TL;DR: Regulatory Alert for Branch 26 & Branch VI Investors

Belgian business owners have long used Branch 26 and Branch VI products to manage excess corporate liquidity with tax-efficient flexibility. But recent guidance from the FSMA (May 2025) has cast doubt on the legality of certain foreign-issued versions — especially those tied to investment funds. These products may no longer meet the strict definition of capitalisation contracts under Belgian law, prompting a freeze on new contracts and top-ups. If you're holding or considering one, now’s the time to reassess your strategy. Monnet Capital breaks down the risks, the rules, and what it means for your financial planning.

Considering a Branch 26 or Branch VI investment?

At Monnet Capital, we believe business owners deserve clear, professional guidance when evaluating financial planning tools to optimize profits, strengthen retirement savings, and distribute dividends efficiently.

Traditional options include: VVPR-bis dividends, liquidation of reserves, & back service contributions to an EIP/IPT - which allow directors to retroactively fund pension plans with corporate deductions (subject to the ubiquitous 80% rule).

Beyond these choices, Branch 26 and Branch VI investments have been adopted by Belgian business owners and their accountants as strategic vehicles for managing excess corporate liquidity. Known for their flexibility and tax efficiency, these vehicles have long been favoured in strategic financial planning.

However, following the FSMA’s May 2025 newsletter, which introduced tighter compliance requirements, the regulatory status and long-term viability of Branch 26 and Branch VI investments has become increasingly uncertain.

So, What's the Issue?

Belgium’s financial regulator, the FSMA, has issued a warning over the use of certain foreign Branch 26 and Branch VI products. Under its interpretation of local insurance law, capitalisation contracts must include a guaranteed cash payout - not just a return, but one that is fixed in both duration and amount (see Article 5, 13° of the law of 4 April 2014 on insurance). However, many Branch VI products, particularly those linked to investment funds, don’t meet this standard. Instead of paying out in cash, they deliver fund units whose value fluctuates; potentially offering better long-term returns, but lacking the certainty required by law.

This poses a compliance issue...

The FSMA argues that such payouts do not qualify as “fixed amounts,” and to complicate matters further, another provision explicitly prohibits capitalisation contracts from being tied to investment funds at all. As a result, the regulatory status of these products is now under serious scrutiny.

A Waiting Game

Here’s where things get murky. FSMA’s stance isn’t final. They’re waiting for guidance from EIOPA, the European Insurance and Occupational Pensions Authority. Until then, FSMA expects no new Branch 26 contracts linked to investment funds to be offered in Belgium. That includes no top-ups on existing ones.

What Does That Mean for You?

If your company is considering a Branch 26 product, or already holds one, it may be time to reassess. The rules could change. Or they might not. But either way, uncertainty is a shaky foundation for any investment strategy. And while your accountant may be excellent with numbers, shifting goalposts mid-game can disrupt even the most carefully laid financial plans.

Speak to Monnet Capital

In times of regulatory uncertainty, expert guidance is more valuable than ever. Whether you're navigating dividend strategies, pension planning, or reassessing Branch 26 and Branch VI investments, the team at Monnet Capital is here to add value to your decision making. Our specialists combine deep technical insight with practical experience to ensure your financial decisions are both compliant and strategically sound.

Click the Button Below To Access Your Complimentary Financial Guides

Download NOW