What is expected of companies?

In Belgium, companies can take various legal forms, each with its own responsibilities and levels of liability.

Under the Belgian Code of Companies and Associations, a company is considered to be Belgian – and subject to Belgian law - if its registered office (statutory seat) is located in Belgium. This address, listed in the articles of association and published in the Belgian Official Gazette (Moniteur belge/Belgisch Staatsblad), determines the company's nationality and legal domicile.

However, for tax purposes, the place of effective management and control ('real seat') may also be taken into account. The Belgian Tax Authorities may also apply the 'real seat' approach, assessing where a company's central management and control is effectively exercised. A company that is legally incorporated abroad may still be treated as a Belgian tax resident if its key management decisions and day-to-day control occur in Belgium.

Organisations Without Legal Personality

These include partnerships and other unincorporated associations. While not formal legal entities, they can still be held accountable for adverse human rights impacts arising out of their activities. Founders of such entities are personally and jointly liable, regardless of whether the organisation is for-profit or not-for-profit.

Organisations With Legal Personality

These include both for-profit and non-profit organisations.

For-Profit Organisations

Under the Belgian Code of Companies and Associations, a corporation is created through a contract between two or more people who agree to contribute something of value — such as capital, goods, or services — to form a new legal entity. The purpose of this entity is to pursue the objectives set out in its statutes, with the intention of providing direct or indirect financial benefits to its shareholders or partners.

Non-Profit organisations

These are structured to serve public or social interests, not private profit. Key types include:

• ASBL - association sans but lucratif / VZW - vereniging zonder winstoogmerk: Associations formed by at least three people for a non-commercial purpose (e.g. sports, culture, advocacy).
• Foundations: Created by one or more founders who transfer assets to pursue philanthropic or public-interest goals. They have a board but no members. Profits must be reinvested in the foundation's mission. Some foundations are public, created by royal decree, and limited to specific purposes such as scientific, cultural, or humanitarian work.

Larger Companies and Public Interest Entities

Large or listed corporations face stricter expectations, particularly when it comes to transparency on sustainability and human rights. They are notably expected to report non-financial information, such as their human rights and environmental performance.

The Belgian Code defines a listed company as one whose shares are publicly traded on a regulated market.

Companies considered to be of general interest — e.g., those operating in energy, water, postal services, or transport — are also subject to enhanced reporting obligations and are expected to demonstrate high standards of responsible conduct.

Company Size and Classification in Belgium

Company obligations can vary according to their size. In Belgium, companies are typically classified as follows:

Large Companies

A company is considered large if it exceeds more than one of the following thresholds for two consecutive financial years:

• More than 50 full-time employees
• Annual turnover exceeding €9 million
• Balance sheet total exceeding €4.5 million

A company is also classified as large if it is listed on a stock exchange, regardless of size.

For parent companies, these thresholds are assessed on a consolidated basis, meaning they must include the figures of subsidiaries and affiliated entities.

Small and Medium-Sized Enterprises (SMEs)

Belgium defines SMEs under the Code of Companies and Associations and for accounting and tax purposes.

A company is considered an SME if it does not exceed more than one of the following criteria:

• 50 full-time employees
• €9 million turnover
• €4.5 million balance sheet total

This classification covers both small and medium-sized enterprises.

Micro Enterprises (SMEs)

In Belgium, micro-enterprises are defined as a specific subcategory of SMEs using thresholds established in its corporate accounting legislation.

A company is considered a micro-enterprise if it does not exceed more than one of the following thresholds:

• 10 full-time employees
• Annual turnover (excluding VAT) of €900,000
• Balance sheet total of €450,000

Recent Changes and EU Alignment

These updated thresholds are effective for financial years starting on or after 1 January 2024, following Belgium's implementation of EU Delegated Directive (EU) 2023/2775, adopted in March 2024. This directive updated the financial thresholds used to classify companies under EU accounting rules, particularly for defining micro, small, and medium-sized enterprises.

