Joint ventures (JVs) can be used for any type of co-operation between parties, for example, industrial, commercial, research and development, and services co-operation. Traditionally they have been used frequently in:

More recently they have been used frequently in:

Belgium is an open market. Cross-border JVs are frequently used, and the majority are corporate JVs.

Parties can use a contractual JV or form a corporate entity. If a corporate form is chosen, the JV must conform to the legal requirements of that specific corporate form.

A distinction is made between companies in which shareholders have limited liability and unlimited liability. The choice is usually determined by tax considerations. Company forms with unlimited liability for shareholders (or at least one shareholder), for example, a partnership limited by shares (commanditaire vennootschap op aandelen) often have fewer formalities than companies with limited liability.

Purely contractual JVs which carry out commercial activities to make profits for their participants qualify as legal entities but with unlimited liability for its parties or at least the general partner.

The main elements affecting the choice of structure or vehicle are:

The choice of form is more frequently dictated by financial, tax, and commercial considerations than legal requirements.

Preliminary agreements used in M&A transactions are frequently used in JVs. Non-disclosure agreements (NDAs) and confidentiality agreements are standard because of the need for secrecy during the negotiations. These are binding agreements.

A letter of intent (LOI) is not binding unless particular provisions are explicitly stated to be binding. However, it is advisable to expressly state in the LOI that the document itself is non-binding so that it cannot be considered a contract. Under Belgian contract law, a contract can exist in non-written form. A contract may exist as soon as the parties agree on the object and price.

Due diligence is frequently conducted. The scope may be more limited than in a full M&A transaction and the focus on more specific characteristics, for example the parties' assets, the state of their R&D, and their permits.

Conditions precedent are valid and used in particular when the JV needs structural adjustments, for example, prior carve-outs, regulatory approvals, or environmental or other permits.

Listed companies must pay extra attention to the requirements imposed by the financial authorities to inform the public in a timely way of issues that may affect their stock price. This also affects the type and degree of due diligence that is carried out.

The main advantage of incorporated JVs is the JV parties' limited liability. An incorporated JV can rely on company law to resolve a lot of issues that need not be repeated in the contract. Incorporated companies are also more easily accepted and recognised by third parties.

Incorporated companies are subject to the formalities and minimum rules imposed by company law for that type of company. However, the company law often allows considerable flexibility.

A company must be incorporated in Belgium to be recognised as a Belgian company. The nationality of the company is not determined by the place of incorporation. The incorporation documents of a corporate entity must conform to the requirements of the particular type of company chosen.

The deed of incorporation is a public document which must be filed with the commercial court and can be inspected by the general public. A summary is published in the Belgian Official Gazette. The deed identifies:

The filing of the incorporation documents is carried out by the notary public.

Corporate JVs must be registered. The incorporation deed is filed with the commercial court and the Crossroads-Bank for Enterprises, an official, nationwide databank which attributes the company a number it must include on its letterhead. The deed of incorporation is a public document. A summary is published in the Belgian Official Gazette. The notary public files the incorporation documents.

Since a JV's business activities are subject to value added tax (VAT), the company must also register with the VAT tax authorities. As soon as the JV employs personnel, it must register with the Social Security Office for employees (RSZ/ONSS). Directors of the company must register with the Social Security Office as self-employed. In addition, the directors of the company and the shareholders (ultimate beneficial owners (UBOs)) must be registered with the UBO register.

All registration requirements are regulated at the national level.

In addition, if the JV will be active in a certain sector there may be additional registration requirements. Regulated activities usually include, among others:

There is no specific legislation in relation to JVs. Although legal and corporate literature frequently uses the term JV, it is a generic one and is not legally defined.

A company with legal personality incorporated in Belgium is governed by the Belgian Company Code. This principle applies to the formation of the company and to its operation including:

The notarial deed incorporating a company with limited liability must be Dutch, French, or German depending on the region in which the company will have its statutory offices. In the Brussels region, parties have the choice of Dutch, French, or both languages. The same applies to:

Documents unnecessary to incorporate the company, for example, shareholders' agreements (SHA) and loan agreements are not subject to this requirement. The parties can choose the language of the document.

