1 Legal framework

1.1 Beyond general commercial and contract laws, what other specific laws and regulations govern secured finance in your jurisdiction?

Belgium has a myriad of laws that may apply to specific financing transactions and security interests granted thereunder. In addition to general statutes and case law, the most common laws pertaining to specific regimes for security interests are as follows:

  • Pledges over movable assets and receivables: Book II, Chapter XVII, "Security on Movable assets", of the Belgian Civil Code, introduced by the Law of 11 July 2013 on Taking Security on Movable Assets, as amended from time to time) ('MAS Law');
  • Pledges over financial instruments (shares) and bank accounts: The Law of 15 December 2004 on Financial Collateral;
  • Real estate mortgages: The Law of 16 December 1851 on Privileges and Mortgages; and
  • Insolvency proceedings: Book XX, "Insolvency of Businesses", of the Belgian Code of Economic Law.

In addition, there are:

  • specific consumer protection laws;
  • laws on financial leasing;
  • laws on lending to small and medium-sized enterprises;
  • usury laws; and
  • a banking supervisory regime.

International private law treaties should also be considered with regard to governing law and jurisdiction. In case of bond issuances, additional bodies of law with regard to prospectus obligations and other information and reporting requirements may also apply.

1.2 Do any bilateral and/or multilateral treaties or trade agreements have particular relevance for secured finance in your jurisdiction?

As Belgium is a member state of the European Union, European law has a considerable impact on domestic law.

Treaties of international private law (ie, jurisdiction and governing law) are especially relevant to secured financing (please see question 12).

1.3 Beyond normal governmental institutions, are there regulatory or tax bodies that play a particular role in secured finance your jurisdiction? What powers do they have?


In addition to the 'twin peaks' model, with separate supervisory authorities for prudential and governance supervision, specific supervisory authorities include:

  • the Federal Public Service Economy for consumer credit loans and financial leasing; and
  • the Federal Public Service Finance.

1.4 What is the government's general approach to secured finance in your jurisdiction? Are there government guarantee/support schemes available to lenders, and if so what are the qualifications to that support?

The government generally considers secured (corporate) finance to be a private matter, although it keeps registers of loans that are granted to Belgian individuals and enterprises.

The Belgian state and its communities also provide corporate lending guarantees (eg, through PMV and Gigarant) and export finance guarantees (through Credendo). During the COVID-19 pandemic, certain support schemes have also been established.

Generally speaking, especially with regard to consumer lending, Belgian law is rather borrower friendly.

2 Secured finance market

2.1 How mature is the secured finance market in your jurisdiction? Are the majority of the transactions purely bilateral and domestic, or is there an international syndicated market for secured financing under your domestic law?

The secured finance market is relatively advanced, with several club deals (with two or more of the four major Belgian banks involved) in the mid-cap market and fully syndicated loans in the mid to large-cap market.

However, alternative credit markets are less developed in Belgium and for more 'novel' constructions (eg, unitranche, term loan B), Belgian players tend to go 'shopping' in international financial hubs (in particular, London and Luxembourg). A limited number of (smaller) players on the Belgian market specialise in providing mezzanine finance.

2.2 Are there any bodies in your jurisdiction/region that promote the use of standard documentation and best practices in secured finance transactions? If so, are these widely used and followed?

The Loan Market Association documentation standard is largely adhered to for mid- to large-cap deals.

Smaller financings are typically based on bilateral credit letters which, although lender-specific, are rather similar between lenders.

2.3 What significant secured finance transactions have taken place in your jurisdiction in recent times?

No official reports on lending transactions are available in Belgium. The main relevant secured finance transactions which have received wide media exposure are:

  • the financing of the Belgium-headquartered (listed) multinationals and/or their assets (eg, the recent A$10.1 billion sustainability linked loan revolving credit facility entered into by AB InBev; a €5 billion medium-term note programme by UCB; and secured loans and/or bond issuances by VGP, Euronav, Fagron and Telenet, among others);
  • major infrastructure works (eg, offshore wind farms in the North Sea); and
  • private equity transactions in relation to Belgian targets or Belgian subsidiaries of international targets.

