Belgium is primarily a mid-market fund jurisdiction. Its flexible corporate law allows governance and economic rights to be tailored to funds and their investors, while a limited number of specific fund statuses – most notably the private privak status – offer favourable tax treatment for eligible investors.

Belgium is used principally by sponsors with a Belgian nexus, whether through the management team, investor base or target portfolio, rather than as a domicile selected from among competing international structuring platforms. Interest from sponsors in neighbouring jurisdictions, particularly the Netherlands and Luxembourg, has nonetheless increased. Belgian alternative investment funds (AIFs) and their managers are subject to supervision or registration requirements administered, as applicable, by the FSMA or the FPS Finance.

Investor interest in private equity has grown significantly, supported by broader access at comparatively smaller ticket sizes. Affluent individuals, family offices and entrepreneurs are important sources of this demand, while fund-of-funds offerings structured around lower minimum commitments have become a significant route to exposure.

Taxation of Carried Interest

The most significant legal development is the introduction of a dedicated tax regime for carried interest attributable to natural persons. This has replaced reliance on general principles with a specific statutory treatment for natural persons while leaving carried interest held through a company to the ordinary corporate taxation rules.

Because the regime reaches carried interest paid or allocated from its entry into force, including under funds already in existence, it applies to arrangements agreed long before it was enacted. Belgian practice has, however, generally placed carried interest shares with the general partner rather than with the individual fund managers, and that arrangement falls outside the new regime. See 3.6 Taxation of Carried Interest.

Implementation of AIFMD II

The second development is the transposition of Directive (EU) 2024/927 (AIFMD II), amending Directive 2011/61/EU (the AIFMD), by the Law of 22 July 2026 and its operational implementation. Open-ended funds and their managers must select liquidity management tools from the harmonised list and adopt policies for their selection, activation and deactivation. Managers of loan-originating AIFs must build the credit risk assessment and monitoring processes the regime requires, within leverage caps, risk retention and diversification limits that constrain how such funds are structured. See 2.10 Anticipated Changes for Funds.

Tax Reform

A broader Belgian tax reform is progressing alongside these developments. A tax has been introduced on capital gains realised by private individuals on financial assets, while the participation exemption available to corporate investors has been tightened in both scope and application. In time, the reform may also affect the tax treatment of certain specific Belgian fund statuses, including the private privak status.

Regulated Fund Categories

Belgian law divides AIFs by reference to the investors to whom their units are offered, and supervision follows that division: the FSMA directly supervises the registered public vehicles, while institutional and private regulated vehicles are subject to a registration requirement with the FPS Finance (and the FSMA supervises the AIFM; see 3.3 Regulatory Regime for Managers).

• Public AIFs raise equity by public offering, require prior FSMA authorisation and an approved prospectus, and are subject to the most extensive (non-elective) regulatory requirements.
• Institutional AIFs raise equity solely from eligible investors, being professional investors and those designated as such, and are registered rather than authorised.
• Private AIFs raise equity solely from private investors within the meaning of the applicable regulation.
• Public and institutional AIFs must be structured as an NV/SA, as must a licensed AIFM or a manager of a public AIF.

Fixed and Variable Capital

These categories are further distinguished according to whether the fund has fixed capital (beleggingsvennootschap met vast kapitaal/société d’investissement à capital fixe – BEVAK/SICAF) or variable capital (beleggingsvennootschap met veranderlijk kapitaal/société d’investissement à capital variable – BEVEK/SICAV). A BEVAK/SICAF has a fixed number of units, which are not redeemable at the investor’s initiative, whereas a BEVEK/SICAV may issue and redeem units on an ongoing basis. This distinction broadly corresponds to the division between closed-ended and open-ended funds, with the choice generally reflecting the liquidity profile of the underlying assets. Open-ended fund structures are used mainly where those assets can support ongoing subscriptions and redemptions.

Principal Legal Structures

Belgian AIFs most commonly adopt one of the following legal forms: a limited partnership (commanditaire vennootschap/société en commandite – CommV/SComm), a private limited liability company (besloten vennootschap/société à responsabilité limitée – BV/SRL) or a public limited company (naamloze vennootschap/société anonyme – NV/SA).

Among these legal forms, the CommV/SComm and the BV/SRL are generally preferred where the choice of legal form is unrestricted, principally because of the flexibility they afford. The CommV/SComm is subject to a limited statutory framework, giving managers and investors substantial contractual freedom within the mandatory rules of civil and corporate law. This makes it particularly well suited to private equity and other strategies requiring tailored governance and economic arrangements. The BV/SRL is subject to a more extensive statutory framework, but became significantly more flexible following the entry into force of the Belgian Code of Companies and Associations on 1 May 2019.

Specific Fund Statuses and Their Investment Limitations

In addition to the classification framework described in 2.1 Types of Alternative Funds and Structures, Belgian law provides for a series of specific fund statuses, subject to their own specific regulatory framework and subject to distinct investment limitations, as follows.

