Yannick Lauwers, Author at STUDIO LEGALE
Author: Yannick Lauwers
SEX WORK IN BELGIUM: RULES IN THE WORKPLACE

Sex work has been present in Belgium for many years, both offline and online. What is new is that the legal framework now effectively reflects that reality: sex workers can now work within a clearly defined social status, with the corresponding protection under labour law and social security law. This shift makes a material difference in practice. Whereas arrangements previously often ended up in a grey area, the legislation now starts from legal certainty: anyone working as a sex worker does so on the basis of a specific employment contract, in writing, signed by the parties.

That contract must be drawn up and signed no later than at the start of the employment and is the key instrument for transparent agreements on rights, obligations and protection. In this article we explain what the new status entails, which conditions apply to employment under it, and which points of attention are essential for both employers and sex workers.

Before 2022, a major vulnerability lay at the intersection of criminal law and labour law. In practice, agreements were sometimes “described” as covering other activities (hospitality, massage), precisely because a contract relating to sexual services was legally sensitive. The object of such agreements was regarded by a significant part of the case law as contrary to public policy and morality and therefore absolutely void. For the sex worker concerned, that could have far-reaching consequences: as soon as “nullity” is raised, the enforceability of labour-law and social-security rights immediately comes under pressure.

That reality explains why the legislator introduced an initial safeguard in 2022. The Act of 21 February 2022[1] provides that an employer cannot simply rely on the “nullity” of the employment contract to deny a sex worker employment rights or social security rights, solely because the work involves prostitution. This was not a complete solution, but it was a clear policy choice: social protection was not to remain dependent on legal artifices that had arisen precisely because of the absence of an appropriate framework.

In the same year, a broader shift also occurred in criminal law. After years of a policy of tolerance, the reform of sexual criminal law effectively decriminalised prostitution in Belgium.[2] Since then, sex workers could lawfully work as self-employed persons.

The real turning point came with the Act of 3 May 2024.[3] This Act creates a specific “employment contract for sex workers” and expressly anchors it in common employment law. It is an employment contract within the meaning of the Act of 3 July 1978, to which labour law and social security law apply in principle, subject to the specific rules set out in the Act of 3 May 2024. The Act also clarifies the scope of the status: “sex work” means performing acts of prostitution in execution of that employment contract, the sex worker performs those acts for remuneration and under the authority of a recognised employer.

With this new framework, the legislator seeks to achieve two objectives at once: to better protect sex workers (with attention to safety, well-being and, above all, free consent) and to prevent exploitation through strict controls on who may act as an employer. For that reason, sex workers may be employed only by an employer who has obtained an official authorisation in advance.

Requirements on the employer’s side (authorisation and obligations)

  • The employer must be a legal person with an admissible legal form (e.g., a BV/SRL—excluding a single-member BV/SRL—, a CV/SC or a vzw/ASBL); natural persons are not eligible.
  • The employer must have a registered seat or establishment in Belgium.
  • The directors must be identified.
  • Disqualifying grounds apply: directors (as well as managerial/supervisory staff) must not have been convicted of a range of serious offences (including sexual offences, human trafficking, violence, etc.).
  • The articles of association must expressly provide that the core rights of sex workers are respected (such as: not being able to be compelled, being able to refuse, being able to interrupt/stop, being able to set conditions).
  • During the period of authorisation, practical safety and organisational obligations also apply, including:
  1. a designated reference person who is at least continuously reachable during the performance of services; and
  2. alarm buttons in the rooms and a mobile alarm button for services performed outside the premises.

If the employer does not comply with the conditions, the authorisation may be suspended or withdrawn.

Requirements on the sex worker’s side (who can work under this status?)

  • Only adults may conclude an employment contract for sex workers; employing minors is prohibited.
  • Persons whose primary status is that of a student cannot do so.
  • It is also not possible via a flexi-job or as an occasional worker.
  • The employment contract must be drawn up in writing for each individual sex worker, no later than at the start.
  • The contract must state the employer’s authorisation number.

What truly distinguishes this Act from “common” employment legislation is how explicitly it enshrines the principle of free consent. The Act provides that the sex worker remains free, at all times, to consent—or not—to a sexual act, and that no one may be compelled to perform an act of prostitution. The right to refuse a client or specific acts, to interrupt a service, or to stop it altogether cannot be regarded as a breach. The employer may not dismiss a sex worker because the sex worker refused to perform a sexual act.

Even the termination of the employment contract is designed in an exceptional manner: the sex worker has the right to terminate the employment contract without notice and without compensation, precisely because no one may be compelled to perform acts of prostitution.

It is noteworthy that this change of course in Belgium also fits within a broader European debate, in which countries take very different approaches to sex work. This was reflected sharply in a judgment of the European Court of Human Rights of 25 July 2024[4] concerning the French 2016 law criminalising the purchase of prostitution services.

In that case, 261 sex workers argued that their circumstances had deteriorated since the law: fewer clients, less freedom of choice and greater pressure to consent to acts they would otherwise refuse. The Court acknowledged that there had been an interference with private life, but accepted the objectives pursued, including public order, the protection of health and the rights of others, and above all the prevention of human trafficking. The Court afforded France a wide margin of appreciation due to the lack of European consensus. It ultimately found no violation of Article 8 of the ECHR.

At the same time, the Court entered an important caveat. National authorities must continuously assess their policy and its consequences. This is not only relevant for France, it also shows that there is not yet a single “right” approach in Europe, and that any policy choice must be assessed by its real impact on the safety and rights of sex workers.

The new development can be regarded as a step forward. With a clear employment-law framework—combined with a strict authorisation system and an explicit anchoring of free consent—legal certainty increases and responsibility is placed where it belongs, namely with those who organise the activity and derive economic benefit from it.