3 Secured finance providers

3.1 Who are the key providers of secured finance in your jurisdiction? Is there a thriving alternative credit market (beyond bank lenders)?

Key secured finance providers are traditional banks, and in particular the major 'Belgian' banks (KBC, ING, BNP Paribas Fortis and Belfius). In larger transactions, these banks often syndicate with international banks and financial institutions. UK, French, Dutch and German banks are often involved in Belgian transactions, but we occasionally also see lenders from other jurisdictions.

Alternative credit markets are less developed in Belgium and Belgian borrowers that wish to utilise more 'novel' constructions (eg, term loan B) or avoid syndication for other reasons tend to tap the international financial markets (in particular, London). High-yield bonds are seldom seen on the Belgian market; however, debt financing through bonds (and in particular private placements) is not uncommon.

3.2 What requirements and restrictions apply to secured finance providers in your jurisdiction? Do these vary depending on (a) the type of entity; (b) whether the lender is domestic or foreign?

Lenders (irrespective of home jurisdiction) that combine lending activity with deposit taking are subject to extensive banking legislation and require a banking licence. However, the mere activity of providing loans (by Belgian or foreign lenders) is not a regulated activity.

Specific restrictions apply to leasing, consumer/mortgage lending and lending to small and medium-sized enterprises.

4 Secured finance structures

4.1 What secured finance structures are most commonly used in your jurisdiction?

Club deals and syndication are commonly used. Mezzanine finance is not uncommon. Larger financings often combine a (syndicated) credit agreement with the issuance of bonds (through private placement or otherwise).

4.2 What are the advantages and disadvantages of these different types of structures?

The structure is typically determined by the amount of financing and the terms required by, and the international footprint of, the borrower. Obviously, involving more parties increases the complexity of the transaction and results in less flexibility on terms and conditions.

4.3 What other factors should parties bear in mind when deciding on a secured finance structure?

Tax factors are a key concern when structuring finance transactions. These factors include withholding taxes on interest payments and dividend payments to non-resident lenders and/or shareholders. Furthermore, Belgian tax law contains certain limitations on interest deductibility and thin capitalisation rules (mainly relevant for interest payments made to non-residents located in so-called 'tax havens' and for so-called 'grandfathered loans').

5 Security

5.1 What types of security interests are available in your jurisdiction? Which are most commonly used and which are recommended (if different)?

Selection of the specific security package is strongly influenced by the cost and practicality of taking and perfecting security. In addition, the exact scope of the package will depend on the activities, creditworthiness and negotiating position of the borrower. The basic security package typically consists of a pledge over shares and a pledge over receivables and bank accounts.

Depending on the circumstances, other security interests are added to this package. A full Belgian law security package consists of:

  • a pledge over all movable assets. These typically include shares, receivables (eg, intragroup receivables, loan assignments, claims, contractual rights, insurance rights), cash accounts, securities accounts, intellectual property, other movable assets and the business as a whole. However, they may also include more 'uncommon' assets such as rolling stock and vessel cargo; and
  • a mortgage and/or a mortgage mandate with respect to real estate (the latter is the more cost-efficient option, although it provides less security to the beneficiary). A mortgage mandate gives the power to the beneficiary to unilaterally register a full mortgage.

Specific security interests exist with regard to intellectual property and vessels, among other things. In consumer credit, retention of title is more commonly used, but it is rarely seen in corporate credit transactions.

Belgian law requires the pledged assets and secured amount to be determinable at the date of the pledge. Hence, a pledge over 'material' assets (eg, 'material bank accounts') is not possible without having a clearly defined materiality concept. This often causes confusion in an international context.

5.2 What are the formal, documentary and procedural requirements for perfecting these different types of security interests (ensuring that they are enforceable against debtors and third parties)?

Perfection requirements vary significantly, depending on:

  • the type of security interest;
  • the collateral; and
  • the preferences of the lenders and the borrower (especially in light of the degree of control that the lenders or borrower wish to acquire or maintain).

