Indeed, any business runs many risks.

Whether an entrepreneur plans to start a business on his/her own or in association, the question is always the same: should he/she start it as an individual or as a company?

If he/she decides to start a business on his/her own, then we have a self-employed type of entrepreneurship (the Romanian equivalent of a freelancer).

Should the entrepreneur decide to start up a business in association with other partners, yet without setting up a company, then we talk about an association.

If the entrepreneur prefers, either alone or together with other individuals, to start up a business as a company, then he/she shall have to choose one or another of the forms of companies provided by law.

In this latter case, the two most common forms of companies are the SPRL (private company with limited liability) and SA (limited company).

The SPRL or SA to be established shall have to:

-    be established through a Notary;
-    have a minimum capital of 18,600 € (1/3 issued capital) in the case of a SPRL, and of  61,500 € in the case of a SA (contribution in kind is also acceptable);
-    draft the Company Statutes and business plan;
-    have at least two shareholders, if a SA, one shareholder in the case of a SPRL (if a natural person) and two shareholders, if also a legal person;
-    be registered with Banque Carrefour des Entreprises.

Establishing such a company will take 24 hours from the payment of the minimum equity capital.

In 2010 the Belgian Federal Government approved a draft law on introducing a new form of company: the private limited company for start-up entrepreneurs, called SPRL Starter.

The minimum equity capital of the new form of company is EUR 1 only, which makes it accessible for young people wishing to start their own business, as well for retirees who wish to remain active and gain extra income in addition to their pension. Also, workers who wish to pursue a second independent business may choose this form of company.

Until now it has been very difficult financially for a young entrepreneur to start up a business, given that to set up a classical SPRL, the minimum opening capital is set to EUR 6200  (1/3 of the total of €18,600 required) and to €12,400 for single-associate SPRL (one shareholder only).

To set up a SPRL Starter, the entrepreneur should:

-    have a minimum capital of  € 1;
-    proceed to a capital increase after a period of five years;
-    prepare a financial plan under the supervision of a professional (accountant, lawyer etc.), so as to avoid failure of the business due to lack of experience.

In conclusion, we are happy to see in the future (the law is still to be passed by the Federal Parliament) this new form of company established by young entrepreneurs, which allows them to benefit from the legal system governing the traditional SPRL, that is one which protects the private property of the individual.

However, it should be noted that, in addition to conditions regulating the setting up of such an company, some specific rules are also set, designed to protect the interests of the creditors. In this sense, the founding members are jointly and severally liable for a period of three years after company establishment for the minimum amount of capital required for a classic SPRL, that is €18,600.

Gelu BUZINCU
Lawyer at the Brussels Bar
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As a reminder, Belgium has decided to extend for another three years, i.e. until 31 December 2011 the restrictions on the free movement of Romanian workers. Thus, Romanian nationals remain subject to the requirement to obtain a work permit in Belgium.

However, certain Romanian workers employed to carry out assignments in Belgium, while still obliged to get a Belgian work permit, they may under certain conditions be exempt from paying contribution and taxes to the Belgian social security and taxation systems.

Social issues

In principle, the social security legislation in the country of employment is applicable in accordance with the EC Regulation 1408/71.

However, in Belgium, different systems provide for exemption of an employed worker from paying contribution to the social security system of another country. Thus, the foreign worker may remain insured under the social security system in his /her country of origin while at the same would be exempt from paying social security contribution in the country of his /her temporary employment.

In the case of such employments and subject to compliance with certain conditions and filling in some specific documents, the worker must have a valid E101 form filled in and the employer may request an extension of the posting period for a further period of 12 months (document E102).

For more details, please visit www.limosa.be

Tax issues

To avoid double taxation of one and the same income, Belgium has signed various treaties for avoidance of double taxation with many countries. Thus, on March 4, 1996, a Convention was signed between the Belgian Government and the Romanian Government for the avoidance of double taxation with respect to taxes on income and on capital.

Under the said Convention employees of a Romanian company, who are posted by the Romanian company to work in Belgium, will continue to pay taxes in Romania provided only that the following three conditions are met cumulatively:

-    the period of residence in Belgium of the posted employees shall not exceed a total of 183 days in any 12-month period;
-    wages are paid by an employer or on behalf of an employer who is not resident in Belgium;
-    remuneration must not be paid by a permanent head office or fixed base of the employer in Belgium.

So, if these three cumulative conditions are met, workers employed from Romania, and who are not resident in Belgium, will not be taxed in Belgium, but in Romania.

In this case, the term of 183 days is calculated over any period of 12 months which is not necessarily a calendar year.

Finally, it is important to note that the Convention between Belgium and Romania provides the following exception: Romanian workers who are posted or assigned to work in Belgium and are not residing in Belgium will not be taxed in Belgium, but in Romania, even if their assignment in Belgium exceeds the limit of 183 days, provided only that they work “onboard a ship or aircraft or road or railway vehicle in international trafic or aboard a boat engaged in inland waterways.”

Gelu BUZINCU
Lawyer at the Brussels Bar
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Created in 2004, the system of "titres-services" was mainly designed to encourage work in adequate environments and fight work on the black market. The huge success this system is now enjoying is easily understandable considering the numerous advantages it offers to both the worker and the user.

What is it all about?

The worker provides services to a user and the user gives the worker, in exchange for the supplied, the documents called „titre-services”. The worker will then submit the documents to his/her enterprise, which pays the worker for his job based on the „titres-services” papers.

Beneficiary

These documents are reserved to private persons. To obtain these documents, anyone interested may fill in the registration form and send it to SODEXHO. After registration, the person concerned may order the titles for the price of EUR 7.5 per title. The advantage is mainly a fiscal one, as 30% of each such „titre-service” is deductible up to a maximum amount to EUR 2,510/year for each and every taxpayer (per taxpayer, not per family!) . Note should also be made that the title is nominal (non-transferable) and has a validity term of 8 months from the date of its issuance (after the expiry of this term, the title can no longer be exchanged nor can it be reimbursed).

Service Provider

Workers should first of all enrol themselves in this system via Internet (www.titres-services.be). They will then be hired by agreed enterprises (private, public etc.) and will be able to go and work for the beneficiary who will give the worker one such title per hour worked. Enrolment is not subject to any conditions and the worker receives a salary higher than the value of the titles. The benefits are very numerous, such as, for example, the obtaining of an employment contact and of the related residence permit, adequate social security (work accidents insurance, medical insurance, pension, employment indemnity, paid holidays, indemnities for licensing). The only real condition is that the worker is forbidden to be next of kin or a relative-in-law down to the second degree of kinship with the beneficiary or with any of the members of the beneficiary’s immediate family. The worker may provide a relatively wide array of services such as housework (ironing, shopping etc.). However, the list of available jobs is limited. Plans are now underway to add baby-sitting on this list of services.

Agreed employers

Employer should be an incorporated and agreed enterprise.

The Employer shall have to insure workers against occupational accidents and shall be accountable for any damages caused by workers, except for those caused by gross negligence (usually, intentional damages).

In conclusion, we are welcoming a system which provides jobs for workers (with significant benefits as well) as well as fiscal and economic benefits to both the user and the company.

For registration and additional information: www.titles-services.be

Gelu BUZINCU
Lawyer at the Brussels Bar
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