Invest in Belgium

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Invest in Belgium

• 2008

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10 reasons to invest in Belgium

• 1. Economic location at the center of a
  large and prosperous EU customer base
• 2. Access to European centers of decision
  making
• 3. A tradition of trade more than 85 of
  Belgian GDP exported
• 4. One of the most popular destinations for
  foreign investment
• 5. Access to high quality labor force
• 6. A center of knowledge
• 7. Modern efficient business infrastructure
• 8. Low real estate costs
• 9. High quality of life
• 10. Attractive tax regime

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Economic Location

• Belgium lies at the very heart of an area where
  60 of Europes purchasing power and 30 of EU
  consumers are concentrated.
• Belgium sits at the heart of the largest
  concentration of wealth in the world.
• Within a radius of 480 km 140 million consumers
  can be reached.

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Denmark
United Kingdom
Ireland
The Netherlands
Dublin
Amsterdam
London
Germany
Belgium
Brussels
Frankfurt
The economic powerbase of Europe
Luxembourg
Paris
Bern
France
Switzerland
Milan
Italy
Rome
Spain
Barcelona
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Economic Location

• Distances from Brussels
• London 319 km
• Paris 265 km
• Amsterdam 170 km
• Luxembourg 186 km
• Frankfurt 312 km
• Travel time by High Speed Train (HST) from
  Brussels
• London 1h51
• Paris 1h22
• Amsterdam 2h40
• Cologne 2h30
• Geneva 5h15
• Brussels Airport
• -73 airlines carry passengers to 131
  destinations

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Easy Access to Decision Makers
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Easy Access to Decision Makers

• Home to EU, NATO, and 1400 governmental
  non-governmental international organizations
• Brussels is
• - first for number of diplomats (3800)
• - first for number of foreign journalists. The
  city hosts about 2400 lobbyists
• -the second international conference center in
  the world (number of meetings per year)

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A Tradition of Foreign Trade
Ghent, trade centre
since the 11th century

• Bruges, almost 2000 years of trade

Brussels, Town Hall
(1712, with sections
dating back to 1402)
Antwerp, financial and trade
centre since the 14th century
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A Tradition of Foreign Trade

• Belgium is the 9th export destination and the
  18th import source for New Zealand.
• Belgian exports to New Zealand were worth 150m
  in 2007
• New Zealand exported 363m to Belgium in 2006.
• Bilateral trade was worth about 513m.

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A Tradition of Foreign Trade

• Belgian exports in 2006 amounted to 294 billion
  in value, more than 85 of Belgian GDP.
• According to the World Trade Organization (WTO),
  Belgium was the 10th exporter of goods worldwide
  in 2006, and the 15th exporter of services.
• 80 of exports go to the EU, about 2/3 of which
  goes to the neighboring countries UK, Germany,
  France and the Netherlands.
• Because of the European orientation of its
  economy, the Belgian business cycle serves as a
  leading indicator to extrapolate developments in
  the European economy.

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A Tradition of Foreign Trade

• Main Belgian Export Products, 2006 ()
• 1. Chemical Pharmaceutical 22.7
• 2. Transport Equipment 12.2
• 3. Machinery Appliances 11.9
• 4. Metals 10.1
• 5. Plastics Rubber 8.5
• 6. Mineral products 8.5
• 7. Precious Stones Precious Metals 4.9
• 8. Textile Textile articles 4.1
• 9. Foodstuffs Beverages 4.0
• 10. Vegetable Products 2.1
• Source Agency for Foreign Trade, Belgium

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A Tradition of Foreign Trade
Belgiums top trading partners
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A Tradition of Foreign Trade

• Belgium and New Zealand have a diversified trade
  relationship

Agency for Foreign Trade-data 2007
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A Major Recipient of Foreign Investment
Belgium is among the top 10 destinations for
foreign direct investment (FDI) worldwide

• Global FDI capital inflows in 2006
• US billion
• 1. U.S. 175
• 2. U.K. 139
• 3. France 81
• 4. Belgium 72
• 5. China 69
• 6. Canada 69
• 7. Hong Kong 43
• 8. Germany 43
• 9. Italy 39
• 10. Luxembourg 29
• Source UN World Investment Report 2007