As a result, Belgian and EU definitions are now aligned for accounting and financial reporting purposes. However, this alignment does not extend to all areas. For example, EU Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (Text with EEA relevance) (notified under document number C(2003) 1422)—which is used to determine SME eligibility for funding, policy exemptions, and legal frameworks—still applies older thresholds for turnover and balance sheet totals.

Companies can affect virtually the full range of internationally recognized human rights. Their involvement in human rights harms can occur not only through their own actions (or omissions), but also through those of their business relationships. According to the UNGPs, a company may:

• Cause harm through its own operations — for example, by directly violating labour rights, engaging in discriminatory practices, or polluting the environment of local communities.
• Contribute to harm by facilitating or increasing the risk of impacts caused by a business partner — for instance, by pressuring suppliers to meet unrealistic production deadlines that result in excessive overtime or unsafe working conditions.
• Be linked to harm through its products, services or business relationships — for example, if a financial institution provides a loan to a client company, and the funded project results in forced evictions or labour abuses, despite previously agreed human rights standards.

These distinctions are important because they determine what is expected of companies in terms of responsibility and response:

• When a company causes an adverse impact, it is expected to take active steps to cease or prevent the impact and provide or cooperate in remediation for affected individuals.
• When a company contributes to an adverse impact, it is expected to cease or prevent its contribution and use its leverage to mitigate any remaining impact to the greatest extent possible, and provide or cooperate in remediation for affected individuals.
• When a company is directly linked to an adverse impact through its operations, products, or services (without causing or contributing to it), it is expected to use (or increase) its leverage to influence the responsible party to prevent or mitigate the harm. If that proves unfeasible, it may need to consider terminating the business relationship. Such termination should be carried out responsibly, taking into account the potential human rights consequences of withdrawal — especially for workers or affected communities. While the company may not be required to provide remedy in such cases, it should still assess the relationship and take appropriate steps to avoid being involved in similar harm in the future.

These categories — cause, contribute to, and linked to — should not be seen as rigid boxes. In practice, company involvement in human rights harms often falls along a spectrum, with overlaps and grey areas. Understanding a company's responsibility requires a careful assessment of how the harm occurred, what the company knew or should have known, and what actions it took or failed to take in response. The more a company enabled, encouraged, or failed to act on known risks, the greater its responsibility is likely to be.

The core responsibility is to 'do no harm'. In practice, this means that companies must ensure that their activities and value chains do not negatively impact human rights or the planet. However, this responsibility is not passive. Companies are expected to take proactive steps to identify where their operations or business relationships may cause harm, prevent or mitigate those risks, and address adverse impacts if they occur.

Both the UNGPs and the OECD Guidelines stress that companies should formalize this responsibility through a public commitment to respect human rights. Most often, this takes the form of a human rights policy which is a statement that sets out the company's commitment to uphold internationally recognized human rights standards and details how that commitment will be implemented. Helpful resources exist, such as the UN Global Compact's Guide on How to Develop a Human Rights Policy, according to which an effective human rights policy should:

• Express a clear commitment to respect all internationally recognised human rights.
• Explain how the company will put this commitment into practice — e.g. governance, accountability, and integration into business operations.
• Set expectations for business partners and stakeholders, making clear that respect for human rights is part of how the company does business.

However, a commitment on paper is not enough. Companies must also 'walk the talk' by putting in place effective HRDD processes (see Tool 8). An HRDD process is an ongoing process to identify, assess, prevent, mitigate, and account for how they address actual and potential human rights impacts. Importantly, HRDD must extend beyond a company's own operations to include its business relationships across its value chain.

The corporate responsibility to respect human rights applies across all of a company's operations, regardless of where they occur. This means that companies must consider their human rights impacts not only within their home country, but also in any foreign countries where they operate, source from, or have business relationships. Under the UNGPs, the responsibility is global in scope: companies are expected to conduct HRDD throughout their entire value chain, including subsidiaries, suppliers, contractors, and other partners located abroad. This extraterritorial dimension is especially relevant for companies with global operations and value chains.

