Setting up a Representative Office in Belgium
Many firms choose to set up a representative office in order to gain experience and gain a better understanding of the size and potential of the Belgian market. They use the representative office to lay out their long-term goals and oversee their other business operations.
The mission of the representative office is to act as a liaison between the home office and trade organizations or related industries in Belgium. Representative offices often engage in market research and establish contacts with prospective customers and partners. It is important to remember that the representative office is not a separate legal entity. Rather, it is an extension of its parent company.
A representative office may only engage in non-profit making activities. Accordingly, the representative office may engage in any of the following functions:
- Providing data and promotion materials to potential clients and partners;
- Liaising with local and foreign contacts in Belgium on behalf of its parent company;
- Acting as a coordinator for the parent company’s activities in Belgium;
- Supervising the implementation of contract signed between your company and local partners in Belgium;
- Conducting research and surveying for its parent company in the local market;
- Identifying trade opportunities;
- Making travel arrangements for parent company representatives and potential Belgian clients;
- And other non-profit making business activities.
That being said, a representative office is restricted from engaging in the following activities:
directly engaging in any business for profit, i.e.,
- It may not receive fees for services it provides
- It may not sign contracts or deals on behalf of the parent company;
- It may not collect money or invoice organizations/individuals within Belgium for services or products
- It may not buy property or import goods or equipment.
As long as your representative office is not engaged in any business for profit in Belgium, there is no registration required and its presence is considered non-taxable.
Considering that this office is limited to preparatory and auxiliary activities that do not constitute a permanent establishment (generally information and public relations services), that staff in Belgium do not have powers and that the company structure does not constitute a branch in the sense of commercial law or accounting, or in terms of income tax; it will not be necessary to keep an accounting in Belgium, to inscribe in a commercial register or to make the tax declaration of non-residents in Belgium.
Statute of the staff
Since April 1, 2007, any employer, officer or manager must, before hiring a salaried worker or hiring a self-employed person in Belgium, make a declaration by electronic means, by fax or by post in the National Office of Social Security (ONSS) or INASTI (National Institute of Social Security for Independent Workers), when appropriate (articles 137 to 167 of the program law of December 27, 2006).
In addition, if the personnel assigned to this office is covered by Belgian labor regulations, since the representative office is not a separate legal entity, the company must register with the ONSS (National Social Security Office). When the company registers with the ONSS as an employer, it must be inscribed at the address of a natural or legal person established in Belgium, where it will receive all the post.