How To Register A Sole Proprietorship In Belgium

Belgium is a prime location to start a business. For most companies, it is the central gateway to some of the wealthiest European cities like the capital, Brussels, and other cities like Paris and Amsterdam. 

Apart from this, Belgium offers low barriers to market entry, a gateway to 500 million European consumers, and a competitive tax regime with ease of setting up a business. Foreign-owned firms in Belgium alone account for about 28% of value in the private sector. 

Exports of goods and services from Belgium account for 84% of its GDP. The service industry contributes about 76.8 percent of GDP. Among manufacturing industries, engineering and metal products, motor vehicle assembly, transportation equipment, and scientific instruments dominate the market. 

In this context, several commercial opportunities exist for entrepreneurs to explore new markets. One great way to utilize these exciting opportunities is by setting up a sole proprietorship in Belgium. Any entrepreneur who wishes to register sole proprietorship must be registered at the Belgian Trade Register and apply for a VAT number.

Keep reading and learn about how to register a sole proprietorship in Belgium. 

Do You Have to Register Your Sole Proprietorship in Belgium? 

A sole proprietorship is the most common form of business entity. As a sole proprietor, there is no legal difference between you and your business. It is easier, less costly, and involves relatively less paperwork than other entities.  

Entrepreneurs who wish to conduct self-employed activity in the form of a company with a legal personality may register a sole proprietorship in Belgium. 

To start a sole proprietorship in Belgium, an entrepreneur must register with the Banque Carrefour des Entreprises (BCE) in Wallonia or Kruispuntbank van Ondernemingen (KBO) in Flanders. 

A registered sole proprietorship in Belgium must also be affiliated with a social insurance fund. To hire staff in Belgium, they must be identified as an employer by the National Social Service Office (NSSO). 

Benefits of Sole Proprietorship in Belgium

Belgium presents multiple reasons for entrepreneurs to invest and expand their operations in mainland Europe. Any foreign entrepreneur can leverage the golden opportunity by setting up a sole proprietorship in Belgium. 

The sole proprietorship is one of the most straightforward business structures that an individual operates, because:

  • Zero capital requirement: Any national & regional law (Walloon Region, Brussels-Capital Region, or Flemish Region) does not impose minimum capital requirements to register a sole proprietorship in Belgium. 
  • Minimum legal obligation: Incorporating a sole proprietorship in Belgium does not require drafting articles of association and related legal requirements. 
  • Minimum tax obligations: Sole proprietorships which do not cross a threshold revenue of 25,000 euros need not manage extensive bookkeeping and maintain financial records as tax liabilities are low. Even VAT exemption may be claimed. It is sufficient for proprietors to file personal income tax as sole proprietorship taxes in Belgium. 
  • Minimize asset-liability risk: A marital agreement can protect the spouse’s assets to pay the company’s debts. Similarly, individuals can protect their residence in Belgium from any risk liability. 
  • Easy banking options: The banking process is simple for sole proprietors. Business owners can accept and make business transactions using their personal accounts. 
  • Operation flexibility: The proprietor holds legal rights to sign business documents, conduct legal operations, or sign a power of attorney on behalf of the business entity. 
  • Less bureaucratic: Sole proprietorship transfers unlimited liability to individual owners, making them responsible for all the profits and losses. For this reason, incorporating a sole proprietorship involves less paperwork, unlike other structures.
  • Social insurance: Any registered self-employed individual in Belgium is entitled to social and economic benefits from the National Institute for the Social Security of the Self-employed (NISSE) upon quarterly social security contributions.
  • Earning profit: Since there is no partner in a sole proprietorship, the profit earned goes directly to the owner. 

Documents Required for Registering Your Business in Belgium

The documents required for setting up a sole proprietorship in Belgium are as follows: 

Professional card & Residence permit

  • A citizen of a non-EU/EEA country (Iceland, Norway, and Liechtenstein) or Switzerland can incorporate a sole proprietorship in Belgium after receiving a valid professional card that acts as a work permit.
  • A residence permit is required to enter Belgium.
  • Moreover, anyone living in Belgium for more than 6 months (183 days) of the year and registered with the local municipality is considered a Belgian resident. 

Licenses and permits

  • There are certain professions in Belgium for which you require licenses and permits to set up businesses.
  • These professions include real estate agents, pharmacists, medical practitioners, mountain guides, and others. 

Tax identity 

  • Incorporating a sole proprietorship in Belgium for Value-Added Tax (VAT) purposes or identifying as an employer will allow businesses to file tax returns as separate entities and hire local talent.   

Current bank account

  • A separate current bank account for sole proprietorships helps manage business transactions more effectively.  
  • Specific requirements for opening a corporate bank account for a sole proprietorship in Belgium may vary, depending on the bank policies. In most cases, establishing the tax identity of the beneficiary is critical. 

Sole proprietors can have the same bank accounts for personal and business purposes. 

It depends on the individual bank policies if they need income tax filings of the proprietor or any other proof to create a bank account in the name of the company. Hence the use of the phrase “in most cases” 

It is difficult to list which cases require the tax identity of the beneficiary.

Other Criteria for Registering a Sole Proprietorship in Belgium

Entrepreneurs interested in a sole proprietorship must follow proper procedures while incorporating a sole proprietorship in Belgium. Below is an overview of some specific criteria for the same:

  • Must be at least 18 years old to register a sole proprietorship in Belgium
  • Age limit relaxed up to 16 years for registering self-employed in Belgium as a craftspeople 
  • Must not be banned from practicing a profession of choice
  • Must be free from civil & criminal liabilities 
  • A proof of residence for foreigners in the form of a valid “certificate of registration model A” (attest van immatriculatie model A/attestation d’immatriculation modèle A) 

Additionally, sole proprietorship operating in regulated businesses may have to apply for necessary permits, for example, environmental protection (environmental permits granted by the Regions), the protection of privacy (private detective), the protection of public order (caretaking), or the security of food hygiene (permit from the Federal Agency for the Safety of the Food Chain (FASFC), etc.

