Family business succession: how to anticipate and secure the transfer?

Did you know that 77% of Belgian businesses are family businesses (representing 77% of businesses with at least one worker, 45% of employment and a third of GDP according to the Degroof Petercam Barometer), but that only 30% of them survive the transition to the second generation? This alarming statistic reveals the urgency of anticipating the transmission of your entrepreneurial heritage. Between regional tax disparities, potential family conflicts and the complexity of the legal conditions to be respected, the succession of a family business represents a real challenge. With his expertise in corporate law and asset transfer, Maître Innocent TWAGIRAMUNGU supports entrepreneurs in this crucial stage from Brussels.

• Anticipate the 2026 tax reform:have your company formally valued before December 31, 2025 to avoid the automatic application of the valuation at 4 times EBITDA plus equity
• Respect the strict procedure of the inheritance pact:sending the project 15 days before the explanation meeting, then obligatory wait of at least one month before signature (article 1100/7 of the Civil Code)
• It is imperative to maintain your post-transmission commitments:retention of 75% of employment and ban on capital reduction for 5 years in Wallonia under penalty of losing all tax advantages
• Use recognized evaluation methods:assets (net assets), sector multiples (CA or EBITDA), or DCF (discounting of future flows) to objectively justify the value transmitted

Diagnosis and preliminary assessment: the foundations of successful transmission

Before considering any transmission procedure, you must carry out a complete diagnosis of your situation. This first step conditions the entire process and determines the tax options available to you.

Checking the status offamily companyconstitutes the essential starting point. To benefit from advantageous tax regimes, your company must meet strict criteria: family ownership of at least 50% of the voting rights, or 30% if another family holds 70%. Beyond this threshold, real economic activity must be demonstrated (note that in Wallonia, according to Vandelanotte, a minimum transmission of 10% of voting rights is obligatory to benefit from the preferential regime).

Real estate cannot represent more than 50% of total assets, and the remuneration paid must reach at least 1.50% of total assets. These conditions, particularly strict in Flanders and Brussels, often require prior adjustments to the asset structure.

Please note:The tax reform planned for 2026 will introduce new automatic valuation rules. If no formal assessment is established before December 31, 2025, the administration will automatically apply a valuation based on 4 times EBITDA increased by equity. This standardized method could prove unfavorable for many family businesses. It is therefore crucial to anticipate by having a professional valuation carried out using recognized methods: asset value (based on net assets), sector multiples (CA or EBITDA depending on your sector of activity), or DCF (discounted future cash flows).

Tax optimization through domiciliation: a little-known lever

Theregeographical locationof the donor or the deceased directly impacts the applicable taxation. In the Walloon Region, family businesses benefit from total exemption from inheritance tax, compared to rates of 3% to 7% in Flanders and Brussels. This regional disparity creates legal optimization opportunities.

If you are considering changing your tax domicile, anticipate this move at least two and a half years before the transfer. The applicable law corresponds to the region where you have been domiciled for the longest time during the last five years. A Brussels entrepreneur who sets up in Wallonia will thus be able to pass on his heirs to the total exemption, provided that he respects this minimum period.

Preparing successors: investing in the family future

The identification and training of future leaders represents a crucial issue for thesustainability of the family business. Between the ages of 16 and 30, your children or grandchildren must gradually understand the issues of the company, its values ​​and its sectoral challenges (statistics reveal that only 15% of French family businesses have a formalized succession plan, compared to 65% in Germany and 76% in Italy).

This preparation goes through several stages: observation courses during school holidays, participation in strategic meetings as observers, then progressive integration into operational functions. A formalized succession plan, including a precise timetable and objective selection criteria, helps avoid future conflicts and reassures external stakeholders.

Concrete example:The family company Dupont SA, specializing in metallurgy in Charleroi, has set up an 8-year training program for its three potential successors. From the age of 18, children have completed summer internships in different departments (production, sales, finance). At the age of 22, after their higher education, they joined the company in junior positions. A quarterly family council, bringing together the parents and the three children, allows for discussions on strategy and performance. After 5 years of operational experience, the board designated the eldest as future general manager, while the two younger ones were assigned specific responsibilities aligned with their skills. This structured approach allowed for a smooth transition and buy-in from all family members.

Legal transmission tools: choosing the appropriate instruments

The range of legal instruments available to organize the succession of a family business has increased considerably in recent years. Each tool serves specific purposes and has its own benefits.

