Document background
The Retention Bank Guarantee is commonly used in Belgian construction, infrastructure, and major service contracts where the employer typically withholds a percentage of payment as security for performance and defect remediation. This document enables contractors to receive their full payment while providing the employer with equivalent security through a bank's guarantee. The Retention Bank Guarantee must comply with Belgian banking regulations and civil code requirements, featuring specific terms for the guarantee amount (usually 5-10% of contract value), validity period, claim conditions, and release mechanisms. It's particularly valuable in large projects where cash flow management is crucial for contractors, and the involvement of a regulated Belgian bank provides additional security and credibility to the arrangement.
