■ Real Estate Issues

· Should I rent, buy or build a building?

As a practical matter, most start-up businesses commence with renting a building or a part of a building that suits their particular needs (i.e. office space, warehouse space, manufacturing space, a combination thereof, etc.). One of the advantages of buying a building, is that the purchase price will be included in the amount which will be considered the "total investment" for purposes of obtaining investment incentives.

· Who can assist in finding proper office and warehouse space?

The Regional Economic Development Authorities keep an inventory of all available office and warehouse space in their area. (See network listing of Regional representatives in Singapore and Japan.) Real estate brokers can also be consulted.

Additionally, the Regional Development Authorities provide the possibility for start-up businesses to participate in so-called "business centers." Business centers rent offices and/or work space and provide secretarial and communication services. Business Centers are actively promoted and encouraged by the regional development authorities as a tool to reduce the cost threshold for start-up companies.

· What is a "commercial" lease?

The Law of April 30, 1951, as amended, specifies a number of requirements, protecting tenants of premises hich are directly accessible to the tenant's customers. Most importantly, the statute provides for quasi-automatic renewal of the lease, and this up to three renewals for a term of 9 years. Further, the statute allows the tenant to sell its business, which is considered to include the lease. While the statute is meant to protect retail commerce, it also can be made applicable by agreement of the parties to other types of leases.

· What is a "3-6-9" lease?

Even for premises which are not used for or intended for direct contact with customers, many leases covering such "non-commercial" premises follow the pattern suggested by the Law of April 30, 1951, as amended, or the law on leases for residential housing. One of the typical features of such leases is that leases which are for a nine-year period generally are terminable by either party under certain conditions after any three-year period.

· What is a lease with option to buy?

It is possible to negotiate with the landlord that the company will have, at some point during the lease, an option to purchase the building. Belgium has no restrictions whatsoever against non-Belgian businesses or persons on the purchaser of buildings or land.

· Should I request a written lease?

Leases must be registered (for tax purposes) and therefore must be in writing. The lease will be in French, Dutch or German depending on the location of the premises, and will stipulate the duties and obligations of the respective parties.

· Must tenants provide guarantees?

Customarily the landlord will require a guarantee, usually equal to three to six months worth of rent. Guarantees are provided by way of deposit with a bank or by way of bank guarantee. In the case of a bank guarantee, the tenant will be charged a (small) fee by the bank in return for which the bank will furnish such a guarantee.