At the same time, this is not the end of the road. The success of this model will depend to a large extent on its implementation: how carefully authorisations are granted, how consistently oversight and enforcement are carried out, and how safety and discretion are guaranteed in practice. If those conditions are met, the framework can genuinely contribute to greater protection and less exploitation, without being blind to the complexity of the sector. The government will evaluate the Act from 1 December 2026 onwards.

If, after reading this article, you have any further questions, please do not hesitate to contact us at [email protected] or +32 3 216 70 70.

[1] Wet van 21 februari 2022 betreffende de niet-inroepbaarheid van de nietigheid van de arbeidsovereenkomst ten aanzien van personen die zich prostitueren (BS 21 maart 2022)

[2] Wet van 21 maart 2022 houdende wijzigingen aan het Strafwetboek met betrekking tot het seksueel strafrecht

[3] Wet van 3 mei 2024 houdende bepalingen betreffende sekswerk onder arbeidsovereenkomst (BS 6 juni 2024)

[4] EHRM 25 juli 2024, RW 2025-26, nr. 20, 17 januari 2026

THINK BEFORE YOU ACT: A CLOSER LOOK AT THE DISPUTE RESOLUTION PROCEDURE

It often begins promisingly. Two or more entrepreneurs join forces, incorporate a company together, and dream of growth and success. However, practice teaches us that not every collaboration withstands the test of time. Visions diverge, interests clash, and what was once a shared ambition culminates in a deadlock. The question then arises: how to proceed when collaboration has become impossible, yet the company itself remains viable?

Belgian company law provides a statutory framework for such situations: the shareholder dispute resolution procedure (geschillenregeling). This mechanism, set forth in Book II, Title 7 of the Belgian Code of Companies and Associations (Wetboek van Vennootschappen en Verenigingen, hereinafter “CCA”), underwent comprehensive reform upon the entry into force of the CCA in 2019. The legislature clarified the scope of application, refined the procedural rules, and granted the court broader discretionary powers. The result is a more balanced framework that enables shareholders to definitively part ways without jeopardising the continuity of the enterprise.

To Whom Does the Dispute Resolution Procedure Apply?

The procedure applies exclusively to non-listed private limited companies (besloten vennootschappen, “BV”) and public limited companies (naamloze vennootschappen, “NV”) with their registered office in Belgium. Claims may relate to various securities, including not only ordinary shares but also subscription rights and convertible bonds. A significant limitation is that any claim for exclusion or withdrawal must encompass all securities held by the shareholder concerned. A partial exit is not permitted, which is logical given the purpose of the procedure: the definitive termination of an untenable situation.

Two Paths to Exit

The dispute resolution procedure comprises two complementary remedies, each invoked from a different position. In the case of an exclusion claim (vordering tot uitsluiting), one or more shareholders take the initiative to compel a fellow shareholder to leave the company. However, this instrument is not available to everyone. The legislature has established quantitative thresholds: whoever seeks exclusion must, individually or together with other claimants, hold at least thirty per cent of the voting rights. This threshold prevents minority shareholders from frivolously initiating exclusion proceedings.

The withdrawal claim (vordering tot uittreding) operates in the reverse direction. Here, a shareholder requests permission to leave the company, with the remaining shareholders being obligated to acquire his securities. No participation threshold applies to this claim—any shareholder, regardless of the size of his holding, may seek withdrawal when he considers his shareholding to have become untenable.

Just Cause as Gatekeeper

Neither exclusion nor withdrawal is granted as a matter of course. Central to both procedures is the requirement of just cause (gegronde reden). This concept constitutes an open-textured norm that affords the court broad discretion. In essence, it concerns a factual situation that justifies why the continuation of the shareholding can no longer reasonably be expected.

The interpretation of this concept warrants nuance. First, just cause need not be attributable solely to the respondent shareholder. Circumstances for which neither party can be held responsible may also suffice. Second, fault is not a prerequisite—the question is not who bears blame, but whether the shareholding remains tenable. Third, just cause must be current, both at the time the claim is brought and at the moment of the court’s decision. A conflict that has since been resolved can no longer serve as a basis. Finally, both the corporate interest and the personal interest of the shareholder may be relevant to the assessment.

The Procedure: Swift but Not Superficial

The legislature has opted for a streamlined procedure. Claims for exclusion or withdrawal are brought before the President of the Enterprise Court (ondernemingsrechtbank) of the place where the company has its registered office. The President sits “as in summary proceedings” (zoals in kort geding), meaning that the procedure utilises the speed and flexibility of summary proceedings while nonetheless yielding a judgment on the merits.

The exclusive jurisdiction of the President carries a downside. Not every dispute between shareholders can be resolved through this procedure. The dispute resolution mechanism is expressly not a one-stop shop. The President may indeed hear related disputes, but only if strict conditions are met. These must concern actually existing disputes relating to financial relationships between the parties and the company—such as loans, current accounts, and security interests—or to non-competition obligations, and which are connected to the termination of the shareholding.

Claims for annulment of resolutions of corporate bodies, return of assets, or appointment of a provisional administrator fall outside this jurisdiction and must be pursued through ordinary court proceedings. The President interprets his jurisdiction restrictively, as befits an exceptional procedure.

Mandatory Law with a Subsidiary Character

The dispute resolution procedure occupies a peculiar tension. On the one hand, it constitutes mandatory law (dwingend recht): shareholders cannot contractually or statutorily exclude or limit their right to invoke it. Provisions that attempt to do so are void. This mandatory character protects shareholders against arrangements that would leave them trapped in the event of conflict.

