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BELGIUM: NON-PROFIT ORGANIZATIONS MUST MEET SPECIFIC COMPLIANCE REQUIREMENTS

Belgium has two main types of non-profit organizations: public utility foundations and private foundations, which must comply with specific requirements to ensure their operations are legal and transparent.

Public Utility Foundations

Public utility foundations serve a common or general interest in one of seven categories, including philanthropic, scientific, artistic, or cultural purposes. These foundations must be approved by a royal decree and the Ministry of Justice’s approval of their Articles of Association (AoA). The AoA includes essential information such as:

  • Name
  • Purpose
  • Appointment procedures for board members

Private Foundations

Private foundations are used to support regional development, maintain cultural heritage, or create study funds. They must serve a purpose in which the founders have no interest. Private foundations can be formed by means of a notarial deed, which includes the AoA and essential information such as:

  • Name
  • Place of seat
  • Purpose

Compliance Requirements

Both public utility and private foundations must comply with specific requirements, including:

  • Maintaining financial records and keeping an administration
  • Preparing annual balance sheets, statements of revenues and expenditures, and budgets for approval by the board
  • Filing financial statements with the company registrar within six months from the end of each financial year
  • Having at least three board members

Dissolving a Foundation

Foundations can only be dissolved after intervention by a judge. The board must ensure that any profits are allocated to achieving the foundation’s goals and not distributed to founders, board members, or other third parties.

Taxation

Foundations are subject to Enterprise Income Tax (EIT) and Value-Added Tax (VAT). EIT rates range from 24.25% for profits between €0 and €25,000 to 34.5% for profits above €322,500. VAT is set at 21%. Foundations can also be used for commercial purposes, but any profits must be allocated to achieving the foundation’s goals.

Limited Liability Company (BVBA)

A limited liability company (BVBA) is a different type of non-profit organization that is formed by means of a notarial deed. It includes essential information such as:

  • Name
  • Purpose
  • Appointment procedures for board members and supervisors

Compliance Requirements

Limited liability companies must comply with specific requirements, including:

  • Maintaining financial records and keeping an administration
  • Preparing annual balance sheets, statements of revenues and expenditures, and budgets for approval by shareholders
  • Filing financial statements within 30 days after approval by the shareholders meeting and within seven months from the end of each financial year
  • Having a minimum registered capital of €18,550

Dissolving a Limited Liability Company

Limited liability companies can be dissolved with approval by a court. Shareholders are subject to Enterprise Income Tax (EIT) and dividend tax in case profits are distributed.

Conclusion

Non-profit organizations in Belgium must comply with specific requirements to ensure their operations are legal and transparent. Public utility foundations and private foundations have different compliance requirements, while limited liability companies must follow specific rules for dissolution and taxation.