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Setting up business in Europe after Brexit: how to keep your access to the single market

By Astrid Geeraerts, Head of Invest, Embassy of Belgium

Commerce has already been influenced by Brexit uncertainty. As a small or medium-sized company based in the UK, you can expect new regulations and trade flows to affect your operations, market position and ability to compete both locally and internationally.

Expanding your business in Europe after Brexit is a fast and straightforward option to maintain your competitive edge. You don’t even have to look far. Only a stone’s throw away, Flanders – the northern region of Belgium – could provide that easy access to the European Single Market.

Flanders: supportive, smart, innovative and affordable

 

  • Flanders’ strategic location in the centre of Western Europe – along with the region’s accessible seaports and transportation network – enables you to reach the majority of Europe’s main markets, partners and consumers in under 24 hours.
  • Get European funding and support for R&D, and innovate alongside Flanders’ chart-topping institutions, sectoral clusters and strategic research centres.
  • Benefit from the region’s R&D-friendly tax system, which exempts up to 85% of your company’s innovation earnings from corporate tax, among other incentives.
  • The workforce in Flanders is the 4th-most productive in the world, not to mention highly skilled and educated.
  • Office, logistics and manufacturing space is readily available and relatively affordable in key locations across the region.

Discover more on the Flanders Investment & Trade website, www.investinflanders.be.

Choose your scenario for getting started in Flanders

When setting up a new business entity in Flanders, your company has a range of different options. There are 5 main scenarios, many of which benefit from the region’s competitive tax incentives for businesses and expatriate employees, as well as labour cost reduction opportunities.

five-scenario

Scenario 1: A representation office

Interested in maintaining a European presence while minimising your footprint outside of the UK? A representation office is not a permanent establishment, meaning that it owes no income taxes to Belgium or Flanders. From a representation office, a company may only ingage in non-profit making activities such as:

• providing data and promotion materials to potential clients and partners;
• coordinating the parent company’s activities in Belgium and supervising the implementation of contracts signed between the parent company and local partners;
• conducting local market research;
• identifying commercial opportunities and making business travel arrangements.

Scenario 2: A principal branch


While a principal branch isn’t a legal entity in Flanders, it can employ highly qualified people to support the corporate head office. Through a principal branch, a firm is able to:

• provide management services to its headquarters;
• take advantage of regional tax incentives as a permanent establishment;
• potentially benefit from VAT deductions, depending on the characteristics and activities of the branch.

Scenario 3: A regional HQ or shared service centre

Ready to firmly establish your business in Europe? A regional HQ or shared service centre in Flanders acts as a headquarters for other local business entities. With this type of establishment, a business can

:


  • perform a wide range of functions, from management, procurement, strategic planning, communication, sales & marketing, R&D, IT, accounting and more;
  • access European Directives;
  • take advantage of R&D and IP incentives;
  • lower the effective tax rate through Notional Interest Deduction

Scenario 4: A holding company

Setting up a holding company in Flanders allows your business to centralise decision-making and equity flows to other local subsidiaries. There are plenty of excellent taxation reasons to set up this type of entity, which allows a firm to:

• avoid Belgian VAT in the case of passive holding activities;
• take advantage of exemptions on duties and taxes;
• benefit from an excellent Tax Treaty Network and European Directives;
• use GBP for accounting purposes;
• harness advance tax ruling to secure incentives.

Scenario 5: A central entrepreneur


A central entrepreneur is fully responsible for profit drivers, risks and high-value intangibles in Flanders, and must register for Belgian VAT. By establishing your business as a central entrepreneur, you can:

• apply Notional Interest Deduction to reduce your company’s effective tax rate;
• gain tax benefits on IP developed and managed by the central entrepreneur;
• receive European tax exemptions; • utilise advanced tax ruling to receive economic and financial support.

Incorporating a company in Flanders, step by step

Branches and subsidiaries are the two main types of business operations in Flanders. You can establish a new branch within a month after submitting the required documentation, and a subsidiary within days. In all cases, you will have to register your employees and directors with social insurance funds and declare your workers.

How to establish a branch

  • Prepare, notarise and authenticate the needed documents and translate them into Dutch.
  • File the documents to receive your business registration number and add your company branch to the Crossroads Bank for Enterprises database.
  • Fulfil VAT, social security and social insurance requirements.
  • Launch your operations.

View the infographic on setting up a branch in Flanders.

How to establish a subsidiary

  • Draft your budget forecast and articles of association.
  • Open a special account at a Belgian bank, deposit the founders’ contributions and submit the receipt to a notary during the incorporation meeting.
  • Notarise the memorandum of association and obtain your business registration number from the notary.
  • Submit a request for e-publication in the Belgian Official Gazette and add your subsidiary to the Crossroads Bank for Enterprises database.
  • Fulfil VAT, social security and social insurance requirements.
  • Launch your operations.

 

View the infographic on setting up a subsidiary in Flanders

 

Numerous businesses have already made the move

British companies from a wide range of sectors are already reaping the benefits of establishing their European activities in Flanders. One of the latest additions to the list is consultancy firm CarterJevons. “We have been welcomed warmly,” says managing director Geoff Carter, “and people really enjoy our few sentences in Dutch before we do the serious discussions in English. We really appreciate Flanders’ attitude to business, the balance with the quality of life, and the local network of excellent motorways leading directly to four other countries.”

Setting up business proved to be a straightforward experience. Geoff Carter: “The legal and financial process may seem demanding if you are from a jurisdiction with a different approach to corporate governance and due diligence. But if you follow the process step by step and have the benefit of a great accountant, payroll experts, insurance broker and bank, you will surface three months later with a fully fledged company across the Channel.”

“We also chose well in deciding to approach Flanders Investment & Trade”, Carter concludes. “They lived up to every word and could not have been more professional and helpful. Although we are a very small SME, they treated us with respect and signposted all of the resources available. They facilitated meetings with accountants and payroll advisers, and didn’t charge us a penny – or euro – for their services. What’s not to like!”

Get professional support close to home

Are you convinced of the benefits of setting up your European operations in Flanders? You don’t need to hire consultants to prepare for new investments. At the Flanders House in London, a team of investment experts provides you with free hands-on help and advice.



To learn more, get in touch with Astrid Geeraerts, the Head of Investment at the Embassy of Belgium in the UK. You can call her on +44 (0)207 307 77 15 (office) or +44 (0)770 138 31 54 (mobile), or e-mail her at astrid.geeraerts@flanders.co.uk