Key takeaways
- A fonds de commerce is not defined by a single statute under Belgian law: it is the set of elements (customers, trade name, equipment, stock, contracts) used to operate a business, distinct from the company that operates it.
- Buying a fonds de commerce (asset deal) differs from buying company shares (share deal): the buyer chooses the assets and liabilities it takes over, instead of inheriting the company's entire legal history.
- The transfer of a fonds de commerce or of a branch of activity to a taxable person who continues the business is in principle outside the scope of VAT (art. 11 of the VAT Code), a mandatory, non-optional regime.
- Staff attached to the transferred business pass automatically to the buyer, keeping their working conditions, under collective bargaining agreement n° 32bis.
Buying an existing business, rather than building one from scratch, remains a common route to establish a presence quickly in Belgium: an existing customer base, location and reputation often save several years of commercial development. But buying a fonds de commerce in Belgium follows its own legal mechanics, distinct from buying a company's shares, with its own protective clauses, a specific VAT regime and a particular fate for the staff in place. This article sets out that mechanics, from the sale agreement through to the tax treatment of the seller's capital gain.
Fonds de commerce or company buyout: two distinct operations
Belgian law does not define the fonds de commerce in any single statute comparable to other concepts of company law. Practice and case law describe it as the set of movable, tangible and intangible elements used to operate a commercial activity: customers and goodwill, the trade name and signage, equipment and tools, stock, the right to the lease where applicable, and certain contracts attached to the business.
Buying this business (an "asset deal") differs fundamentally from buying the shares of the company that operates it (a "share deal"). In the first case, the buyer negotiates and chooses precisely which assets and liabilities it takes over. In the second, it becomes the owner of the legal entity itself, together with its entire legal, tax and social history.
| Fonds de commerce purchase (asset deal) | Share purchase (share deal) | |
|---|---|---|
| Subject of the transfer | The chosen assets and contracts | The company itself, with its estate |
| History of the company taken over | Does not automatically bind the buyer | Fully passed on to the buyer |
| VAT treatment in principle | Outside scope, under conditions (transfer of a going concern) | Outside scope (share transfer) |
| Fate of attached staff | Automatic transfer if CBA 32bis applies | Unchanged, the company remains the employer |
The key clauses of the sale agreement
Selling a fonds de commerce does not require notarial form: a private agreement is in principle sufficient, unless the deal includes immovable property or the parties choose the notarial form for its evidential strength. A few clauses structure almost every well-drafted sale agreement.
The non-competition clause commits the seller not to resume a similar activity, for a defined period and within a defined geographic area, to protect the transferred customer base. Belgian courts assess its validity against proportionality: a clause too broad in time, space or scope of activity risks being reduced or set aside by the judge.
The asset and liability warranty commits the seller to indemnify the buyer if a liability predating the sale, undisclosed or understated, comes to light after the transfer. It complements the audit (or "due diligence") carried out by the buyer before signing, and generally runs for a limited period and a capped amount, negotiated between the parties.
Staff: collective bargaining agreement n° 32bis
Where the purchase of a fonds de commerce comes with a change of employer through a conventional transfer, collective bargaining agreement n° 32bis, concluded within the National Labour Council on 7 June 1985, organises the preservation of the rights of workers attached to the transferred activity.
The central principle: the employment contracts of workers linked to the transferred business pass automatically to the buyer, who takes over all the related rights and obligations, without a new contract having to be signed, and without the worker being able to object to the transfer as such. The worker can only refuse to continue the employment relationship with the buyer, which, absent a justified reason tied to a substantial change to an essential condition, amounts to a resignation. The transfer itself cannot constitute a ground for dismissal, whether at the initiative of the seller or the buyer.
Formalities to anticipate on staff and contracts
Information and consultation of staff representatives
Where a works council or a union delegation exists, inform and consult workers before the transfer, in line with the obligations of CBA n° 32bis.
Inventory of the employment contracts concerned
Identify precisely which workers are attached to the transferred business, as opposed to those who stay with the seller if it continues another activity.
