1. DEFINITION OF A BRANCH
1.1 Definition
There is no legal definition under Belgian law of the concept of a branch of a foreign company. Based on various decisions of the Belgian Supreme Court, most legal scholars are of the opinion that the existence of a branch of a foreign company requires the fulfillment of two conditions:
(a) the company must have an office in Belgium where it carries out commercial activities on a regular basis; and
(b) a person must have been authorized to represent the company in dealings with third parties and in legal proceedings for the activities of the branch.
A branch can be defined as a permanent place of business of a foreign company in Belgium which is managed by a person who has been authorized to validly bind the foreign company.
1.2 No Legal Personality
A Belgian branch of a foreign company does not have a separate legal personality from that of the foreign company. From a legal point of view, the branch is part of the foreign company. Therefore, the branch as such may not own assets, benefit from rights or incur liabilities. All rights and liabilities arising from the activities of the branch are vested with the foreign company.
1.3 Branches and permanent establishments
From a tax point of view, a foreign company which has opened a Belgian branch will be considered as having a permanent establishment in Belgium. However, these two notions are not identical. A foreign company may have a permanent establishment in Belgium for tax purposes even in the absence of a branch, as the existence of a permanent establishment does not require the appointment of a representative of the foreign company in Belgium.
The content of this article is intended to provide general information on the subject matter. It is not a substitute for specialist advice.
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