• Public privak – the public vehicle for investment in unlisted and growth companies. It must be set up as a fixed capital vehicle (BEVAK/SICAF) and its units must be admitted to trading on a regulated market. At least 70% of its assets must sit in eligible categories, and no more than 30% in UCITS-eligible assets; at least 25% of net assets must be invested in unlisted companies; exposure to a single counterparty may not exceed 20% of statutory net assets; statutory borrowing is capped at 10% of assets; and at least 80% of the year’s profit must be distributed. These limits apply at the latest five years after registration.
• Private privak – the main Belgian private equity vehicle, reserved to a minimum of six unrelated private investors who must subscribe to at least EUR25,000 each. Investment limitations are applicable on the basis of the eligible instruments of investment, a private privak may only invest in instruments issued by unlisted companies, including shares, bonds, units of comparable vehicles and straight loans. Accessory and temporary holdings of cash, deposits and other securities may not exceed 30% of the balance sheet from the third year following incorporation.
• Institutional BEVEK/SICAV – open to eligible institutional investors. It may only invest in financial instruments, and must comply with the general principle of risk spreading.
• Specialised real estate investment fund (GVBF/FIIS) – reserved to eligible institutional investors, it invests exclusively in real estate. Belgian real estate must be held directly, while foreign assets may be held indirectly. It must reach EUR10 million in assets by the end of the second financial year following registration, and has a ten-year term renewable for successive periods of up to five years.
• Public and private starter funds – comprising the public starter fund and the private starter privak (startersprivak), whose units carry a personal income tax reduction for the investor. They invest exclusively in newly issued shares of qualifying start-up companies.

Authorisation

Assuming that the fund’s manager is duly licensed or registered, as described in 3.3 Regulatory Regime for Managers, certain specific Belgian fund statuses also require authorisation or registration at fund level.

Before its units may be offered to the public, a public AIF must be entered on the list maintained by the FSMA. Its prospectus must also be prepared, approved by the FSMA and published.

The FSMA must decide on a public AIF’s authorisation application within three months after receiving a complete application file. Where the fund’s application is submitted together with the manager’s licence application, both are determined within the same period. Registration of an institutional or private AIF with the FPS Finance is confirmed within 30 calendar days.

Investor Disclosure

Where the AIF is managed by a licensed alternative investment fund manager (AIFM), investors are entitled to receive an annual report, along with the disclosures required under Article 23 of the AIFMD. These disclosures include, inter alia, information on the investment strategy, details of any delegation arrangements entered into by the AIFM, and information on all fees, charges and expenses borne by investors.

Investors must also be informed – prior to investing – of their redemption rights in both normal and exceptional circumstances, as well as the existing redemption arrangements. Where liquidity management tools are used, the tools and their operation must be disclosed in the fund documentation.

Regulatory Reporting

AIFMs are subject to periodic reporting to the FSMA under the so-called Annex IV reporting rules, and licensed AIFMs must (to the extent applicable) report on the application of liquidity management tools and notify the FSMA of the activation or deactivation of suspensions and of side pockets.

Public Availability

The fund documentation, the Article 23 disclosures, and the annual report of a non-public Belgian AIF are generally not available to the public. These documents are solely provided to its investors.

Three categories are nonetheless publicly accessible.

• First, Belgian AIFs established as companies must file their annual accounts with the National Bank of Belgium, where they can be consulted by anyone.
• Second, the regulatory status of a fund and its manager can be verified from the public record: the FSMA maintains and publishes the lists of licensed AIFMs and of registered sub-threshold managers, while the list of registered AIFs is maintained by the FPS Finance.
• Third, where an AIF is offered to the public, the prospectus is subject to FSMA approval and must be published, together with the Key Information Document.

General Approach

Tax treatment at both fund and investor level depends on: (i) the fund’s legal form (a contractual fund without legal personality or a company with legal personality); (ii) whether the fund benefits from a specific fund status; and (iii) the tax residence of the fund and its investors. These characteristics are typically determined by the fund’s investment focus, exit strategy, target investors and their preferred legal and tax treatment.

Qualification as an Investment Company

The tax treatment of a Belgian AIF depends first on whether it qualifies as an “investment company” for the purposes of the Belgian Income Tax Code. That qualification is determined by three substantive conditions: (i) the company’s corporate object must be the collective investment of capital; (ii) there must be a plurality of investors; and (iii) the investment portfolio must comprise a plurality of investments. These conditions distinguish an investment company from an ordinary holding company, which holds and manages investments for its own account rather than pooling third-party capital for collective investment. Their scope has been shaped to a significant extent by the Belgian tax authorities, which apply them more strictly than the statutory wording alone might suggest.

The concept of an investment company is autonomous for Belgian tax purposes and does not correspond exactly to the financial-law definition of an AIF. In practice, the Belgian tax authorities generally expect a company claiming investment company status to satisfy the regulatory requirements applicable to an AIF, making compliance with those requirements a de facto prerequisite. The converse is not, by definition, true: qualification as an AIF does not in itself confer investment company status for tax purposes, which must be assessed independently against the applicable tax criteria.