The most common perfection actions are as follows:

  • A pledge over movable assets can be perfected by:
    • registration in the national pledge register; or
    • dispossession (ie, control in the hands of a third-party warehouse manager);
  • A pledge over shares should be inscribed in the share register (in the case of registered shares) or shares should be held on a blocked account (in the case of dematerialised shares);
  • A mortgage and mortgage mandate must be inscribed in the mortgage register and (contrary to the other security interests listed here) must be executed before a notary public;
  • A pledge over receivables and cash accounts must be notified to the debtor or account bank, but can also be validly taken 'silent' (which may entail certain risks vis-à-vis third-party rights). Alternatively, cash may also be held on a blocked account;
  • A pledge over intellectual property must be registered in the relevant IP register. Such registration is typically done by specialist third-party service providers; and
  • Vessel mortgages must be registered in the relevant vessel register.

5.3 What are the main types of collateral used as security in your jurisdiction and what specific points should be borne in mind regarding each?

See questions 5.1 and 5.2. Depending on the transaction, this security package is typically tailored to the borrower.

5.4 Can security be taken over property, plant and equipment in your jurisdiction? If so, how?

This result is typically achieved by combining a real estate mortgage (mandate) with a pledge over all movable assets. Belgian law does not have a 'floating charge' concept, but the notion of a pledge over the 'entire business as a whole' achieves a fairly similar result.

5.5 Can security be taken over cash (including bank accounts generally) and receivables in your jurisdiction? If so, how?

Yes, by way of non-notarial pledge agreement. The security is perfected by notification to the account bank or the debtor. Security over cash may also be perfected by dispossession (ie, transfer to a blocked account).

5.6 Can security be taken over company shares in your jurisdiction? If so, how?

Yes, by way of non-notarial pledge agreement. The security is perfected by:

  • inscription of the pledge in the pledge register (registered shares); or
  • dispossession (dematerialised shares), by way of inscription of the dematerialised shares onto a specific pledged securities account.

5.7 Can security be taken over inventory/moveables in your jurisdiction? If so, how?

Yes, by way of non-notarial pledge agreement. The security is perfected by:

  • inscription of the pledge in the pledge register; and/or
  • dispossession, typically by way of placing the stock under the control of a third party warehouse manager.

Which perfection option will be used will be determined on a case-by-case basis. Dispossession can in practice ease enforcement (as it gives direct access to the pledged assets), but it is more expensive, may restrict the inventory fluctuations of the borrower and is more susceptible to 'incomplete' perfection.

5.8 What charges, fees and taxes (including notary and similar fees) arise from the perfection of a security interest? Do these vary depending on the type of assets used as collateral?

The charges, fees and taxes depend on the type of assets used as collateral. Notarial fees are payable on some security documents. Stamp duties are not material.

Registration fees for a movable assets pledge amount to €500.

Registration and mortgage fees due upon registration of a mortgage agreement are calculated as a percentage of the secured amount and may be high (as a rule of thumb, 1.6% of the secured amount). For a more cost-efficient option, real estate security is typically split over a full mortgage and a (less expensive) mortgage mandate.

Fees for the registration of IP pledges vary widely and depend on the third-party service provider involved for registration.

5.9 What are the respective obligations and liabilities of the parties under the security documents?

These vary widely and are generally linked to the conditions of the relevant credit agreement.

Security agreements tend to include a negative pledge and further assurance obligations, as well as perfection obligations with regard to future assets (where relevant). They typically also include representations on the status of the collateral and pre-agreed triggers for control and enforcement.

5.10 What other considerations should be borne in mind by all counterparties when perfecting a security interest in your jurisdiction?

Security perfection of both movable assets pledges and mortgages must be renewed after 10 and 30 years respectively.

If perfection is achieved through dispossession, the requirements of dispossession (eg, clear designation of pledged assets) should be observed at all times during the lifetime of the pledge.

Specific attention is due where assets would need to be transferred and/or processed during the course of the pledge.

The coverage of future assets under the existing pledge should be clear.

The pledge agreement should provide a mechanism to cover amendments to the underlying credit documentation.

6 Guarantees

6.1 What types of guarantees are available in your jurisdiction? Which are most commonly used and which are recommended (if different)?