On the other hand, the legislature regards the dispute resolution procedure as an ultimum remedium—a last resort that comes into play only when other solutions have failed. The legislative history is unequivocal on this point: the procedure is “only to be offered as a technique when conflicts between shareholders cannot be resolved amicably.” This subsidiary character finds its basis in the good faith that parties owe to one another and in the drastic nature of a forced exit. A shareholder who resorts too hastily to the dispute resolution procedure without first exploring alternative solutions risks having his claim dismissed as unfounded.

The Possibility of Arbitration

An important nuance concerns the relationship with arbitration. Although the dispute resolution procedure constitutes mandatory law, parties may agree to submit disputes concerning exclusion or withdrawal to arbitration proceedings. The legislature expressly recognises this possibility. Two conditions must be fulfilled: all parties involved in the dispute resolution must be parties to the arbitration clause, and the intention must be to resolve the dispute resolution matter exclusively through arbitration. If these conditions are met, the President of the Enterprise Court lacks jurisdiction and the arbitral tribunal is competent. Case law interprets arbitration clauses restrictively in this context, such that doubt is resolved in favour of the ordinary courts.

Statutory and Contractual Exit Mechanisms

In addition to the statutory dispute resolution procedure, practice often features statutory or contractual mechanisms that provide for an exit upon certain events. Consider good leaver and bad leaver provisions in shareholders’ agreements, or statutory withdrawal arrangements in the BV. The question arises how these relate to the statutory procedure.

The answer is nuanced. Such mechanisms may exist alongside the statutory procedure but cannot exclude it. A shareholder who is statutorily invited to first exhaust the contractual procedure retains the right to apply directly to the court. Mandatory legal protection cannot be circumvented through contractual conditions or delaying tactics. That said, the existence of workable contractual mechanisms may be relevant when assessing whether the statutory procedure, as an ultimum remedium, is actually warranted.

Valuation at the Appropriate Moment

When the court decides that exclusion or withdrawal is justified, the question of price inevitably arises. The CCA adopts as its starting point that the value of the securities is to be assessed at the time the court orders the transfer. This principle aligns with the reality that the right to payment of the price arises at the moment of transfer of ownership.

However, the legislature has recognised that strict application of this principle may in certain cases lead to inequitable results. Where the circumstances giving rise to the claim, or the conduct of the parties in connection with the proceedings, have influenced the value of the securities, a correction may be necessary. The CCA therefore expressly grants the court the power to apply an equitable price increase or reduction when the standard valuation would lead to a manifestly unreasonable result.

The Court’s Toolkit

The court has at its disposal various instruments to arrive at a fair price. A first option is to shift the valuation date (peildatum) to an earlier point in time, for example to the moment before the escalation of the conflict or before certain harmful conduct by a party. The Court of Cassation (Hof van Cassatie) has confirmed that such a shift is possible where the court specifically establishes that the circumstances or conduct have had an impact on value. The court must, however, provide reasons for its choice.

Additionally, the court may award a provisional price pending definitive determination, for example where uncertainty exists regarding the impact of certain elements on value. It may also incorporate adjustment mechanisms for risks that are known at the valuation date but whose extent has yet to materialise. To protect the parties’ interests, the court may impose security for the amount still to be paid, such as a pledge over the transferred securities, a bank guarantee, or a deposit into an escrow account.

Non-Competition Obligations as a Pricing Element

A particular aspect of price determination concerns non-competition obligations. The court may link the price to the departing shareholder’s consent to a non-competition covenant or to the strengthening of an existing covenant. Conversely, it may lift or limit an existing non-competition prohibition, with a corresponding price reduction. This power recognises that the value of a shareholding is partly determined by whether the departing shareholder may subsequently act as a competitor.

However, an important limitation applies: the court cannot impose a new non-competition covenant where none exists. Party autonomy is respected in this regard. Whoever wishes to enforce a non-competition prohibition must have stipulated it contractually.

When a Shareholder Departs

The dynamics of dispute proceedings may change significantly when a shareholder dies, is declared bankrupt, or is dissolved during the proceedings. These events have both procedural and substantive consequences.

At the procedural level, heirs or trustees in bankruptcy may continue the proceedings. Whether heirs may become shareholders at all depends on any statutory restrictions. In a BV, the articles of association may provide that heirs are not automatically admitted, resulting in a withdrawal by operation of law. Substantively, just cause is assessed following resumption of proceedings with reference to the legal successor. This may materially alter the situation, particularly where the original just cause was closely connected to the person of the deceased or bankrupt shareholder.

When the Company Itself Disappears

The situation becomes more complex when not a shareholder but the company itself is dissolved or declared bankrupt. Case law is divided here. One school of thought holds that the dispute resolution procedure is no longer possible in such cases, or that pending proceedings become moot. The reasoning is that the purpose of the procedure—ensuring continuity—lapses when the company ceases to exist.

Another school of thought nuances this and accepts that the dispute resolution procedure may nonetheless be continued under certain conditions, particularly where the bankruptcy or dissolution was artificially brought about to circumvent the procedure. An absolute exclusion would indeed open the door to artificial or malicious dissolutions, intended solely to frustrate threatened or pending dispute resolution proceedings. The court assesses this on a case-by-case basis.

No Way Back

Whoever contemplates initiating dispute proceedings must be aware of a fundamental reality: there is no right of retraction. Once the court has ruled in an (interlocutory) judgment on the merits of the exclusion or withdrawal, that decision is final. The claimant can no longer withdraw, even if the price turns out to be lower or higher than expected.

Case law is particularly clear on this point. In a case where the claimant had litigated for years and, upon receipt of the expert report, suddenly wished to abandon his claim, the court held that the law does not provide for a right of retraction for the party who instigates a buyout and subsequently finds that the outcome is less favourable than anticipated. This falls within the litigation risk. An attempt to bring a new, modified claim following an unfavourable expert report was likewise rejected as contrary to procedural rules.