Documents and information which need to be provided to the Works Council must be in one of the national languages used by the Works Council.

The share capital of the company and the annual accounts must be in euros. Using another currency, which is highly exceptional, requires a special permission.

The duty of a notary public is to:

Companies are distinguished between those with a minimum corporate capital and those without.

The minimum capital requirement that previously was part of company law for most types of companies has now been abolished except for NV/SAs, which have minimum capital of EUR61,500.

All other companies must be provided with equity but there is no minimum. The contribution can take the form of cash, assets, rights, or services.

Cash contributions at the time of formation must be made through a prior transfer to a specific bank account. This is verified by the notary at the time of formation.

Shareholders can make loans to a JV company . If these loans are subordinated in rank, this must be clearly defined. If the company guarantees reimbursement, the board must ensure that the guarantee is within the limits of the company's financial capability and does not endanger the rights of third party creditors.

A financial plan for the first two years needs to be prepared at the time of incorporation establish evidencing that the company is capable of meeting its financial obligations, as estimated during the first two years.

See above, Shares/Equity Issued for Assets/Services.

Contributions in kind require a founders' report of what is contributed, its value, and what is received in return for the contribution. This report is reviewed by a public accountant who must approve the appropriateness of the description, valuation, and what is received in return for the contribution.

In addition to the company's articles, it is general practice to use an SHA. The Belgian Corporate Code sets out certain mandatory rules for both documents. In addition, the general Civil Code rules of contract law have been recently changed to allow, as of 2023, some more flexibility, for example the inclusion of hardship clauses, and therefore specific attention must be given to these. Aside from these the parties are free to draft them as they wish. The main reason for the parties to use articles and a SHA is that the articles set out the JV company's general or more formal principles, whereas detailed technical, governance, or financial provisions can be developed in the SHA. This is especially relevant for provisions that the parties do not want to make public.

The key issues that the SHA covers are:

All parties to the JV are typically parties to the SHA to ensure the regulation of the JV's overall governance and financing. The JV itself is a party to the SHA to bind the company to its provisions, therefore allowing it to refuse to accept a shareholders' decision which is not taken in conformity with the provisions in the SHA.

It is possible for a group of JV parties to make separate SHAs. It is important to ensure that this sub-group SHA is not in conflict with the overall SHA and limits itself to internal issues for the group concerned. This sub-group of shareholders is not necessarily a party to the main SHA as the issues dealt with in the sub-group SHA precede the overall procedures in the main SHA.

The SHA binds its parties and, therefore, the JV company if it is a signatory. If the articles and the SHA conflict, and the articles' provisions are mandatory provisions, the articles will prevail.

An SHA can usually only be changed with the consent of all parties. It is possible, but rare, to deviate from this principle. This can be done through explicit provision in the SHA or if all parties give their consent in a separate decision, preferably in writing.

The remedies for breach are provided for in the SHA. The JV, as a party to the SHA, can refuse to execute or honour a shareholders' decision which is taken without following the procedures in the SHA.

New members can join if new shares are issued. This requires a change of the articles, and therefore a 75% majority shareholder vote in favour of the issuance.

If there is a change of control the SHA usually provides for protections in drag-along or right of first refusal clauses. These form a standard and detailed part of the SHA. Quite often these procedures are also included in the articles to make them enforceable against third parties. The articles are public and accessible by third parties.

The majority of SHAs will include restrictions on share transfers. The SHA may provide for:

Shareholders' meetings requirements are governed by certain mandatory rules imposed by law and the articles of the company. A minimum of one annual shareholders' meeting must be held to:

In practice, additional shareholders' meetings are held only in the event of:

The meeting is called by the chair of the board who also sets the agenda and the date. The chair must call a meeting if shareholders representing 10% of the voting shares issued demand one. A meeting can be called with minimum notice of 15 days. If it is an annual meeting, the board can decide during the meeting to adjourn the meeting for three weeks for the purpose of deciding on the approval of the annual accounts. A similar right can be introduced by the parties in the articles for all other meetings and subjects.