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High Quality Labor Force

• Belgiums workforce is highly productive,
  educated and multilingual
• Productivity
• - The World Competitiveness Yearbook ranks
  Belgiums workforce 6th in the world for
  productivity/hour.
• - The Conference Boards 2006 report ranks
  Belgiums workforce 3rd for productivity/hour.
• Language skills and education
• Belgiums Ranking
• Global Competitiveness Yearbook 2006-2007, World
  Economic Forum
• World Competitiveness Yearbook, 2005

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A Center of Knowledge

• Belgium offers 16 university centers and an
  extensive community of world-renowned scientific
  institutes such as IMEC, the Institute for
  Tropical Medicine, or the Institute for Cellular
  Pathology (ICP) at the University of
  Louvain-la-Neuve.
• RD activities employ about 80,000 people,
  including some 50,000 researchers. 60 of RD
  personnel works in the private sector, 33 in
  education, 7 in the public sector.
• Belgium was voted Best country in the world for
  academic research. (The Scientist, November
  2007)
• Close to the leading university centers,
  innovation and incubation centers and science
  parks provide new innovative businesses, shared
  facilities, equipment and services.
• The World Competitiveness Yearbook ranks Belgium
  consistently among the top 10 countries worldwide
  for the productivity and the skills of its labor
  force, its scientific infrastructure, its
  educational system and the quality of education
  at university level.
• Belgium is the best performing country in the
  OECD in terms of innovation and biotech industry
  development, based on biopharmaceutical patent
  applications, drugs under development, venture
  capital invested, and the number of biotech
  companies per capita. (OECD, Innovation in
  Pharmaceutical Biotechnology, 2006)
• Proximity of Brussels allows direct monitoring of
  EU biotech regulations, direct access to
  information on obtaining EU RD grants.

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A Center of Knowledge

• Case study Pharmaceuticals
• Belgium employs more than 26,000 in the
  pharmaceutical sector, in over 150 pharmaceutical
  companies
• Belgium is ranked 2nd for pharmaceutical exports
  per capita in Europe (European Federation of
  Pharmaceutical Industries Associations)
• More than 5,000 researchers work in clinical
  testing, 80 financed by the pharma industry.
• Belgium has the largest number of clinical trials
  per capita in Europe, evidence of the close
  interaction between research labs and medical
  schools
• The OECD Study Innovation in Biopharmaceutical
  Technology (March 2006) ranks Belgium nr.1 in
  terms of innovation and industry development.
  Factors included patent applications, drugs
  under development, venture capital, number of
  companies.
• Belgium produces more than 5 of all new
  medicines worldwide New recent examples
  include
• new drugs against epilepsy, bipolar disorder,
  allergies, obesity, reproductive medicine,
  tuberculosis
• vaccine against malaria
• new chemotherapy against blood cancer
• preventive molecule against AIDS

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Business Infrastructure

• 1. Belgium scores among the top 10 worldwide for
  

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Business Infrastructure

• 2. Rail transport
• With 3,536 km of track, Belgiums rail
  infrastructure is among the highest-density
  networks in the world.
• The Belgian railway freight system B-Cargo offers
  daily transport to Europes major economic zones,
  with no border stops and speeds op to 60 mph.

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Business Infrastructure

• 3. Water transportation
• 4 major seaports (Antwerp, Ghent, Zeebrugge,
  Ostend), and 2 major riverports (Liège and
  Brussels), provide the biggest port concentration
  in Europe
• Antwerp is the 5th port in the world (2nd in
  Europe), and the 2nd chemical cluster in the
  world.
• The port of Antwerp participates in the U.S.
  Container Security Initiative (CSI).
• More than 1500 km of inland waterways and canals
  provide the worlds densest inland waterway
  network, connecting to all major Belgian cities,
  France, the Netherlands, the Rhine-Main-Danube
  network and Central and Eastern Europe Liège is
  the 2nd riverport in Europe.