Consequences of Qualification

Qualification as an investment company allows the company to benefit from the Belgian participation exemption (the dividends-received deduction, or DBI/RDT) without satisfying the minimum participation and holding-period conditions that ordinarily apply. Accordingly, neither the minimum ownership threshold of 10% nor the minimum acquisition-value threshold of EUR2.5 million applies. The same relaxation of those conditions applies to the exemption for capital gains on shares realised by the investment company.

A corresponding benefit may be available to a Belgian corporate investor in the investment company, as described in 4.9 Tax Regime for Investors. Individual investors do not benefit from the participation exemption. Depending on the legal character of the return and the investor’s circumstances, their return may instead be subject to capital gains tax at the standard rate of 10% or to withholding tax at the standard rate of 30%.

Specific Fund Statuses

The specific fund statuses described in 2.2 Regulatory Regime for Funds may confer additional tax advantages at both fund and investor level. At fund level, an investment company benefiting from such a status may, in defined circumstances, be taxed on a narrowly defined basis rather than on its investment income, resulting in practice in a substantial exemption from corporate income tax. At investor level, certain statuses provide additional relief, including access to the participation exemption for corporate investors and withholding tax exemptions for individual investors.

The private privak is the specific fund status most commonly used for private equity investments, owing, in particular, to the tax treatment it affords to certain categories of investor. The GVBF/FIIS serves a comparable function for real estate investments, but is available only to institutional investors.

Tax Residence and Substance

An AIF whose registered office is in Belgium may nevertheless be treated as non-resident for Belgian tax purposes if its place of effective management is situated abroad. In that case, it will cease to qualify for any beneficial Belgian fund status requiring Belgian tax residence, including the private privak status. See 2.8 Local/Presence Requirements for Funds.

Loan Origination

The Belgian legal framework has transposed AIFMD II’s harmonised regime for loan-originating AIFs. Licensed managers of AIFs that originate loans are required to put in place specific policies, procedures and processes for the assessment of credit risk and the management and monitoring of their portfolio. They may not pursue “originate-to-distribute” strategies, and may not lend to their staff, depositary, delegates or group entities.

Consumer and Mortgage Credit

Belgium has opted not to prohibit AIFs from lending to consumers, so an AIF may grant consumer or mortgage credit. Doing so is not governed by the fund framework, however: the granting of consumer and mortgage credit is a separate regulated activity, supervised by the FSMA, and prior authorisation as a lender is required.

Belgian law does not generally restrict the asset classes in which an AIF may invest. For a non-public AIF, the permitted scope is determined by its fund documentation and any specific fund status it has elected. The applicable constraints are those described in 2.2 Regulatory Regime for Funds, together with the manager’s risk and liquidity management obligations.

Use of Subsidiaries

The use of subsidiaries for investment purposes is a feature of Belgian practice. An intermediate vehicle is commonly interposed where the structure has to accommodate specific legislation applying to the fund or to a particular category of its investors, or where the characteristics of a given investment are better held at a level below the fund itself.

More generally, acquiring an investment through a dedicated special purpose vehicle is market practice. An SPV facilitates acquisition financing, accommodates the mechanics of a subsequent exit, and ring-fences liability at the level of the individual investment.

Co-Investment

Co-investment rights granted to selected investors are frequently given effect through a dedicated co-investment vehicle. Pooling co-investors in a separate vehicle allows specific tax points to be addressed for the participants concerned, and permits the commercial arrangements at the level of that vehicle to diverge from those applying in the fund itself.

No Co-Domiciliation Requirement

There is no requirement for the manager or adviser to be domiciled in the same jurisdiction as the AIF itself. The registration and notification requirements applying to EEA and non-EEA managers operating AIFs in Belgium are set out in 4.4 Rules Concerning Marketing of Alternative Funds.

Substance at Fund Level

Substance requirements nonetheless apply at fund level to ensure that the fund has a genuine local presence. They are particularly relevant for Belgian tax purposes, since an AIF with its registered office in Belgium may still be treated as a non-resident if its place of effective management is located abroad.

Directors

While there are no formal nationality or residency requirements for directors, the FSMA and Belgian tax authorities pay particular attention to local presence when assessing substance requirements. There is no requirement for a Belgian general partner in the case of a partnership fund, and no obligation for the AIF itself to maintain business premises or hire local employees, although effective management functions should be carried out locally for the substance reasons set out above. The position of the manager is more demanding, as described in 3.8 Local Substance Requirements.

Mandatory Service Providers

Under Belgian law, the following service providers (other than, as the case may be, an external AIFM) are to be mandatorily appointed:

• Depositary – required only for funds managed by licensed AIFMs and performs essential safekeeping, cash monitoring and oversight functions as mandated by the AIFMD.
• Statutory auditor (commissaris/commissaire) – generally required for an AIF, unless the AIF is managed by a sub-threshold AIFM and no applicable specific fund status requires the appointment; a fund benefiting from the private privak status, for example, must appoint one.
• Additional service providers may be required in certain circumstances or under a specific fund status – eg, a GVBF/FIIS must appoint an independent valuation expert.