Rules on participation, for example, evidence of share ownership or attendance are provided for in the articles. Therefore, they are freely set by the parties at the time of incorporation.

A written resolution without a formal meeting is possible if all shareholders agree and it is a unanimous vote.

There is no mandatory minimum attendance quorum, but a minimum can be stipulated in the articles. In a JV, all of the parties will require a representative present in the first meeting. It is usually provided that a second meeting can be called without any minimum requirement.

A change to the articles requires a 75% majority. A change to the corporate purpose requires an 80% majority. All other decisions require a majority of over 50%.

Shareholders' decisions must be recorded and reflected in the minutes of the meeting. The minutes are signed by the chair, secretary, and the two adjuncts of the shareholders meeting if they were appointed. All shareholders have the right to request to sign the minutes. The minutes must be kept for five years.

Dividend payments are proposed by the board and approved by the shareholders' meeting. The board is responsible for effective payment and ensuring that the company is in a financial position to do so.

An interim dividend can be paid by the board out of the current year's profits. The board can take into account the freely available reserves of previous years. The rules are slightly different for NV/SAs and the other corporate forms. For all companies other than NV/SAs there is a double test:

For NV/SAs the old requirements of capital maintenance remain applicable and dividends can only be paid from profits realised and accumulated reserves available for distribution. The latter requirement is important as certain reserves are qualified as not available for distribution, for example, the legal reserve of 5% of the company's capital and reserves.

Shareholder approval is required for payment of an ordinary dividend (see above, Limits on Distribution, Capital Maintenance Rules, and Directors' Powers to Declare a Dividend).

The general practice is to have a unitary board. A dual board structure is legal, but this is still novel. Few companies have made use of this possibility. However, in a JV where supervision and management can be more split than usual it may be more applicable. This Q&A will focus on the unitary board structure and practice.

The board has full powers to act on all matters necessary or useful for the realisation of the company’s purpose. Only the powers explicitly reserved by law to the shareholders restrict the board's powers. The board must determine the company's strategy and supervise its general management. In addition it has some specific powers explicitly granted by law. These are:

The board can delegate management powers to a management committee which operates under the board's supervision and guidance. To fulfil good governance and code requirements, the company may, and listed companies must, institute separate committees which have a specific area of concern to focus on, for example:

These committees are used frequently in practice and not only by the very large companies. However, their role is advisory, the board remains ultimately responsible for the decisions taken.

The board can also decide to split responsibilities and powers among the directors, but that decision only has internal effect. The responsibilities and powers remain with the board.

The general practice is to delegate the powers to represent the company in dealing with third parties to any two of the directors acting together. This is the done by a provision in the articles so that it is publicly known. Specific delegation of powers to one director is possible in a specifically described and limited way.

Although the board acts as a collective body, each director has an individual right to investigate the company's actions, books, and records. In practice, and particularly in larger companies, this power is usually structured to be channelled through the chair of the board. The director or chair must provide full information to the entire board about the results of their investigation.

A director has a duty of care (see below, Directors' Duties and Liabilities). The delegation of powers is intended to increase efficiency and the quality of management decisions. It may however also increase the standard of care which the director must observe.

A director must take the decisions necessary to manage the business. They must do so on in a way that a normally prudent and careful person in the same circumstances would do, recognizing that differences of judgment may exist. Only if the director has clearly acted outside of this scope will they incur personal liability.

A de facto director incurs the same liability as a director.

See Question 9, Participation and Voting Procedures.

The rules are freely set by the parties in the articles and can be supplemented in the SHA. The meeting is called by the chair who also sets the agenda.

The rules are set by the parties. Usually, a notice period of at least one week applies for calling a meeting. It can be adjourned or postponed by the chair.

Written resolutions are valid if all directors agree and the decision is unanimous.

The rules are set by the parties. In JVs, the rules often dictate that at least one representative of each party must be present. A director can give a power of attorney to another director but not to another person. There are no substitute or alternate directors.

The board always has a chair who presides over the meeting and organises the debate. They are appointed by the board by ordinary majority, but this can be modified to give all parties a vote.