The Cost of Being Right

The financial implications of dispute proceedings extend beyond the share price. Legal costs can be substantial, particularly when an expert investigation into the value of the securities is ordered. The unsuccessful party bears the costs in principle, with case law often looking to the shareholder who is at the root of the just cause. Where multiple parties and claims are involved, multiple procedural indemnities (rechtsplegingsvergoedingen) may be owed, causing the bill to escalate rapidly.

Parties may make derogating arrangements in the articles of association or shareholders’ agreements regarding the allocation of procedural and expert costs. Such arrangements may be confirmed by the court and provide parties with greater upfront certainty regarding cost allocation. It is advisable to address this aspect when drafting shareholders’ agreements.

Conclusion

The dispute resolution procedure in the BV and NV embodies a delicate balancing act. It offers shareholders trapped in an unworkable situation a statutorily guaranteed way out, without the company itself becoming the victim. At the same time, it sets high thresholds: just cause is required, the procedure serves as an ultimum remedium, and whoever initiates proceedings must be prepared to bear the consequences.

The reform under the CCA has refined the procedure and given the court more instruments to achieve an equitable outcome. The broader possibilities for price correction, the hearing of related disputes, and the imposition of security contribute to a more balanced framework. But the core remains unchanged: the dispute resolution procedure is a weighty instrument that must be handled with due circumspection.

For shareholders finding themselves in a conflict situation, it is essential to carefully weigh the options. Negotiation, mediation, and statutory or contractual mechanisms deserve priority. Only when these avenues reach a dead end does the statutory dispute resolution procedure come into view. And whoever takes that step would do well to thoroughly prepare the proceedings, map the financial risks, and engage specialised counsel. For in dispute resolution proceedings more than elsewhere: look before you leap.

Are you confronted with a shareholder dispute and wondering what options you have? Our corporate law specialists stand ready to guide you towards a sustainable solution.

Authors:

  • Mr. Joost Peeters
  • Mr. Yannick Lauwers
GOVERNANCE 2025: EIGHT MONTHS OF CODE BUYSSE IV

Eight months into 2025, it is an opportune moment to reflect on Code Buysse IV, which was presented in Antwerp at the end of 2024. After eight months of implementation, this revised code has proven to be a valuable framework for non-listed Belgian companies seeking to optimize their governance in an increasingly complex business environment.

What is Code Buysse IV?

Code Buysse IV constitutes a series of guidelines for good corporate governance specifically targeted at non-listed Belgian companies. Although the Code does not constitute binding legislation but rather “soft law,” its implementation may have significant legal implications. In disputes, Belgian courts may consider the extent to which a company has adhered to the recommendations when assessing whether directors have fulfilled their duties of care and diligence.

Companies that systematically apply the principles of the Code may rely on this as evidence of good corporate governance, which can serve as a positive factor in potential director and officer liability matters. Code Buysse IV is not a rigid prescription but rather a flexible framework that companies can apply at their own discretion.

The Code encourages companies to develop a competency matrix for their board of directors, enabling them to systematically determine which expertise and perspectives are still lacking. A key characteristic of the Code is that it applies to both small and large enterprises. The guidelines are formulated in such a way that every organization, regardless of its size, can derive valuable guidance to strengthen its future prospects.

The new Code primarily focuses on:

  • Belgian companies without stock exchange listing;
  • Enterprises where shares are not publicly traded;
  • Organizations that voluntarily wish to optimize their governance practices;
  • Family businesses that require structure in familial governance;
  • Companies that wish to integrate sustainability and social responsibility into their strategy.

Key Innovations in Code Buysse IV

Now that Code Buysse IV has been in effect for eight months, it is an appropriate time to review the key innovations once more. These innovations address contemporary challenges in the business environment:

Innovation Explanation
1. Enhanced emphasis on diversity The Code encourages companies to attract directors with diverse backgrounds, areas of expertise, ages, and gender perspectives. This heterogeneity promotes richer decision-making and a broader strategic vision.
2. Critical approach to mandate accumulation The Code advocates for limiting the number of directorships per individual, ensuring that directors can truly immerse themselves in the specific context and challenges of each company.
3. Integration of sustainability principles Companies are encouraged to structurally embed environmental, social, and governance aspects (ESG) in their strategic planning and operational decision-making.
4. Comprehensive guidelines for familial governance For family businesses, the Code introduces more detailed recommendations regarding familial governance, emphasizing the formalization of agreements through a family charter and the establishment of a family forum.
5. Enhanced risk management Increased attention to systematic risk management, with encouragement to develop a structured risk policy and implement adequate internal control mechanisms.
6. Active involvement of shareholders Shareholders are encouraged to formulate a clear vision regarding their ownership and communicate this to the board of directors.
7. Focus on strategic long-term planning Directors are encouraged to look beyond short-term results and invest in sustainable value creation.
8. Balance between management and supervision The Code recognizes the importance of effective information exchange between daily management and the board of directors, recommending that, in addition to joint meetings, periodic board meetings be organized without the presence of operational management.
9. Innovative observational internships A novel concept whereby potential future directors can participate as observers in board meetings, facilitating knowledge transfer and preparing new generations of directors.

 

Conclusion

Code Buysse IV represents an evolution in governance standards for non-listed Belgian companies. The revised directive reflects contemporary insights into effective corporate governance, with particular attention to diversity, sustainability, risk management, and long-term planning.

Although compliance remains voluntary, the Code offers a valuable framework for companies striving for excellence in their governance practices. By implementing the recommendations, companies can strengthen their decision-making processes, enhance their resilience, and promote sustainable value creation.