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Business Infrastructure

• 4. Air transportation
• Brussels has the 5th cargo airport in Europe
  (Brucargo), only ten miles from the city
• Europes largest highway interchange is only 2
  minutes from Brussels Airport
• Every 15 minute a passenger rail service provides
  services to the city center and the HST High
  Speed Train Network.
• Brussels was named Best Airport in Europe by
  Airport Council International (ACI) for 2005
• Liège, Charleroi, Ostend, and Antwerp offer
  regional airports

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Low Real Estate Costs

• Belgium offers one of the lowest real estate
  costs in Europe
• In the world ranking of most expensive office
  locations, Brussels occupies only the 35th spot.
  London, Paris, Frankfurt, Dublin, and Luxembourg
  are all in the top 10 (2006 Global Office
  Occupancy Costs Survey, DTZ).
• Brussels occupied the 71th spot for cost of
  living in the 2006 ranking of 144 cities by
  Mercer Human Resources Consulting. London (5),
  Geneva (7), MIlan (13), Paris (15), Amsterdam
  (41), and Luxembourg (56), and Frankfurt (61)
  were all more expensive.

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Quality of Life

• International studies constantly show that
  Belgium offers
• excellent quality of life outside the business
  environment.
• In the World Competitiveness Yearbook 2005
  Belgium was ranked among the top 10 for
• Ranking
• Pupil/teacher ratio (secondary education)
  2th
• Health infrastructure 5th
• Education system 9th
• Quality of university education 10th
• A recent comparative study by KPMG in thirty
  European countries cites Belgium as having one of
  the best health care systems.

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Quality of Life
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Attractive Tax Regime

• Notional interest deduction (NID)
• Lower taxes, higher profits
• Expat regime
• Extensive network of double tax treaties
• Ruling practice legal certainty for investors
• New tax measures to stimulate research
• New law on patent income
• Pension funds

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Attractive tax regime

• Notional Interest Deduction (NID)
• the notional interest deduction is a new tax
  deduction for all Belgian companies and Belgian
  branches of foreign companies applicable since
  January 1, 2006
• it introduces an annual deduction on taxable
  income equal to the interest that would have been
  paid on the aggregate equity amount in the case
  of long-term debt financing, reducing the taxable
  base of the company.
• the deduction is based on the equity capital as
  stated in the companys opening balance sheet of
  the taxable period. Increases or decreases of the
  equity during the taxable period will be taken
  into account on a pro rata basis.
• the notional interest rate will be set each year
  and will follow the average annual 10-year
  government bond rate. At this time, that rate is
  4.307. The law sets a maximum deviation of 1
  from one year to the next and a maximum
  percentage of 6.5.
• to the extent that the interest deduction does
  not have a direct tax effect (e.g. in loss
  situations), the interest deduction can be
  carried forward for the next seven years.

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Attractive Tax Regime

• Notional Interest Deduction (continued)
• the NID is unique in the world in the area of
  corporate taxation.
• the NID encourages capital intensive investments,
  and provides an incentive for multinationals to
  allocate activities such as intra-group
  financing, central procurement and factoring, to
  a Belgian group entity.
• it is a viable alternative to the current Belgian
  coordination center regime, which will be phased
  out between 2006 and 2010.
• Belgium also abolished the 0.5 registration duty
  on capital contributions as of January 1, 2006.
  Therefore, the equity of companies in Belgium can
  be increased without any further tax burden.

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Attractive Tax Regime

• Lower Taxes Lead to Higher Profits
• Estimates are that the notional interest
  deduction cuts the corporate income tax rate on
  average to around 25, but this figure could be
  even lower for highly capitalized corporations.
• US tax magazines like Tax Notes have pointed out
  that for U.S. companies, the effective tax rate
  in Belgium was only 12 in 2002, only slightly
  higher than the rate in low-tax Ireland (8).

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Attractive Tax Regime

• Expatriate regime
• Foreign executives assigned temporarily to
  Belgium within an international group of
  companies may qualify for a special expat
  taxation regime.
• The expatriate will be treated for tax purposes
  as a non-resident, liable to Belgian personal
  income tax only on income related to the
  activities in Belgium. Days spent outside Belgium
  will not be taxed in Belgium under the so-called
  travel exclusion.
• Non-taxable allowances apply, such as allowances
  or reimbursements made to cover the extra
  expenses caused by the assignment in Belgium.