The money laundering reporting and compliance functions are addressed in 4.12 Anti-Money Laundering (AML) and Know Your Customer (KYC) Regime.

Depositary Location

The depositary of a Belgian AIF must be established in Belgium. Where a Belgian manager appoints a depositary for an AIF governed by the law of another Member State, it may appoint one established elsewhere, but only where that home Member State permits it. Belgium has not extended equivalent flexibility to Belgian AIFs, so the availability of a suitable depositary should be confirmed early.

Other Service Providers

Fund administration and the provision of directors are not regulated activities in Belgium in their own right: neither requires a licence, and the regulated entity is the manager. A non-Belgian administrator therefore faces no Belgian authorisation requirement in order to service a Belgian AIF.

Implementation of AIFMD II

AIFMD II was transposed into Belgian law by the Law of 22 July 2026. Its main consequences for funds are the harmonised liquidity management tools available to open-ended funds and their managers, and the regime applying to loan-originating AIFs.

What remains outstanding is the practical bedding-in of those rules: supervisory expectations have still to develop, and managers of funds established before the new regime took effect will need to monitor the grandfathering arrangements as their portfolios evolve.

Taxation

A broader Belgian tax reform is ongoing. A new tax on capital gains has been introduced and the participation exemption has been tightened, both in scope and in the conditions for benefiting from it; see 2.4 Tax Regime for Funds and 4.9 Tax Regime for Investors. The reform may, in time, extend to the tax treatment of specific Belgian fund statuses, including the private privak status.

Anti-Money Laundering

The EU anti-money laundering package, and the establishment of the Anti-Money Laundering Authority, will reshape the compliance framework in which Belgian funds and their managers operate. Those developments are addressed in 4.12 Anti-Money Laundering (AML) and Know Your Customer (KYC) Regime.

Sponsors of Belgian AIFs typically have a Belgian nexus, whether through the sponsor or management team, the investor base or the target portfolio. Accordingly, the substantial majority of sponsors are Belgian.

Interest from sponsors in neighbouring jurisdictions, particularly the Netherlands and Luxembourg, has nonetheless increased. Those sponsors generally establish a Belgian AIF where the proposed fund has a Belgian market nexus, whether through its investor base or investment strategy, rather than selecting Belgium as a default domicile from among competing international structuring platforms.

Manager Vehicles

A licensed AIFM, or a manager of a public AIF, must be incorporated as an NV/SA. Managers of non-public sub-threshold AIFs are not subject to that constraint and are generally incorporated as a Belgian limited liability company (BV/SRL), which offers a greater degree of flexibility in governance and in the structuring of equity and profit distribution.

Incentive Arrangements

For closed-ended AIFs, performance-based compensation is typically structured as carried interest, through the issuance of carried interest shares. Most often those shares are held directly by the general partner, rather than through a separate carried interest vehicle established for the purpose. The flexibility of the BV/SRL in structuring equity and profit distribution makes it well suited to accommodating these arrangements, and its use for that purpose is market practice.

Licensing

In Belgium, AIFMs are, in principle, required to obtain a licence from the FSMA under the Law of 19 April 2014 on Alternative Investment Funds and their Managers, which implements the AIFMD. A manager intending to manage a public AIF requires, in addition, a specific FSMA authorisation for that activity and must be incorporated as an NV/SA.

An exemption exists for “sub-threshold” managers – those managing AIFs with assets under management not exceeding EUR100 million, or EUR500 million if the AIFs are unleveraged and no redemption rights apply during the first five years. They are not subject to the full AIFMD regime, but must register with the FSMA, submit regular reporting and comply with basic conduct of business and organisational requirements.

Ongoing Obligations

Licensed AIFMs are required to implement comprehensive risk and liquidity management systems, monitor and report leverage levels, and appoint a regulated depositary responsible for overseeing fund assets.

They must furthermore ensure, including through stress testing, that each AIF’s investment strategy, liquidity profile and redemption policy remain aligned. Sub-threshold AIFMs benefit from a lighter regulatory framework; however, they are still expected to maintain basic risk management practices and appropriately manage conflicts of interest.

Duties Owed by the Manager

A licensed AIFM must act honestly, fairly and with due skill, care and diligence, and in the best interests of the AIF it manages and of that AIF’s investors, as well as in the interest of the integrity of the market. It must treat investors fairly and must identify, prevent, manage and monitor conflicts of interest, being organised in such a way that conflicts do not damage the interests of the AIF or its investors.

Preferential treatment of an individual investor is permitted, but for licensed managers it is conditioned on transparency, as described in 4.2 Side Letters.

