Liability of directors and officers according to new corporate law

A lot has been written about the new Belgian Companies and Associations Code (hereinafter ‚ÄėCAC‚Äô). The CAC contains plenty of important new provisions, not least of which is the limited liability for company directors and officers. Here, the legislator has clearly reacted to the tendency of holding directors and officers increasingly liable for their actions. The new rules aim at making running a business sexy again and giving current and future directors and officers some peace of mind.

General liability

The CAC provides a general rule. It is ‚Äėgeneral‚Äô because it applies to each and every legal person, regardless of their concrete form. It also applies to each member of a management body, hence to the executive manager and even to de facto directors. After all: de facto directors are the people who actually manage the company, even if they haven‚Äôt been appointed as such (by the general meeting, with subsequent publication of the appointment in the appendices to the Belgian Official Journal).

Joint and several liability

All the above-mentioned persons are jointly and severally liable for errors made in the performance of their assignment. This means that each member is personally liable for decisions or failures of the management, regardless of whether or not the management forms a board. The members of the management body are jointly and severally liable towards the company as well as third parties for any damage arising from violations of the CAC or the company’s articles of association. In other words: each director may be held liable in full for compensation of the affected party/ies involved.

Joint and several liability for mere management errors has thus been added to the former liability rules.

Is this a fait accompli for directors? Are they expected to simply go along with the new rules and accept joint and several liability for damage just like that? Absolutely not! Directors are offered the option of reporting the alleged error to the other management members (or to another supervisory body). Only in that case can a director be released from their liability for errors in which they did not play a demonstrable role.

Statutory limitations of liability

Joint and several liability is a huge thing. Based on the foregoing you could be sceptical as to what is the purpose of a company after this. And justifiably so … Were it not for the fact that the CAC also provides for explicit limitations. The Code introduces a cap on the amount for which directors can be held liable. The cap depends on two variables: the average balance sheet total and the average turnover (ex. VAT) of the last three financial years prior to the filing of the action for liability.

The reason for introducing these limitations is to allow directors to take out reasonable liability insurance. At the same time, the aim is to remove inequality between managers who get 'insurance' as employees and those who get 'insurance' via management companies.

The limitation of liability is enforceable against the company as well as against third parties. Furthermore, it applies regardless of the (extra-)contractual ground for liability. The maximum amounts also apply to all of the persons indicated combined. They apply to each fact or set of facts that may give rise to liability, regardless of the number of claimants or claims.

Is further contractual limitation possible?

The CAC stipulates that further limitations, other than these provided by law is not possible. Provisions in the articles of association and in contracts, as well as unilateral indications of intent whereby directors are exonerated or indemnified from liability beforehand, are not taken into account. This means that one cannot renounce actions for liability against directors beforehand.

Furthermore, having another entity bear the financial consequences of the directors’ and officers’ liability is also prohibited, as this would easily erode the personal liability scheme of the director. That said, third parties such as parent companies, controlling entities or shareholders do have the ability to indemnify directors.


But, much like medals, these rules also have a flip side, for limitation of liability does not apply in the case of:

  • frequently occurring minor errors;
  • major errors;
  • fraudulent intention or intention to harm;
  • errors in legal obligations e.g. with respect to valid registration of shares, full payment of capital and capital increase;
  • joint and several liability for tax debts (under certain circumstances);
  • joint and several liability for social security contributions (under certain circumstances).

In other words: only random light errors qualify for limitation of liability. The question whether these limitations of liability are nothing more than an empty shell seems justified.

Points for consideration for directors or shareholders?

Now more than ever it is recommended to check articles of association and management agreements beforehand and update them where necessary.

The following are key points for consideration:

  • the director‚Äôs assignment must be described in as much detail as possible, as for the company, the director‚Äôs liability is of a contractual nature. The preferred route would be to describe the assignment, define the errors and elaborate on the possible consequences as clearly as possible;
  • even though derogation from the caps on the limitations of liability is forbidden, there is no rule against fine-tuning the provisions (e.g. evidence clauses and force majeure clauses);
  • another possibility is to establish how joint and several liability compares between the different directors.

De juristen van aternio staan u graag bij met raad en daad om u te adviseren in deze materie. U kan ze hier contacteren.

Contact us for further advice and assistance.

