When you are thinking about sending your employees to Belgium to do business whether on a short term assignment or on a longer-term secondment, getting immigration, employment and social security issues right will play a key role in the success of your endeavor.
Here is an overview of the considerations to have in mind when sending US employees in Belgium, to make sure your company is able to pursue its goal as smoothly as possible and in full compliance with all applicable Belgian laws. While we have focussed on Belgium in this article, the type of considerations will be similar across Europe.
What are the immigration requirements?
As a matter of principle, every non-European Economic Area national who intends to work in Belgium must get a work permit.
The employer has to obtain the authorization to employ the employee before starting any work in Belgium. This requires the employer (or its representative) to file an application along with a set of documents, drafted in the official language applicable, to the relevant regional authorities (the Brussels Region, Flemish Region or Walloon Region), depending on the proposed place of work.
However, some foreign employees are exempt from the work permit obligation, in particular:
- Foreign employees with a managerial or executive position provided that they are employed by the Belgian headquarters (under a local contract of employment) and earn a gross annual salary of at least €66,405. Regional authorities must still be informed before commencement of the employment in Belgium.
- Foreign employees on business trips for attendance at private meetings, for example a meeting of the board of directors, provided that their stay in Belgium does not exceed 60 days par calendar year, with a maximum of 20 consecutive calendar days per meeting or employees sent to Belgium to attend scientific conference for the duration of any such conference.
Residence permit formalities
Depending on their length of stay, non-EEA nationals need a residence permit (visa) to enter Belgium. The type of residence permit required depends on the purpose and length of their stay in Belgium.
Short stay (< 90 days): For stays in Belgium of less than 90 days over any given 6-month period, a US national will not need a visa to enter in Belgium; they will be able to enter Belgium on the basis of their national passport.
Long stay (> 90 days): Any non-EEA national staying in Belgium for more than 90 days within a given 6-month period has to get a type D Visa in order to enter Belgium and obtain a residence permit.
Registration formalities with the local government
Short stay (< 90 days): Even though they will be able to enter Belgium without obtaining a visa, US nationals staying in Belgium for less than 90 days within a given 6-month period will have to make a “Declaration of arrival” at the local government of the place they have chosen for residence in Belgium or at their hotel, within three days of arrival in Belgium.
Long stay (> 90 days): For stays of more than 90 days within a given 6-month period, the US employee will need a Belgian residence permit (“type A” electronic card). To that purpose, the employee has to register with the local government of the place where he intends to reside, within eight days of arrival in Belgium.
Since each local government has its own requirements in terms of documents to provide for the application for residence permit, it is recommended to check local documents and language requirements.
Compliance with Belgian Labour law
Any foreign employer which assigns employees in Belgium shall comply with the labour, salary and employment conditions set out by local laws and should also comply with sector-based agreements. For example, provisions on working hours, public holidays, safety at work, salary protection and salary rates will all differ from the US.
Any employer engaging personnel in Belgium must set up and retain the ‘Labour documents’ (i.e. work regulations, personnel register, salary slips) to enable the Labour Inspectorate to verify that the employer is complying with the local laws.
Every foreign employer which sends employees on assignment to Belgium temporarily or on a part-time basis, who are not liable to the Belgian social security scheme, is under the obligation to file a declaration (known as a Limosa declaration) before any commencement of work in Belgium. US employees on business trips are however exempted from filing the Limosa declaration if their stay in Belgium does not exceed 60 calendar days and attendance does not exceed 20 consecutive calendar days per meeting, or if attending scientific conferences.
If you assign US employees to Belgium and make a Limosa declaration, your company will be exempt from setting up and retaining the labour documents for a fixed period of 12 months, provided that your company is in a position to provide equivalent US work documents if and when requested by the Labour Inspectorate.
Generally speaking, employees working in Belgium are subject to the Belgian social security system (the income tax system is discussed below). However, as is the case in many European countries, there is an agreement between the US and Belgium which means that employees will not be subject to double taxation of income with respect to social security contributions.
While the starting point under that agreement is that a person employed in Belgium shall be subject to the social security rules of Belgium, there is an exception which means that if the secondment of a US employee to Belgium is not expected to last for more than five years, the employee can remain subject to the laws of the US in relation to social security contributions.
Income tax and the expatriate taxation regime
In some circumstances, a US executive assigned temporarily to Belgium within an international group of companies may qualify for the special expatriate taxation regime. The executive will be treated for Belgian tax purposes as a non-resident, liable to Belgian personal income tax only on income earned in Belgium. The benefits of this special tax regime means that the part of the salary relating to services provided outside Belgium is not subject to Belgian taxes.
US expats with a management position may qualify for the application of this special tax regime, providing they meet the following criteria:
- the employment must be in a businesses under foreign control or; part of an international group or; in a control or coordination office of a multinational group of companies or; in a scientific research center;
- the employment in Belgium must be temporary in nature;
- the centre of the expatriate economic and personal interests must not be in Belgium; and
- the expatriate may not have Belgian nationality.
An employee should file an application for treatment under the expatriate taxation within six months following their arrival in Belgium if they think they may qualify.
What action should we take?
- Plan the international deployment of your employees well in advance. Make sure your company seeks advice well ahead to anticipate the assignment of your executive employees or managers and ensure them – and their families –a smooth transition in their professional careers.
- Bear in mind that the work permit procedure, if applicable, takes about two to four weeks, once the application has been filed. Because the procedure has a local language requirement for the application form and letters to the Belgian authorities, you need to factor in time for translation of relevant documents.
- Also bear in mind that the issuance of a long stay visa for Belgium takes about three months.
- Consider the tax consequences of the secondment before the employee leaves the US.