From a tax perspective, the main decision you will need to make when financing your business is whether to use equity or debt. For equity and equity-like financing (shares, warrants, options, etc), the contributor bears the business risk. For debt financing, however, the contributors are in principle ensured a periodic return and are paid back before equity stakeholders.
The holders of equity (instruments) qualify for dividends or share redemptions and the like. The holders of debt instruments receive interest. For the company, dividends are not deductible as a business expense, whereas interest on debt is. Leveraged financing can thus help to decrease the corporate tax base. To help level the playing field between equity and debt, the Belgian legislature created the notional interest deduction (aftrek voor risicokapitaal/déduction fiscale pour le capital à risque), which allows companies to deduct a percentage of their adjusted equity as fictitious interest.
In startups and research-intensive companies and joint ventures, mixed financing is often preferred (or even required by foreign investors and venture capitalists), whereby debt financing is initially used which can be converted into equity at a later stage (convertible bonds, etc).
As mentioned above, interest on business loans is in principle tax deductible. There are, however, several rules to avoid abuse of interest deductions, such as the thin capitalisation rule and the non-deductibility of excessive interest.
Certain types of financing are hybrid, meaning they are considered equity in one jurisdiction and debt in another. Such hybrid instruments can be particularly interesting from a tax perspective, as they may eliminate withholding tax or even qualify
for a double deduction of costs (one in each jurisdiction).