Among the options available to business people looking to invest in Belgium, buying an existing firm might be the quickest. If they can buy a ready-made business. A Belgian “off-the-shelf” corporation is an existing legal entity that is typically inactive or inert. This kind of business should have a spotless background and no prior history of conducting business.
Requirements and procedure
The complicated process of purchasing stock in an established corporation always necessitates notifying the Belgian Commercial Registry. A new list of stakeholders, contact information, and an international entity’s consent to buy stock of the Belgian firm must all be provided by the new investor. A Belgian business may also alter its name by notifying the regional Trade Register of the modifications. The company’s formation date cannot be amended.
After a notary authenticates the process, the Belgian firm’s stock transfer is accomplished. The new ownership board’s resolution, the location, and other pertinent papers where alterations have been made must all be provided for this reason by the new buyer. The alterations can include new areas of operation and other amendments to the corporation’s articles of incorporation,
The international investor must make sure the Belgian readymade firm is free of creditors, including taxes, national insurance payments, and other owed obligations and liens. The owner may submit a formal petition to Belgium’s Direct Taxation Office for this reason.
The procedure is easier because there are already a variety of existing companies suitable for any business kind, even though there are some requirements. Still, one can easily buy a company in his or her name without executing the required paperwork for the firm to take over.
Adjustments after the purchase.
Once the new owner takes over company administration, the firm can still undergo many adjustments. A company secretary may be appointed, the share capital may be raised, the shareholding structure may alter, and other actions may be taken. It’s important to keep in mind that any modifications that take place after a company is registered in Belgium must be properly reported to the officials.
Top business structures in Belgium
There are several alternatives available when buying an enterprise in Belgium. Private limited liability and public limited liability are the two choices available in Belgium for those wishing to purchase a company there. One of the most common types of legal structures is the private limited liability corporation, which is typically used for privately owned small and medium size organizations. Larger businesses typically choose a public limited liability company because its minimum capital requirement is much higher than that of a private limited liability corporation.
Corporate tax
You won’t need to submit a VAT or other associated tax application if you buy a previously operational and incorporated firm. You still need to handle and pay the business taxes, though. Make certain you request all tax and financial records from the previous owner. Apply for changes at the tax department as well.
Belgian corporate tax rates have dropped from 29 percent to 25 percent in 2022. Companies with greater than 50% individual ownership or fewer profits are subject to a lower rate.
Underlying risks
Before closing the purchase, you must conduct exhaustive thorough research to obtain an accurate picture of your prospective acquisition. To identify risks, yes, but also to find untapped potential for a realistic assessment of your target. Analyzing and estimating the share purchase agreement’s (SPA) tax-related risks is crucial before purchasing the company’s stock. You can examine:
- business structure’s model;
- costs and other related expenses;
- organizational problems; and
- legal challenges.
