a minimum capital to incorporate a Limited Partnership and also less administrative formalities are required. It still remains less common due to the full liability of general partners.

Other types of business structures in Belgium include:

Cooperative with unlimited liability (SCRI/CVOA);
Cooperative with limited liability (SC/SCRL – CV/CVBA);
General Partnership (SNC/VOF);
Sole Proprietorship.