The position is reinforced at company law level, for licensed and sub-threshold managers alike. Directors of a Belgian manager owe their duties to the company and are subject to the conflict-of-interest procedure under the Belgian Code of Companies and Associations: a director with a conflicting financial interest must declare it before the governing body deliberates, the conflict and the reasons for the decision must be recorded, and, in defined cases, that director may not participate in the vote.

Disclosure and Public Availability

Licensed AIFMs must make the disclosures required under Article 23 of the AIFMD and report to the FSMA under the so-called Annex IV reporting rules.

The regulatory status of a manager is a matter of public record, the lists of licensed and registered managers being published, and a Belgian manager’s annual accounts are filed and open to consultation. Where the conflict-of-interest procedure applies and the company must prepare an annual report, the declaration and the reasons for the decision are reproduced in it and so reach the public record.

Enforcement

The FSMA has a broad range of enforcement powers: administrative fines, publication of enforcement actions, suspension or revocation of licences, corrective measures and, in severe cases, referral for criminal prosecution.

Corporate Income Tax

A Belgian AIFM established as a Belgian company is ordinarily resident in Belgium for tax purposes and subject to the standard Belgian corporate income tax rules. Its management fee income is therefore taxable at the standard corporate income tax rate of 25%, and no special tax treatment applies to AIFMs as a category, in of itself.

VAT

The management of AIFs is exempt from VAT. The exemption is determined by the nature of the activity rather than the identity of the service provider, and is therefore not limited to services performed by the AIFM itself. Services delegated to a third party may also qualify, provided that, viewed as a whole, they form a distinct whole and are specific and essential to the management of the fund.

The decisive consideration is therefore the nature of the service performed. Portfolio management, whether discretionary or advisory, and administrative functions required under the regulatory framework for the operation of the fund and its manager, may qualify for exemption from VAT.

Belgium does not have a dedicated investment manager exemption or comparable safe harbour. There is no statutory provision confirming that a foreign fund escapes a Belgian taxable presence merely because the manager it appoints is established in Belgium.

The question is therefore resolved under the general rules. Whether a foreign fund has a permanent establishment in Belgium depends on the ordinary permanent establishment analysis under Belgian domestic law and, where a double tax treaty applies, under that treaty.

Carried Interest Held by a Company

In Belgian practice, carried interest is, for a number of reasons, generally structured as a separate class of shares accruing to the general partner vehicle rather than to the individual fund managers directly. The applicable tax regime follows from that structuring choice, with the ordinary corporate rules applying to the vehicle that holds the entitlement.

The carried interest return is typically structured as a dividend or capital gain on shares, and the treatment follows from that characterisation, as described in 2.4 Tax Regime for Funds. This implies that the carried interest return is often tax exempt at the level of the general partner vehicle. A subsequent distribution to the individual shareholder is typically subject to withholding tax, at a standard rate of 30%, although reductions may be available.

Carried Interest Held by Individuals

Belgium introduced a specific tax regime for carried interest entitlements received by individual fund managers by the Programme Law of 18 July 2025. It applies to carried interest paid or allocated as of the effective date, including under funds already in existence, unless the fund concerned is already in liquidation.

Carried interest is defined for these purposes as income (irrespective of the form of payment) received by an individual fund manager, whether directly or through a separate carried interest vehicle, to the extent that the return on the investment exceeds the return received by a passive investor. In other words, only the disproportionate return qualifies and is taxable as carried interest. The regime is confined to AIFs established in Belgium or elsewhere in the European Union, and to comparable vehicles established outside it. Funds that are not AIFs fall outside the regime, as do management incentive arrangements at portfolio company level, including sweet equity.

Where the regime applies, carried interest is taxed as movable income at a flat rate of 25%, levied by way of a final withholding tax. Neither social security contributions nor the municipal surcharge are due.

Responsibility and Governance

A manager that outsources functions must comply with the applicable statutory safeguards and maintain a written outsourcing policy approved by its governing body, a register of outsourcing arrangements distinguishing critical or important functions from others, arrangements for identifying and managing conflicts of interest, a business continuity plan and, for critical or important functions, a documented exit strategy. Specific requirements apply to the outsourcing of portfolio or risk management functions.

The Outsourcing Agreement

The arrangement must be recorded in a written agreement. For critical or important functions, that agreement must address a defined list of matters including sub-outsourcing, the locations at which the function is performed and the data held, service levels and reporting, audit and inspection rights, cooperation with the FSMA, and termination rights.

Notification and Limits

Where critical or important functions are outsourced, the manager must inform the FSMA in advance of how it intends to apply the principles of sound management to the arrangement, and must do so before the agreement takes effect. The same obligation applies to any subsequent significant development concerning those functions.

The outer limit is substance: a manager must continue to perform sufficient tasks itself and may not become a letterbox entity. See 3.8 Local Substance Requirements.

