BELGIUM Law and Practice Contributed by: Thomas Lenné, Mathias Hendrickx, Valentijn de Boe and Bram Devlies, Loyens & Loeff
• Financing – early-stage companies often require significant capital to cover initial costs and sustain operations until they become profitable. In Bel- gium, there are various financing options available, including venture capital, private equity, debt fund- ing, and government grants or incentives aimed at promoting investment in the energy and infrastruc- ture sectors. • In addition to the articles of association of a Belgian company, certain other key governance documents are typically prepared for early-stage companies with multiple investors. For example, a shareholders’ agreement may contain additional governance arrangements, provisions relating to the transfer of shares and exit arrangements. 2.2 Liquidity Events Liquidity events in Belgium are predominantly struc- tured as private sales. In line with trends globally and at the EU level, the Belgian market for initial public offerings has seen limited activity in recent years. One notable exception in the E&I sector is the IPO of Ener- gyvision in 2025, the first Belgian IPO in four years. Private sales in the E&I sector are typically structured as share purchase transactions, in which the selling shareholders should be mindful of the fact that rep- resentations and warranties are given in virtually all private transactions in Belgium, it being noted that warranty and indemnity insurance is becoming more prevalent in private Belgian M&A transactions. Additionally, in early-stage ventures it is typical for shareholders to enter into a shareholders’ agreement, which usually contains specific exit mechanisms as well as share transfer restrictions, including tag and drag along rights and other customary transfer restric- tions in case of liquidity events.
For example, EnergyVille – a joint initiative between VITO (a leading European independent research organisation in the field of cleantech and sustainable development) and the Catholic University of Leuven – has given rise to several start-ups specialising in energy efficiency, smart energy systems, and storage solutions. The main drivers for considering a spin-off in the E&I sector are typically related to the energy transition towards carbon neutrality and other ESG considera- tions. 3.2 Tax Consequences A spin-off that is structured as a (partial) demerger under Belgian corporate law (or similar applicable for- eign legislation) is in principle treated as a liquidation for Belgian income tax purposes, which entails: • taxation of all net latent gains and tax-exempt reserves at the corporate level; and • recognition of a (deemed) dividend at the share- holder level (subject to Belgian withholding tax). However, a (partial) demerger can benefit from a tax- neutral roll-over regime at both corporate and share- holder level provided that the (partial) demerger is not entered into for tax avoidance or tax evasion reasons (the “business purpose test”). Furthermore, if the (par- tial) demerger would be to a non-Belgian tax resident company, the roll-over regime can only be applied to the extent that (i) the partial demerger is to an EEA- company and (ii) the Belgian activities are continued in a Belgian permanent establishment of the foreign company. The business purpose test is strictly construed by the Belgian tax administration, notably in cases where the (partial) demerger would be followed by a sale of the partially demerged company or the receiving compa- ny, in which case the tax administration could try to deny the application of the roll-over regime under the premise that, economically, the transaction amounted to a sale of the spun-off assets (which would be a taxable transaction). In practice, the Belgian tax ruling commission nevertheless accepts that the business purpose test is met in such case if the selling share- holder durably re-invests the full sales proceeds of
3. Spin-Offs 3.1 Trends: Spin-Offs
Contrary to other sectors, spin-offs are quite rare in Belgium in the E&I market. On the energy side, they do exist, though generally on a relatively small scale.
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