Legal Considerations for Directors in Belgian Companies
Taking on a director position in a Belgian company comes with important legal considerations, particularly regarding remuneration and social security. Board members typically receive compensation for their directorship, but Belgian companies can also opt to appoint them without remuneration. A common reason for this is to avoid subjecting directors to multiple social security classifications or to avoid triggering Belgian social security in general.
Self-Employed or Employee Status for Belgian Company Directors
In most cases, Belgian company directors are considered self-employed, unless they can prove that they work as an employee under the authority of an employer. If you are considering a directorship, it is crucial for social security purposes to assess whether you will be considered a self-employed professional or if your role qualifies for employee status. If you are already employed by a company, whether in Belgium or abroad, you normally pay social security contributions as an employee. If you are appointed as a director of a Belgian company, it may be advisable to take on this mandate unpaid to avoid also being required to contribute as a self-employed. This prevents double contributions. The burden of proof of not being remunerated lies with the director, as they are legally presumed to be self-employed.
Strict Social Security Requirements for Belgian Directors
The National Social Security Office in Belgium takes a strict stance and requires that the unpaid nature of a directorship be demonstrated both legally and factually. Even if the company’s bylaws explicitly state that the directorship is unpaid, the authorities require concrete evidence that this status is not only declared on paper but is also followed in practice.
Implications of Paid vs. Unpaid Director Roles in Belgian Companies
If the bylaws specify that a directorship is unpaid unless decided otherwise by the general meeting (GM), the directorship is considered paid unless the GM explicitly confirms its unpaid nature. The obligation to pay social security contributions remains in effect until the quarter in which the GM formally confirms that the mandate is unpaid. Even if no salary is paid, but the director receives certain benefits in kind like a company car or housing at the company’s expense, it will trigger a social security liability.
Presumed Paid Directorships under Belgian Law
If the bylaws do not clearly specify whether a directorship is paid or unpaid, the Belgian Code of Companies and Associations states that a directorship is presumed to be paid unless the bylaws or the GM decide otherwise at the time of appointment. Directorships are therefore assumed to be paid unless proven otherwise. This legal presumption does not exist for the non-profit sector, as it remains more common for directorships to be unpaid.
Avoiding Belgian Social Security Contributions as an Expat Director
If you do not reside in Belgium and you plan to take on a paid director role in a Belgian company, you could also potentially avoid Belgian social security contributions under Regulation (EC) n. 883/04 (within the EU) or a bilateral agreement that may exist with your country of residency (outside the EU). TAXPATRIA® can advise you on the tax and social security implications of your Belgian directorship and any related formalities.