Code Buysse IV thus constitutes an essential instrument for Belgian companies seeking to optimize their governance in an increasingly complex and demanding business environment.

Should you have any questions after reading this article, please do not hesitate to contact us via [email protected] or 03 216 70 70.

TAX SHELTER FOR START-UP COMPANIES

Good news for investors and start-up companies: the Tax Shelter for start-up companies remains a powerful fiscal incentive in 2025, with a maximum investment amount of €500,000 per company. This measure is specifically designed to promote the growth of SMEs and micro-enterprises in the post-COVID economic landscape.

What is the Tax Shelter?

The Tax Shelter offers individuals an attractive tax reduction when they invest in start-up companies that are at most four years old. Depending on the size of the company in which the investment is made, this reduction can amount to 30% or even 45% of the invested amount.

Specifically, investors are entitled to a tax reduction of 30% when investing in small companies, and an even more attractive 45% when choosing micro-companies. This tax reduction applies to the tax assessment year relating to the income year in which the investment was made.

An important point to note is that this reduction is neither refundable nor transferable to subsequent tax years. It is therefore an advantage that you must be able to utilize directly in the year of investment.

One of the most notable aspects of the Tax Shelter regime in 2025 is the increased maximum amount that start-up companies can raise. A start-up company can raise up to €500,000 through this fiscal measure. This amount has recently been doubled (previously €250,000) to further support companies in their growth after the COVID-19 pandemic.

This increase provides young companies with considerably more room to expand their activities, invest in innovation, or enlarge their workforce. For investors, this means more opportunities to participate in the success of promising startups.

Who is eligible as an investor?

The Tax Shelter is open to a broad group of potential investors. You are eligible if you belong to one of the following categories:

  • Residents subject to personal income tax;
  • Non-residents subject to and regularized in the tax for non-residents (natural persons);
  • Family members of founders and employees of the company.

Investors can invest a maximum of €100,000 per taxable period via the “Tax Shelter for start-ups and scale-ups” combined. This ceiling ensures that the fiscal advantage is spread across multiple investors and projects.

The Tax Shelter does not apply to company directors of companies in which they themselves directly or indirectly exercise their activity as company director. This is to prevent conflicts of interest and ensure that the fiscal advantage benefits genuine external investors.

A direct company director is someone who performs a task as director, manager, liquidator or similar function, or who exercises a leading function or activity of daily management, of a commercial, financial or technical nature in the company outside an employment contract.

An indirect company director is someone who exercises a function of company director as a permanent representative of another company, or through the intervention of another company of which this person is a shareholder.

Which companies are eligible?

To be eligible for the Tax Shelter regime, a company must meet specific criteria. The investment must be made at the incorporation of the company, or during a capital increase within four years after incorporation. In both cases, it concerns companies that were incorporated no earlier than January 1, 2013.

Since January 1, 2024, the following criteria apply:

Micro-company Small company
Annual average workforce 10 50
Annual turnover (excl. VAT) €900,000 €11,250,000
Balance sheet total €450,000 €6,000,000

A company qualifies as micro or small when it does not exceed more than one of these criteria.

In addition to the size criteria, the company must satisfy various other conditions to be eligible for the Tax Shelter regime:

  • It must be a domestic company or a company from the European Union with a Belgian establishment;
  • The company may not have been incorporated in the context of a merger or division;
  • The company may not be an investment, treasury or financing company;
  • The company may not be a ‘real estate company’;
  • The company may not have been incorporated with a view to concluding management or director agreements;
  • The company is not listed on the stock exchange;
  • The company may not have implemented a capital reduction in the past (except for exceptions) or distributed dividends;
  • The company may not use the received sums for the distribution of dividends, the purchase of shares, or the granting of loans.

Different investment possibilities

Investors can use the Tax Shelter regime in different ways:

  • Direct investment in shares of a start-up company;
  • Investment via approved crowdfunding platforms;
  • Investment via a starter fund or private starter PRICAF.

For each investment method, specific conditions and procedures apply, but the fiscal advantage remains substantial: 30% tax reduction for investments in small companies and 45% for investments in micro-companies.

Practical Requirements for a Successful Tax Shelter Investment

To optimally utilize the Tax Shelter scheme, there are several practical steps that both investors and companies must follow:

  • For Investors:

As an investor, you must receive a tax certificate from the company or platform through which you have invested. This certificate is crucial for your tax return and must be carefully preserved. The certificate states the invested amount eligible for the tax reduction.

On your annual personal income tax return, you must declare the invested amount using the designated codes. The tax reduction will then be automatically calculated and applied to your tax liability.

Remember that you must retain the shares for a minimum of 4 years to definitively maintain the tax benefit. In case of premature sale or transfer of shares, the tax authorities may reclaim all or part of the benefit received.

  • For Start-up Companies:

As a start-up company raising capital through the Tax Shelter, you are obligated to prepare tax certificates for your investors. These certificates must be provided to investors in a timely manner and submitted electronically to the tax authorities via Belcotax-on-web, no later than March 31st of the year following the investment.

For four years following the investment, you must annually confirm that all conditions are still being met and that the investor still holds their shares. This is also done via a certificate provided to the investor.

It is advisable to establish a clear procedure for the timely preparation and submission of these certificates to prevent investors from missing out on their tax benefits due to administrative shortcomings.

Please note that Tax Shelter operations carry certain risks, particularly the risk that the investor may not receive the expected tax benefit, which could lead to partial or total loss of the invested amount if the intermediary’s guarantee mechanisms prove ineffective.

Conclusion

The Tax Shelter for start-up companies offers an excellent opportunity in 2025 for both investors and young companies. Investors can enjoy considerable tax advantages, while start-up companies gain access to necessary financing to realize their growth ambitions. With the increased investment ceiling of €500,000 per company, this regime is more powerful than ever.