Cross-border tax arrangements: be warned!

We have already discussed Directive (EU) 2018/822 as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements. Although the various European Member States, including Belgium, have yet to transpose the directive into national legislation, the directive entered into force on 26 June 2018. The actual first notification will only have to take place from 2020 onwards.

Intermediaries and taxpayers who are obliged to report must be aware of this new and additional weapon in the fight against tax evasion. It complements the various national anti-abuse tax provisions already in place in the Member States.

What arrangements?

The Directive requires the reporting of potentially aggressive cross-border tax planning arrangements. A cross-border arrangement is one which involves either more than one Member State or one Member State and a third country.

In addition, at least one of the following conditions must be fulfilled:
a) not all of the participants in the arrangement are resident for tax purposes in the same jurisdiction;
b) one or more of the participants in the arrangement is simultaneously resident for tax purposes in more than one jurisdiction;
c) one or more of the participants in the arrangement carries on a trade or business in another jurisdiction through a permanent establishment and the arrangement constitutes part or all of the trade or business of that permanent establishment;
d) one or more of the participants in the arrangement carries on an activity in another jurisdiction without being resident for tax purposes or without creating a permanent establishment therein;
e) such a mechanism is liable to affect the automatic exchange of information or the determination of the ultimate interest.

These arrangements must be primarily, but not exclusively, for the purpose of obtaining a tax advantage (main benefit test).

Essential characteristics or hallmarks of the arrangement

In order to minimise costs and administrative burdens for both tax administrations and intermediaries, and to make the directive an effective deterrent, not all arrangements should be reported. This is only the case when the cross-border construction possesses one of the essential characteristics listed in Annex IV to the directive .

There are five categories of essential characteristics or hallmarks:
Category A - General essential characteristics associated with the main benefit test;
Category B ‚Äď Specific essential characteristics associated with the¬†main benefit test;
Category C ‚Äď Specific essential characteristics relating to cross-border transactions;
Category D ‚ÄstSpecific essential characteristics for automatic exchange of information and ultimate interest; and
Category E ‚ÄstSpecific essential characteristics related to transfer pricing.

It is important to note that certain categories may only be taken into account if they comply with the main benefit test.

Notifications linked to the main benefit test

Category A covers arrangements with a confidentiality clause, a success fee for the intermediary or where a standard, market-ready structure or standardised documents are used.

Category B includes arrangements whereby the taxpayer uses tax losses, income is converted into capital, gifts or other categories that are taxed at a lower rate or not, or resources are pumped around (round-tripping) by means of intermediate entities without a primary commercial purpose.

In category C, three arrangements are linked to the main benefit test. More specifically, those where deductible cross-border payments are made between two or more related companies and (a) the recipient is - for tax purposes - resident in a jurisdiction that does not levy (or levies at a zero or near zero rate) corporate income tax; (b) the payment enjoys a full tax exemption in the jurisdiction where the recipient is resident for tax purposes or (c) the payment enjoys a favourable tax treatment in the jurisdiction where the recipient is resident for tax purposes.

Mandatory reporting obligation

If an arrangement contains one of the essential characteristics that occur in the other categories of C, D or E, then the arrangement must always be reported. This applies irrespective of whether the main objective is to gain a tax advantage.

Under category C, this is the case for arrangements where the same asset is depreciated in more than one jurisdiction;  double taxation is claimed for the same income or capital item in more than one jurisdiction; transfers of assets take place where there is a material difference between the amount designated in the jurisdictions concerned as the remuneration to be paid for those assets or where the recipient of the cross-border payments is resident for tax purposes in a jurisdiction included in a list of jurisdictions of third countries that have been assessed as non-cooperative by the Member States jointly or in the OECD.

Category D covers those arrangements which are designed to circumvent the automatic exchange of information or where legal or beneficial ownership is non-transparent through the use of persons, legal arrangements or structures.

Finally, category E focuses on transfer pricing arrangements based on unilateral safe-haven rules; transfers are made of intangible assets which are difficult to value or cross-border intra-group transfers where the estimated annual pre-tax earnings before interest and taxes (EBIT) of the transferor(s), in the three-year period following the transfer, are less than 50 % of the estimated annual EBIT of that/those transferor(s) if the transfer had not taken place.

