The new Belgian code on Companies & Associations was finally adopted on Thursday 28 February 2019 by the Belgian federal parliament after several years of work.
FAIB, which has provided input specifically on those articles which affect AISBL/iVZW throughout the consultation and adoption process, welcomes the new Code: while preserving the essential elements of the flexibility of the AISBL / iVZW statute for international not for profit associations (INPAs) established in Belgium, the new Code modernises the law, making it much easier for associations of all types, whether trade or professional, NGOs or charities to transfer their seat seamlessly to Belgium. This is important as Brussels has now become the second advocacy capital of the world after Washington DC due to its twin advantages as the centre for the EU institutions and the flexible legal status for INPAs, a Belgian concept originally enacted in 1919.
“We would like to thank Minister of Justice Geens and his team for their collaboration with our experts throughout the drafting process and also the federal government and in particular Rapporteur Kattrin Jadin and her colleagues and the Brussels region for their openness to discuss issues which are essential for FAIB members and for the attractiveness of Belgium as a location for international associations” commented Adrian Harris, FAIB President.
Where the new legislation is particularly innovative is in the area of national and transnational conversions of ASBL/VZW into INPAs and other forms of company and vice versa.
This will prove particularly attractive to foreign charities and associations, including those benefiting from EU funding which are affected by BREXIT: indeed, they will be able to convert seamlessly from a company with charitable status into a Belgian INPA while ensuring legal continuity. The merger and demerger of INPAs will also now be possible.
At a more operational level, legislators have accepted to adapt their initial draft in areas such as voting rights, proxies, Belgium-based representatives for foreign directors and internal rules complementing the articles of association. These are issues specific to INPAs which by their very nature are international and operate internationally.
FAIB now expects the new Code will enter into force on 1 May 2019 for new companies and associations while the new rules will apply to existing INPAs as from 1 January 2020. Changes to articles of association will also be required for all INPAs after a lengthy transition period of several years.
Concluded Adrian Harris: “After the successful adoption of the law, what will be particularly important to ensure that the Code proves attractive to INPAs looking into relocating to Belgium by rapidly processing applications for AISBL/iVZW status and making administrative requirements such as the registration of foreign directors simple. These are issues which we are eager to quickly move forward on with the support of the Federal Ministry of Justice.”
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