Does the name Bernard Arnault ring a bell? French billionaire Bernard Arnault, chief executive of LVMH Moet Hennessy Louis Vuitton SA, has recently come under the attention of the French and Belgian financial press, as he uses several Belgium based holding companies in order to optimize his business empire. Why this interest for Belgium?
The holding structure established in Belgium can benefit from a number of national and international advantages. First of all, Belgian companies can benefit from a very extensive range of double taxation treaties, even with tax havens such as Hong Kong. Moreover, the holding can benefit from the advantages conferred by EU directives, such as 95% tax exemption on received dividends, no withholding tax on the distribution of dividends, and the benefits offered by the interest and royalty directives.
Capital gains made upon the transfer of shareholdings are also tax exempt, if certain conditions are met. Furthermore, Belgium does not apply CFC regulations, nor imposes high taxes on the contribution of movable or immovable assets to the holding company (exceptions to this rule exist).
Also, the holding offers many ways to deduct costs related to the shareholdings, for example interests are 100% deductible.
This short introduction indicates clearly that Belgium is an ideal place to create holding companies which enjoy a very interesting tax system. For the last few years, this tax system proper to holding companies has also been relatively stable, which adds to its appeal within the scope of organizing groups of international companies.
Nonetheless, correct advice is a key element for the success of your Belgium based holding company.