Choice between regulated Belgian vehicles and non-regulated or foreign vehicles

Recently, the Belgian government has completed the introduction into Belgian financial law of an appropriate legal structure for securitization of receivables. A company which decides to securitize its receivables can now use either an "Institution for Investment in Receivables", which is organized by the Belgian law of December 4, 1990 on financial transactions and financial markets (fund or company), or another Belgian or foreign vehicle as the "Special Purpose Vehicle" for its securitization transaction.

The main advantages of a Belgian "Institution for Investment in Receivables" are the following :

-	mortgage loans and consumer loans can be transferred 
	to this Institution without any important costs or 
	burdensome formalities;
	
-	the virtual absence of corporate income tax in the hands 
	of the Institution organized in the form of a company;
	
-	the unconditional application of the lower rate of withholding 
	tax (13.39%) on dividends distributed by the Institution organized 
	in the form of a company;
	
-	the absence of withholding tax on any interest payments received 
	by the Institution organized in the form of a company (According 
	to a Bill of law, this will also apply to interest paid to an 
	Institution organized in the form of a fund. The Institution 
	will, according to the Bill of law, have to levy a withholding 
	tax of 13.39 % on income distributed to the holders of its 
	participation rights insofar as such income has its origin in 
	moveable income; we will report hereon in a later edition).

The main disadvantages of a Belgian "Institution for Investment in Receivables" can be summarized as follows :

• - the control by the Banking and Finance Commission;
• - the obligation to offer at least part of the securities to
• the public (There exists a Bill of law which purports to make
• a 100 % private placement possible for an Institution; we will
• report hereon in a later edition).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Jan Van Lancker on + 32.2. 517.94.31.
For further information contact Vincent Macq on + 32.2. 517.94.47.