ESTABLISH A BRANCH OFFICE

The branch is an extension of the parent company, a different location of the main office of the company, located in another country where the main company wishes to conduct business. It is not the same as when foreign investors open a company in Belgium as it is not entirely separate from the parent company.

A branch established in Belgium must carry the same name as the parent company and it’s not considered a legal entity. The commercial name of the branch may differ from the registered name and can be or not reported at registration. The parent company is carrying full responsibility for the branch’s actions.

The branch and the subsidiary are the two manners in which a foreign company can expand its activities to the Belgian market. they are fundamentally different in terms of liability for the parent company, nevertheless, they each have their set of advantages. The list below highlights some of the most important advantages of the branch in Belgium:

• Lower incorporation costs: the costs associated with opening a branch are generally lower than in the case of the subsidiary (which can be a Belgian limited liability company).
• Different annual reporting: the branch, because of its relation to the foreign company is subject to different annual reporting requirements in Belgium; in general  these can be lighter than in the case of the limited liability company.
• Control: this type of business entity is preferred in some business sectors because of the high level of control the parent company has over its branch.
• Double taxation relief: branches are subject to the provisions of the double tax treaties signed between Belgium and other countries; we recommend talking to our lawyers specialized in company formation in Belgium for more details.

Foreign companies that open a branch will need to conduct the same business activities in Belgium as the parent company conducts in its country of origin.

The procedure of starting a branch in Belgium

The procedure to start a branch is not entirely the same as that required to open a company in Belgium because of the fact that the branch does not need to have its own Articles of Association. Instead  as highlighted below in the section offering information on required documents  the foreign company will provide its own Articles translated as needed. You will also need to open a bank account in Belgium in order to deposit the share capital.

A special business permit is required for the branch in certain business sectors. This is needed before the branch office actually commences the activities and can be required for banking, insurance, medical and pharmaceutical activities and others.

The documents related to the branch must be drafted in one of the official languages of Belgium (Dutch, French or German) depending on the area of registration. The translation of the company’s Articles of Association and the excerpt from the local register will be needed and investors will need to include these translation costs which will vary according to the number of pages.

The legal representative of a branch opened in Belgium doesn’t need to have Belgian nationality but is recommended to be based there (as all the branchs’ activities take place here).

A branch opened in Belgium has a number of advantages such as the fact that there is no minimum share capital requested upon registration. Also, there are no taxes on the capital gains.

The process of registering a branch in Belgium was simplified by introducing the one-stop-shop for companies, a centralized organism for applying for company registration, VAT in Belgium and for the specific taxes.

Documentation required for opening a branch in Belgium

The following documents must be legalized by a notary from the foreign country and then translated into one of the official languages by an authorized Belgian translator:

• copy of the registration certificate:  a certified copy of the foreign company’s registration certificate issued by the local registry in its country of origin.
• the articles of incorporation: belonging to the parent company, as stated above, translated by a sworn translator.
• the decision of opening a branch: the company’s Board decision to open a branch in Belgium, translated.
• the appointment of the representative: the decision of appointing the branch’s representative and his personal details.
• specimen signature: this belongs to the individual appointed as the branch representative, concluded before a notary public.

The previous year’s balance sheet must also be translated and published it into the Belgian Official Journal and register it in the National Bank of Belgium.

The above documents must be submitted to the Registrar office of the Commercial Court and then in the Crossroads Bank for Enterprises. The registration in the Crossroads bank is possible by submitting the documentation to a one-stop-shop for companies. One of our agents who specialize in company formation in Belgium can provide more details on the submission process and can assist foreign company representatives interested in opening a branch.

The Crossroads Bank for Enterprises will issue a registration number, a VAT number and the connection with a payroll agency.

The new branch may begin its commercial activities as soon as it receives the registration number and the incorporation of it must be published in the Annex to the Belgian Official Gazette.

The branch registration process will generally take no more than a week if all the requested documents are delivered in time and properly. Please remember that this is only an estimated timeframe and the actual time may vary. Foreign company representatives can reach out to our Belgian company formation agents for an analysis depending on their particular conditions.