Minutes of meetings must be drawn up and should reflect the decisions of the board.

As a general rule, there are no limits to or restrictions on individuals acting as director of a company (see Question 15, Age, Nationality, Identity, Bankruptcy Status, and Mental Capacity).

The traditional company law rule was that directors can be removed at will with no reason or justification required (ad nutum power). This principle was set aside by the 2019 reform of the law. The right to remove can now be detailed in the director's contract. The constitutional documents can provide for general rules on the contractual arrangements that can be made.

The director's contract may include a notice period, financial indemnification, or both. The indemnification amount is often equal to the remuneration lost for the portion of a non-respected notice period. For public companies an 18 month period is frequently used. An obligation to justify the removal is usually not provided for in the contract terms with the director. In the event of serious cause, removal can be without notice or compensation.

A director in a BV/SRL company can be appointed for life if this is provided for in the charter. Their removal will require a modification of the articles. A similar position can be obtained in NV/SRs but only in the single director structure.

In a typical JV, there will be an arrangement between the parties that they can ask for the removal of a director initially appointed at their request. This is usually provided for in the SHA.

Directors' duties are in principal to the JV company and not to the shareholder they represent. They are the same as those of all company directors in this respect. Directors also have a duty of care to the company, see Question 11, Directors' Powers and Directors' Duties and Liabilities.

If the conflict of interest is personal and has a financial impact for the director concerned, they must:

If a conflict is not a personal one but a functional one, these rules need not be observed. The board is free to decide on the conflict and must explain its position in the decision taken. That decision must be reported at the annual shareholders' meeting.

As a general rule, there are no limits to or restrictions on individuals acting as director of a company. Restrictions can be imposed in the company's articles, and may relate to characteristics including competence, experience, or family background. They must not be discriminatory. These restrictions are rarely used but may be useful for a JV situation.

The exception is the financial sector in which directors of companies must be approved by the regulator and pass the fit and proper test. The restrictions can also result from rules restricting certain functions for example those of:

They may also impose certain restrictions on board composition concerning the qualifications of the directors.

There are no legal requirements as to nationality or residence. However, the exercise of a mandate of a director is a professional activity which, if exercised in Belgium, requires residents of a non-EU member state to obtain a professional card (which is different from a work permit). If the role requires a director's presence in Belgium only occasionally, a professional card is not required.

There is no legal requirement that a director holds shares of the company.

A director cannot exercise their function under the terms of an employment contract. A director must be as an independent manager. This is relevant to their social security position and protection against dismissal. In BV/SRLs they can be appointed for a definite term (usually six years) or for an indefinite time. In NV/SAs they can be appointed for six years, but this is renewable.

Individuals can be prohibited from being a director if a court has so ordered. The court order may specify the relevant period of time. This can occur in bankruptcy cases or where the court believes the director has carried out criminal activities.

If a company is acting as a director that company must appoint a natural person as its permanent representative. That person will incur the same liability.

Remuneration is provided on an individual basis by contract. There is no mandatory maximum remuneration, except in some state-controlled companies.

Payments to directors and management for the performance of their duties are distinguished from dividend payments and follow the contractual regime that is agreed with the JV.

Directors of the company are presumed by law to be remunerated. This remuneration is determined by the board. If a director exercises his function without remuneration this needs to be provided for either in the articles or on a decision of the shareholders. The director is then exempted from paying social security contributions as an independent.

Directors' individual liability has a financial limit. Therefore, the company cannot indemnify the director by contract. It is expected to insure the risk.

There are no other key limitations.

There is great flexibility to give shares preferential rights to dividends, a right to veto a reduction of capital, or to appoint and remove directors.

The minority protection rules in the articles can provide for separate majority rules for different groups of parties. When this is done the shares are often issued as different classes of shares even if the only difference is their voting rights. This is often done in a 50/50 JV in which double majority rules are introduced. It is also possible to stipulate in the articles that a shareholder can only vote for a determined maximum of its shares, therefore giving the minority shareholder a stronger position.

The law permits increases to the majority percentages set by law, but not decreases.

