Self Employed in Belgium

Disclaimer: Information contained on this page is only an outline of self-employment structures and systems in Belgium and is not a comprehensive guide. Banks can provide advice on the costs and the legal formalities for setting up a business and advice on general business and financial management. For detailed tax and legal advice, businesses should contact a specialist lawyer or accounting firm.

A self-employed individual works as a private person. They must be at least 18 years of age to set up as self-employed and there is a general requirement to be able to communicate in one of the Belgian national languages and to be able to run a business. This can be fulfilled by a spouse or by an employee or assistant, if necessary. For some trades, there are minimum educational and training requirements, depending on the type of work chosen.

The self-employed person is fully liable for all debts of the business but receives all after-tax profits.

Note: If the entrepreneur is married, the non-trading spouse is liable for the debts of the business unless there is a formal marital agreement, drawn up by a notary, that separates the assets of each spouse.

Professional Card

Foreigners who are citizens of an EU member state or of Norway, Iceland or Lichtenstein can set up as self-employed in Belgium without restriction. Non-EU nationals must apply for a professional card (beroepskaart/carte professionelle) at the Belgian embassy or consulate in their home country, or, if they are already in Belgium, at the municipality where they live.

The following documents are needed for the application:

• A completed registration form
• A photocopy of the passport or residence permit
• A medical certificate
• A certificate of good conduct from the last country of residence (or an equivalent document recognised by the Belgian authorities)
• A CV

Applications are sent to the Federal Public Service for the Economy:

• At: WTC III, Boulevard Simon Bolivar 30, 1000 Brussels
  Tel: 02 277 74 01
  Fax: 02 277 53 66
  e-mail
  Website

The Federal Public Service for the Economy then investigates the application. If it is approved, the municipality issues a professional card with an exact description of the authorised activity. This card may be valid for up to five years.

In addition to nationals of a Member State of the European Economic Area, this formality is waived for certain other people, such as asylum seekers and nationals of countries which have a special relationship with Belgium under a treaty. The countries that currently have such a special relationship are Bulgaria and Romania. However, nationals of these countries require a permit to be able to conduct a self-employed business. The permit must be applied for from the Federal Public Department for the Economy.

Setting up as Self-employed

Public business coordination centres (ondernemingsloketen/guichets d'enterprise) deal with most of the formalities for setting up a business – either as a company or as self-employed. They are one-stop shops between businesses and the public services.

• For a full list of public business coordination centres: Click here (in Dutch and French)

Through them, companies and starter self-employed persons register with the electronic Register of Companies (Kruispuntbank voor Ondernemingen/Banque-Carrefour des Entreprise, KBO/BCE). This is set up within the Federal Public Department for the Economy, Small and Medium-sized Enterprises, Self-employed and Energy (Economie, KMO, Middenstand en Energie/Economie, PME, Classes Moyennes et Energie)

Once registered the business is given a unique identification number – the company number. This number will in due course replace the VAT and social security numbers. The electronic Register of Companies collects full details on the name of the business, its structure, founders, legal documents and licences, and the type of activity.

Taxes on the Self-employed

Income tax

The income of self-employed people is deemed to be personal income for tax purposes. The net amount of such income, obtained after deducting tax-allowable business expenses, is subject to personal income tax (personenbelasting/impôt des personnes physiques, PB/IPP) based on a sliding scale of rates.

Self-employed people may deduct the amount of their social security contributions from their income as well as either actual business expenses or a lump-sum tax allowance.

The yearly tax declaration is via the standard personal tax return and profits are taxed at personal income tax rates, which are higher than corporation tax rates.

VAT

The self-employed person may need to register for VAT and complete a quarterly VAT return. The rules for registering for VAT depend on the type of work done. The rules are complicated and can be explained by the local VAT office, which can be found in the telephone directory under Ministerie van Financiën/Ministère des Finances.

Social Security for the Self-employed

Contributions

Social Security contributions are paid every three months and are based on income from the business. Since no benchmark for tax can be established for a person who is just starting to trade, initially a provisional amount is paid, on account, every quarter, the amount of which is fixed by royal decree. This continues for at least three years (twelve quarters) up to a maximum of fifteen quarters. Once the fund has accurate figures for the actual income generated since start-up, it adjusts the provisional contributions and sends a demand for payment of any amounts owing.

Registration of an assisting spouse

An assisting spouse is one who assists or stands in for the self-employed person in the performance of the business without being linked by a contract of employment. Since 1 July 2005, an assisting spouse who undertakes no other activities that provide him or her with social welfare protection in the strict sense has, by default, maximum self-employed social security contributions status ("maxi-statut"). He or she must therefore also register with a social security contributions fund.

