2.1 Legal Framework

The formalities required for the opening of a Belgian branch by a foreign company are laid down in Article 198 of the Consolidated Laws on Commercial Companies ("CLCC"). This provision was amended by the Law of April 13, 1995 which has implemented the Eleventh EC Directive of December 21, 1989.

Any foreign company wishing to open a branch in Belgium must disclose certain documents and information in Belgium and register with various Belgian authorities prior to starting commercial activities through that branch. The purpose of such disclosure and registration requirements is to ensure the protection of third parties who deal with Belgian branches of foreign companies by providing them with basic information about the foreign company and its Belgian branch.

2.2 No Approval of Belgian Governmental Authorities

As a general rule, no approval of Belgian governmental authorities is required for the opening of a branch in Belgium. Some exceptions apply, e.g., for banks and insurance companies.

2.3 Documents and Information to be Disclosed

The following documents and information must be disclosed by the foreign company prior to opening a branch in Belgium (Article 198, par. 1 CLCC). Most documents and information are the same for all foreign companies, regardless of whether they are governed by the laws of a EU Member State or a third country. There are, however, some differences which are highlighted below.

2.3.1 Documents and Information About the Company

(a) A copy of the company's Articles of Incorporation and By-laws (if the latter are contained in a separate document) or an amended and restated version of these documents as currently in force if there have been any amendments thereto.

The requirement to file an amended and restated version of the Articles of Incorporation and the By-laws applies only for companies from EU Member States. For companies from other countries, the amendments must be filed but they need not be incorporated in an amended and restated version of the Articles of Incorporation and the By-laws.

(b) A copy of the company's annual financial statements (and consolidated financial statements, if any) for the most recent closed business year, in the format in which these financial statements have been prepared, audited and filed under the law governing the company (i.e., including copies of Board and auditors reports relating to such financial statements, if any).

(c) A document issued by the commercial register, companies register or central register in which the company's file is kept in accordance with Article 3 of the EC Directive of March 9, 1968 certifying the company's existence. Companies from countries which are not EU Member States must provide such a document only if they are required under applicable law to be registered with such a register.

(d) The company's registration number with the register as referred to under (c) above.

(e) The company's name and legal form and, for companies from non-EU Member States, the law of the State by which the company is governed.

(f) The appointment and particulars of the persons who are authorized to represent the company in dealings with third parties and in legal proceedings, as a company organ constituted pursuant to law or as a member of any such organ (e.g., directors, corporate officers). For companies from non-EU Member States, the extent of the powers of such persons must be stated, including whether these persons may act alone or must act jointly.

(g) Companies from non-EU Member States are required to disclose their principal place of business and their corporate purpose and, at least annually, the amount of the subscribed capital if such information is not contained in the Articles of Incorporation or the By-laws.

2.3.2 Information about the branch

(a) The address of the branch.
(b) The activities of the branch.
(c) The name of the branch if it is different from the company's name.
(d) The appointment and particulars of the person(s) who are authorized to represent the company in dealings with third parties and in legal proceedings, as permanent representative(s) of the company for the activities of the branch. The extent of the powers of such persons must also be stated.

2.4 Disclosure Formalities

2.4.1 Disclosure Procedure

All of the above documents and information must be filed with the clerk's office of the local Commercial Court which has jurisdiction over the area where the branch is located, except for the annual financial statements (and consolidated financial statements, if any) which must be filed with the National Bank of Belgium (Article 198, par. 3 CLCC). In addition, the information listed in items 2.3.1 and 2.3.2 above must be published in the Annex to the Belgian State Gazette.

If a foreign company has opened more than one branch in Belgium, the above documents and information may be filed with the clerk's office of the local Commercial Court of any one of the branches, at the company's choice.

2.4.2 Affidavit from the Company

For filing purposes with the clerk's office of the local Commercial Court, the company's Articles of Incorporation and By-laws (see 2.3.1 (a) above) must be attached to an Affidavit issued by the company's Secretary or any other duly authorized officer certifying that the attached documents are a true copy of the Articles of Incorporation and the By-laws as currently in force.

The corporate resolutions with respect to the opening of the branch and the extent of the powers granted to the company's permanent representative for the activities of the branch must be stated in this Affidavit or attached thereto and certified as true resolutions of the company's competent corporate body (usually the Board of Directors). All other information listed in items 2.3.1 and 2.3.2 above should also be contained in the Affidavit.

This Affidavit must be legalized, either by a Notary Public and the Apostille as provided for under The Hague Convention of 1961 or, if the company is not governed by the law of a country which is a party to this Convention, by the Belgian Embassy or the nearest Belgian Consulate.

