How To work as a IT Consultant in Belgium?
If you get an offer to work for the European Institutions from a company, and you don't want to be an employee, you will find the different options below
In Belgium, freelancers can choose to be a sole proprietorship or a company (with or without legal personality). Both options have advantages and disadvantages, and the choice will have a significant impact on the business.
Factors to consider include the type of activity, the number of people involved, the available capital, the financial contribution of partners, the most appropriate tax regime, and the foreseeable development of the activity. It is recommended to seek advice from a notary, lawyer, business consultant, accountant, or tax expert before making a decision.
As a self-employed IT consultant, both options are possible, as you will not have any employees.
A sole proprietorship is simpler to set up and manage than a company, but the entrepreneur is personally responsible for all the debts of the business.
A company may have a separate legal personality with its own rights and obligations, but requires a minimum capital, higher setup and dissolution costs, and more complex accounting. The main residence of the self-employed person can be protected against seizure by making a declaration of unseizability to a notary, but this protection does not apply to private debts and ends if the person changes status or dies.
Comparisons
In Belgium, the main business structures available to freelancers are sole proprietorships, and limited liability companies.
Sole proprietorship
This is the most simple and common business structure for freelancers in Belgium. As a sole proprietor, you are personally responsible for all aspects of your business, including any debts or liabilities.
Advantages:
Simple and easy to set up
No need to pay corporate taxes
You have complete control over the business
Disadvantages:
You are personally responsible for all aspects of the business, including any debts or liabilities
It can be harder to raise capital or obtain financing
You may have a harder time separating your personal and business finances
Limited liability company (LLC)
An LLC is a legal entity that is separate from its owners, which means that the owners are not personally responsible for the debts and liabilities of the business. There are two main types of LLCs in Belgium: private limited liability companies (SPRL/BVBA) and public limited liability companies (SA/NV).
Advantages:
Provides limited liability protection for its owners
You only pay taxes on your share of the profits
Can be easier to raise capital or obtain financing
Disadvantages:
More complex to set up and maintain than a sole proprietorship
May be required to pay corporate taxes
Owners have less control over the business than in a sole proprietorship or partnership
Costs
The costs of creating a company in Belgium will depend on the type of company you choose to form and the specific circumstances of your business. Here are some of the costs you may incur when setting up a company in Belgium:
Professional fees: You may need to pay fees to professionals such as a notary, lawyer, or business consultant for their services in setting up your company.
Capital requirements: Some types of companies, such as a public limited liability company (SA/NV), require a minimum capital investment.
Registration fees: You will need to pay fees to register your company with the appropriate authorities, such as the National Bank of Belgium.
Insurance: You may need to purchase insurance to protect your business, such as liability insurance or business interruption insurance.
Ongoing costs: There may be ongoing costs associated with running your company, such as accounting and legal fees, taxes, and other business expenses.
Where to register your company?
Here are some options for establishing the business address or "domicile" of a company in Brussels:
Physical address: The company can have a physical location in Brussels where it conducts business and receives mail. This could be a commercial office space, coworking space, or even a virtual office with a mailbox service. This option can be used if you want to use your personal address for your company; it might allow you to rent an area of your home to your company.
Virtual office: A virtual office service provides a Brussels address for the company to use as its official business address, without the need for a physical workspace. The company can receive mail and packages at the virtual office address, and may also have access to other services such as a receptionist or meeting rooms on demand.
How to register a company?
Forming a company in Belgium involves the following steps:
Choose a business structure: Decide on the type of company you want to form, such as a sole proprietorship, partnership, or limited liability company (SRL/BVBA). Consider the advantages and disadvantages of each option, and seek advice from a lawyer or accountant if necessary.
Choose a name: Choose a unique name for your company that complies with Belgian naming laws. You may need to conduct a name search to ensure that the name you have chosen is available and not already in use by another company.
Check if a company with your target name already exists: https://economie.fgov.be/en/themes/enterprises/crossroads-bank-enterprises/services-everyone/consultation-and-research-data/cbe-public-search
Check if your name is already registered as a brand in BeNeLux https://www.boip.int/en/trademarks-register?app=%2F
Draft articles of association: Depending on the type of company you are forming, you may need to draft articles of association that outline the governance and operation of the company. This document should be signed by all the founders of the company. This is probably not needed for IT Consultancy alone.
Register the company: Register the company with the appropriate government agencies, such as the National Bank of Belgium, the Crossroads Bank for Enterprises, and the VAT office. You will need to provide certain documents, such as the articles of association, proof of identity, and proof of payment of the registration fee. You can get assisted by companies like this one for instance : https://www.partena-professional.be/en/start-your-business
Obtain necessary licenses and permits: Depending on the nature of your business, you may need to obtain certain licenses or permits before you can start operations. This could include a business license, a food safety permit, or a professional qualification. No permit is required to work as an IT consultant.
Obligations to run a business in Belgium
Running a business in Belgium involves certain tax and financial obligations that must be met in order to remain compliant with the law. Here are some of the main tax and financial obligations of running a business in Belgium:
Paying taxes: Businesses in Belgium are required to pay various taxes, such as corporate income tax, value-added tax (VAT), and social security contributions. The specific taxes that must be paid will depend on the nature of the business and its income.
Filing tax returns: Businesses are required to file tax returns on a regular basis, usually annually or quarterly. The tax returns must report the business's income, expenses, and taxes paid.
Keeping financial records: Businesses in Belgium are required to keep accurate financial records, including invoices, receipts, and other documents related to the business's income and expenses. These records must be kept for at least 10 years.
Paying employees: If the business has employees, it is required to pay their salaries and any other required benefits, such as social security contributions. For IT consultants, this is not required, as the company has no employees.
Making contributions to social security: Businesses in Belgium are required to make contributions to social security on behalf of their employees. These contributions cover various benefits, such as unemployment insurance and health insurance.
It is important to understand and comply with these tax and financial obligations in order to avoid penalties and fines.
Taxes
The amount of tax and fees that a consultant in Belgium will need to pay will depend on various factors, such as their business structure, the type of services they provide, and their personal tax situation. Here are some general estimates of the taxes and fees that a consultant charging 10,000 euros per month might expect to pay:
Corporate income tax: If the consultant operates as a company, they will be subject to corporate income tax on their profits. The corporate income tax rate in Belgium is currently 25%.
Value-added tax (VAT): The consultant may be required to charge VAT on their services and pay it to the government. The VAT rate in Belgium is currently 21%. The daily rate at the Commission is before taxes, so you have to add 21% on top when invoicing the company you are working through.
Social security contributions: The consultant will be required to pay social security contributions on their income. The contribution rates for self-employed individuals in Belgium range from 15.38% to 27.07% of the income, depending on the type of activity and the individual's age.
Personal income tax: The consultant may also be required to pay personal income tax on their profits. The personal income tax rate in Belgium ranges from 25% to 50%, depending on the amount of income.
Links and ressources
Here are some resources that may be useful for aspiring freelancers in Belgium:
Federal Public Service for Economy, SMEs, Self-Employed and Energy: This government website provides information on starting and running a business in Belgium, including information on business structures, tax obligations, and grants and subsidies.
BECI: The Brussels Enterprise Commerce and Industry (BECI) is a non-profit organization that provides support and resources to entrepreneurs and small businesses in Brussels. They offer a range of services, including business coaching, networking events, and access to funding.
Union of Self-Employed: The Union of Self-Employed is a professional organization that represents the interests of self-employed individuals in Belgium. They offer legal and financial support to their members, as well as access to a range of services and resources.
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