Venture Capital

Accelerators and Incubators

Accelerators and incubators can invest in your startup with expertise, network and, depending on a program, seed capital. Brussels has a wide variety of accelerators and incubators, including ICAB, EEBIC, EYnovation, and [email protected]. Find more accelerators and incubators on the startups.be website.

Angels

angel.me is a crowdfunding platform to finance creativity and entrepreneurs.

Bank Loans

Several business banks in Belgium provide regular loans to SME’s. This can also be the bank where you have your regular bank account. These are the main banks in the Netherlands:

Crowdfunding

Crowdfunding has gained a lot of popularity in recent years as a source of investment for startups. As a result, platforms such as Kickstarter or Bolero have grown in popularity.

Tax shelter for start-ups

A tax shelter for start-ups encourages individuals to invest in equity in “start-ups” which are basically defined as small companies of less than four years old.

In return of such direct investment, the investor is granted with a tax relief (reduction and not deduction) on his personal income tax which equals 30% or 45% of his investment. The applicable rate depends on the size of a start-up, 30% for SME’s and 45% for “very small enterprises”.

The Act of 10 August 2015 also provided for the possibility to benefit from the tax relief for indirect investments via a crowdfunding platform, a funding vehicle or a start-up fund. However, for indirect investment the tax relief is then capped to 30%, including for investments realized in a “very small enterprise”.

The Act of 10 August 2015 did not set forth the conditions and formalities required for crowdfunding platforms, funding vehicles and start-up funds to operate. Hence, a new intervention of the Parliament was necessary.

The legislation adopted on the 15th of December in 2016 defines now these conditions and formalities.

More info here.

Investment by an individual – different possibilities

After the entry into force of this new legislation, an individual will be able to invest in a start-up and benefit from the tax relief by opting to one of the four following possibilities:

  • An investor may directly invest in a start-up’s capital without the intervention of any intermediary as initially organized by the Act and explained above.
  • An investor may invest in a start-up with the intervention of a crowdfunding platform or a regulated company. In this situation, the investor becomes a shareholder of the start-up. The crowdfunding platform / regulated company acts as a “mere” broker between the investor and the start-up.
  • An investor may invest in a funding vehicle which invests itself in start-up. The investor does not become a shareholder of the start-up but a shareholder of the funding vehicle. However, the investment is dedicated to a well identified start-up and remains bound to this start-up.
  • Finally, an investor may invest in a start-up fund which invests in several start-ups. Here again, the investor is not directly a shareholder in any start-up. His investment is however not bound to a specific startup. The investment is managed by the start-up fund on the basis of its investment policy and may be allocated in a portfolio of a startup that may vary in time.

Overview of the tax shelter regime

A company may allow its investors to benefit from the measure up to a maximum of EUR 250,000 (cap at the level of the start-up) and any individual may benefit from such advantage up to EUR 100,000 per year (cap at the level of the investor).

However, in order to offer the benefit of the tax relief to its investors, the start-up has to respect conditions:

  • the start-up shall be a Belgian or EU tax resident company or must have a permanent establishment in Belgium or the EU;
  • the start-up may not result from a merger or spin-off transaction;
  • any director of the start-up is not eligible to the tax advantage;
  • the shares received in consideration of the tax shelter investment may not exceed 30% of the start-up’s share capital;
  • the tax shelter investment shall be fully paid-up in cash;
  • during at least 48 months as of the equity investment, the start-up may not be a management company, real estate company, patrimonial company, investment company, treasury company or finance company;
  • the investment may not be used to fund a dividend distribution, to grant a loan or to buy shares during 48 months as from the date of equity investment;
  • the start-up may not have distributed any dividend or made any capital reduction previously;
  • the start-up cannot be listed on a stock exchange;
  • the start-up business may face insolvency issues during 48 months as of the date of equity investment;

Furthermore, the investor should keep the shares which he holds in the start-up’s share capital for at least four years, except in case of decease.