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Executive Summary
The Kingdom of Belgium is situated in the heart of Europe. Not only geographically Belgium is located in the heart of Europe, Belgium is also the economic and political centre of Europe. The capital, Brussels, hosts the headquarters of the European Union (EU) and the North Atlantic Treaty Organization (NATO). For all these reasons, Belgium continues to be a magnet for many foreign companies desiring to establish their presence in Europe. For many international corporations, Belgium is seen as “Europe’s portal or HUB” and is a gateway for entering the growing European market.

The Netherlands, Germany, Luxembourg, France and England (across the English Channel) are the neighbouring countries of Belgium, which is one of the most accessible countries in Europe. Belgium has three official languages: Dutch, French and German. The total area of the country covers approximately 30.530 sq km.

Belgium is a constitutional monarchy and parliamentary democracy. The Monarch is the head of the state, legislative power belongs to the bicameral parliament consisting of the Chamber of Representatives and the Senate. Executive power is vested by the federal government, headed by the Prime Minister.

Belgium has a diversified economy with a well-developed infrastructure and highly productive workforce. It exports food products, textiles, automobiles, different commodities and their proceeds.

The national currency is Euro (€).

Geography
Belgium has a beautiful landscape with large plains varied by hills, irrigated by a number of waterways, with fertile valleys and sandy territories. Thick forests and rocky caves are an ideal environment for a rich and diversified wildlife, but leave little opportunity for wide agricultural activities.

Maritime temperate climate ensures the average lowest temperature in January to be around +3 degrees C, and in July it reaches +18 degrees C. Precipitations occur in  all seasons.

Being situated in the Centre of Western Europe, Belgium lives a relatively bad environmental situation caused by high density of population with one of the worst water quality in Europe.

Map, Flag and Coat of Arm


Types of Company


Private Limited Liability Company (BVBA / SPRL)
A minimum share capital required for registering this type of company is of EUR 18,550, of which at least EUR 6,200 must be fully paid up at the time of incorporation. In case a company has only one shareholder and one director, the paid up capital must constitute EUR 12,400.

Public Limited Liability Company (NV / SA)
A minimum fully paid up capital in order to establish this type of company must constitute EUR 61,500. In case the share capital is higher and minimum requirements are met, at least one fourth must be fully paid up. A company must have at least two shareholders, three directors and a managing director must be appointed. Directors may be private persons or corporate entities.

Branch of a Foreign Company
A branch of a foreign company is a part of its head-office and does not constitute a separate legal entity. Specific documentation must be translated and submitted to the local authorities, in order to register a branch.

Subsidiary
A subsidiary is a separate legal entity from its members and the parent company, and it may take a form of different types of companies, depending on the business owners’ decisions. It may be registered by submitting requested documentation and following a precisely outlined procedure.

Holding Companies
It may be advantageous to incorporate a holding company in Belgium, as it benefits from participation exemption from dividend income, withholding tax on dividends paid by a Belgian subsidiary to the EU parent company or a company located in one of the countries with which Belgium has signed a treaty. Moreover, capital gains on shares are not taxed.

Taxation

Personal
Individuals are liable to pay income tax in addition to withholding, inheritance and gift taxes, as well as communal taxes and social security contributions. Income tax has a progressive nature and the maximum income tax rate reaches 50% over a certain total amount of annual income. Significant deductions and allowances exist.

In order to qualify for a special expatriate taxation regime, main economic interests of an individual must be located outside Belgium and other specific criteria must be satisfied.

Corporate
The standard rate of corporation tax is 33,99%, but reduced rates may be granted to companies the profits of which do not exceed certain amounts. There are a number of allowed deductions that companies may mention for corporation tax purposes. 95% of the dividends received by a Belgian company are exempted from taxations, while the remaining 5% is taxed at a standard rate.
The standard rate of the VAT is 21%, reduced rates of 12%, 6% and 0% are applicable on certain goods and services. Withholding tax is charged at rates of 15% and 25% depending on each particular situation. National Interest Deductions, Patent Income Deductions, Incentives for Research & Development and Audiovisual works provide significant incentives to business management, significantly reducing tax rates.
 
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