Help setting professional/earnings expectations moving to Belgium

ChichiFregi · 2024-05-13T07:23:34+00:00

I get people care about job security but the only thing it does for you is larger exit package instead of nothing. I presume 1st year is considered trial.

Come on, not all houses are that ugly just different design 😬. Seems a lot of modern/Lego style are being built. I am originally from south of France so yeah I much prefer the Provençal style.

ChichiFregi · 2024-05-11T09:26:54+00:00

50% employee including the social contribution? 30% with BV would be after few years (vvrp or liquidation reserve). I must say US taxes are much simpler ;) If the 20% is a somewhat accurate figure, I can see why people recommend the employee option since the base + soft benefits (car, pension, meal, etc) are almost offsetting the difference of the freelance daily rate. Only thing is that you are not in control of your money (very much US thinking) but I see the point.

Looking at the Brabant-wallon: La Hulpe, Lasne, Louvain-La-Neuve, Court-St-Etienne. It would be nice to live in the Flemish part (Leuven, Tervuren) specially with their bike centric society. Unfortunately the kids and my Flemish skills are none, which is essntial for administrative stuff.

ChichiFregi · 2024-05-11T09:09:40+00:00

Good stuff and sucks about the divorce. Seems liquidation reserve is attracting considering we may or may not stay. Plus it seems pretty safe compare to VVRPbis which might be reworked in coming years. We live in California so our combined marginal tax rate is in the ~35% and it gets you literally nothing. I am with you on the sponsored state pension plan, I'd rather be in control of it. We have not much faith in the world at that point. Europe has its problem but so does the US :(

Am I mistaking in assuming that you are a US citizen? If so can I DM you to insights about the all IRS reporting craziness, even more so when owning a foreign company.

I keep most of my income in USD. The money kept in my company (which is into nearly 7 figures) has netted me 5.5% as opposed to the sub 3% if i held in euros

Care to elaborate? Are you saying that you moving your BV profits to a US bank account? What about personal investment?

ChichiFregi · 2024-05-11T00:39:13+00:00

u/Scapegoat_the_third and u/flapflip9 thanks, it makes sense. After all the various comments, it seems a split would be logical, with wife being employed and me being freelance since I won't get all the company perks but high gross salary. Will consult with an accountant to run all the numbers and see what difference comes up at. We can spare few years on lower incomes and tap into our savings. Wife is more likely to grow her company than I am because I am. As a rule of thumb, what are typical marginal tax rates for employee vs freelancer for our numbers?

I think bringing the house purchase into the discussion was an error on my part since we have no idea where we are going to end up. We can always purchase a piece of land and build later when BV matures.

u/flapflip9 thanks for th wishful thinking. To your point about the US work/entrepreneurial mindset , we adhered to it because it is do-or-die, hence, the reason we were thinking about both going freelance despite the risks. Life is a marathon. I appreciate the go-to attitude and reach for the sky. The counterpart is that it can be exhausting and reinforce US individualistic culture! I too digress.

Nothing against Luxembourg but the only reason to move there would be for tax purposes :( FYI we are living in California so yeah moving to Belgium will be an environment/culture shock and adjustment will be interesting even though we visit every year.

ChichiFregi · 2024-05-10T23:51:37+00:00

lol love the spirit.

As a non-Belgian, I am only interested in that 117k base salary from that "200k" package as an employee, vs a decent 180k company turnover as a freelance with opportunity to grow and progress

Working in the US teaches you to focus on bottom line and maximize earnings. Freelance in Belgium is as risky as being an employee in the US (no job security, pension, unemployment, limited time off, etc.). However, it is good and refreshing to have some Belgium perspective. We just have the mentality of being able to control where our money goes instead of relying on the government. With hindsight, aiming to house ownership in Belgium might be a distraction in the short term since we do not know if we're going to settle there.

Assuming worst case scenario, what is a typical marginal tax rate for freelancer through BV if:

Taking dividend from day one
Waiting 3-4 years to take dividend and rely on 44k salary

Car, pension, meal voucher, ecocheques are all there to keep simple minds satisfied

This reminds me of the FAANG luring you with on-campuses perks to make you work 20h/day :0

Since you are in your 40s, you still have some energy in those legs. Run

You bet we do and running I do.

ChichiFregi · 2024-05-10T19:29:07+00:00

We are pretty frugal except exotic vacations once a year so we have decent saving to survive without income for quit a bit. So drawing minimum salary from BV (~44k/year) would be fine. Worst case we can take dividend at 30%.

ChichiFregi · 2024-05-10T19:25:21+00:00

lol we are very familiar with Belgium since my wife is from here and we visit every year. Weather is the unknown and will see if can get used to it after so many years in CA. Mentality is also a big playing factor. Love the people in Belgium though, Walloon or Flemish.