2.4.3 Publication in the Belgian State Gazette

For publication purposes in the Annex to the Belgian State Gazette, the information listed in items 2.3.1 and 2.3.2 above must be stated in a special form, signed by the permanent representative. His/her signature need not be legalized.

2.4.4 Filing of Financial Statements

A special form must be signed by the company's permanent representative in order to file the company's annual financial statements (and, as the case may be, the consolidated financial statements) with the National Bank of Belgium. The signature of permanent representative need not be legalized.
The financial statements need not be filed in Belgium if the law governing the company does not require the company to file its financial statements.

2.4.5 Translation of Documents

For filing purposes, all documents must be translated into one of Belgium's official languages, i.e., French, Dutch, or German, depending on the Belgian linguistic region where the branch is located (Article 198, par. 4 CLCC).

If the branch is located in the French-speaking Region or the Dutch-speaking Region, the documents must be translated into French or Dutch, respectively. In Brussels, the company may choose either language or even both.

The Articles of Incorporation and the By-laws, as well as the Affidavit, must be translated by a certified translator. A free translation is allowed for the annual financial statements and the consolidated financial statements.

2.5 Registration with the local Commercial Register

The foreign company may start its commercial activities through its Belgian branch only after it is registered with the local Commercial Register. Some specific information must be disclosed to the Commercial Register, including personal data about the company's permanent representative and the number of a bank account opened by the company in Belgium.

The registration formalities must be handled by the company's permanent representative or by an attorney-in-fact appointed by the company's permanent representative. The power of attorney must be given in writing and must be legalized.

The legalization procedure depends on the place of residence of the permanent representative. If his/her place of residence is in Belgium, the power of attorney must be legalized by the local public authorities ("administration communale/gemeente-bestuur"). If his/her place of residence is located abroad, the power of attorney must be legalized, either by a Notary Public and the Apostille as provided for under The Hague Convention of 1961 or, if the place of residence is not located in a country which is a party to this Convention, by the Belgian Embassy or the nearest Belgian Consulate.

2.6 Registration with the VAT Administration

If the commercial activities that the foreign company intends to carry out in Belgium are subject to VAT, the latter must be registered with the Belgian VAT Administration.

The registration form must be signed by the permanent representative. His/her signature need not be legalized.

2.7 Registration with the Social Security Administration

If the company hires employees in Belgium for the activities of its branch, it must register with the Belgian Social Security Administration.

The registration procedure is usually handled by payroll offices ("secretariats sociaux/sociale secretariaten") which are specialized in all dealings with the Social Security Administration.

2.8 The permanent representative

2.8.1 No citizenship or residence requirements

There are no citizenship or residence requirements for the appointment of the company's permanent representative. However, permanent representatives of foreign companies are usually Belgian residents, as the purpose of a branch is to carry out business in Belgium on a regular basis.

If the permanent representative is not a Belgian resident and only travels to Belgium when the activities of the branch so require, it is advisable for all practical purposes that some powers be granted to another person in Belgium (e.g., the power to claim registered mail from the Post Office, the power to commit the company up to a certain amount).

2.8.2 Work permit or professional card

As a general rule, the permanent representative must have a work permit or a professional card in order to be allowed to work in Belgium, if he/she is not a citizen of an EU Member State. The work permit or the professional card must normally be applied for and issued before the arrival of the permanent representative in Belgium. The application process usually takes four to six weeks for a work permit and up to six months for a professional card.

A work permit is required when the permanent representative is employed on a salaried basis by the foreign company. A professional card is required when the permanent representative performs his/her duties as a self-employed person and is remunerated for such duties. No professional card is required when the permanent representative receives no remuneration for the performance of his/her duties. In that case, the corporate resolution appointing the permanent representative must state that he/she will receive no remuneration for the performance of his/her duties.

A certified copy of the work permit or professional card must normally be filed with the local Commercial Register at the time the company's registration is applied for. However, if the branch's address is located in the Brussels area, no copy of these documents must be filed if the permanent representative resides abroad and receives no remuneration for the performance of his/her duties. This is merely an administrative tolerance that has grown up at the Brussels Commercial Register.

2.8.3 Certificate of residence

If the permanent representative is not a Belgian citizen and has his/her place of residence in Belgium, he/she must file a certificate of residence with the local Commercial Register at the time the company's registration is applied for. This certificate of residence is issued by the local public authorities ("administration communale/gemeentebestuur") where the permanent representative has his/her place of residence.

2.8.4 Social Security

The permanent representative must register with the Belgian Social Security Administration if he/she is not a salaried employee and works as a self-employed person, regardless of whether he/she receives any remuneration for the performance of his/her duties.

The content of this article is intended to provide general information on the subject matter. It is not a substitute for specialist advice.

De Bandt, van Hecke & Lagae - Brussels (32-2) 501 94 11