Health insurance

Contributions are managed via the national social security fund. At the start of each year, the national social security funds provide the mutual health insurance funds with particulars of the contributions made by registered people for the past year. Cover is only against major risks, such as operations, hospitalisation, and x-rays. However, individuals may take out supplementary insurance against "minor risks" such as consultation fees for a GP, pharmaceutical expenses and dental care.

Special conditions relating to self-employment on a supplementary basis

People may operate on a self-employed basis alongside their main salaried professional activity (employee, civil servant, teacher, etc.) as long as this is allowed by their existing contract of employment or industry collective agreement. More information is available from the public business coordination centres.

Funds & support provided by the public authorities

Whether at European, federal, regional or provincial level, an wide range of public financial aid is available to businesses and the self-employed. Apart from certain sectors officially excluded by the public authorities, most businesses and self-employed persons are entitled to support. Much of this aid can be combined and particular attention is paid to starter companies and self-employed people. The key categories of subsidised investments are set out below.

• For full details and application forms see the EcoSubsiBru website under Alle tegemoetkomingen/Toutes les aides (in Dutch & French)

Regional aid

The Flemish and Walloon Regions and the Brussels-Capital Region offer a range of investment aids to assist Belgian or foreign businesses established in the region concerned. Investment must be made in that region. These measures are specifically aimed at start-up businesses and the self-employed.

Assistance can take various forms, the most popular of which are:

• Interest subsidies (interestsubsidies/subventions en intérêts) and capital contribution grants (kapitaalpremies/primes en capital). The amount of these subsidies depends on a number of factors, notably the amount of the investment that can be subsidised, the business sector, and the size and age of the company
• Support for specific types of investment, such as those favouring the environment, permitting savings in energy and raw materials or investment of an innovative nature
• Supplementary subsidies for investments favouring job creation
• Tax advantages (where a capital contribution grant or interest subsidy has been granted)
• Accelerated depreciation
• Exemption from withholding tax over a specified period

The type of assistance available, the selection criteria, and the formalities and conditions to be fulfilled differ from one region to another. The source of funding will therefore depend on the particular project and the place where it is going to set up.

The Participation Fund

The Participation Fund (participatiefonds/fonds de participation) is a federal public institution involved in the market for small and medium-sized businesses and the self-employed. It offers the Starteo loan, the start-up loan and the joint loan.

The Starteo loan is aimed at the self-employed, small companies and those in the liberal professions with businesses that have been in operation for less than four years. The support consists of a subordinated loan of no more than €250,000 at a preferential rate of 3% for the first two years. The loan is granted for 5, 7 or 10 years, depending on the project type. The amount of the loan is decided on the basis of the capital investment made by the business itself in the project concerned. The loan can never be more than four times the investment made by the business itself and cannot exceed the amount loaned by the business's bank to finance the project.

The start-up loan (startlening/prêt lancement) is aimed at the fully unemployed who have been receiving benefits or a job-seeker's allowance (wachtuitkering/allocations d'attente) for less than three months, or those on subsistence allowance (bestaansminimum/ minimexe) who wish to become self-employed or set up a company. The support consists of a subordinated loan not exceeding €30,000, for a period not exceeding ten years, at a preferential rate of 4%. The applicant must contribute one quarter of the sum borrowed, which could be through a loan granted by a financial institution. Should activity cease during the first five years, the Fund may waive repayment of the balance if proof can be shown, within three months of activity ceasing, that the stoppage was beyond the control of the person concerned. The start-up loan can be combined with a Starteo or Optimeo loan provided the conditions under which the latter are granted are met.

A joint loan is aimed at a private person who starts up as self-employed or who sets up a business and who has substantial financial difficulties (a person receiving a social reintegration income (leefloon/revenu d'intégration sociael– LL/RIS), social security benefits, unemployment benefits, etc). The support consists of a subordinated loan not exceeding €12,000, repayable over four years at a fixed rate of 3 percent. The joint loan can be combined with a start-up loan provided the conditions under which the latter is granted are met.

Further Information

• InvestinBelgium – official Finance Ministry site for foreign investors
• Invest.Belgium - Government site for foreign investors
• The Federal portal for Belgium (under Businesses)
• The Finance Ministry
• The Ministry of Economy, SMEs, Self-employed and Energy

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Prepared using information supplied by ING Bank SA/NV
www.ing.be