If you have any questions after reading this article, please do not hesitate to contact us via [email protected] or 03 216 70 70.

A NEW TRANSFER MARKET: COURT OF JUSTICE VS. FIFA

With the opening of the winter transfer window on January 1, 2025, the recent ruling by the Court of Justice of the European Union on October 4, 2024, will have a concrete impact on international football. This groundbreaking ruling significantly alters the foundations of the current football transfer system. It challenges FIFA’s strict rules on contract breaches and transfers, subjecting them to the critical scrutiny of European law. For players, clubs, and legal professionals, this ruling represents a revolution in the landscape of international transfers.

Background of the Dispute

The case originated from a dispute between French footballer Lassana Diarra and his former club, Lokomotiv Moscow. In 2013, Diarra transferred from Anzhi Makhachkala to Lokomotiv Moscow and signed a four-year contract. After a conflict over a proposed salary reduction, the club unilaterally terminated the contract and claimed compensation of 20 million euros under Article 17 of the FIFA Regulations on the Status and Transfer of Players (FIFA RSTP). Article 17 imposes strict sanctions for unilateral contract breaches, including financial claims against the player and his new club, sporting sanctions such as suspensions, and the refusal to issue the International Transfer Certificate (ITC), which is necessary to complete a transfer.

The impact of these sanctions was immediately evident. Despite interest from the Belgian club Sporting Charleroi, the club refrained from signing Diarra due to the risk of fines and sporting sanctions. The dispute led to a preliminary question being referred to the Court of Justice, examining whether FIFA’s rules violated Article 45 TFEU (free movement of workers) and Article 101 TFEU (competition law).

Court Analysis

The Court of Justice ruled that FIFA’s regulations constitute a dual violation of European law. Firstly, they hinder the free movement of workers by discouraging players from terminating their contracts and deterring new clubs from signing these players.

The Court acknowledged that contractual stability and the integrity of competitions are legitimate objectives but found that FIFA’s regulations go beyond what is necessary to achieve these goals. The joint liability of the new club for compensation was deemed disproportionate, as was the presumption that the club had induced the player to breach his contract. The refusal to issue the International Transfer Certificate was also dismissed as an excessive impediment to the labor mobility of players.

Secondly, the Court found that FIFA’s rules also violate competition law. By imposing heavy sanctions on clubs wishing to sign players with ongoing contracts, these regulations create a situation comparable to a “non-poaching” agreement. This restricts access to what the Court described as “essential resources” – in this case, professional footballers – and significantly limits competition between clubs in the transfer market. The Court classified the regulations as anti-competitive in nature and therefore in violation of Article 101 TFEU.

Consequences of the Ruling

The consequences of this ruling are far-reaching. For players, it means greater freedom to terminate their contracts without fear of heavy sanctions. However, they remain subject to national labor laws, such as the obligation to pay severance compensation. In Belgium, this compensation is limited, which gives players a stronger negotiating position and is likely to lead to higher wages. For major clubs in top leagues, the ruling offers new opportunities to attract players at lower costs.

At the same time, the ruling presents challenges for smaller clubs in training leagues, such as Belgium and the Netherlands. These clubs may rely less on high transfer fees for their talents, putting their revenue model under pressure.

From a legal perspective, the ruling has a major impact. Pending disputes regarding compensation claims based on Article 17 of the FIFA RSTP will need to be reconsidered in light of this ruling. Moreover, the ruling requires FIFA to thoroughly reform its rules, which could have implications beyond the European Union.

This ruling marks a milestone in the football landscape. It confirms that international sports regulations, no matter how important, remain subordinate to European law. For players and major clubs, it opens new opportunities, while smaller clubs and training leagues must rethink their models. At the same time, this ruling provides legal professionals with new guidance in the complex relationship between sports regulations and European law.

Conclusion

The ruling of the Court of Justice of October 4, 2024, has fundamentally changed the international football transfer system. The Court ruled that FIFA’s rules on contract breaches and transfers hinder both the free movement of workers and competition and are therefore in violation of European law. By rejecting heavy financial and sporting sanctions, players now have greater freedom to terminate their contracts, and a fairer playing field is created for clubs.

Players can now terminate their contracts more easily without disproportionate sanctions. Although national labor laws, such as severance payments, still apply, the financial burden is significantly lower than under the previous FIFA rules. This provides players with more freedom of movement within Europe and strengthens their negotiating position.

For clubs, especially in top leagues, the ruling means lower costs when attracting talented players. However, the business model of smaller clubs in training leagues, such as Belgium and the Netherlands, is under pressure. With lower financial barriers, major clubs can more easily sign young talents, threatening the economic stability of smaller clubs.

The ruling forces FIFA to revise its rules, leading to legal uncertainty. Pending disputes regarding transfers and compensation claims will need to be reassessed, and the broader implications of this ruling for the global transfer system remain unclear. At the same time, it offers opportunities for legal challenges against other restrictive sports regulations.

While the ruling advances the protection of players’ rights and promotes fair competition, it exacerbates the inequality between wealthy and less financially powerful clubs. This could further disrupt the competitive balance in football and increase the dominance of top clubs.

The ruling underscores that international sports regulations must comply with European law. It serves as a warning to sports federations to keep their regulations proportionate and legally valid. The coming years will be crucial in determining how this ruling is interpreted outside the EU and whether it initiates a broader reform of the transfer system.

If you have any questions after reading this article, please do not hesitate to contact us at [email protected] or 03 216 70 70.