Which intermediary should report?

Any intermediary who conceives, offers, designs, makes available for implementation or manages the implementation of a reportable, cross-border arrangement.

An intermediary is also a person who, bearing in mind the facts and circumstances involved and on the basis of the available information, expertise and understanding necessary to provide such services, has, directly or indirectly, provided any material assistance, other assistance or advice.  Any person shall have the right to provide evidence that he or she did not know and could not reasonably have known that he or she was involved in a reportable cross-border arrangement.

In addition, an intermediary must meet at least one of the following additional conditions: be resident for tax purposes in a Member State; have a permanent establishment in a Member State through which the services relating to the arrangement are provided; be constituted in, or subject to, the laws of a Member State or be registered with a professional body in connection with the provision of legal, tax or advisory services in a Member State.

Does the taxpayer have a reporting duty?

Three situations are de facto foreseen which the taxable person has to report himself.

The taxable person shall be under an obligation to report if he has at no time engaged intermediaries to carry out the cross-border arrangement. The obligation to report also shifts to the taxpayer when the intermediaries are established outside the European Union. Finally, the taxpayer will also have to take responsibility for the notification if the intermediary in question invokes a legal professional confidentiality and the intermediary operates within the limits of this professional confidentiality.

What needs to be reported?

The following information must be reported:
a) the identification details of intermediaries and relevant taxable persons;
b) the essential characteristics that require the notification of the cross-border arrangement;
c) a summary of the contents of the cross-border arrangement subject to the notification requirement;
d) the date on which the first step towards implementing the reportable cross-border arrangement has been, or will be, taken;
e) the national provisions underlying the reportable cross-border arrangement;
f) the value of the reportable cross-border arrangement;
g) the Member State of the relevant taxpayer(s) and any other Member State likely to be affected by the reportable cross-border arrangement; and
h) the identification of other persons in a Member State who are likely to be affected by the reportable cross-border arrangement, together with an indication of the Member States to which they are linked.

When will the arrangement be reported?

Depending on what occurs first, the intermediary or taxpayer shall be obliged to report the cross-border arrangements of which they are aware, possess or control within 30 days of their becoming aware:
a) the day after the reportable cross-border arrangement has been made available for implementation; or
b)  the day after the reportable cross-border arrangement is ready for implementation, or
c) the moment when the first step in the implementation of the reportable cross-border arrangement has been taken.

Intermediaries who have directly or indirectly provided material assistance, other assistance or advice are also obliged to provide information within 30 days of the day after they have directly or indirectly provided assistance, other assistance or advice.

In the case of a market-ready arrangement, the intermediary is obliged to draw up a three-monthly report with an overview of the new notifiers who have also opted for the implementation of this arrangement.


This directive once again increases the pressure on intermediaries involved in cross-border tax arrangements. That much is clear. It remains to be seen how and when Belgium will transpose the directive. In any case, the penalties for arrangements that are not reported will be effective, proportionate and dissuasive. In addition, any intermediary who chooses to ignore the directive and its national interpretation may suffer considerable reputational damage.

Can you still carry out prospecting and marketing after 25 May 2018?

Can you still carry out prospecting and marketing under the GDPR? Many entrepreneurs are racking their brains about this question. Discover the answer below.

Legal processing of personal data

According to the regulation, any processing of personal data must be done legitimately. Processing legitimately is processing that is done on a legal basis. The GDPR foresees six legal bases. These are:

  • defence of the vital interests of the data subject;
  • execution of a task of general interest or public order;
  • compliance with legal obligations;
  • obtaining permission;
  • executing a contract; and
  • legitimate interest of the controller.

Marketing and/or prospecting versus GDPR

Marketing and/or prospecting are often deemed to be almost impossible within the new obligations of the GDPR. This is not the case. The two are perfectly compatible if you take a few precautions.

The biggest problem is legitimacy, namely having the right legal basis to do marketing or prospecting. From the permissible legal bases of the regulation there are only two which you could possibly use. The defence of the vital interests of the data subject, the execution of a task of general interest or public order or the compliance with legal obligations are not applicable legal bases.

In most cases, you will not be allowed to invoke the execution of a contract as a legal basis. This legal basis only covers the processing operations that are necessary for the execution of the contract. Marketing or prospecting are not included here.

