Key takeaways
- Turning a self-employed activity into an SRL can be done by contribution of a universality (art. 12:9 and art. 12:92 of the CAC), which transfers all ongoing contracts without the individual consent of third parties.
- A tax-neutrality regime exists for this contribution under conditions (art. 46, §1, 2° ITC 1992): the capital gain is not immediately taxed.
- The SRL no longer requires a legal minimum capital since the 2019 Companies and Associations Code, but a serious financial plan remains mandatory.
- As an SRL director, you remain self-employed with NISSE, with a social-contribution base linked to your director's remuneration.
- The transformation separates professional and personal assets: your house and savings no longer answer for the company's debts, except in the event of serious fault.
Many self-employed natural persons reach a point where their activity has grown, but where their legal status no longer protects them enough. Their personal assets answer for every professional debt, their effective tax rate on profits climbs, and relations with banks or large clients become more complex without a company structure. Turning a self-employed activity into an SRL is the legal answer to these three problems at once. This guide presents the available legal mechanisms, the concrete advantages and the steps to follow to make this move in Belgium.
Why the SRL attracts growing self-employed people
The self-employed natural person and the SRL director often carry out the same activity day to day, but their legal and tax exposure is very different. The two main reasons pushing towards transformation are the protection of personal assets and the optimisation of the tax burden.
Advantages
- Limited liability: your personal assets do not answer for the SRL's debts except in the event of serious management fault
- Corporate income tax rate of 25% (reduced rate of 20% on the first bracket of profits under conditions) instead of the progressive PIT scale
- Clear separation between director's income and profits kept in reserve in the company
- Reinforced credibility with banks, suppliers and large principals
- Possibility of bringing partners or investors into the structure
Disadvantages
- Incorporation costs: notarial fees for the deed of incorporation and, depending on the route chosen, a company auditor's report
- Reinforced accounting obligations: full accounting mandatory, filing of annual accounts with the CBE
- Director's remuneration subject to withholding tax and NISSE social contributions
- Later dissolution of the SRL involves a formal procedure and additional costs
The tax boundary is often the trigger: from a certain level of profits, the corporate income tax rate becomes more advantageous than the progressive personal income tax scale. The tipping point depends on everyone's personal situation (household income, deductions, charges), but many self-employed people observe this advantage when their profits regularly exceed a certain annual threshold. A chartered accountant can calculate this tipping point precisely.
The two legal routes: contribution of a universality or contribution in kind
Two distinct mechanisms allow a self-employed activity to be transferred to an SRL. The choice between them depends on what you wish to transfer and the complexity of your activity.
| Contribution of a universality | Contribution in kind | |
|---|---|---|
| Legal basis | Art. 12:9 and art. 12:92 of the CAC | Art. 5:7 of the CAC |
| What is transferred | All assets AND liabilities as a block | The explicitly designated elements |
| Client/supplier contracts | Transferred by operation of law | Requires individual consent of third parties |
| Debts and commitments | Transferred to the SRL automatically | Only the debts explicitly contributed |
| Auditor's report | Not required under the same conditions | Mandatory (valuation of the goods) |
| Tax neutrality possible |
The contribution of a universality (art. 12:9 and art. 12:92 and following of the Companies and Associations Code) is the most complete mechanism: the entirety of the self-employed person's professional assets, assets and liabilities included, is transferred to the SRL in a single operation. Ongoing contracts with clients and suppliers pass into the SRL without their individual consent being required. It is the preferred route for the self-employed whose activity rests on framework contracts or continuous commercial relations.
The contribution in kind is more targeted: you designate the elements to transfer (equipment, contracted client portfolio, stock). It is simpler to implement for activities light on assets, but each contract with a third party must be the subject of a specific assignment agreement. A company auditor must draw up a valuation report of the contributed elements (art. 5:7 CAC).
What changes for VAT and the enterprise number
Two administrative points deserve particular attention: the enterprise number and the VAT number.
The SRL obtains a new enterprise number at the Crossroads Bank for Enterprises (CBE) at its registration, via an approved enterprise counter. Your old self-employed natural-person number stays associated with your identity. If you cease all professional activity in your own name, you request the deregistration of this capacity with the same counter.
For VAT, the transformation must be reported to the VAT administration. In the case of a contribution of a universality, article 11 of the Belgian VAT Code provides that this type of transfer is not a supply of goods or services subject to VAT. The SRL obtains its own VAT number; your personal number is closed if you keep no activity in your own name. Your local VAT administration will specify the forms to file.
The steps, step by step
- 1
Review and decision
Weeks 1-2Assess with a chartered accountant whether the move to an SRL is relevant in view of your tax, social and asset situation. Set the desired transformation date.
- 2
Inventory and valuation of professional assets
Weeks 2-4List all the assets (equipment, stock, receivables, contracts) and liabilities (supplier debts, loans) to transfer. For a contribution in kind, a company auditor draws up a valuation report.
- 3
Drafting the financial plan
Weeks 3-5A mandatory document handed to the notary before the deed of incorporation (art. 5:4 of the CAC). It covers the SRL's first two financial years and must justify that the start-up resources are proportionate to the activity.
- 4
Deed of incorporation before the notary
Weeks 5-7The notary drafts the SRL's articles and executes the deed. The financial plan is handed to the notary at this stage. The deed is published in the Moniteur belge.
- 5
Registration with the CBE
Week 7-8An approved enterprise counter registers the SRL and assigns it its enterprise number. Activation of the VAT number if the activity is subject to it.
- 6
Administrative closing formalities
Weeks 8-10Deregistration of the old self-employed natural-person capacity with the enterprise counter, closure of the personal VAT number, update with NISSE and the social insurance fund.
Your social status after the transformation
As director of your SRL, you remain affiliated with NISSE as a self-employed worker. Your social status does not change in nature, but the calculation base of your social contributions evolves.
Key points of your NISSE status after the transformation
Affiliation with a social insurance fund
Mandatory within 90 days of the start of the SRL's activity. If you were already affiliated, report the change of situation to your fund.
Social-contribution base
Your contributions are calculated on your professional income of year N-3 (provisional regime then adjustment). As a director, this includes your director's remuneration.
Recommended minimum remuneration
To benefit from the reduced corporate tax rate of 20% on the first bracket of profits, the SRL must award at least one director a minimum remuneration defined by the CAC. Check the amounts in force with an accountant.
Social rights maintained
Your rights to pension, sickness-invalidity insurance and family allowances are maintained as a self-employed worker running an SRL.
The SRL also allows you to steer your taxable income more finely: you choose your director's remuneration (subject to PIT and social contributions) and the share of profits left in the company (subject to corporate tax). This flexibility is one of the structural assets of the company form.
Before finalising this decision, a consultation with our team on SRL creation allows the most suitable set-up for your activity to be assessed, in particular the choice between a contribution of a universality and a contribution in kind, and to check that the financial plan will be solid.
Ready to turn your activity into an SRL?
Our teams support Belgian self-employed people in creating their SRL: articles, financial plan, business address and registration with the CBE.
Going further
- Setting up an SRL in Belgium: the essential steps: the complete route from incorporation to registration.
- Financial plan of an SRL: role, content and drafting: how to prepare the mandatory document handed to the notary.
- SRL or SA: which legal form to choose in Belgium: compare the two forms for high-growth activities.
- The consolidated text of the Companies and Associations Code on ejustice.just.fgov.be (art. 5:4, 5:7, 12:9, 12:92 and following).