CONFLICTS OF INTEREST WITHIN THE BOARD OF A COMPANY

A conflict of interest for a director of a company occurs sooner than one might think. Several situations are possible. For example, when the director is also a director in another company with which one wants to enter into an agreement. Or when the director wants to enter into an agreement with himself as a natural person.

The legislator has worked out a regime so that a director cannot let his own interest take precedence over the interests he should represent as a director of a company.

Specifically, the problem arises when the governing body of a company has to take a decision or make a ruling on a transaction under its jurisdiction, and it turns out that one or all of the directors have an interest that conflicts with it. In this article, we set out how to legally approach these conflicts of interest.

  1. Conflict of interest: concept

It follows from the relevant provisions of the Companies and Associations Code (“Wetboek van Vennootschappen en Verenigingen”, hereinafter “WVV”) that a conflict of interest is the situation where a director or governing body has a direct or indirect interest of a patrimonial nature that conflicts with the company’s interest.[1]

The requirement of “patrimonial” means that a material benefit is obtained or a material disadvantage is avoided. A potential patrimonial interest is sufficient. It need not be established that by making the decision the conflicted director obtains a material benefit or avoids material prejudice, if there is a possibility that this is the case, it qualifies as a patrimonial interest covered by the conflict of interest rule.

An example of such a conflict of interest is when the director wants to sell a property to his company. As a private seller, he will try to ask the highest possible price, as a director-buyer he should try to strive for the lowest possible price in the company’s interest.[2]

  1. Duty to report and prohibition on participation

The BV and CV can be managed by one or more directors who may or may not form a collegiate body.  If the governing body does not form a collegiate body, each director is individually authorised to manage and represent the company.[3]

When a conflict of interest arises in a BV or CV, and there are several directors who are each individually authorised to manage and represent the company, the conflicted director should notify the other directors. They will then take the decision or carry out the transaction. The director concerned may not participate in the deliberation or vote by the other directors in this regard.[4]

If the articles of association of a BV or CV provide that the governing body is a collegiate body, the decision is taken or the transaction is carried out by the governing body. In collegial decision-making, a majority of directors must meet or be represented to decide by a simple majority of votes.[5] Accordingly, the director with the conflict of interest may not participate in the deliberations or vote.[6]

In an NV, when a board member has a conflict of interest in a decision or transaction within the board’s competence, the director concerned must notify the other directors before the board takes a decision. The board may not delegate this decision.[7] Such as, for example, to the daily governance. As in the BV and CV, the conflicted director may not participate in deliberations or vote.[8]

Within a dual governance in an NV, the conflicted director on the supervisory board must also report it before the board takes a decision. It may not delegate this decision either.[9] The director concerned may again not participate in the other director’s deliberation or vote on such decision or transaction.[10]

When the executive board has to take a decision, or decide on a transaction within its competence, and a conflict of interest arises, the executive board refers the decision to the supervisory board. The board then acts as set out above.[11]

  1. Intervention general meeting

When all the directors have a conflict of interest, the power to take the decision or carry out the transaction shifts to the general meeting. If it approves the decision or transaction, then the governing body can still execute it. This regulation applies to the directors in the BV and CV, the board of directors in an NV with a monistic governance and the supervisory board in an NV with a dual governance.[12]

  1. Sole director

This submission to the General Meeting also happens when there is only one director in the BV, CV or NV.[13] This is because in that case there are no other directors who can take the decision or carry out the transaction. In the NV, the general meeting can approve the decision or transaction, allowing the sole director to carry it out.[14] If the sole director is also the sole shareholder, he or she may take the decision or carry out the transaction.[15] This can only be done in the BV and NV, as for the CV the WVV requires at least three founders.[16]

If the sole director of the NV is an NV with a collegiate management body, the rules relating to the board of directors in a monistic governance, or the executive board in the case of a dual governance, apply. If all members of the governing body of the sole director who has to rule on the conflict of interest have a conflicting interest, the decision or transaction is submitted to the general meeting. If the general meeting of the governed company approves the decision or transaction, the governing body, or, in the case of a dual board, the executive board, may implement it.[17]

  1. Exceptions

There are two exceptions where the above procedure should not be applied: when there are close links or when the acts are in conformity with the market.

As a first exception, the conflict-of-interest rule is not applied when the decisions or transactions were made between companies that are closely related. That is when one company directly or indirectly holds at least 95% of the votes attached to the whole of the securities issued by the other company. Or companies of which at least 95% of the votes attached to the whole of the securities issued by each of them are held by another company.[18]

This ground for exemption does not apply when the sole director in the BV or NV is also the sole shareholder.[19] After all, there is no one whose interests he can harm.

The second ground for exception is when the decisions of the governing body relate to customary transactions that are done under the conditions and at the collateral usually prevailing in the market for similar transactions. In that case, the conflict of interest rule should not be applied either.[20]

  1. The permanent representative

Article 2:55 of the WVV now also legally enshrines the majority view in case law. The rules on conflicts of interest for directors and members of the governing body apply to the permanent representative where applicable.[21]

  1. Publicity

The conflicted director must make a statement explaining the nature of the conflicting interest. That statement is recorded in the minutes of the meeting of the other directors, the board of directors in a monistic NV or the supervisory board in a NV with dual governance.[22] The sole director in a NV does not have this obligation.

The other directors or the general meeting shall describe in the minutes the nature of the decision or transaction for which the conflict exists and its patrimonial consequences for the company. They also justify the adopted decision.[23] If in the BV or NV the sole director is also the sole shareholder, he shall also include in his special report the agreements concluded between him and the company.[24] This part of the minutes or this report should be included in its entirety in the annual report or in a document filed together with the financial statements.[25] If the company has appointed an auditor (“commissaris”), the minutes of the meeting or report shall be communicated to him.[26]

  1. Nullity

The conflict of interest procedure in the WVV provides for the explicit additional possibility for the company to claim the nullity of the decisions or transactions taken in violation thereof if the other party to those decisions or transactions knew or should have known about them.[27]

  1. Conclusion

After more than two decades of absence, the ban on participating in deliberations has been reintroduced. The director with a conflict of interest must always report this to the other directors before the governing body takes a decision. The management board in the dual governance of a NV refers this decision to the supervisory board if necessary.

