A management company is a tax and wealth optimisation tool widely used by high-earning freelancers and consultants in Belgium. But setting up a company is not a decision to take lightly. This guide explains in detail when, why and how to set up your management company under Belgian law, with concrete worked examples.
What is a management company?
Definition
A management company is a company (usually an SRL – Société à Responsabilité Limitée, private limited company) set up by a freelancer or consultant to invoice clients for their services. Instead of invoicing as a private individual, the freelancer invoices through the company and then pays themselves director's remuneration and/or dividends.
How it works
Client --> Invoice --> Management company (SRL) --> Director's remuneration --> You
--> Dividends --> You
--> Benefits in kind --> You
--> Reserves / investment --> Company
The company is a legal entity distinct from you personally. It has its own bookkeeping, its own bank account, and pays its own taxes (corporate tax – ISOC).
Why set up a management company?
1. The major tax advantage: the tax rate
This is reason number one. Let's compare the tax rates:
As a private individual (personal income tax, IPP):
| Bracket | Rate |
|---|---|
| EUR 0 – 15,820 | 25% |
| EUR 15,820 – 27,920 | 40% |
| EUR 27,920 – 46,440 | 45% |
| > EUR 46,440 | 50% |
Maximum marginal rate: 50% plus municipal surcharges (roughly 53-54% in total)
Through a company (corporate tax, ISOC):
| Condition | Rate |
|---|---|
| SME – first bracket of EUR 100,000 | 20% |
| Above EUR 100,000 (or non-SME) | 25% |
The gap between 50% and 20% is considerable. On EUR 100,000 of profit, you potentially save EUR 30,000 in tax.
2. Conditions for the reduced 20% SME rate
Article 215, paragraph 3 of the 1992 Income Tax Code (CIR 92) sets out the cumulative conditions:
- Minimum director's remuneration: at least EUR 45,000 gross a year (or at least equal to the taxable profit if that is lower than EUR 45,000)
- Not a financial company: more than 50% of income must not come from dividends, interest and royalties
- Limited shareholdings: the company must not hold shareholdings of more than 50% in other companies
- Individual shareholding: at least one individual shareholder must hold more than 50% of the shares
- Turnover (excluding VAT) below EUR 9,000,000
- Balance sheet total below EUR 4,500,000
- Average headcount below 50 employees
For an IT freelancer, these conditions are generally all met.
3. Getting the balance right: remuneration plus dividends
The art of running a management company lies in finding the optimal split between director's remuneration and dividends.
Detailed example: Sarah, an SAP consultant, turnover of EUR 150,000 excluding VAT
Scenario as a private individual:
| Item | Amount |
|---|---|
| Gross turnover | EUR 150,000 |
| Social contributions (20.5% on the first bracket) | -EUR 25,425 |
| Professional expenses | -EUR 15,000 |
| Taxable income | EUR 109,575 |
| Personal income tax (progressive) | -EUR 46,700 |
| Municipal surcharges (7%) | -EUR 3,269 |
| Net disposable income | ~EUR 59,606 |
Scenario through an SRL with optimisation:
| Item | Amount |
|---|---|
| SRL gross turnover | EUR 150,000 |
| Deductible professional expenses (including remuneration) | -EUR 65,000 |
| SRL running costs | -EUR 8,000 |
| SRL taxable profit | EUR 77,000 |
| ISOC (20% – SME rate) | -EUR 15,400 |
| Net profit after ISOC | EUR 61,600 |
Director's side (remuneration of EUR 45,000 gross):
| Item | Amount |
|---|---|
| Gross remuneration | EUR 45,000 |
| Social contributions (20.5%) | -EUR 9,225 |
| Taxable income | EUR 35,775 |
| Personal income tax (progressive) | -EUR 9,300 |
| Municipal surcharges | -EUR 651 |
| Net remuneration | ~EUR 25,824 |
Dividends via VVPRbis:
The SRL can distribute dividends at a reduced rate under the VVPRbis scheme (introduced by the law of 28 December 2018):
- After year 2: a final withholding tax of 20%
- After year 3: a final withholding tax of 15%
| Item | Amount |
|---|---|
| Dividend distributed | EUR 40,000 |
| Final withholding tax (15%) | -EUR 6,000 |
| Net dividend | EUR 34,000 |
Liquidation reserve (alternative or supplement):
The liquidation reserve (article 184quater CIR 92) allows you to set aside profit subject to a 10% tax. If distributed after 5 years, a further 5% withholding applies. If the company is liquidated, no further withholding applies.