Other formalities for registering self-employed in Belgium are using the title and obtaining specific licenses and authorizations.  

How to Register a Sole Proprietorship Company in Belgium

Here is a simple overview of how to register a sole proprietorship in Belgium.

1. Do your research

  • Individuals may ensure personal conditions are met, such as legal capacity, age, diploma, or relevant knowledge.
  • Conduct a feasibility study before establishing your business.
  • Any business plan to set up a sole proprietorship in Belgium may include a project presentation, an environmental analysis, a commercial program, and a financial plan.

2. Register at Belgian one-stop-shop

3. Visit an enterprise counter 

  • Once they have decided to carry out business activities through a company, they will need to set up a legal entity like a sole proprietorship.
  • Individuals willing to incorporate a sole proprietorship in Belgium may visit an enterprise counter (ondernemingsloket/guichet d’entreprises). 
  • Enterprise counters help companies without a deed of incorporation for mandatory registration with the Kruispuntbank van Ondernemingen (KBO)/Banque-Carrefour des Entreprises (BCE). 
  • KBO/BCE is a national database where all companies are registered to run a business legally in Belgium. 

4. Register a sole proprietorship for tax purposes

  • Valid VAT registration will help in filing tax returns as a business entity. 
  • Visit or avail of e-services from the enterprise counters to apply for VAT registration. 
  • A self-employed person should obtain an enterprise number.
  • The sole proprietorship company number is the same as the VAT number (BE-nummer/numero TVA). BE prefix signifies use abroad. 
  • Sole proprietorships earning less than €25,000 can opt for petite enterprise/kleine onderneming status. 
  • The petite enterprise status exempts them from paying VAT. It also prohibits them from claiming it. 

6. Open a current bank account

  • A sole proprietorship in Belgium can open a current bank account.
  • Documents related to incorporation, business registration, and tax identities may be required. 

7. Joining social insurance fund & health insurance

  • A registered self-employed in Belgium must pay quarterly social security contributions for their socioeconomic benefits. 
  • They can be associated with health funds (ziekenfonds/mutualité) for their health insurance. This means some funds are restricted to members of various religious, political, or professional organizations for historic reasons, but most are open to all. Hence, they have to be “associated” or choose carefully.
  • Any self-employed person can choose from 20 Christian, 13 socialist, 10 liberal, seven independent, and seven neutral health funds from all over Belgium. 

8. Register for hiring employees

Sole proprietorship Belgian law requires entrepreneurs to complete a series of administrative formalities before hiring staff, all free of cost:

  • First, they must identify as an employer with the NSSO. 
  • Second, they should make an electronic employment declaration (DIMONA).
  • Third, they should draft a quarterly multifunctional declaration stating the work and remunerations of all employees. 

The business registration process may require a comprehensive understanding of national and regional laws, which usually takes time and effort. 

Here is why we recommend entrepreneurs or global businesses to look beyond registering a sole proprietorship in Belgium and adopt global Employer Of Record (EOR) solutions. 

How can Multiplier Help You Carry Out Business in Belgium? 

While sole proprietorships offer maximum benefit for foreign entrepreneurs looking to set up a business quickly in Belgium, sole proprietorship taxes in Belgium are progressive, i.e., increase with income. 

Sole proprietorship Belgian laws do not impose any minimum requirements for the number of employees or capital. However, individuals are personally liable for all business activities.

Even though the registration is straightforward, with simple filing procedures, there are a lot of challenges to overcome. These include expanding teams and hiring employees in Belgium, payroll, and team management.

That is where Multiplier comes in to take the pressure of coordination and onboarding off of your hands.

Multiplier is a global employment solution designed exclusively for sole proprietors looking to expand globally. It offers reliable EOR solutions to manage recruits, onboard employees, and drive HR responsibilities in Belgium. The one-click payroll services can make seamless payments to international employees and freelancers. 

Multiplier ensures 100% compliance with the local rules and regulations to manage any form of business in Belgium effectively.

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Frequently Asked Questions

Belgium has a civil law system that is majorly influenced by French law.

If you are a registered self-employed in Belgium and have set up a sole proprietorship, Belgium has no exchange control restrictions for inward or outward investment. Trademark registration in Belgium is possible.

Belgium has adopted the EU Common External Tariff, making any goods imported into Belgium that have originated in the EU free from customs duties. However, Belgian resident individuals are subject to progressive personal tax on their worldwide income. Individuals and businesses have several obligations under anti-money laundering and data protection laws.

The Belgian Guaranteed Average Monthly Minimum Income (RMMMG) is €1,806.16 before tax on 1 April yet fails to meet European standards. Additionally, for an average employee, an employer in Belgium spends €2.10 for every €1 of net salary after tax.

Taxation in Belgium for a sole proprietorship is simple. As a registered self-employed in Belgium, you pay your taxes through personal income tax on your total taxable income after deducting social security charges and professional expenses.

Below are the personal income tax rates for the tax year 2022 (income generated in 2021):

  • Up to €13,870: 25%
  • From €13,870 to €24,480: 40%
  • From € 24,480 to € 42,370: 45%
  • From €42,370: 50%

If a sole proprietorship in Belgium is registered with a VAT number, they can deduct or claim that taxes are paid accordingly.

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