Domiciliation in Belgium for Foreign Companies: Branch or Subsidiary

Why foreign companies choose Belgium

Belgium sits at the heart of Europe's main markets. Its capital also hosts the institutions of the Union. For foreign companies, a Belgian presence therefore brings clients, partners and policymakers closer.

Many start without premises of their own. Domiciliation gives them an official address, mail handling and sometimes meeting rooms. Still, the choice of legal structure remains the first decision.

Three ways to set up

Each option comes with different duties.

Selling without an establishment

An overseas business can sell in Belgium without creating any structure there. For certain taxable transactions in Belgium, it may need a Belgian VAT identification. Outside the European Union, it then appoints a responsible representative. This lets you test the market, but it does not give you a Belgian seat.

Opening a branch

A branch extends the parent firm into Belgium. It has no legal personality of its own, so the parent answers for its debts. It suits foreign companies that want a quick presence without forming a new legal entity.

The main formalities:

Forming a Belgian subsidiary

A subsidiary is a separate entity under Belgian law, usually an SRL or an SA. It has its own legal personality and, in principle, confines the risk to its own assets. Setting one up requires a notarial deed and a mandatory financial plan. An SA also needs minimum share capital of 61,500 euros. Our guide to choosing a legal form compares both.

What domiciliation actually does

For a subsidiary, domiciliation provides the seat recorded in the CBE and published in the Gazette. For a branch, it offers a Belgian address and a point of receipt for official post. In both cases, the provider applies anti-money laundering rules and identifies the parent and its beneficial owners.

Foreign companies should therefore prepare a solid file: the parent's articles, a recent register extract, the directors' identity and a group chart. Documents in another language often need a translation.

Be careful, though: the tax authority looks at real activity, not just the address. If a team works in Belgium, declare that place as an establishment unit. Our guide on how to domicile a company explains that rule.

Tax for foreign companies

Foreign companies are not taxed the same way under each structure.

• Subsidiary: it pays corporate income tax at the standard rate of 25%.
• Branch: it falls under non-resident tax on its Belgian profits.
• Reduced rate: the 20% SME rate on the first 100,000 euros comes with strict conditions.
• VAT: identification applies once the activity carries out taxable transactions in Belgium.
• Payroll: the employer withholds wage tax and declares its staff to the NSSO.

The conditions for the reduced rate cover, among other things, the shareholding and directors' pay. Check them on the FPS Finance website before you build a budget. Our article on VAT registration walks through the identification step.

Accounting and the UBO register

A subsidiary keeps double-entry books and files its annual accounts with the National Bank of Belgium. Foreign companies that open a branch normally file the parent's annual accounts instead. The branch also tracks its Belgian transactions for tax purposes.

Finally, a Belgian subsidiary records its beneficial owners in the UBO register and keeps that data current. Our guide to NBB filing sets out the timetable.

Step-by-step plan for foreign companies

Common mistakes

Foreign companies often make the same mistakes:

• Confusing the domiciliation address with the real place of activity.
• Underestimating how long translations take.
• Counting on the reduced rate without checking its conditions.
• Forgetting to file the parent's accounts for a branch.

Each slip delays the launch or creates a tax risk. A local adviser and a realistic schedule keep those risks down.

To sum up

For foreign companies, domiciliation opens a flexible door to the Belgian market. A branch moves fast, whereas a subsidiary better shields the parent. In both cases, plan tax, accounting and mail follow-up ahead. If your team also needs desks, compare with a coworking space.