Home Finance Investment Offshore companies in Belgium
Last update on March 11, 2019

Consider the advantages of setting up an offshore company by registering, establishing or incorporating your business outside of Belgium.

Offshore incorporation is a straightforward process in all of the popular offshore financial centres and tax havens and can provide a wide range of benefits to the company and company principal(s). Offshore company registration is undertaken by individuals primarily for the following reasons:

  • Privacy
  • Asset protection
  • Reduced tax liability
  • Protection against lawsuits
  • Flexible business laws
  • Ease of operation
  • Confidentiality

Advantages of offshore companies

Overseas company formation can provide a wealth of benefits: offshore asset protection, confidentiality, enhanced privacy, tax savings or simply grow your business outside of the European Union.

Conducting business and undertaking banking transactions in the name of a legal entity, such as an offshore corporation, provide significant privacy and confidentiality benefits. Most offshore financial centres will not divulge the responsible individuals within the offshore corporations to a third party or foreign government. However, exceptions will be made in the event that an act of terrorism or a criminal atrocity has taken place and is being investigated.

Asset protection

The placing of assets into offshore corporations and overseas legal structures can provide a strong layer of protection from future liabilities. By having trusts, investments or bank accounts and other assets owned by your offshore corporation, it makes tracking them down via an asset search difficult. Offshore companies provide highly effective asset protection and effectively screen your finances from public view.

Legal protection through incorporating offshore

If a legal opponent is pursuing a legal action against you, it typically involves an asset search to make sure there will be money to pay out in the event a judgment is awarded against you. Forming offshore companies and having assets held by the overseas company mean they are no longer associated with your name. Therefore your assets can be effectively shielded from legal opponents, judges and court rulings simply by incorporating offshore.

An additional benefit is simplicity and ease of operation. Most overseas jurisdictions make it simple for anyone who is interested in offshore incorporation. The statutory obligations in the running of the offshore entity have also been simplified.

Disadvantages of offshore companies

One of the main drawbacks is in the area of remittance and distribution of the assets and income of the offshore company. Once monies are transferred to the resident country, they become subject to taxation, which can negate the benefits of the initial tax-free environment.

Due to the absence of detailed, publicly maintained registers, proving ownership of a company registered offshore can be difficult. While anonymity can be an advantage for overseas companies, when it becomes in the owner’s interests to declare themselves as the beneficial shareholder, this might be a difficult exercise.

Dividend income that is received by a Belgian holding company from a company based elsewhere (where income from foreign sources is not taxed) will pay corporate income tax at the normal Belgian rate. In addition to offshore jurisdictions, this would also include companies based in Costa Rica, Hong Kong, Malaysia, Singapore and Oman.

Where dividends are received from holding companies or subsidiaries that are based in territories with more advantageous tax systems, the dividends are subject to Belgian corporate income tax. Other than corporations located in traditional offshore tax havens, this list would include companies located in Luxembourg, Liechtenstein and Uruguay.

Risks related to an offshore company

Belgian residents pay personal income tax on their total income from all worldwide sources on a sliding scale. This means there is a high risk of income being taxed from a company registered offshore.

Some offshore jurisdictions are more stable than others, whether from a political or economic perspective. Physical distance, lack of knowledge of local customers, government and social attributes can increase the risks of financial loss occurring in some countries.

Renowned offshore locations

The following locations are well-known offshore locations:

  • Belize
  • The Caribbean
  • Nevis
  • Bahamas
  • The British Virgin Islands

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