If the full board or the sole director has a conflict of interest, the WVV provides for a shift of power towards the general meeting. If it gives its approval, the governing body may still implement the decision or transaction. If the sole director is also the sole shareholder, he can of course decide on this himself.

One situation that the legislator did not take into account in 2019 is what to do if several, but not all, board members have a conflict of interest. There is a possibility that, as a result, the governing body may not achieve the required quorum to deliberate and decide.[28] A power shift to the general meeting is only possible if all board members have a conflict of interest. A statutory regulation of this remains outstanding for now.

One suggestion from legal doctrine is to formulate a provision in the articles of association for this purpose.[29] This way, you can provide for different attendance rules and possibly majority rules for deliberation in your company’s articles of association themselves. Another possibility is to include the shift of power towards the general meeting itself. Or the temporary appointment of a proxy to achieve the required number of attendees for deliberation and voting.

As such, there are some opportunities to provide a procedure for this yourself.

We will be happy to assist you in working out a regime tailored to your company, and with any other questions or concerns regarding the operation of your governing body.

You can contact us via e-mail at [email protected] or by telephone at 03/216.70.70.

Bronnen

Wetboek van Vennootschappen, BS 6 augustus 1999.

Wetboek van Vennootschappen en Verenigingen, BS 4 april 2019.

BRAECKMANS, H. en HOUBEN, R., Handboek vennootschapsrecht, Antwerpen, Intersentia, 2020, 975 p.

ERNST, P., “Belangenconflicten revisited, 25 jaar later. De nieuwe regels in het WVV over belangenconflicten van bestuurders in de niet-genoteerde NV en BV en hun ruimere impact” in HOUBEN, R., GOOSSENS, N. en LEUNEN, C. (eds.), JPB. Liber amicorum Jean-Pierre Blumberg, Antwerpen, Intersentia, 2021, 177-212.

[1] Art. 5:76, §1, lid 1; 6:64, §1, lid 1; 7:96, §1, lid 1; 7:102, §1, lid 1; 7:115, §1, lid 1, 7:117, §1 WVV.

[2] H. BRAECKMANS en R. HOUBEN, Handboek vennootschapsrecht, Antwerpen, Intersentia, 2020, 278. (hierna: H. BRAECKMANS en R. HOUBEN, Handboek vennootschapsrecht)

[3] H. BRAECKMANS en R. HOUBEN, Handboek vennootschapsrecht, 82, nr. 136.

[4] Artt. 5:76, §1, lid 1 en 6:64, §1, lid 1 WVV.

[5] H. BRAECKMANS en R. HOUBEN, Handboek vennootschapsrecht, 272, nr. 576.

[6] Artt. 5:76, §2 en 6:64, §2 WVV.

[7] Art. 7:96, §1, lid 1 WVV.

[8] Art. 7:96, §1, lid 4 WVV.

[9] Art. 7:115, §1, lid 1 WVV.

[10] Art. 7:115, §1, lid 4 WVV.

[11] Art. 7:117, §1 WVV.

[12] Artt. 5:76, §1, lid 2; 6:64, §1, lid 2; 7:96, §1, lid 4 WVV en 7:115, §1, lid 4 WVV.

[13] Artt. 5:76, §3; 6:64, §3 en 7:102, §1, lid 1 WVV.

[14] Art. 7:102, §1, lid 1 WVV.

[15] Artt. 5:76, §4 en 7:102, §1, lid 3 WVV.

[16] Art. 6:3 WVV.

[17] Art. 7:102, §1, lid 2 WVV.

[18] Artt. 5:76, §5, lid 1; 6:64, §4, lid 1; 7:96, §3, lid 1; 7:102, §2, lid 1 en 7:115, §3, lid 1 WVV.

[19] Artt. 5:76, §5, lid 1 en 7:102, §2, lid 1 WVV.

[20] Artt. 5:76, §5, lid 2; 6:64, §4, lid 2; 7:96, §3, lid 2; 7:102, §2, lid 2 en 7:115, §3, lid 2 WVV.

[21] Art. 2:55, lid 1 WVV.

[22] Artt. 5:76, §1, lid 1; 6:64, §1, lid 1; 7:96, §1, lid 1 en 7:115, §1, lid 1 WVV.

[23] Artt. 5:77, §1, lid 1; 6:65, §1, lid 1; 7:96, §1, lid 2; 7:103, §1, lid 1 en 7:115, §1, lid 2 WVV.

[24] Artt. 5:77, §1, lid 1 en 7:103, §1, lid 1 WVV.

[25] Artt. 5:77, §1, lid 2; 6:65, §1, lid 2; 7:96, §1, lid 2; 7:103, §1, lid 2 en 7:115, §1, lid 2 WVV.

[26] Artt. 5:77, §1, lid 3; 6:65, §1, lid 3; 7:96, §1, lid 3; 7:103, §1, lid 3 en 7:115, §1, lid 3 WVV.

[27] Art. 5:77, §2; 6:65, §2; 7:96, §2; 7:103, §2 en 7:115, §2 WVV.

[28] P. ERNST, “Belangenconflicten revisited”, 202.

[29] H. BRAECKMANS en R. HOUBEN, Handboek vennootschapsrecht, 285; P. ERNST, “Belangenconflicten revisited”, 203.

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