BELGIUM Law and Practice Contributed by: Steven De Schrijver and Carl Dotremont, Allegiance Law
(a) Providers – individuals in the entrepreneur’s personal network provide the early-stage financing. (b) Documentation – the respective documenta- tion requirements are: (i) co-shareholders – formal agreements out- lining the terms of co-ownership; (ii) borrowing – clear loan agreements speci- fying terms and conditions; and (iii) win-win loans – documented loan agree- ments with specific conditions (govern- ment support involves annual tax dis- counts). • Crowdfunding – the providers and their documen- tation processes are as follows. (a) Providers – early-stage financing is provided by the general public or private investors through online platforms. (b) Documentation – the process varies by plat- form but typically involves detailed project descriptions, financial plans, and rewards or equity distribution. Regulation (EU) 2020/1503, effective from 10 November 2021, establishes a unified framework for crowdfunding service providers (CSPs) operating digital platforms, facilitating connections between investors and businesses seeking funding by way of loans (lending-based crowdfunding) or acquisition of transferable securities (investment-based crowdfunding). To operate under Regulation (EU) 2020/1503, CSPs must be authorised by their national competent authority and can then extend their services across EU member states. Additionally, Regulation (EU) 2020/1503 imposes operational requirements, including restrictions on inducements, credit risk as- sessments, due diligence on project owners, and investor protection measures such as fair marketing, entry knowledge tests, a reflection period, and the involvement of a licensed pay- ment service provider. • Venture capital – the providers and their documen- tation processes are as follows. (a) Providers – early stage-funding is provided by public and private venture capitalists (business angels). (b) Documentation – comprehensive investment agreements outlining terms, conditions and
expected returns are required. • Corporate loans – the providers and their docu- mentation processes are as follows. (a) Providers – early-stage funding is provided by regional public institutions that support eco- nomic investment initiatives in Flanders, Brus- sels and Wallonia and provide corporate loans that are tailored to SMEs and large companies and do not involve bank loans. (b) Documentation – detailed loan agreements specifying amounts, terms and conditions are required and can be subordinated or non-sub- ordinated. • Bank financing – the providers and their documen- tation processes are as follows. (a) Providers – early-stage financing is provided by various banks offering government-supported options. (b) Documentation – the following respective documentation requirements apply. (i) Investment loans from the European Investment Bank (EIB) – an agreement with the European Investment Bank and partner banks is required. This investment credit scheme includes (in)tangible invest- ments within the EU of less than EUR25 million. It aims to support investment projects by European SMEs with fewer than 250 employees, as well as mid-sized enterprises with fewer than 3,000 employ- ees. (ii) Guarantee schemes – detailed agreements outlining guaranteed amounts by the gov- ernment and conditions are required. • Non-bank financing (leasing) – the providers and their documentation processes are as follows. (a) Providers – early-stage financing is provided by credited leasing companies. (b) Documentation – formal leasing agreements, with on-balance and off-balance leasing options, are required. Each financing option has its specific requirements and documentation procedures. Entrepreneurs should carefully consider the terms and conditions of each source and engage legal and financial professionals to ensure clarity and compliance with financial regula- tions.
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