Creating a Foundation in Belgium: Conditions, Types, and Procedures

What Is a Foundation?

A foundation is a legal entity without profit motive that allocates assets to achieving a disinterested purpose. Unlike the ASBL (non-profit association) which relies on members, a foundation is established by one or more founders who endow the structure with assets. There are no members in the strict sense.

The legal framework for foundations in Belgium is defined by Book 11 of the Code of Companies and Associations (CCA).

The Two Types of Foundations

The Private Foundation

The private foundation is the most accessible form. It is established by notarial deed and acquires legal personality through the filing of its articles at the clerk's office of the enterprise court.

Characteristics:

• Can be created by a single person (natural or legal)
• Disinterested purpose defined in the articles
• No minimum assets required
• Legal personality from the moment of filing at the clerk's office
• Can also be created by will

The Public Utility Foundation

The public utility foundation benefits from an enhanced status but is subject to stricter conditions. It must pursue a purpose of general interest of a philanthropic, scientific, artistic, cultural, or educational nature.

Characteristics:

• Requires a royal decree of approval
• Clearly defined public utility purpose
• Supervision by the supervisory authority (FPS Justice)
• Enhanced tax advantages, including eligibility for tax-deductible donations

Creation Conditions

Articles of Incorporation

The articles of incorporation must be drawn up by notarial deed and must contain:

Administrative Body

The foundation is managed by an administrative body whose members are appointed according to the terms set out in the articles. There is no general meeting (since there are no members), which fundamentally distinguishes the foundation from the ASBL.

Tax Regime

Legal Entity Tax

The foundation is subject to legal entity tax (not corporate tax), which is generally more favourable. Only certain income is taxed:

• Real estate income
• Investment income
• Certain capital gains

Patrimony Tax

Foundations are subject to an annual compensatory inheritance tax of 0.17% on the value of their assets. This tax replaces the inheritance taxes that would be due if the assets were held by a natural person.

Tax Deductibility of Donations

Only accredited public utility foundations can issue tax certificates allowing donors to benefit from a 45% tax reduction on their donations (minimum EUR 40 per year per institution).

Foundation vs ASBL: What's the Difference?

Conclusion

Considering creating a foundation in Belgium? LegalBelgique guides you in choosing between a private foundation and a public utility foundation, drafts your articles, and supports you through all administrative procedures. Contact our experts to make your philanthropic project a reality!