In line with Loan Market Association practice, secured finance arrangements typically include joint and several personal guarantees pursuant to which the obligors guarantee the obligations under the finance documents with all their assets. The beneficiary can turn to the guarantor for the full amount of the guaranteed amounts.

Alternatively, with an 'in rem' guarantee, a guarantee is granted up to (the value of) a certain asset. In the context of secured finance arrangements, this type of guarantee is often used where third parties own certain group assets (eg, minority shareholders, real estate owned in part by a shareholder).

A surety is typically avoided. A surety is an accessory to the main obligation, whereas a guarantee is a separate and independent obligation (although dependence on a 'main' document can to a certain degree be added to a guarantee).

6.2 What are the formal, documentary and procedural requirements to perfect a guarantee?

There are no specific requirements.

6.3 What charges, fees and taxes (including notary and similar fees) arise from the perfection of a guarantee?

There are no specific requirements.

6.4 What are the respective obligations and liabilities of the parties under the guarantee?

This is very much dependent on the specific guarantee agreement. Belgian law is rather flexible in this respect.

Beneficiaries (including the security agent) are jointly liable for the wrongful exercise of rights under the guarantee or security interests. Typically, corporate finance agreements include indemnity clauses between the security agent and the other lenders in this regard. Liability vis-à-vis the guarantors cannot be waived until it has arisen.

6.5 What other considerations should be borne in mind by all counterparties when taking the benefit of a guarantee in your jurisdiction?

A Belgian company may grant guarantees or security (or, for that matter, enter into any transaction) only if entry into such transaction is in accordance with its legal purpose, its corporate object and its corporate interest. If these conditions are not met, the guarantee is voidable.

For a guarantee to accord with the corporate interest of the guarantor, it should not be disproportionate to the financial means and the benefits enjoyed by the guarantor thanks to the guarantee. Especially in upstream or downstream transactions, this must be assessed taking into account the specifics of the transaction.

For these purposes, in practice, we see that cross-stream and upstream guarantees granted by a Belgian guarantor will typically be subject to certain limitations, calculated on the base of the net assets of such guarantor, among other things.

7 Financial assistance

7.1 What requirements and restrictions apply with regard to the provision of financial assistance in your jurisdiction? What specific implications do these have for secured finance transactions?

Subject to certain strict and limited exceptions, limited liability companies in Belgium are generally not allowed to advance funds, make loans or provide security with a view to the acquisition of their own shares. It is generally considered that subsequent refinancings also fall within this prohibition.

Financial assistance rules may have an impact on debt push-downs and cross-guarantees, among other things. This should therefore be considered at an early stage of transaction structuring.

Breach of financial assistance provisions renders the transaction voidable. Hence, lenders and their counsel typically also keep a close eye on this. Nevertheless, structuring with tranches and guarantee/security limitations often allow parties to work around this hurdle.

8 Syndicated lending

8.1 Is the concept of an agent or trustee recognised in your jurisdiction? If not, how is security taken for multiple lenders?

The concept of an agent is generally recognised in Belgium. A legal security agent concept has been introduced in Belgian law, initially for financial collateral (shares, bank accounts), but now also more broadly for pledges over movable assets. Previously, the lack of a legally defined agency concept was typically solved by including parallel debt wording.

The trust does not exist in Belgium. Under Belgian conflict of law rules, a foreign trust will be recognised if certain conditions are met. However, it is typically accepted that this will not govern 'in rem' aspects on Belgian collateral. This would in fact render a trust ineffective with respect to Belgian security interests. Hence, in case of Belgian collateral, it is preferable to add agency wording to agreements where there is a security trustee.

However, it remains subject to debate to what extent agent or trust concepts are recognised with respect to real estate mortgages (which generally require a notarial deed). Typically, mortgages are granted to each lender individually, in addition to a parallel debt construction which should cover additional lenders. However, although these parallel debt constructions were once rather common, to our knowledge there is no case law explicitly recognising such construction.

8.2 What requirements and restrictions apply with regard to syndicated lending in your jurisdiction?

There are no specific restrictions or requirements. European competition rules should be taken into account in the syndication process. In this regard, we refer to the final report of the European Commission on "EU Loan Syndication and its Impact on Competition in Credit Markets" (available on https://ec.europa.eu/competition/publications/reports/kd0419330enn.pdf)

8.3 What other considerations should be borne in mind by all counterparties when engaging in syndicated lending in your jurisdiction?

