New Belgian Pledge Act confirmed for 1 January 2018
Today, a Royal Decree was published confirming the entry into force of the new Belgian Pledge Act of 1 July 2013. The Belgian Pledge Act introduces a major reform of the Belgian regime of security interests on movable property.
Main innovation of the Pledge Act
The main innovation of the Pledge Act is the introduction of a central register, enabling a pledgor to grant a register pledge on its movable assets without having to hand over its goods to its creditor. Instead the pledge will be perfected by registration in a newly created Pledge Register.
The main unknown factor until today was the cost of registration. The Royal Decree confirms that the registration cost will be capped at EUR 500. Other actions such as amendment or a release entail maximum costs of EUR 300 and EUR 200 respectively. A far cry from the amounts payable under the old regime, where a pledge on business required payment of a 0.5% registration tax.
Pledge Register will be an online register
In addition, it is confirmed that the Pledge Register will be an online register which will function without gatekeepers. Every Belgian national will have access to it by using his electronic ID card and large users can agree on specific arrangements to access and use the Pledge Register with the Federal Public Service Finance. Foreign entities will be required to make use of a Belgian representative to access the register, perform searches in it, make registrations, etc.
Boost for asset based finance
The market anticipates that this new law will be a boost for inventory financing, borrowing base lending and other forms of asset based financing. With these details published, the last hurdle toward the entry into force on 1 January 2018 has been taken.
For more information on the Pledge Act or the National Pledge Register, please visit our dedicated Collateral Services webpage.
MarcVermylenAttorney at law Managing partner Belgium
Marc Vermylen is managing partner of Loyens & Loeff Belgium and heads the Banking & Finance Practice Group in Brussels. He is recognised worldwide as an expert and influential lawyer in banking law and finance law.T: +32 2 743 43 15 E: email@example.com
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