Therefamily business donationbefore a notary remains the preferred instrument, benefiting from a total exemption in the three regions. This donation can be accompanied by a global inheritance pact, making it possible to establish a balance between all the heirs and to prevent future disputes. Since 2018, more than 13,000 inheritance pacts have been signed in Belgium, testifying to the success of this tool (note: the procedure requires sending a draft 15 days before the explanation meeting, then a waiting period of at least one month before signing before a notary, in accordance with article 1100/7 of the Civil Code).

The creation of a family holding company in SRL has multiple advantages: consolidation of management, facilitation of future transfers, and optimization of governance. This structure makes it possible to dissociate capital ownership from operational management, while preserving family control. For in-depth expertise in corporate structuring and asset optimization,our corporate law firmsupports you in setting up arrangements adapted to your family situation.

For complex situations, the private foundation with share certification offers a sophisticated solution. Voting rights remain concentrated within the foundation, ensuring stability of governance, while certificates representing economic rights are distributed to family members according to the founder’s wishes.

Practical advice:For blended families, the Valkeniers pact constitutes a little-known but particularly effective tool. It allows spouses, one of whom has children from a previous relationship, to partially or totally waive their inheritance rights through a clause inserted in the marriage contract. This early renunciation avoids conflicts between the surviving spouse and the children of the first marriage, while preserving the interests of the family business. For example, the spouse can renounce his rights to the shares while retaining the usufruct of the family home.

The organization of preventive family governance

The writing of afamily charterconstitutes the basis of preventive governance. This document, developed collectively, defines the common values, the company’s objectives, the remuneration policy and the rules for access to management positions. It serves as a reference in the event of discrepancies and facilitates the integration of new generations.

The shareholders’ agreement usefully complements the family charter by legally regulating relations between partners. Key clauses include:

• Pre-emption rights guaranteeing family priority in the event of transfer
• Approval clauses to control the entry of third parties
• “Buy or sell” mechanisms to resolve conflict situations
• The preventive appointment of conciliators to resolve disputes
• Statutory anti-blockage mechanisms (reinforced majorities for certain decisions, forced exit clauses in the event of persistent disagreement, appointment of independent directors to avoid decision-making paralysis)

The establishment of a formalized family council represents an essential governance body. This structure periodically brings together family shareholders for strategic decisions and facilitates communication between generations. A voluntary limitation by family branch helps avoid excessive dilution of decision-making power while guaranteeing equitable representation.

Post-transmission monitoring: guaranteeing the sustainability of tax advantages

The transmission is only the beginning of a rigorous monitoring process. THEmaintenance conditionsimposed by the regions must be scrupulously respected under penalty of retroactively losing the tax advantages obtained.

In Wallonia, the company must maintain its operational activity and retain at least 75% of its employment volume for five years. Any reduction in capital is strictly prohibited during this period, a condition often overlooked but systematically verified by the administration. Administrative controls regularly verify compliance with these commitments.

The establishment of a rigorous administrative monitoring system is essential. A quarterly dashboard makes it possible to monitor key indicators: changes in employment, maintenance of main economic activity, compliance with asset ratios. This constant vigilance avoids unpleasant surprises during tax audits.

The organization of an annual buyback pool facilitates the management of individual exits while preserving the family character of the company. Members wishing to sell their shares offer them as a priority to other family shareholders, according to terms predefined in the shareholders’ agreement.

To absolutely remember:The ban on capital reduction for 5 years in Wallonia applies even in the event of significant losses or necessary restructuring. This rigid constraint has already caused the loss of tax advantages for several companies which were unaware of it. Anticipate capital requirements from the transfer stage to avoid any temptation to reduce capital. A financial safety cushion of at least 20% of equity is recommended to cope with economic uncertainties without compromising the benefits obtained.

The succession of a family business cannot be improvised. It requires careful preparation, informed strategic choices and expert legal support. Maître Innocent TWAGIRAMUNGU, with nearly twenty years of experience in corporate law and asset transfer, supports Brussels entrepreneurs in this decisive stage. His firm offers a transversal approach, combining technical expertise and human dimension, to legally and fiscally secure your transfer project while preserving family harmony. If you are an entrepreneur in Brussels or its surroundings and you are considering the transfer of your business, do not hesitate to seek their advice to calmly anticipate this crucial transition.