A change of the articles requires a 75% majority vote of the shareholders. A change to the corporate purpose requires an 80% majority. All other decisions require a majority of over 50%.

Minority shareholders will look for some protection on top of the legal rights they have as a minority shareholder. These rights are negotiated and agreed with the other parties either at the time of incorporating the contractual JV or through separate agreements, usually the shareholders' agreement (see Question 6, Shareholders' Agreement).

The principal concern is representation in the management structure since by law this is decided on by a majority vote. The practice is to guarantee the minority shareholder a (minority) position in the board through an exclusive right to propose candidates. The minority shareholder can seek protection in the subsequent voting process through voting agreements.

Buy-outs of minority shareholders can be provided for in several ways, for example, a shareholder's right to exercise a put or call option on the shares, or through separate call agreements which are not a part of the articles. A shareholder can at all times issue a private offer to buy out the other shareholders but they do not have to accept.

The most drastic dispute resolution method is the liquidation of the company. This can be decided at any time by shareholders with over 75% of the voting rights. If the shareholders vote to dissolve the company, one or more liquidators are appointed (who can be all or some of the directors). The rules to be followed on the liquidation of the company are explicitly set out in corporate law. Even in liquidation, a company can still be declared bankrupt.

Put and call options are often used to resolve a deadlock or permanent conflict. There is debate on the validity of these clauses. However, based on a Supreme Court decision the present position is that they are allowed, provided they respect the corporate interest. Therefore, it is advisable to express in the document containing the clauses explicitly how the corporate interest is served by making use of them. All well-known clauses are found in practice, but there is no general trend.

There are specific rules on the buy-out of a shareholder in the event of a permanent dispute among shareholders which hinders the normal functioning of a company. The shareholder must represent at least 30% of the shares issued and must prove to the court a cause that is permanently hindering the effective management of the company. The shareholder can ask to buy the shares of the other shareholders or to sell to the other shareholders. The risk in this approach is that the price is fixed by the court, not the parties involved.

Termination provisions which do not result from the law (that is, liquidation) are specified in the SHA. Frequently, the JV is wound up when other dispute mechanisms have not resulted in a solution.

Contractual arrangements are confidential. Unlike the articles of a corporate entity, they are not publicly available. In the event of changes, they are not subject to a formal registration or notarisation. A written document between the parties is sufficient.

Since the terms of the agreement between the parties are only provided for in the contract, there is no body of additional legal rules which can be relied on to resolve formal or procedural matters, for example, how shareholders' or board meetings are organised or who has authority to act for the company. In the event of court proceedings the individuals themselves are involved. Therefore contracting can be long and time-consuming.

The revision of the Companies Code in 2019 has reduced the number of corporate entities and the various types of partnership forms. The intention was to allow greater variation within these forms for parties to tailor them to their wishes.

A pure limited liability partnership on a contractual basis does not exist in Belgium.

The standard form of a contractual partnership is a private partnership (maatschap/societé de droit commun). This is formed between two or more parties that, in principal, all have a joint and unlimited responsibility for the acts of the partnership. This partnership is purely contractual and has no legal personality.

To create a private partnership a written document is not required but it is highly recommended and standard practice. Belgian contract law recognises oral contracts. Parties must have the capacity to contract, the object of the co-operation must be defined, and the parties' consent confirmed by signing the agreement.

A general partnership can also be formed on the basis of a contract but it has a legal personality when the activities are commercial and for the purpose of making a profit (Companies Code). Partners also have joint and several liability. However, parties can provide in the general partnership agreement that at least one of the partners has an unlimited liability and other partners limited liability (silent partners). The silent partners cannot intervene in the management of the company and must limit themselves to a purely financial role.

See Question 19.

If in a silent partnership the partner with limited liability intervenes in the management their limited liability will be null and void. They will have joint unlimited liability.

This Q&A does not address the tax issues on setting up a JV.

This Q&A does not address how the JV or interests of the parties are taxed.

This Q&A does not address how dividends are taxed.

This Q&A does not address the tax status of interest payments.

