As a recruitment company operating in the European Life Sciences industry, Panda International also collaborates with many professionals who are currently or planning on working as a contractor or freelancer in Belgium. This can be a complicated process, especially for non-Belgian professionals who aren’t familiar with the Belgian regulations. After the success of our previous blog on freelancing in The Netherlands, we turned back to our compliance expert, Brian Daley from Crescenzi Consulting, to provide an easy-to-read guide on everything you need to know to become a freelancer in Belgium.
When you become a freelancer in Belgium, you essentially become self-employed. A self-employed person is one who exercises a remunerative professional activity for which they are not contractually bound to an employer, making them their own bosses to a certain extent.
1. Forms of Self-Employment and Liability
The first thing to do when starting up as a freelancer is to decide which legal form of self-employment suits your business best. These are the different types of entities; each entity comes with its own specification:
Sole-trader (entreprise individuelle/eenmanszaak)
- You become the founder – a single individual
- You are personally liable
Partnership under a Common Firm (SNC/VOF)
- You start the SNC/VOF together with other freelancers
- Each partner is personally liable
Limited Company (BVBA/SPRL)
- You start a legal entity held by at least one shareholder/partner/founder
- The company has its own capital and a separate legal personality with its own rights and obligations
- The directors are liable only to the amount contributed or invested when the company was founded – fully subscribed and to the value of €18,550
(A copy of the articles of incorporation must be filed at the registry within 15 days of the final articles of incorporation being drawn up. The registrar then arranges publication in the Belgian Official Gazette.)
As a freelancer in Belgium, regardless of the business form, you must enroll your company on the register of legal entities kept at the commercial court registry. The registry will assign the company an enterprise number. Once completed, companies wishing to engage in commercial activities must register as traders at the Banque-Carrefour des Entreprises or Kruispuntbank van Ondernemingen.
In Belgium, income tax (impôt des personnes physiques or personenbelasting) is assessed once a year. As a freelancer, you are responsible for the correct declaration of taxes. Here is a breakdown of the tax legislation in Belgium according to whether you operate under an individual name or as company:
A Sole-Trader or Partnership
- Your or the partnership’s profits are subject to personal income tax
- The tax rate is progressive up to 50%
A Belgian Limited Company
- The company’s profits are subject to corporate income tax
- The maximum tax rate for corporate income tax is 33.9%, but in certain cases may be lower
4. Social Insurance Fund
As a freelancer, you must join a social insurance fund and pay social security contributions. You should join a social insurance fund:
- either 6 months before starting your activity
- or within 90 days after starting your activity
If you set up a company, it too must join a social insurance fund for self-employed persons, with an annual fee related to its status as an independent concern. Non-Belgian nationals must submit any authorisations required for them to work on freelance or contract base in Belgium. This is normally a professional card (carte professionnelle/beroepskaart) for foreign workers wishing to work in Belgium on a self-employed basis.
Be sure to register with a social insurance fund within 90 days to avoid any unnecessary sanctions from the National Institute for the Social Security of the Self-employed (NISSE).
5. Social Insurance Contributions & Benefits
When calculating your social security contributions your social insurance fund takes your reference income as its basis, meaning your contributions represent a percentage of your professional income. The amount used is your combined net revenue as a freelancer during the third calendar year (so-called ‘reference year’) prior to the year in which your contributions are due. For example: your 2014 contributions are calculated on the basis of your 2011 revenues.
Your social security contributions as a freelancer in Belgium entitle you to the following social benefits:
- Health and invalidity
- Family Allowance
- Bankruptcy Insurance
Anyone starting up a new business takes risks. As such you should consider whether or not to take out an insurance policy to cover these risks. It is useful to think about which risks you wish to run and which insurances you wish to take out. In the world of contracting, insurance is an unavoidable overhead and one which most recruitment agents insist upon. At Panda International, we require candidates to have professional indemnity and public liability insurance. We are able to provide additional information when necessary.
When you decide to establish yourself as a self-employed person, or freelancer, you can use the following steps as a check-list:
- Choose how you plan to exercise your activity: either as a natural person or as a company
- Open a bank account
- Register with the guichet d’entreprises/ ondernemingsloket (one-stop shop for businesses) and check your entrepreneurial aptitude and management skills
- Register with the Central Enterprise Databank (BCE/KBO) and obtain an enterprise number and an establishment number (which will be identical with your VAT number)
- Join a social insurance fund and pay social security contributions
- Obtain a licence, if required for your profession
- Register for professional indemnity and public liability insurance
Do you have any experience in the above activities or questions on setting yourself up as a freelancer in Belgium? Please feel free to add them in the comment box below or get in touch with one of our colleagues!
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