Head Office and Effective Management

Belgian licensed AIFMs must have their head office and registered office in Belgium. The FSMA scrutinises the substance of Belgian AIFMs (whether licensed or registered) during authorisation and ongoing supervision, ensuring that they are not letterbox entities. Typically, Belgian AIFMs must be able to demonstrate effective local management, staffing, governance and infrastructure.

The effective management of licensed AIFMs must be entrusted to at least two natural persons who are resident in the European Union and who: (i) are employed full-time by the manager; or (ii) hold the position of executive members of the manager’s governing body and are dedicated full-time to carrying out the manager’s activities.

Directors and Local Presence

While there are no formal nationality or residency requirements for directors, the FSMA pays particular attention to local presence when assessing substance requirements. Local presence may also be relevant for other legal and regulatory reasons – eg, to ensure that individuals responsible for anti-money laundering compliance possess sufficient knowledge of Belgian legislation and can interact effectively with the supervisory authorities.

Regulatory Approvals

There is no free-standing change-of-control approval procedure for AIF managers of non-public AIFs. The suitability of shareholders holding a qualifying holding is assessed when the licence is granted, and subsequent changes are treated as changes to the conditions of authorisation. A licensed AIFM must therefore notify the FSMA before implementing any material change to the conditions on which its licence was granted, which will ordinarily include a change of control at its own level or at the level of its parent. The FSMA may impose restrictions on or reject the change and must inform the manager within one month of the notification, subject to any permitted extension. A dedicated approval regime applies to transfers of qualifying holdings in managers of public AIFs.

A sub-threshold manager is not subject to an equivalent requirement. Its obligation is to keep its registration file up to date, informing the FSMA without delay of the information needed for that purpose and in particular if it ceases to satisfy the conditions for registration. A change of control is accordingly a matter of notification rather than of approval.

Investor Approvals

Investor consent is a matter for the fund documentation rather than for regulation. Belgian fund documentation typically contains key person provisions and rights to remove the manager, and a change of control at sponsor level commonly engages them: it may constitute a key person event, trigger a suspension of the investment period, or require the prior approval of the investment committee.

There is no Belgian regime specific to the use of artificial intelligence, predictive data or big data by managers. The applicable requirements are those of the EU framework, which applies across sectors rather than to managers as such.

To the best of our knowledge, no forthcoming changes are expected at this stage that would affect the position of managers.

Interest in private equity and alternative investment funds as a whole has grown significantly, supported in large part by broader access at relatively smaller ticket sizes. Affluent individuals, family offices and entrepreneurs are notable sources of that demand.

Permissibility

In principle, AIFMs are permitted to enter into side letters with investors. There are no Belgian rules restricting the subject matter of side letters as such, subject to the disclosure obligations set out below and to general civil and corporate law.

Disclosure

Licensed AIFMs are subject to the disclosure obligations set forth in Article 23(1)(j) of the AIFMD. Pursuant to this provision, AIFMs must disclose to all investors the existence and nature of any preferential treatment granted to other investors.

This specific disclosure obligation does not apply to sub-threshold AIFMs. However, sub-threshold AIFMs remain subject to general civil and corporate law obligations under Belgian law, including duties to avoid and manage conflicts of interest where they may arise.

In addition, licensed AIFMs must report to the FSMA whether any investors have been granted preferential treatment, as well as the nature of such preferential treatment, in accordance with the so-called Annex IV reporting rules.

Common Terms

The most common arrangements included in side letters relate to most-favoured-nation clauses, which allow investors to benefit from more favourable terms granted to other investors; co-investment rights, which enable select investors to participate alongside the fund in specific investments; and investment committee membership or observer rights, which provide certain strategic or cornerstone investors with governance or oversight participation. In addition, it is also common for side letters to address specific terms concerning management and entry fees.

Most-favoured-nation clauses, in practice, operate as the principal mechanism by which side-letter rights are extended to other investors; there is no free-standing Belgian requirement to offer side-letter rights to particular categories of investor.

Professional Investors

Under the AIFMD, licensed AIFMs benefit from a marketing passport that allows them to market AIFs to professional investors across the EU. Sub-threshold AIFMs do not benefit from the AIFMD passport and may, in principle, only market their AIFs domestically, such as in Belgium, under national private placement regimes, and subject to local conditions.

Retail Investors

The AIFMD marketing passport does not extend to retail investors; the AIFMD does not prohibit such marketing, but leaves it to each Member State. In Belgium it is permitted, subject to specific regulatory requirements which apply in full unless a private placement exemption applies, and even within that regime marketing to retail investors demands enhanced transparency and disclosure. A retail investor is defined in accordance with MiFID II as any investor not meeting the criteria to be classified as a professional client.

Belgium does not have a default rule that allows any AIF to be freely marketed to retail investors. However, it recognises specific AIF structures that, once approved by the FSMA, can be publicly offered to retail investors. These include ELTIFs and certain public AIFs under Belgian law. Conversely, AIFs that do not fall into these specific categories must rely on a private placement exemption. Belgian investors may invest in Belgian AIFs on the same footing as investors elsewhere in the EU, subject to the eligibility rules described below.