It is important to ensure that no lenders which are part of the syndicate (or guarantors) are covered by Belgian or EU financial sanctions regimes, as this may have a severe impact on enforceability, anti-money laundering (AML) and tax treatment of the transaction as a whole. AML rules must be observed at all times.

If the security agent is not a Belgian entity, choice of domicile with a Belgian bailiff may be required or preferable. A mortgagee must obtain a registration number at the Belgian crossroad bank for enterprises (the commercial registry). This is a formality and can be done at the moment of taking the security. The costs relating to such choice of domicile or registration are not material.

9 Taxes, charges and fees

9.1 What taxes and similar charges are levied in the secured finance context in your jurisdiction? Do these vary depending on whether the lender is a domestic or foreign entity?

The most important tax considerations are as follows:

  • A 30% withholding tax is due on interest payments made by a Belgian borrower to a non-resident lender. Certain (domestic) exemptions are available – for example, for Belgian intra-group banks, loans contracted with credit institutions which are resident in or acting through a facility office in the European Economic Area or with which Belgian has a double tax treaty, and for certain EU-intra group loans. A withholding tax exemption or reduction can also be based on an applicable double tax treaty. Interest paid to a Belgian (corporate) lender should in principle be exempt from withholding tax.
  • A 30% withholding tax is due on dividend payments made by a Belgian company to certain resident and non-resident shareholders. A withholding tax reduction or exemption might be available, based on domestic law (eg, the Belgian implementation of the EU Parent-Subsidiary Directive) or an applicable double tax treaty.

9.2 Are any exemptions or incentives available?

Yes, as discussed under question 9.1.

9.3 What other significant costs will be incurred by the counterparties in entering into a secured finance transaction? Do these vary depending on whether the lender is a domestic or foreign entity?

No specific costs are related to corporate lending activities per se.

9.4 What strategies might the counterparties consider to mitigate their tax and other liabilities in the secured finance context?

Generally, corporate finance agreements contain gross-up and indemnity clauses to cover these risks.

10 Judicial enforcement

10.1 In the event of default, what options are available to enforce a security interest or guarantee? Is self-help available in your jurisdiction in connection with the enforcement of security (if so, in what circumstances) or must enforcement action be pursued through the courts?

Most security interests (except for mortgages) can be enforced out of court, although any interested party can contest enforcement (a priori and a posteriori) in court. A priori contest of enforcement may trigger suspension of enforcement. Specific enforcement proceedings depend on the collateral and the regime governing the security interest (see question 10.2).

Severe enforcement restrictions come into place in case of judicial reorganisation or the commencement of bankruptcy proceedings (see below). Certain additional restrictions may apply depending on the specific pledged asset (eg, vessel security) or the pledgor (eg, in case of public entities).

10.2 How long does the enforcement process generally take and what steps does this typically involve? Do these vary depending on any applicable requirements or restrictions (eg, requirement for public auction or regulatory consents)? Do these vary depending on whether the lender is a domestic or foreign entity?

The duration of the enforcement process mainly depends on the type of security that is enforced and whether enforcement is contested in court (and whether decisions are appealed), and can vary from a couple of weeks to several months or years. The following steps should be followed in case of enforcement of the main security interests:

  • In case of a pledge over movable assets, a notice of default must be sent to the debtor, pledgor and other pledgees and attaching creditors, after which a waiting period of three days (for rapidly depreciating goods) or 10 days (for all other goods) must be observed. Enforcement occurs by public or private sale, among others, or (under certain conditions which are typically included in pledge agreements) by appropriation.
  • A pledge over receivables can be directly collected by the creditor, without a waiting period. Pledge agreements typically contain template notice forms and proceedings for such collection.
  • A pledge over financial collateral (including shares and bank accounts) can be enforced without a waiting period by private sale or (under certain conditions – notably a valuation method, which is to be set in the pledge agreements) by appropriation.
  • A real estate mortgage mandate can be enforced by registering a mortgage.
  • Enforcement of a real estate mortgage is subject to a strict and cumbersome proceeding, with a mandatory public sale.