Therefore, only two possible legal bases remain. In principle, they can both be used. If you obtain permission from the data subject in a correct manner to process his/her personal data with the objective of marketing, you have a legal basis. Although this is the "safest" way, in practice this is not always achievable. Certainly, in the context of prospecting, obtaining permission will not provide a way out.

Another possible legal basis is the legitimate interest of the controller. This legal basis can be called upon for marketing or prospecting. However, you will need to make sure that the rights of the data subjects are not more important than your legitimate interest. You will always have to perform a balancing exercise, where you'll need to critically contrast your interest with that of the data subject.

Privacy Statement

In addition to the obligation of legitimate processing, you must inform the data subject about his rights and how these can be exercised. If a data subject exercises these, you must react according to the rules of the regulation. Informing the data subject about this can be done via a privacy declaration.


Regarding the question about marketing and prospecting being compatible with the GDPR, the answer is positive.

If you so wish, aternio can assist you with the implementation of the obligations imposed by the GDPR.

Disclosure obligation of aggressive cross-border constructions for tax specialists

From 1 July 2020, tax specialists will have to disclose aggressive cross-border constructions to the tax authority. This is part of the new fight against international tax evasion. The proposal mainly reflects Action Point 12 of the 2013 international plan of the OECD on Base Erosion and Profit Shifting (BEPS).

Transparent fiscal constructions

Today, fiscal constructions are still being set up so taxable profits can be flushed through tax havens or total tax burden is significantly reduced in other artificial ways. The constructions themselves aren't always illegal, but since the Panama Papers aggressive fiscal planning is no longer justifiable to society.

Central database

On Tuesday 13 March 2018, the European Ministers of Economic and Financial Affairs (‚ÄėECOFIN‚Äô) met to discuss the implementation of a disclosure obligation for ‚Äėintermediaries‚Äô.¬†This draft Directive is part of a series of measures that should help to avoid evasion of corporation tax.

Intermediaries ‚Äď such as tax lawyers, tax advisers, accountants ‚Äď will therefore have to disclose potentially harmful constructions to the national tax authority.¬†European Union member states will be able to exchange this information via a central database.¬†In addition, member states will be obliged¬†to impose sanctions on intermediaries who do not comply with the transparency measures.

What does ‚Äėaggressive‚Äô mean?

Of course, the question is: what should be understood by ‚Äėaggressive' cross-border planning‚Äô? A set of¬†‚Äúessential characteristics‚Ä̬†will help determine which types of constructions will have to be reported to the tax authority. This doesn't necessarily mean that a construction is harmful. It suggests it may have to be investigated by tax authorities. A lot of constructions are entirely legitimate so it is a matter of determining which ones aren't.


Member states have until 31 December 2019 to incorporate the Directive into their national legislation. The new disclosure obligations will apply from 1 July 2020. From that date, the disclosure obligation should also come into effect in Belgium.

Member states are obliged to exchange information every 3 months, more precisely within one month after the end of the quarter in which the information was presented. This means the first automatic information exchange has to take place on 31 October 2020 at the latest.

The final Directive will be adopted by the Council acting on unanimity after consulting the European Parliament.

Right of entry for tax authorities is no right to search

May tax authorities enter your professional premises without your permission? The fiscal right to entry has been a topic of discussion for quite some time. The Constitutional Court of Belgium provided more insight into the issue in its October 12, 2017 decision (no. 2017-116).

Violation of a fundamental right?

The Constitutional Court responded to the question of whether the right to fiscal visitation conflicts with the right to privacy.

The Court starts by noting that a limitation of a fundamental right may be legal in certain circumstances. But the limitation always has to be specifically in furtherance of, and proportional to, the objective.

The Court decides here that access to professional premises is in specific furtherance of a determination of fiscal (non-)compliance. And the proportionality requirement is sufficiently protected by anti-abuse measures.  Thus, entry of professional premises for purposes of fiscal control is allowed, within limits.

Permission to enter required

Within these limits, tax authorities have to obtain permission, prior to entering professional premises. The necessary permission may be granted by the taxable person him/herself or by an authorized representative.

Fiscal authorities may in no case enter the premises without permission.

This implies that the taxable person may deny entrance. However, because there is a duty to cooperate with the tax authorities, denying entrance is sanctionable. Sanctions include administrative fines and possibly criminal sanctions.