Belgian law, through a nationwide binding collective bargaining agreement (32bis), provides for complete protection of employees that are transferred, if that transfer is collective and results from the reorganisation of the company in which they are employed, for example, a company split, transfer of a branch of its activity, or merger. The principle is that employees maintain all rights under their employment contract, including seniority acquired in the company from which they are transferred. Changes to these rights can only be made with the consent of the employees concerned if it concerns their individual contract or by a new collective bargaining agreement for the new entity.

Unionisation is structured at a nationwide level. In every company the nationwide recognised unions can have access if members of that union request it.

Pension schemes and benefits form part of the employment conditions that must be maintained. If they consist of part of a pension fund through insurance policies or a company carve out, they must be negotiated.

Secondments can be used for individual jobs that did not exist in the transferred activity. If a person that is not a national of the EU, Iceland, Norway, Liechtenstein, or Switzerland is seconded they must have a residence and work permit. This is unnecessary if they enter Belgium for a limited time, for example, for a short training session or attendance of a meeting.

For more permanent positions, there is a distinction between people that work under an employment contract or self-employed people. The conditions for obtaining a professional card, a work permit for self-employed people, are stricter than those for an employee. The social security position is also different.

For EU citizens, social security rights, for example, medical care and pension rights, are regulated on an EU-wide basis. Extra-EU pension rights will depend on the individual situations.

Competition law is included in Book IV of the Belgian Code of Economic Law (CEL) and Royal Decree of 30 August 2013 on the notification of concentrations (Concentration Decree).

The Belgian Competition Authority (BCA) is responsible for the enforcement of this legislation. The BCA is an independent public service, and is composed of a President, the Competition College (presided over by the President), the Management Committee, and the College of the Competition Prosecutors (headed by the Competition Prosecutor General).

Concentrative full-function JVs with a Belgian dimension require the prior approval of the BCA if both of the following turnover thresholds are met:

Concentrative full-function JVs that reach the European notification thresholds as provided by EU Merger Regulation (139/2004/EC), do not require investigation by the BCA. However, in certain conditions, the European Commission may refer a concentration to the BCA. This would be the case if, for example, that concentration could appreciably affect competition within the Belgian market.

Prior notification of the transaction is mandatory for concentrations that meet the turnover thresholds.

The notification must be made jointly by the parties that acquire joint control and is submitted to the Competition Prosecutor General by completing the form attached to the Concentration Decree.

The notification is subject to the payment of a lump sum fee of EUR52,350 for a concentration, or EUR17,450 for a concentration subject to a simplified procedure. These amounts can be subject to indexation.

The parties to a concentration are encouraged to contact the College of the Competition Prosecutors before announcing the concentration, to make the best possible use of the time prior to the notification to flag possible competition problems and avoid delays, so that the strict time limits for the investigation can be met.

The concentration cannot be implemented before the BCA’s clearance. However, the obligation to suspend the concentration does not prevent a public bid or of a series of transactions in securities, provided that both:

In certain cases, the President can grant an exemption to the suspension obligation.

The substantive test is aligned with the EU substantive test. A concentration is cleared provided that it does not significantly impede effective competition in the Belgian market, or on a substantial part of it, in particular by creating or reinforcing a dominant position.

In its assessment the Competition College must take into account elements including:

The Competition College is required to clear concentrations where the undertakings concerned jointly control less than 25% of any relevant market, whether through horizontal or vertical agreements.

To the extent that full-function JVs between undertakings that remain independent may lead to co-ordination of the behaviour of the parent companies, that co-ordination is assessed under the criteria set out in Article IV.1 CEL regarding restrictive practices (see Question 30).

On notification, the Competition Prosecutor General opens the investigation and appoints one of the competition prosecutors to be in charge of:

The Competition College may decide to initiate a second phase procedure if the concentration raises serious doubts as to its effect on competition. The competition prosecutor will perform an additional investigation and provide the Competition College with a reviewed draft decision within a time limit of 30 business days following the decision to launch the second phase procedure. The Competition College issues its decision within a time limit of 60 business days after its decision to launch a second phase.