| Item | Amount |
|---|---|
| Amount set aside in the liquidation reserve | EUR 21,600 |
| 10% tax | -EUR 2,160 |
| Net reserve | EUR 19,440 |
| Distribution after 5 years (5%) | -EUR 972 |
| Net received | EUR 18,468 |
Total net annual income via the SRL: EUR 25,824 + 34,000 + 18,468 (after 5 years) = ~EUR 78,292
Net gain compared with a private individual: ~EUR 18,686/year (excluding the capitalised liquidation reserve)
4. Benefits in kind
The company can make goods and services available to you, taxed as a benefit in kind (ATN) at a flat rate that is often below their real value.
| Benefit in kind | Real cost to the company | Taxable ATN (2026 flat-rate basis) |
|---|---|---|
| Company car (e.g. Tesla Model 3) | ~EUR 8,000/year (leasing) | ~EUR 1,800-3,500/year (depending on CO2 emissions) |
| Mobile phone + subscription | ~EUR 600/year | EUR 36/year (flat rate) |
| Tablet/laptop | ~EUR 300/year (depreciated) | EUR 72/year (flat rate) |
| Home internet | ~EUR 600/year | EUR 60/year (flat rate) |
| Heating/electricity | Variable | Flat rate of EUR 2,130/year (heating) and EUR 1,060/year (electricity) |
The company car is the most popular benefit in kind in Belgium. The real leasing cost is deductible for the company (within limits linked to CO2 emissions), while the ATN taxed on the director is calculated using a flat-rate formula based on the catalogue value and CO2 emissions. For an electric vehicle, the ATN is generally very low.
5. PCLI and EIP: supplementary pension
PCLI (Pension Complémentaire Libre pour Indépendants, voluntary supplementary pension for the self-employed):
- Maximum deductible amount: around EUR 3,447.62/year (8.17% of reference income)
- Tax advantage: a 30% tax reduction plus municipal tax
EIP (Engagement Individuel de Pension, individual pension commitment):
Through the company, you can build up an EIP whose premiums are deductible for ISOC purposes, within the limits of the "80% rule" (the statutory pension plus supplementary pension must not exceed 80% of your last gross annual remuneration).
For a director earning EUR 45,000 with a 40-year career, the annual EIP premium ceiling can reach EUR 10,000 to 15,000/year, fully deductible for the company.
When should you set up your company? The break-even threshold
The EUR 45,000 rule
Below EUR 45,000 of annual profit, a management company generally has no financial benefit:
- You cannot benefit from the 20% SME rate (the minimum remuneration is not reached)
- The company's fixed costs (accountant, publication of accounts, etc.) eat into part of the gain
The break-even threshold in detail
| Annual turnover excl. VAT | Value of an SRL | Estimated net annual gain |
|---|---|---|
| < EUR 45,000 | Not worthwhile | Negative (costs > gain) |
| EUR 45,000 – 70,000 | Marginal | EUR 0 – 3,000 |
| EUR 70,000 – 100,000 | Worthwhile | EUR 3,000 – 10,000 |
| EUR 100,000 – 150,000 | Very worthwhile | EUR 10,000 – 20,000 |
| > EUR 150,000 | Essential | > EUR 20,000 |
Recommendation: above EUR 80,000 of stable annual turnover, consult an accountant for a personalised simulation.
How to set up your SRL: the steps
1. Draft the financial plan
Under the CSA (Companies and Associations Code), the financial plan is mandatory (article 5:4 CSA). It must cover at least the first two years of activity and demonstrate that the initial equity is sufficient.
Mandatory content:
- Description of the planned activity
- Overview of all sources of financing
- Opening balance sheet
- Projected income statements over 2 years
- Projected cash-flow budget over 2 years
Important point: there is no longer a mandatory minimum capital for an SRL under the CSA. However, the initial equity must be "sufficient" in view of the planned activity. In practice, notaries recommend a minimum contribution of EUR 1 to 5,000 for an IT services activity.
2. Visit the notary
The SRL's incorporation deed must be drawn up as an authentic deed before a notary.
Documents to prepare:
- Financial plan
- Identity document
- Bank certificate confirming the deposit of the contribution (if a cash contribution)
- Draft articles of association
Costs:
- Notary fees: around EUR 750 to 1,200
- Registration duty: EUR 50
- Publication in the Belgian Official Gazette: around EUR 230
- Total: around EUR 1,200 to 1,800
3. Register with the BCE and activate your VAT number
After publication in the Belgian Official Gazette, register your company:
- With an approved enterprise counter (Xerius, Acerta, UCM, Liantis, Partena)
- Activate your VAT number with FPS Finance
4. Join a social insurance fund
The SRL's director must register personally as a self-employed person in a main occupation with a social insurance fund (caisse d'assurances sociales).
5. Open a business bank account
The company's account must be kept separate from your personal account. Many banks offer packages for SRLs:
- KBC/CBC Business: a full package with accounting integration
- BNP Paribas Fortis: an SME package
- Belfius Business
- Qonto, Finom: neobanks with reduced fees
6. Choose an accountant
For an SRL, an accountant is almost essential. Double-entry bookkeeping is mandatory, and there are numerous reporting obligations (ISOC, VAT, advance tax on remuneration, annual accounts to be filed with the BNB).