The right to search

What about the right to search cabinets and safes etc?  The Court decided to apply the same reasoning as outlined above.  Tax authorities are once again not permitted to open cabinets and safes themselves, forcefully or otherwise.  However, if the taxable person fails to cooperate (by opening the cabinets and safes), he is subject to sanctions.

Invoking the right to remain silent

With this verdict, the Court makes a fundamental distinction between fiscal entry and criminal investigation. The right to remain silent only applies to criminal matters. Thus, one cannot invoke the right to remain silent to avoid the duty to cooperate with tax authorities.

What if there is a legitimate chance of criminal sanctions for a person suspected of tax evasion? Can the right to remain silent be invoked? The Court did not answer this question specifically, but the suspicion of tax evasion combined with the legitimate chance of criminal sanctions seems to justify the applicability of the right to remain silent.

In conclusion

The Constitutional Court has hereby provided further insight into the limits of fiscal entry.

Within these limits, fiscal entry violates the fundamental right to privacy.  The Court makes clear that entry may be denied. However, know that obstruction to entrance may lead to penalties.

The court draws a clear line between fiscal entry and criminal investigation.

Legal requirements for your business website: check it now

Does your Belgian business have a website, facebook page or some other kind of online platform that contains personalized information about your business?  Belgian law requires you to mention certain information on these online platforms.

The goal is to maximize transparency and accessibility.  An analysis by the Federal Public Service (FPS) Economics revealed that more than half of businesses are not compliant.  In response to this statistic, the FPS has created a checklist which provides a clear overview of the legal requirements.

Legal requirements


This is the name of your business.  If there is no business name, then you state your own name.


This is your business address: the address where your business is located, where the day to day operations are carried out.

Contact information

This is the contact information that allows for fast and efficient communication, such as a phone number or email address.  If certain conditions are met, an electronic form can be used instead of an email address.

In that case, the electronic form has to:

    • be easily, directly and permanently accessible;
    • contain a blank field for the internet user; and
    • allow for the possibility to attach a file.

Once the form is sent by the internet user, an automatic and immediate confirmation has to be sent containing the completed form; this can appear on the screen but at all times has to be emailed to the internet user.  Additionally, in direct email communications with the internet user, an actual working email address has to be used that allows for quick communication between the parties.

Business number 

Your business number (‚Äėondernemingsnummer‚Äô) is your business‚Äôs unique identification number, as assigned by the Registry for Businesses (Kruispuntbank voor Ondernemingen ‚Äď a.k.a. KBO).

Supervising authority

If you need a license to exercise your profession/trade then you are required to mention the name and contact information of the supervising authority.

Regulated profession

If your profession is regulated, name the professional association of which you are a member, state your official title and the place where it is recognized, and be sure to refer to the regulations of the association.


In case you have a VAT-number, this has to be mentioned as well.

Code of Conduct

In case your business has signed a Code of Conduct, then this has to be mentioned; also let the internet user know where they can find it.

Warning and fine

If this required information is not mentioned, the FPS Economics can issue a warning of non-compliance. If this warning is ignored, one risks getting fined.

Important to know is that these regulations are applicable regardless of whether or not the website is used to sell goods or services.  Thus, even purely informative websites need to meet these requirements.  In the event you do have a webshop, your website will need to meet additional requirements.


Feel free to contact aternio and we can screen your website to ensure that it meets all of the legal requirements.


What information may a landlord ask of a potential tenant?

The relationship between landlord and tenant often raises questions: what is allowed, what isn’t?

Recently the Flemish government approved a preliminary draft of the new Flemish Rental Decree. Undoubtedly a few more changes will come, but the intention is that the new legislation will apply starting September 1st 2018.

One of the most obvious changes concerns the information a landlord may ask a candidate tenant.  Until now, the law did not explicitly address this issue.

In the interest of the landlord …

The new legislation is being created mainly to protect the landlord.  Landlords are of course very interested in ensuring that their potential tenant is in fact in a position to pay (and continue paying) his rent. Under the new legislation, the landlord will be allowed to ask the potential tenant to not only share his personal identity information and address, but to also provide proof of  monthly income. Proof of income can include copies of paystubs, an overview of retirement funds etc.