Checking the transferability of the commercial lease
A lease is not always transferable as of right: check the transfer clause in the current lease and, where needed, obtain the landlord's consent.
Transfer of authorisations and licences specific to the activity
Some approvals are attached to the holder personally and must be re-applied for by the buyer, rather than automatically passed on with the business.
Update with the Crossroads Bank for Enterprises
Declare the change of operator and the activation of the buyer's enterprise number with an approved business counter.
VAT treatment of a fonds de commerce transfer
The sale of a fonds de commerce taken as a whole, or of an autonomous branch of activity, is in principle outside the scope of VAT where the acquirer is a taxable person who continues the business: article 11 of the VAT Code then treats the buyer as continuing the seller's position, and no VAT is charged on the sale price. This regime, intended to avoid penalising a business's cash flow on a transfer, is mandatory and non-optional: the parties cannot choose to apply VAT where the conditions of article 11 are met.
This regime covers the transfer of a totality of assets or of a branch of activity. It does not apply to the isolated sale of a single asset without continuity of the business, which remains subject to the normal VAT regime applicable to each item sold.
The steps of the process, from audit to signing
Once the principle of the takeover is agreed, the operation follows a fairly constant sequence, whose duration mainly depends on the size of the business and the complexity of the audit.
- 1
Letter of intent and confidentiality
Week 1The parties formalise their mutual interest and set the confidentiality of information exchanged before the audit.
- 2
Acquisition audit (due diligence)
Weeks 2 to 4The buyer checks the accounting, tax, social and contractual position of the business: current contracts, disputes, stock levels, and the seller's VAT and social security position.
- 3
Negotiating the sale agreement
Weeks 4 to 6Drafting the non-competition and asset and liability warranty clauses, and drawing up the precise list of transferred elements.
- 4
Informing the staff concerned
Before signingWhere CBA n° 32bis applies, informing and consulting staff representatives before the final decision.
- 5
Signing the agreement and paying the price
Closing dayThe deed can be executed privately or before a notary depending on the parties' choice; no authentic form is required for the business itself.
- 6
Post-transfer formalities
Following weeksDeclaring the change with the Crossroads Bank for Enterprises, updating authorisations, informing customers and suppliers.
The buyer often has an interest in housing the takeover in a dedicated company rather than operating as a sole trader, in particular to ring-fence the risks taken over. Our support for setting up a company in Belgium covers this step ahead of signing.
Tax treatment of the seller's capital gain
Where the seller is a sole trader or a company, the gain realised on the sale of the fonds de commerce, in particular on its intangible elements such as goodwill, is classified for tax purposes as a cessation gain. It can be taxed at the ordinary progressive rate or, under certain conditions, benefit from separate taxation under article 171 of the 1992 Income Tax Code rather than being added to other professional income.
Separate taxation of gains on intangible elements stands in principle at 33% (art. 171, 1°, c, CIR 92). A reduced rate may apply in certain cessation circumstances, in particular linked to age, death or a forced cessation, but its exact level and conditions vary by situation and must be checked case by case with an accountant or tax adviser before any sale.
This separate taxation regime departs from the progressive rate normally applicable to professional income, which is often higher. The capital gain, in principle, also enters the basis for calculating the self-employed person's social security contributions, subject to the exclusions provided for a complete and definitive cessation of activity, to be confirmed with the social insurance fund.
Need support to take over or sell a business?
Monsiegesocial supports the incorporation and structuring of Belgian companies, from the constitutive deed to day-to-day management after a takeover.
Going further
A fonds de commerce purchase can also tie in with a company merger where the buyer wants to absorb the structure directly rather than only its assets, or with a dissolution and winding-up of an SRL on the seller's side once the business has been sold. To budget the structure that will carry the takeover, see our guide on the cost of setting up an SRL in Belgium.
- Conventional business transfer, collective bargaining agreement n° 32bis: Federal Public Service Employment, Labour and Social Dialogue
- VAT Code: consolidated text, FPS Justice
- 1992 Income Tax Code: consolidated text, FPS Justice