Pledge agreements typically set out specific procedures (eg, with regard to control triggers and valuation methods) to be followed in case of enforcement.

10.3 What other considerations should be borne in mind when enforcing a security interest or guarantee in your jurisdiction?

The main other considerations to be borne in mind in case of enforcement are as follows:

  • International private law plays a major role in (especially cross-border) enforcement and should always be considered before opening any bankruptcy or similar proceedings.
  • Directors of Belgian companies must file for bankruptcy within one month once the conditions for bankruptcy are met. These conditions are twofold:
    • suspension of payment of obligations that have become due and payable; and
    • loss of credit.
  • When enforcing, it should be considered whether this will trigger bankruptcy.
  • Undue enforcement of security (ie, not in good faith) may lead to an 'abuse of rights' claim in torts. This will be the case if, among other things:
    • enforcement is performed without reasonable and sufficient interest while causing damage; or
    • the damage is disproportionate to the obtained or intended advantage.
  • This doctrine may prevent accelerations and enforcements for minor defaults or temporary problems, among other things. Similarly, enforcement which would jeopardise the continuity of the debtor's enterprise may also be considered an abuse of rights, depending on the circumstances. The pledgee cannot limit its liability in this context.
  • The transfer of assets as a consequence of enforcement may lead to taxation on the realised added value.
  • The Belgian courts may require a sworn translation of documents used as evidence and file in a language other than the language of the court.

10.4 Are direct agreements with contractual counterparties well understood in your jurisdiction?

Yes. Direct agreements are well used in the context of public-private partnerships and project finance transactions.

10.5 What other avenues are available to a lender to safeguard its position in connection with security or guarantees?

This should be considered on a case-by-case basis, such as seeking temporary relief or seizing assets.

11 Bankruptcy

11.1 How (if at all) do bankruptcy proceedings impact on the enforcement of security by a creditor?

During bankruptcy proceedings and judicial reorganisations, enforcement of security is in principle suspended, subject to limited exceptions – for example, for security falling under the Financial Collateral Law (eg, bank accounts and shares) and first ranking mortgages.

11.2 In what circumstances can antecedent transactions be unwound for preference? What other similar measures apply in this regard?

Transactions can be unwound for preference in case of, among other things:

  • fraud against (other) creditors;
  • new security granted for a pre-existing debt, if granted during the six-month hardening period
  • transactions for no consideration or at an undervalue, if done during the six-month hardening period;
  • payments for debt which is not yet due and payments made by means other than in cash or by way of commercial paper (with certain safe harbours in the case of court-approved arrangements with creditors); and
  • other payments where the lender was aware of a bankruptcy.

Security over financial collateral (eg, bank accounts and shares) is generally exempt from these provisions.

11.3 Are any types of entities excluded from the bankruptcy regime in your jurisdiction? If so, what alternative regimes apply?

Certain public authorities may be exempt. In addition, assets 'required for public service' are exempt from enforcement.

12 Governing law and jurisdiction

12.1 What law typically governs secured finance agreements in your jurisdiction? Do any specific requirements apply in this regard?

Finance agreements granted by Belgian lenders (especially in a club deal structure) are typically governed by Belgian law.

Cross-border transactions are typically (but not exclusively) governed by English law or New York law.

12.2 Is a choice of foreign law or jurisdiction valid and enforceable? In the case of a choice of foreign law of jurisdiction, will any provisions of local law have mandatory application? Are submission to jurisdiction provisions that operate in favour of one party only enforceable?

This will vary depending on the applicable treaties.


  • Belgium is a party to EU Regulation 1215/2012 ('Brussels Ibis') on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, as well as to the Lugano and Hague Conventions.
  • A choice of foreign forum by the parties will typically be upheld and cannot be rendered ineffective, unless:
    • the matter has a close connection to Belgium; and
    • a procedure outside Belgium would be impossible; or
    • it would be unreasonable to demand that the case is commenced abroad.
  • Submission to foreign jurisdiction may not prevent a party from instituting summary proceedings in Belgium to obtain urgent conservatory measures.
  • Validity of unilateral optional jurisdiction clauses under Belgian law is contested.