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Attractive Tax Regime

• Extensive network of double tax treaties
• Belgium has a very extensive network of double
  taxation treaties, including the Double Taxation
  Convention between Australia and Belgium (1977).
  The treaty went into effect on 13.10.1977.
• The double tax treaties often provide for reduced
  or 0 withholding tax rates (for example on
  dividends and interests on company loans), and
  exempt (under certain conditions) foreign source
  profits.
• Belgium was the first country to conclude a tax
  treaty (2004) with Hong Kong (0 dividend
  withholding tax under certain conditions).

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Attractive Tax Regime

• Double Taxation Convention between New Zealand
  and Belgium (1981).

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Attractive Tax Regime

• Upfront legal certainty for investors
• Since January 1, 2005 a new general ruling
  practice has been established
• Upon request, an independent ruling commission
  of the Federal Public Service (FPS) Finance will
  inform investors about the tax implications of
  their investments prior to the start or the
  expansion of operations.
• Rulings can cover all matters under the
  jurisdiction of the FPS Finance, and will be
  given within three months of the ruling request,
  unless otherwise determined by mutual agreement.
• Ruling decisions will be binding for a maximum of
  five years and based on Belgian law, providing
  investors with maximum legal certainty.
• An elaborate pre-filing practice has been
  developed. Pre-filing meetings can be done on a
  no name basis.

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Attractive Tax Regime

• RD tax incentives
• Companies that recruit additional full-time RD
  personnel employed benefit from a tax exemption
  of 12,780 to 25,570 (depending on the
  research level) for FY 2007.
• Partial exemption of payroll taxes (up to 50 and
  more) applies for RD personnel employed in
• -universities, institutions of higher education
• -scientific institutes
• -private companies
• Companies can receive a tax deduction or a tax
  credit for investments regarding patents, RD for
  environmentally friendly or energy reducing new
  products and future technologies

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Attractive Tax Regime

• New Law on Patent Income
• A new patent royalties deduction has recently
  come into effect, which allows Belgian companies,
  or Belgian branches of foreign companies, to
  deduct 80 of patent royalties from their taxable
  income.
• Companies will deduct from their taxable income
  80 of the patent income. The 20 left from the
  patent income (after deduction) remains taxable,
  in effect decreasing the maximum effective tax
  rate from 33.99 to 6.8 of the patent income.
  This rate is substantially lower than the rates
  available for patent income in most other
  European countries.
• The deduction has no cap, but if the patent
  royalties' deduction exceeds the company's
  taxable income, it cannot be carried forward to
  the following tax year.
• The new tax deduction will apply not only to
  patents owned and developed, by the company or
  one of its branches. It will also apply to
  patents acquired from a third party. In such a
  case, the company or the Belgian branch of a
  foreign company has to improve the patent in one
  of its own research centers, in Belgium or
  abroad, in order to benefit from this incentive.
  
• For patents used by the Belgian company or
  establishment for the manufacture of patented
  products, the tax deduction will amount to 80 of
  the license fee that the Belgian company would
  have received if it had licensed the patents used
  in the manufacturing process to an unrelated
  party.
• Companies can combine this new measure with the
  other already existing tax incentives.

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Attractive Tax Regime

• New Law on Pension Funds
• A new tax regime for pension funds went into
  effect in 2007, making Belgium the first European
  country offering multinationals a complete and
  comprehensive framework for the creation of both
  pan-European and international pension funds.
• The new regime makes it very attractive for
  multinationals in Europe to register their
  pension fund in Belgium, while their benefits can
  be enjoyed throughout the EU.
• Dividends arising from such pension funds are
  exempt from tax in Belgium, which means that
  capital gains on their investments increase.
• Mobility of employees among the branches of the
  multinational in Europe will also be facilitated,
  because rights to extra pension can be
  maintained.

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10 reasons to invest in Belgium

• 1. Economic location at the center of a
  large and prosperous EU customer base
• 2. Access to European centers of decision
  making
• 3. A tradition of trade more than 85 of
  Belgian GDP exported
• 4. One of the most popular destinations for
  foreign investment
• 5. Access to high quality labor force
• 6. A center of knowledge
• 7. Modern efficient business infrastructure
• 8. Low real estate costs
• 9. High quality of life
• 10. Attractive tax regime