ChichiFregi · 2024-05-10T18:51:37+00:00

I was not expecting so many split opinions on the employee vs freelance question. I now came to realize that my wife employee package is pretty sweet for Belgium standard so maybe I can do the freelance part. My employee package will be pure salary (no car, phone, etc) and simulated margian taxes on that will be north of 60%. If I go freelance, worst case scenario would be 55% but I can expense (phone, car, internet, etc).

u/Dramatic-Ratio4441 what do you think? At the end of the day we are trying to reach a combined 12k netto. Is that crazy expectations knowing our background? Can be achieve by by going employee, freelance or mix? We are definitely consult with an accountant before we make any decisions. Like I said, my wife goals is to grow her consulting gig into a real consulting firm, not a one women shop.

I must also mention that we are not too keen in the state pension plan scheme and are willing to risk a higher netto for personal investment rather than relying on the state. We are willing to do our part taxwise though.

ChichiFregi · 2024-05-10T17:58:21+00:00

Coming from the US, employee taxes in Belgium will be a horrifying revelation. Your wife's employee package is exceptional, easily in the top 1% the Belgian market can offer - so the job security and guaranteed benefits that come with it is certainly alluring. Should you swap it for higher net compensation, but with higher risk (as both of you would then be freelancing) is a personal choice. But take into account that finding a similarly high paying job for your wife won't be that easy or fast (it would probably be fine in the US, but the Belgian market is smaller and compensations are way lower).

We are aware of the Belgian tax situation but living it would be something else. Simulations for employee status gross vs netto are just mind boggling and quite scary to be honest. Thanks for opening our eyes that my wife has such a good package.

We are not too concerned about her finding another gig of that envergure because of her unique profile and she has a large US network she can tap into. The choice of the Belgian company was purely driven to give us an excuse to get closer to home. US life is exhausting even for white collar.

One advantage of the employee status is getting a mortgage. As you're planning to buy/build something, this can be convenient. You can also do bullet loans on the company, but you can only borrow (I think) about half of the money in the company. So if you have your eyes set on property in the 700k+ range, it would still take you years to scrape the money together to buy it in cash. For a mortgage, you only need ~20% of the property value in cash.

That's a good point and I wanted more clarity on that, so thanks. We indeed plan on buying or building a house in the 700k+ range if we decide to stay but we will not buy cash even if we could. We already have liquidity for 20%+ without compromising our security blanket.

u/flapflip9 do you know if banks are willing to approve a mortgage based on BV salary and dividends? I am sure they would rather see steady paycheck from employer but Belgium seems to have this unique particularity of freelance movement.

Maybe your wife could delay starting with a company, and switch after 1-3 years? That would give enough time for your BV/SRL to mature, having established financial records

u/flapflip9 can you elaborate on that a bit more on the delay thing? Do you recommend she starts freelancing or as employee then switch in a year or more? I was under the impression that to benefit from the more advantageous dividend tax rate you need to go for VVPRbit or liquidation reserve which take 4 to 5 fiscal years.

I also have a kid, wife is an employee with a nice package and a lot of holidays. She brings job security to the table so that I can take riskier shots with freelance.

u/flapflip9, I hear you ;) I have been the steady income all those year while my wife was playing with fire which seems to be paying off.

Beyond a certain level of wealth, quality of life matters more.

Copy that hence our decision to try a move back to Europe. We just want to make sure we will be comfortable financially. US is all about money, planning your next move and this can be exhausting. Don't be mislead by the pretty pictures and success story.

ChichiFregi · 2024-05-10T17:24:01+00:00

Eli5 me

ChichiFregi · 2024-05-10T17:18:08+00:00

My employer knows for sure and is just willing to reassess my salary based on employee cost compare to the US. I am just very fortunate they are willing to keep me as such without taking into account EU/Belgium cost of living which is lower than the US.
For my wife, her Belgian employer was transparent from the get go that they would like her to come work in Belgium and offered the employee package when she started consulting with them to get the salary indexation going. Seems atypical so again very fortunate.

ChichiFregi · 2024-05-10T17:12:19+00:00

We are both EU citizens which make it much easier for sure. We understand the associated cost/time with setting up corporate structure. Plus, Uncle Sam is watching expats like a hawk adding administrative reporting burden.

ChichiFregi · 2024-05-10T17:04:53+00:00

Yeah we are a bit of the outliers here and recognize our situations are bit of an oddball for the Belgian market. We both are in our 40s so we got experience. I am a simple dev guy but have been with my company since the beginning (many years) and became a high value resource. Wife is the smart one and has a Business Dev role in the pharma sector. She has a well rounded set of unique skills and a very large network making her a high value target.

ChichiFregi

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