Governing law:

  • Belgium is a party to the Rome I Regulation on governing law between contracting parties. The Rome I Regulation recognises a choice of law between the parties, subject to the limits set out therein.
  • In rem security rights are in principle governed by the law of the state where the collateral is located at the time a party invokes these rights. Similarly, the opposability of the creation and loss of such rights is determined by the law of the state of the location of the collateral at the time of the facts or deeds causing the creation or loss. The applicable law depends on the nature of the collateral.

12.3 Are waivers of immunity enforceable in your jurisdiction?

In principle, yes. Waivers may not be enforceable if they would impede the exercise of public functions. The application of criminal law, among others, cannot be waived.

12.4 Will foreign judgments or arbitral awards be enforced in your jurisdiction? If so, how?

Belgium is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, but has made a reciprocity reservation under Article I(3) of the convention. The recognition and enforcement of any arbitral awards will be limited to the confines set out in the New York Arbitration Convention, as implemented, and may require the filing of a translation of the arbitral award, among other things.

The enforcement of arbitral awards is subject to a declaration of enforceability obtained from the Belgian competent court (and subject to any appeal thereof) (see Articles 1719 and 1720 of the Belgian Judicial Code). In principle, this declaration will not involve a re-examination of the merits, subject to the conditions of the 1958 New York Convention and the provisions of the Belgian Judicial Code. These conditions include that the award may not infringe Belgian public policy and must be sufficiently motivated.

A clause providing for submission to arbitration jurisdiction may not prevent a party from instituting summary proceedings in Belgium to obtain urgent conservatory measures.

13 Trends and predictions

13.1 How would you describe the current secured finance landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

  • Since 2018, Belgian has seen an increase in credits granted to non-financial institutions, with a (high) peak in early 2020 and a new peak in Q3 2021 (as per reporting by the European Central Bank and the National Bank of Belgium). These peaks can be attributed (i) to prudence in a COVID-19-related context, with many financings being taken out or extended to ensure continuity of business and (ii) to high dealflow thanks to fast moving markets, cheap financing combined with a lot of 'dry powder' and an up-tick on delayed deals after Covid-19 (see next bullets).
  • Financing is still relatively cheap. Nevertheless, due to an increased perception of risk and high demand for funding, lenders have slightly tightened lending criteria.
  • In 2020, multiple covenant waivers and extensions were granted within the framework of COVID-19. These will need to be addressed and/or reassessed when business flows stabilise and ratios become predictable again. Especially in heavy-hit sectors, this might be problematic where amend-and-extend is no longer a feasible option.
  • Post COVID-19, increased deal flow may be expected, as a number of transactions were put on hold, on a slower track or held on the market, awaiting stabilisation. This has already started to materialize in Q2-Q3 2021.
  • A number of legislative reforms are in the works. In particular, the procedure of judicial reorganisation will be updated, improving on COVID-19-era trial legislation on pre-packs. A new civil code will soon enter into force, although the specific impact thereof on secured finance transactions is still to be seen. Legislative reforms with respect to covered bonds are in the making as well.

14 Tips and traps

14.1 What are your top tips for the smooth conclusion of a secured finance transaction in your jurisdiction and what potential sticking points would you highlight?


  • If the issuance of bonds is considered in addition to a (syndicated) loan, prospectus rules and consumer protection rules should be considered.
  • Generally corporate finance agreements contain gross-up and indemnity clauses to cover tax risks.
  • When dealing with (semi-)public entities, the immunity and liability of such entities should be considered.
  • For export finance credit to Belgian borrowers, a Credendo (state) guarantee may be considered. Typically, Belgian borrowers will be aware of this.

Sticking points:

  • The grant of real estate mortgages often leads to discussions, given the high cost for the borrower.
  • Lenders should tread carefully when enforcing, to avoid triggering (unwanted?) bankruptcy and generally avoid lender liability.
  • The validity of unilateral optional jurisdiction clauses under Belgian law is contested.
  • A syndicate should not include lenders in sanctioned countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.