But also in the interest of the tenant…

Of course the legislature has not lost sight of the potential tenants’ rights.

The right to privacy has be respected. As such, the potential tenant may mark out certain information prior to providing documents to the landlord.  For example, the name and address of the place of employment.  After all, this information is irrelevant to the landlord.

Needless to say, the potential tenant also may not be discriminated against based on gender, age, nationality, etc…

The landlord also is not allowed to ask questions regarding a potential tenant’s health. Asking for proof of good conduct is out of the question as well.

In conclusion

The new Flemish Rental Decree has the intention to provide a balance between both parties’ rights.

But, in the event the paystubs (or other documents provided) indicate that a would-be-tenant would not be able to meet his rental obligation, the landlord may refuse tenancy. But this information may never be shared with third parties!


A clean slate for Belgian business law!

Not much longer and the current rules and regulations affecting businesses and other organizations will look completely different.
Our current legislation no longer meets the needs of the modern business climate. The legislation, published in the Business Code, is too complicated and inconsistent. Legislators have therefore promised to simplify and modernize it. With the renewed legislation they aim to make Belgium more attractive to businesses.

The pioneer of the entire overhaul, Minister of Justice Koen Geens, already gave us a glimpse of what is to come in a July 20th 2017 press release.

Combined legislation for all businesses and associations  

The new Business Code will combine the legislation for all businesses, associations and foundations. Thus, all common provisions will be addressed together, rather than in separate sections. Associations and foundations will also be allowed to engage in unlimited economic activities in the future. And when they do so, they will be considered to constitute a ‚Äėbusiness enterprise‚Äô just like any other business.

The new Business Code will be divided into 5 parts to be covered in 14 books; for ease of use, article numbers will also include the book number.

Major shift in key principles

Many new key principles will appear. Following are a few examples:

  • all organizations will be allowed to engage in commercial activities;
  • the address stated in the business agreement, rather than the actual address, will be considered for international purposes;
  • the minimum investment required for closed corporations will no longer apply;
  • ‚Äėsuper voting shares‚Äô will be allowed for public corporations as well as closed corporations;
  • both public and¬†closed corporations will be allowed to opt for single shareholder and/or Board option(s); and
  • the liability of the Board of Directors will be capped.

A limited amount of business structures

The new legislation greatly limits the amount of available business structures. Only 4 basic business structures remain: the partnership, the closed corporation, the cooperative corporation and the public corporation. All other business structures, other than those created by European law, disappear.

The closed corporation is the new spill-over

The renewed partnership structure will offer more possibilities and only 2 types will remain: the general partnership and the limited partnership (in which some of the partners enjoy limited liability).

The public corporation will be the preeminent vehicle for corporations with a large and public shareholdership.

The cooperative corporation returns to its historical foundation and is only available to businesses which truly serve a cooperative goal.¬† ‚ÄėFake‚Äô cooperatives will be pushed in the direction of the closed corporation.

The biggest change is definitely that the closed corporation will become the spill-over structure for all businesses that are not public and not too large.

The new closed corporation offers a lot of contractual freedom and flexibility, with comprehensive legislation to supplement it. For example, the requirement of a minimum investment disappears but is being counteracted with an extensive liability for incorporators or the Board of Directors. The existing rules regarding investment protection will be abolished or drastically rewritten.

For closed corporations we will also see the option of super voting shares (multiple voting rights per share), the possibility for the Board to increase capital and to distribute participation certificates, share purchase rights and convertible bonds. The rules concerning the addition, resignation or forced buy-out of shareholders will be modeled after those for the cooperatives. The regulations involving profit distribution are also being completely rewritten and a distribution will in the future only be possible when the business meets 2 requirements: an equity test and a liquidation test.


Existing agreements will definitely be affected by the new legislation. Partnership agreements, articles of incorporation and shareholder agreements need to be reviewed and rewritten. It is very clear now that present or future business partners and shareholders will need to have appropriate agreements in place. Customization will more than ever become the new norm. The legal advisors at aternio are keeping a close eye on all of the legislative changes and would be happy to assist you with your legal needs.

International assignment of employees: Belgian law revamped

As of December 30, 2016, Belgium has adopted the new European regulations regarding the international assignment of employees.