Following the start of the second phase procedure, the notifying parties can request the procedure is extended and submit commitments in order to obtain clearance. The procedure is extended for the duration that they propose, but for no more than 20 business days.

At the end of the second phase, the Competition College issues one of the following decisions:

The Competition College can impose the following fines and periodic penalty payments for non-compliance:

When a JV does not constitute a concentration, it is subject to the prohibition on anti-competitive agreements as set out in Article IV.1 of the CEL.

In addition, to the extent that there is a JV between undertakings that remain independent that may lead to co-ordination of the behaviour of the parent companies, that co-ordination will also be assessed under the criteria set out in Article IV.1 of the CEL. Article IV.1 of the CEL is the national equivalent of Article 101 of the Treaty on the Functioning of the European Union (TFEU). It prohibits agreements between undertakings, decisions by associations of undertakings, or concerted practices that have as their object or effect to appreciably prevent, restrict, or distort competition in the Belgian market or within a substantial part of it. The BCA may both enforce Article IV.1 of the CEL and Article 101 of the TFEU, if the behaviour subject to the inquiry is also likely to affect trade between member states.

In addition to the restrictions related to the merger control or dominant position there is a number of restrictions on the freedom to contract in B2B contracts. The main concern of these provisions, incorporated in the Belgian Code of Economic Law and applicable as of 1 December 2020, is to ban a manifest imbalance in the rights of the contracting parties. They provide:

The blacklist consists of:

The grey list consists of:

The BCA and the Belgian courts apply the European Commission’s guidelines when assessing horizontal and vertical co-operation agreements with regard to Article 101 of the TFEU. A prohibited agreement or concerted practice between undertakings can, for example, relate to the setting of prices, production limitations, the exclusion of a newcomer, or the distribution of markets or customers between parties.

Article IV.1, section 1 of the CEL is equivalent to article 101(1) TFEU, and prohibits agreements between undertakings that have as their object or effect the prevention, restriction, or distortion of competition within Belgium. Agreements falling within this prohibition are null and void (Article IV.1, section 2, CEL), unless they satisfy the conditions for exemption under article IV.1, section 3 of the CEL in a similar way as Article 101(2) and (3) TFEU.

In addition, the prohibition on restrictive practices is not applicable to agreements that benefit from an EU block exemption. The EU block exemptions are extended to situations where trade between member states is not affected.

The European Commission has issued guidelines in relation to horizontal co-operation agreements that focus on R&D and joint production and on joint purchasing or commercialisation agreements. These guidelines apply to the Belgian market, and are permitted if a party demonstrates how the economic advantages will outweigh the negative effects on competition.

Currently no specific Belgian block exemptions have been issued.

Not all IP rights exist in all countries. Therefore, it is not useful to provide an IP right to the JV when the IP right is non-existent in the country where the JV will operate. In addition, IP rights are almost always regulated by separate laws, often with their own specific property rights, which may differ from country to country. Therefore, the requirements for a licence or transfer need to be assessed for each IP right and each country separately.

The main reason to transfer IP rights as property to a JV is funding. The JV can use them to raise capital. They can be pledged as security. Although licences can also be pledged, they offer less security to the pledgee, and a pledge may even be worthless if the licences cannot be transferred independently (which is most often the case).

When an IP right is transferred to the JV, it is necessary to verify whether the transferring JV party has not already encumbered this right in any way by consulting the relevant IP registers.

The transferring JV party no longer controls the IP rights, and may lose them, unless there are any contractual provisions to prevent that loss. This risk is very high if the JV becomes bankrupt. It is not unusual to provide for a grant-back of the transferred IP rights. Grant-backs are useful if the JV is terminated, but can also be used to control the JV, for example, as an incentive to achieve certain milestones or to continue on a certain course. If these milestones are not achieved or there is an undesirable change of course, the JV need not be terminated. The grant-back of all or certain IP rights can be exercised. The grant can also be replaced with a licence.

Unlike a transfer of the property, a licence can be more easily tailored without the risk of loss of the IP rights. A licence offers more flexibility and can be subject to a multitude of restrictions, for example, exclusivity, duration, milestones, capital commitment, or profitability. The licence will generally be part of a much more extensive nexus of cross-licences, which will also set out the rights to improvements arising out of the JV.

