Internal Loan Agreement Template for Belgium

The Internal Loan Agreement is a crucial document for facilitating financial arrangements between related entities within a corporate group under Belgian law. It is typically used when one group entity needs to provide financing to another for purposes such as working capital, expansion projects, or restructuring activities. The agreement must comply with Belgian corporate law, tax regulations (particularly transfer pricing rules), and financial sector requirements. The document includes detailed provisions on loan terms, interest calculations, repayment schedules, and security arrangements (if applicable). Special consideration is given to Belgian thin capitalization rules and corporate governance requirements, making it essential to involve both legal and financial expertise in its preparation. The Internal Loan Agreement also serves as important documentation for tax authorities and auditors in demonstrating the arm's length nature of the financial arrangement.

1. Parties: Identification of the lender and borrower entities, including their full legal names, registration numbers, and registered addresses

2. Background: Context of the internal loan, relationship between the parties, and purpose of the loan

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. The Loan: Core terms of the loan including principal amount, purpose, and availability

5. Interest: Interest rate, calculation method, payment dates, and default interest provisions

6. Repayment: Terms for repayment of the principal, including schedule, prepayment options, and mandatory prepayment events

7. Payments: Payment mechanics, currency, and business day conventions

8. Representations and Warranties: Standard representations by the borrower regarding its status, capacity, and financial condition

9. Information Undertakings: Obligations to provide financial and other information to the lender

10. General Undertakings: General obligations of the borrower during the loan term

11. Events of Default: Circumstances constituting default and consequences

12. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

13. Notices: Communication methods and contact details for formal notices

14. Calculations and Certificates: Rules regarding calculations and evidential value of certificates

15. General Provisions: Miscellaneous legal provisions including partial invalidity, remedies, amendments

16. Governing Law and Jurisdiction: Confirmation of Belgian law as governing law and jurisdiction for disputes