Investor Qualification

In principle, the regulatory framework distinguishes between retail and professional investors when determining eligibility to invest in AIFs. Certain specific fund statuses impose additional investor-qualification requirements, including the private privak status, and specific marketing restrictions apply to AIFs marketed under the EuVECA or ELTIF regimes.

Who May Market

In principle, only licensed AIFMs may market AIFs to professional investors on a cross-border basis through the AIFMD passport; an AIFM wishing to market to retail investors must first verify whether that is permitted locally. The position of sub-threshold AIFMs is described in 4.3 Marketing of Alternative Funds to Investors.

Notification and Filings

EEA AIFMs seeking to operate AIFs in Belgium must register with the FSMA, the distinction between fully licensed and sub-threshold managers being reflected in the notification process: a passport notification under Article 33 AIFMD for the former, a separate domestic procedure for the latter. Additional requirements apply where the manager intends to manage public AIFs.

Since the passport does not cover retail marketing, an AIFM from another Member State wishing to market to retail investors in Belgium must additionally follow a local notification and approval process with the FSMA before commencing any marketing activity.

Notification is made before marketing begins. On a complete notification, the FSMA informs the manager within 20 working days whether marketing may commence, and marketing may begin once that confirmation is received.

Content Requirements

Marketing to retail investors attracts stricter disclosure requirements, including the obligation to provide a Key Information Document in accordance with the PRIIPs Regulation, which gives retail investors a concise and comparable summary of the product’s features, risks and costs.

Continuing Obligations

A manager must notify the FSMA of any material change to its original notification, in principle at least one month in advance, and withdrawal of marketing follows a prescribed procedure. Licensed AIFMs remain subject to the Article 23 disclosure obligations and to Annex IV reporting throughout.

Advertising

Advertising communications relating to fund interests offered in Belgium are subject to advertising rules at both European and Belgian level, and the requirements differ according to the nature of the fund, the entity distributing the communication and the public to which it is addressed.

Where the communication concerns a public offering of units in a public fund, it must be approved by the FSMA before publication. Where it concerns a non-public fund but is distributed to non-professional investors, the harmonised advertising rules apply and the FSMA supervises after the fact. Communications addressed only to professional investors are treated separately again. A sponsor cannot therefore assume that a private placement carries with it any freedom to advertise.

The principal vehicle through which alternative investment strategies are made available to a broader investor base in Belgium is the private privak. This specific fund status is available to qualifying private investors and requires a minimum commitment of EUR25,000, thereby allowing participation at a lower threshold than is customary for institutional funds.

Fund-of-funds offerings with comparatively low minimum commitments have also grown significantly. They provide exposure to a diversified portfolio of underlying private equity funds without requiring the commitment typically associated with a direct investment in each underlying fund, and have become an important access route for affluent individuals and family offices.

There is no meaningful channel in Belgium through which alternative investment strategies are made available to pension or self-directed retirement plan investors. No products or distribution arrangements are designed or used for that purpose.

Private Placement

An AIF not authorised for public offer must rely on a private placement exemption, as described in 4.3 Marketing of Alternative Funds to Investors, and sub-threshold AIFMs depend on that route for any domestic fundraising.

Pre-Marketing

Belgian law has implemented the pre-marketing framework of the CBDF Directive and Regulation. It applies technically only to pre-marketing by fully licensed AIFMs and managers of EuVECA and EuSEF funds to professional investors, but is in practice applied also to sub-threshold AIFMs and retail investors.

Pre-marketing covers information or communication, direct or indirect, on investment strategies or investment ideas provided by or on behalf of an EU AIFM to potential professional investors in the Union, in order to test their interest in an AIF that is not yet established or not yet notified for marketing in that Member State, and which does not amount to an offer or placement.

Pre-marketing also forecloses subsequent reliance on reverse solicitation. Any subscription by professional investors, within 18 months of the manager having begun pre-marketing, to units or shares of an AIF referred to in the information provided in the course of that pre-marketing, or of an AIF established as a result of it, is treated as the result of marketing and is subject to the applicable notification procedures.

Reverse Solicitation

Where an investor approaches the fund on its own initiative, the resulting subscription is not generally treated as a public offering of fund interests on Belgian territory, with the consequence that the fund need not be registered and no prospectus need be approved in Belgium.

Sponsors should nonetheless treat the exemption as a narrow one: it responds to an initiative genuinely taken by the investor and cannot be relied on to place a marketed offering.

Placement Agents

A limited number of placement agents operate in the Belgian market. Where an intermediary is used in the fundraising process, it is typically regulated under MiFID, the placing of fund interests and the reception and transmission of orders in relation to them being investment services. The specific requirements applicable will vary with the nature of the fundraising and the extent of the intermediary’s involvement.

