BELGIUM Law and Practice Contributed by: Steven De Schrijver, Allegiance Law
Financing Reporting Standards publication requirements. It maintains rules for investor transparency and protection. Euronext Access (formerly Free Market) is a non-regulated trading facility with significantly relaxed requirements for SMEs – for example, While listings of foreign companies in Belgium are limited, exceptions include notable compa- nies such as argenx (BEL 20 index member), Shurgard Self-Storage, Brederode, and Acacia Pharma. Some foreign companies also have sec- ondary listings on Euronext Brussels, including Ahold Delhaize, Aperam (BEL 20 index constitu- ent), ENGIE, Euronext, ING Groep, Saint-Gobain, Suez and Total. These foreign listings constitute less than 15% of the total listed companies. 3.3 Impact of the Choice of Listing on Future M&A Transactions The decision to list on a foreign exchange does not impede the possibility of a future sale. Bel- gian corporate law and financial law will still govern minority squeeze-out rules and other corporate restructuring measures, regardless of a foreign listing. Nevertheless, managing trans- actions across two or more jurisdictions does introduce additional complexities to the process of a future sale. 4. Sale as a Liquidity Event (Sale of a Privately Held Venture Capital- Financed Company) 4.1 Liquidity Event: Sale Process The sale of a company held by venture capital is often orchestrated as an auction, strategically harnessing competitive tension to its maximum on free float and transparency. Foreign Listings in Belgium
potential. A positive correlation can be estab- lished between the use of competitive auctions and the transaction value. More than three out of four transactions with values exceeding EUR100 million are preceded by a competitive auction. In contrast, only one in three transactions with val- ues between EUR10 million and EUR100 million involve such auctions, and competitive auctions occur in less than one in five transactions valued below EUR10 million. In the present market landscape, initiating bilat- eral negotiations from the outset is the excep- tion rather than the rule. It is important to note, however, that not every auction maintains its competitive intensity until the final phase. In numerous instances, only a handful of bidders remain actively engaged until the closing stages, and – occasionally – certain bidders successfully secure exclusivity. 4.2 Liquidity Event: Transaction Structure The typical structure for the sale of a privately held technology company involves the sale of shares, as corporate capital gains on shares are 100% tax-exempt as long as the following con- ditions are met. • Subject-to-tax condition – the shares in ques- tion from which the dividends derive must fulfil the dividends-received deduction condi- tions. • One-year holding period – the company must hold the shares for an uninterrupted period of at least one year. • Participation condition – an implied minimum participation threshold of at least 10% or an acquisition value of at least EUR2.5 million in the share capital is required.
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