International assignment involves an employee who is called upon to work in another country on behalf of his employer for a certain period of time.  With an international assignment, the employee becomes subject to the terms of employment (such as applicable wages, hours of work and vacation) of the country where he/she works.  However, if the terms of employment of the country of original employment are more favorable, then the more favorable regulations apply.  The assigned employee remains subject to the social security system of the country of original (usual) employment.

The new regulation is meant to thwart unfair competition and ‚Äėsocial dumping‚Äô, where countries intentionally worsen their terms of employment (ie: lower minimum wage) in order to attract more foreign companies.¬† It also discourages local employers from going abroad to seek more employer-favorable terms.

The implementation of the European regulations brings 4 notable changes.

First change ‚Äď Protection of the employee

When an employee from Belgium is assigned to work in another country in the EEA or Switserland where more favorable wage- and employment terms apply, the employee can file an administrative or legal claim against his employer.   The new regulations aim to protect the employee from suffering any negative consequences as a result of filing such a claim.

Second change ‚Äď Social inspection

When an employer wants to send an employee on international assignment, he now has to appoint a ‚Äėmiddle man‚Äô.¬† This person is charged with the task of providing the inspection services with the necessary documents.¬† These include:

-a copy of the employee’s employment agreement

-an overview of the hours worked

- copies of the pay slips (or similar proof of payment)

Third change ‚Äď Principal liability for wages in construction sector

There is now a principal liability provision for the payment of wages in the construction sector.   This provision applies to all persons employed in Belgium.  This means that it is applicable to Belgian employees as well as persons who are internationally assigned to work here.   In the event of (partial) non-payment of an employee by a direct (sub) contractor, the builder or contractor (the principal) will be responsible for the wages due.  Note that this only applies to payroll debts that are incurred after implementation of the new regulations.

Fourth change ‚Äď Administrative sanctions and fines

The implementation of sanctions and fines has not gone without a (serious) hitch in the past.  Adoption of the new European regulations, with its changes to the Social Criminal Code, aims to put an end to this.



Public records fraud: the uninvited business administrator or board member

It‚Äôs been in the news multiple times in the past several years: criminals who appoint themselves as business administrator or board member by way of a fraudulent publication in the Belgian public records (‚Äėstaatsblad‚Äô).¬† This type of crime is called 'staatsblad fraud',¬†herein after referred to as public records fraud.

The idea is to use the fraudulent publication to make purchases and/or otherwise withdraw from the financial accounts of the unsuspecting business.  Unfortunately, this is a very simple form of fraud which can easily result in huge financial harm.

Public records fraud

The fraudsters use the downloadable publication forms from the website to name themselves as administrator or board member of an unsuspecting company.  They then pay the relatively low publication fee and have the form publicized.  This is unfortunately quite easy to do.

After the appointment has been publicized in the public records, the fraudster’s real work begins.  Using the publication, he/she tries to gain access to the company’s bank accounts to make purchases (such as the acquisition of a personal vehicle), or to otherwise withdraw money from the account.

If the seller or banker is not sufficiently critical or careful, then the financial harm to the company is at that point unpreventable.

No automatic pro-active updates or control

Up until now there has been no accessible pro-active measure to control the accuracy of the publications.  This means that anyone could technically put together a form and have it publicized, and this for any random company.  To further contribute to the issue, companies remain unaware of the publication as they do not receive any kind of notification.

Due to the lack of effective control, companies have no way of timely knowing of these fraudulent publications.

This, until recently.

Protection by registration

Considering the absence of a protective law, three parties from the private sector put their heads together to maximize protection, with support of the Belgian reporting authority (‚ÄėStaatsblad‚Äô).

Companies can register free of charge at  (translated: legal publications) by submitting their KBO-number, name, address and email address.  Anytime a new publication appears in the public records, they are immediately notified.  Companies receive confirmation of all publications, along with as a pdf version of the publicized form(s).  In the event a fraudulent publication was issued, the company can have the publication removed, inform the appropriate financial institutions and seek criminal punishment of the wrongdoers.

This registration system offers a simple solution to help companies prevent unwelcome purchases and withdrawals and at the same time, discourage wrongdoers.

We would stronly encourage you to take a few minutes to register, it may save you quite the nightmare (and money) in the future.