Compensation of Personnel

A manager’s own personnel may be remunerated in connection with fundraising. The constraint is not a prohibition but the remuneration framework applying to licensed managers, which requires remuneration policies and practices that are consistent with sound and effective risk management and that do not encourage risk-taking inconsistent with the risk profile or the fund documentation of the AIFs managed. The manager’s obligations to identify and manage conflicts of interest and to treat investors fairly apply in the same way.

Corporate Investors

Where the fund qualifies as an “investment company”, as described in 2.4 Tax Regime for Funds, a Belgian corporate investor has the benefit of the participation exemption without the participation and holding-period conditions that ordinarily apply, and relief from those same conditions extends to capital gains on shares.

Individual Investors

An individual investor derives no benefit from the participation exemption. The return may instead be taxed as a capital gain subject to the new capital gains tax, or as a distribution subject to withholding tax, depending on the form the distribution takes and on the investor’s own position. Capital gains realised by private individuals on financial assets, including fund units, are taxed at a general rate of 10% for gains realised from 1 January 2026, subject to an annual exemption. Different rates apply to gains on substantial shareholdings and to internal capital gains. A separate charge applies where the fund has a debt component: the interest element of the return realised by a private individual on the redemption or disposal of units in a fund that invests in debt claims is taxed as interest at the standard rate of 30% (the so-called Reynders tax) rather than under the capital gains rules described above.

Tax-Shelter Regimes

A limited number of specific regimes provide a tax shelter to individual investors. The most commonly known applies to investment in start-up companies, where an individual obtains a reduction in personal income tax in respect of a qualifying equity investment, including where that investment is made through a qualifying vehicle rather than directly. These regimes are narrowly targeted and subject to conditions.

Whether a Belgian AIF is entitled to benefits under a double tax treaty depends on its legal form, including whether it is constituted contractually or has separate legal personality; its tax treatment, including whether it is tax-transparent, subject to the ordinary corporate income tax rules or taxed on a special basis; and the terms of the treaty concerned.

An AIF benefiting from a specific fund status under which it is taxed on a narrowly defined basis is not necessarily in the same position as an AIF subject to corporate income tax under the ordinary rules. Treaty entitlement must therefore be assessed by reference to the circumstances of the fund and the terms of each applicable treaty.

Belgium applies both regimes through its ordinary framework for the international exchange of tax information, rather than through fund-specific legislation.

FATCA operates under an intergovernmental agreement concluded with the US. A Belgian alternative investment fund that is a financial institution for these purposes must register, identify reportable accounts by carrying out the prescribed due diligence on its investors, and report annually to the Belgian tax authorities, which transmit the information to the US tax authorities.

The Common Reporting Standard applies through the European framework for administrative cooperation in tax matters, and its mechanics mirror those of FATCA: identification of the tax residence of account holders and controlling persons, annual reporting to the Belgian tax authorities, and automatic exchange with the participating jurisdictions.

Scope and Officers

Managers of AIFs are obliged entities under Belgian anti-money laundering legislation, and this applies to sub-threshold managers as well as to licensed AIFMs.

Two appointments are required:

• a person at the highest level, drawn from within the statutory management body or the effective management, responsible for overseeing compliance with the legislation; and
• one or more persons responsible for the day-to-day application of this compliance, with the professional integrity, expertise, availability, seniority and internal authority to perform the role independently, including knowledge of the Belgian legal and regulatory framework.

Where the nature and size of the entity justify it, the two functions may be performed by the same person.

Neither appointment is subject to residence requirements, and neither requires supervisory approval. Local presence nonetheless matters in practice, since the person responsible must know the Belgian framework and be able to deal effectively with the supervisory authorities.

Customer Due Diligence

The regime is risk-based: a manager must assess the money laundering and terrorist financing risks to which it is exposed and calibrate its procedures accordingly, applying enhanced measures where the risk is higher and simplified measures where it is lower.

Due diligence is carried out before the relationship is entered into: the investor must be identified and its identity verified, the ultimate beneficial owners behind it identified, and the purpose and intended nature of the relationship understood. The relationship is then monitored on an ongoing basis.

Beneficial Ownership

Belgian companies, including fund vehicles, must identify their ultimate beneficial owners and record them in the national beneficial ownership register, keeping the entry current.

Reporting and Supervision

Where a manager knows or suspects that funds are connected with money laundering or terrorist financing, it must report the matter to the Belgian Financial Intelligence Processing Unit (CTIF-CFI) and must not disclose to the investor that a report has been made or is contemplated. Records relating to customer due diligence and transactions must be retained for the applicable statutory period. The FSMA supervises compliance by managers and may exercise its enforcement powers where those obligations are breached.

There is no Belgian regime specific to data security and privacy in dealings between funds and their investors. The processing of investor personal data is governed by the GDPR, and information and communication technology risk by DORA.

Personal data collected for customer due diligence purposes is processed on the basis of the manager’s legal obligations and is subject to the retention periods imposed by anti-money laundering legislation.

Apart from the potential reform of certain tax and regulatory aspects of the private privak status, no other changes affecting investors are currently anticipated.