Average annual accounting cost for a management SRL:
- Bookkeeping: EUR 1,500 to 2,500/year
- Year-end closing and filing of accounts: EUR 500 to 1,000
- VAT returns: included
- ISOC return: included
- Total: EUR 2,000 to 3,500/year
Legal obligations of the SRL
Filing annual accounts
The annual accounts must be filed with the National Bank of Belgium (BNB) within 7 months of the accounting year-end (usually 31 December) and within a month of approval by the general meeting.
- Micro scheme (used by most management SRLs): filing cost of around EUR 73
- Abridged scheme: around EUR 130
Annual general meeting
The ordinary general meeting must be held within 6 months of the year-end. For a sole director, this is an administrative formality (minutes to be drafted and kept).
UBO register
Since 2019, every Belgian company must register its beneficial owners (UBO – Ultimate Beneficial Owners) in the UBO register managed by FPS Finance. Failure to register is punishable by fines of EUR 250 to 50,000.
Keeping the share register
The share register (formerly the register of shares) must be kept up to date and held at the registered office.
Advanced optimisation strategies
Once your management company is up and running, several further levers can improve your net income.
1. The remuneration/dividends mix
The key is finding the optimal balance:
- Remuneration: at least EUR 45,000 for the reduced ISOC rate, more if you want to build up a higher statutory pension
- VVPRbis dividends: from year 3 onwards, a 15% rate (much more attractive than personal income tax)
- Liquidation reserve: for profit you do not distribute immediately
2. Copyright income
If your activity includes creating software, source code or creative content, part of your remuneration can qualify as copyright income (droits d'auteur). The Belgian tax regime for copyright income is very attractive:
- Separate taxation at 15% (final withholding tax)
- A flat-rate expense allowance of 50% on the first EUR 18,720 and 25% on the bracket from EUR 18,720 to 37,500 (2026 amounts)
- Effective tax rate: around 7.5 to 11%
Note: since the law of 16 December 2022, the copyright income regime has been reformed. You must demonstrate that creating protected works forms a significant part of your activity, and the amount is capped at the lower of two sums: EUR 37,500 or 30% of total remuneration.
3. Investing in property through the company
Some high-earning freelancers use their company to invest in property (a professional office, a rental property). This is a complex strategy that requires specialist advice, but it can offer advantages (depreciation, interest deduction, etc.).
4. The director's current account
A credit current account (where the director lends money to the company, or the company owes the director money) is a common cash-management tool. Watch out, however, for the tax implications:
- A debit current account (where the company lends you money) is treated as a benefit in kind and taxed accordingly
- The reference rate used to calculate the ATN is set annually by royal decree
Pitfalls to avoid
-
Forgetting the minimum remuneration of EUR 45,000: if you do not pay yourself at least EUR 45,000 in remuneration, your company is taxed at 25% instead of 20% on the first bracket of EUR 100,000. Worse, a special contribution of 5.1% to 10% is due on the difference between EUR 45,000 and your actual remuneration.
-
Confusing private and professional assets: the SRL is a separate legal person. Using the company's account for personal expenses creates a taxable benefit in kind.
-
Neglecting the financial plan: in the event of bankruptcy within the first 3 years, founders can be held personally liable if the financial plan was inadequate (article 5:16 CSA – founders' liability).
-
Underestimating fixed costs: accountant, filing of accounts, insurance, UBO register, occasional legal advice… An SRL's fixed costs easily amount to EUR 3,000 to 5,000/year.
-
Not planning your exit: liquidating an SRL is a costly, time-consuming process (at least 6 months, plus notary and publication fees). Think about your exit strategy from the outset.
Useful resources
- FPS Finance (finances.belgium.be): ISOC, VAT, copyright income
- FPS Justice / Belgian Official Gazette (ejustice.just.fgov.be): publication of company deeds
- National Bank of Belgium (nbb.be): filing of annual accounts
- UBO register (finances.belgium.be/fr/E-services/ubo-register): registering beneficial owners
- Notaire.be: find a notary and estimate incorporation costs
- IPCF / IEC: find an approved bookkeeper or accountant
Conclusion
A management company is a powerful tax-optimisation tool for high-earning IT freelancers in Belgium. From EUR 80,000 of annual turnover, the tax saving can reach EUR 10,000 to 20,000 a year. However, setting up and running an SRL involves fixed costs, administrative obligations and added complexity. The decision should be made together with an accountant or tax adviser who can analyse your personal situation. Do not set up a company purely for tax optimisation without the income to justify it.
This article was written by the Espero-Soft team for the blog dedicated to entrepreneurs in Belgium. Amounts are based on the tax legislation applicable in 2026. For personalised advice, consult an approved accountant or tax adviser.