Importantly, legal frameworks are also evolving to reflect this expectation. For example, the CSDDD establishes binding human rights and environmental due diligence obligations that apply to both EU companies and non-EU companies with significant EU market presence, and requires them to conduct due diligence across their global operations and value chains. Companies can be held accountable for human rights or environmental harms occurring outside the EU, such as those caused by overseas suppliers or subsidiaries, reinforcing the need to manage risks wherever they arise.

Companies can affect many different groups of people through their operations and value chains, and the responsibility to respect human rights therefore extends broadly. It covers workers — not only direct employees but also contract workers, agency staff, and people working in value chains. It also applies to consumers and end-users, who rely on companies to provide safe, fair, and reliable products and services. This extends to responsible marketing practices, meaning companies should avoid misleading claims, respect consumer rights to accurate information, and ensure advertising does not reinforce harmful stereotypes or exploit vulnerable groups such as children. It extends to communities living near operations, who may be affected by land use, pollution, or other business activities. Finally, companies must pay particular attention to vulnerable groups, including women, Indigenous Peoples, children, migrant workers, people with disabilities, and minorities, who are often disproportionately affected by business practices.

Human rights due diligence should be informed by a gender perspective and include specific attention to children's rights, recognising that risks and impacts may differ based on age and gender. Applying these lenses can help companies identify hidden or overlooked harms and design more inclusive and effective responses.

To identify and address these risks effectively, companies are expected to engage meaningfully with affected stakeholders and their legitimate representatives. Stakeholder engagement is a central part of human rights due diligence and helps ensure that company decisions are informed by the perspectives of those who may be impacted. Done well, it enables companies to identify potential harms early, build trust, and design more effective responses.

Belgium has committed to upholding the international human rights agreements mentioned above, including the duty to ensure these rights are respected in practice, notably through domestic laws, state institutions, and cooperation with other states.

For companies operating in Belgium, many of these international commitments are already reflected in national legislation. The Belgian Constitution (Official English Translation, 2021) guarantees a broad range of fundamental rights and prohibits discrimination. In addition, Belgium has enacted comprehensive laws and regulations covering labour rights, occupational health and safety, equality and non-discrimination, environmental protection, and consumer rights. These frameworks provide the legal foundation for corporate responsibility and accountability in domestic business operations.

Belgian National Action Plan on Business and Human Rights

In line with the UNGPs, Belgium adopted its first National Action Plan (NAP) on Business and Human Rights in 2017. The NAP outlined measures to promote responsible business conduct, improve access to remedy, and strengthen policy coherence across government departments. It also led to the creation of resources aimed at helping companies and organisations understand and embed human rights in their practices, which include:

• This Human Rights Toolbox, offering user-friendly tools to support businesses and their stakeholders in implementing human rights responsibilities;
• A Brochure on Access to Remedies in Belgium, summarising the main legal and non-legal remedies available to victims of human rights violations.

In 2024, Belgium published its second National Action Plan, which will run until 2029. This updated NAP builds on lessons from the first, and places greater emphasis on integrating human rights due diligence into corporate practice, supporting SMEs, and aligning with EU and international developments such as the CSDDD. It also outlines measures to improve policy coordination, stakeholder engagement, and access to remedy.

Legislative Developments

Belgium has also taken steps toward strengthening its legal framework. In April 2021, a legislative proposal was introduced to establish a mandatory human rights due diligence obligation for companies operating in Belgium. Although this proposal was not adopted — pending the finalisation of the CSDDD at the EU level — it signalled strong momentum toward aligning national practice with international standards and enhancing corporate accountability.

As an EU Member State, Belgium is now required to transpose the CSDDD into national law by July 2027. This will introduce legally binding due diligence obligations for Belgian companies. Businesses subject to the Directive will be expected to review and adapt their policies, processes, and governance structures accordingly. Further national guidance and implementation measures are anticipated to help companies comply with their duties in practice.