The parties must agree whether the JV will own new IP rights developed within it. This is particularly relevant when the JV makes use of employees from one or more of the JV parties. JV parties must investigate the stipulations of these employees' employment contracts and the applicable national rules. If the national rules provide that the employer owns IP rights created by the employee, it must be clear who the employer is in this situation.

A simple decision that the property of new IP rights lies with the JV may not be sufficient for the JV to make free use of these rights, in particular when a new invention patent appears to be dependent on one of the JV parties' patents. The relevant licence will most often allow for the exploitation of the dependent patent, but this may not always be the case, for example, if a JV party partner leaves, if certain milestones are not achieved, or on termination of the JV. In these cases, the use of the dependent patent is not possible without the express consent of the original patent holder.

A key issue is whether each party can commercially exploit the new IP rights, including licensing them to third parties, with or without the consent of the other JV parties. Is there an obligation to share revenues with the JV and JV parties? Will JV parties be able to compete with the JV and one another? The answer to these questions will in large part depend on the purpose of the JV. It may be that shared property ownership is not sufficient for the intended commercialisation of the IP.

It is advisable to avoid joint property of IP rights on termination of a JV. As an alternative, JV parties can consider options that allow one party to own the IP rights outright, combined with a general licence to the other parties to use the IP rights within an agreed territory and timeframe.

The anti-bribery and corruption rules have been part of the Belgian Criminal Code (Articles 240-253) since 1999. A distinction is made between persons exercising a public function (public corruption) and persons who do not (private corruption). A further distinction is made between:

Sanctions are more severe for public bribery and range from fines between EUR100 and 100,000 (to be multiplied by eight) and imprisonment of between six months and five years.

Political contributions are very restricted and can only be made to individual persons, not to legal entities. The maximum contribution is EUR2,000, but per individual beneficiaries are limited to EUR500.

It is not common to provide specific warranties in relation to these issues. These concerns are considered to be covered by general warranties that the business has been conducted with the observance of all legal rules.

It is not common to address these issues in the due diligence process.

Whistleblowing protection has been introduced in various steps. At the regional level (Flanders) a decree of July 1988 addresses the protection of staff members of a public body.

In the financial sector the supervisory authority has introduced specific whistleblowing rules.

See above, Protections in the Agreement.

The law of 18 September 2017 implements the Fourth EU Anti-Money Laundering Directive ((EU) 2015/849). Its objective is to trace UBOs. A central Belgian UBO register collects the information concerning all natural persons owning or controlling a legal entity, even those which are non-commercial. This applies to all company directors and shareholders. The register is electronically accessible and part of the information is public. Individual transactions that require the intervention of a notary undergo a similar scrutiny.

The additional documents required will depend entirely on the factual situation. All types of contracts can be necessary. They can be:

The main documents are:

There are no general formal restrictions on foreign direct investment (FDI). Belgium promotes foreign investment. The agencies in charge are at the regional level and open to provide information.

However at the EU level a framework for the screening of foreign investments is established by the FDI Screening Regulation ((EU) 2019/452). Belgium has accompanying national measures. The test is whether the investment is likely to affect public order or security.

Chinese investments in sensitive activities and sectors, for example energy or technology, are monitored or controlled.

There are no authorisations required.

There are no restrictions on investment levels.

There are no foreign exchange controls.

Belgium provides incentives at the regional level but they do not distinguish between ordinary companies or JV’s. A general regime is applicable and is frequently adjusted.

There is no specific regime for JV’s. The choice of law and governing jurisdiction is more limited than for an incorporated JV than a contractual JV. A company with legal personality incorporated in Belgium is governed by the Belgian Company Code. This principle applies to the formation of the company and to its operation including:

If SHAs are entered into in addition to the incorporation documents and articles it is possible to make these contracts subject to foreign law in conformity with the Belgian rules of private international law. However, this would create obvious complications in conflicts of interpretation between the SHA and the company's articles.