Belgium: Investing

FDI in Figures

Belgium figures among the countries most attractive to foreign direct investment (FDI). In its annual World Investment Report, the UNCTAD (United Nations Conference on Trade and Development) puts Belgium ahead of emerging economies such China, India and Russia, as well as established powers such as Canada and Hong Kong. Nevertheless, the recession has had a strong impact on the Belgian economy, which depends heavily on the countries of the European Union. FDI flows have dried up in 2009-2010 and are unlikely to recover their pre-crisis level soon.

Among the attractions of Belgian economy are: its strategic geographical position, at the crossroads of the main European markets; its high-quality transport, logistics and telecommunications infrastructure; its businesses specialized in the supply of intermediate and semi-finished goods; its multilingual and qualified workforce and a strong purchasing power.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	109,956	23,595	61,714
FDI Stock (million USD)	671,084	862,503	670,013
Performance Index*, Ranking on 141 Economies	4	28	-
Potential Index**, Ranking on 141 Economies	15	-	-
Number of Greenfield Investments***	182	101	-
FDI Inwards (in % of GFCF****)	96.3	109.0	-
FDI Stock (in % of GDP)	132.9	177.2	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2008, in%
United States	28.0
France	12.0
United Kingdoms	9.0
Netherlands	8.0
Germany	7.4

Main Invested Sectors	2008, in%
Business support services, marketing...	50.0
Industry	20.0

Source: FDI - Last Available Data.

Form of Company Preferred By Foreign Investors: Belgian company law recognizes the commercial company in various forms. The most common forms commercial companies can take are: the Company limited by shares (S.A./N.V.), the Private Limited Liability Company (S.P.R.L./B.V.B.A.), the Co-operative company, the European Economic Interest Grouping.

Companies aiming at incorporating in Belgium may decide between operating through a subsidiary (incorporated under Belgian law) or a branch (incorporated under the laws of a foreign country).
Sources of Statistics: National statistics

Why You Should Choose to Invest in Belgium

Strong Points: Belgium's strong points are:
- A highly educated, productive, multilingual and flexible workforce;
- Quality business infrastructures;
- The country's strategic location at the center of Europe;
- A tradition openness to international trade; and
- Good quality of life.
Weak Points: Belgium's weak points are:
- High cost of salaries;
- A damaged financial system.
Government Measures to Motivate or Restrict FDI: The Belgian government recently introduced the notional interest. This is a new and innovative measure in the field of international tax law, by which all companies subject to Belgian corporate tax will be able to deduct from their taxable income an amount equal to the interest they would have paid on their capital in the case of long-term debt financing. In addition, the 0.5% registration fee on capital contributions has been abolished. For more information on the notional interest and investing in Belgium, please go to Invest in Belgium.

With regard to the financial crisis, the outcome from the authorities was quick, with the hardening of lending conditions on the inter-banking market. Nevertheless, the Belgian government will develop and implement withdrawal strategies later, aimed at avoiding having the state hold a long-term stake in the creation.

Protection of Foreign Investment

Country Comparison For the Protection of Investors

	Belgium	OECD	الولايات المتحدة	Germany
Index of Transaction Transparency*	8.0	6.0	7.0	5.0
Index of Manager’s Responsibility**	6.0	5.2	9.0	5.0
Index of Shareholders’ Power***	7.0	6.8	9.0	5.0
Index of Investor Protection****	7.0	6.0	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Belgium has in place policies to facilitate the free flow of financial resources. Credit is allocated at market rates and is available sufficiently to foreign and domestic investors without discrimination. Belgium is fully served by the international banking community and is implementing all relevant EU financial directives.

More than 100 different banks are represented in Belgium; 54 Belgian or foreign-owned institutions are incorporated under Belgian law, and 50 institutions are incorporated under foreign law.
Acquisition of Holdings: Legal.
Obligation to Declare: Direct foreign investments are not submitted to a preliminary authorization, but in some activity sectors, the investor has to ask for an authorization from the government: banks, insurances, food products production or sale, retail trade.

Office Real Estate and Land Ownership

Possible Temporary Solutions: In Brussels mainly, you can find some short term appartment contracts , or serviced appartments.
Many business centers with flexible solutions.
The Possibility of Buying Land and Industrial and Commercial Buildings: Same as other european countries, with no specific restrictions.
Risk of Expropriation: Low.

Investment Aid

Forms of Aid: Belgium is divided into three regions, Brussels, Flemish and Wallonia. Granted aids depend and vary according to the company, the sector and the chosen region. To find out about these aids, the Service of Foreign Investors of the Ministry of Economics should be contacted.
Investment incentives are also described by the OFI (Office for foreign investors) in Wallonia and the FFIO in Flanders.
Organizations Which Finance: Belgium Forbes Companies and National Bank of Belgium.

Investment Opportunities

The Key Sectors of the National Economy: - Food: Food industry comprise a major sector of the economy. The world's largest food groups are active in Belgium (Danone, InBev, Coca-Cola, Unilever Belgium, Kraft Foods Belgium, Nestlé, Materne, Ferrero, etc.). More about foodstuffs on the website Invest Belgium.

- Biotechnology: some 140 companies are active in biotechnology in Belgium. Universities and research centres have forged strong links with economic players to develop this forward-looking sector. Belgian companies accounted for 16% of Europe's turnover in biotech and around 10% of R&D spending. More about biotechnology on the website Invest Belgium.

- European headquarters: Brussels offers a strategic location, an attractive real estate market and the presence of key European decision-making bodies, making it the ideal headquarters for major corporations. Hundreds of multinationals – mainly American and Japanese – have their European headquarters in Belgium. More about European Headquarters on the website Invest Belgium.

- Transport and logistics: Belgium is the perfect location for a logistical base, headquarters or distribution centre in mainland Europe. The infrastructure, skills and IT facilities provide an ideal environment and beachhead for conquering the European market. More about transport and logistics on the website Invest Belgium.

- Automotive: Over the past 20 years Belgium has turned out an average of 1,000,000 vehicles a year, most of them destined for export. Belgium is a key player in vehicle assembly. With plants like Opel Antwerp, Ford Genk, Audi Forest/Brussels, Volvo Europa, Van Hool (busses) and Truco, we truly have a strong presence in the production market. More about automotive on the website Invest Belgium.

- Aerospace: Belgian industry plays a key role in the aerospace sector. Many aircraft bear the stamp of Belgian know-how: Airbuses, Boeings, the F-16, the Rafale, the Falcon 7X, the Ariane 4 and 5 space programmes, SPOT earth observation satellites to name but a few. In its economic development plan, the Walloon Region specifically promotes competitiveness in the aerospace industry. More about aerospace on the website Invest Belgium.

- Pharmaceuticals.
High Potential Sectors: There is a significant growth in the service sector. The country switched from heavy production to light manufacturing and began producing finished products instead of steel, textiles, and raw materials. Belgium imports basic or intermediary goods, adds value to them through advanced manufacturing and then exports the finished products. With the exception of its remaining coal resources, Belgium has no significant natural resources.
Privatization Programs: The government has also engaged in initiatives to privatize many companies that were formally owned by the state. Ongoing efforts are underway to privatize 2 of the largest remaining companies: Sabena (the national airline) and Belgacom (the main communications company). Since 1993, successive governments have privatized some 280 billion Belgian francs worth of business.
Tenders, Projects and Public Procurement: Ministry of finances, Public Procurements (in French)
EBP, Tenders and Projects in Belgium
Globaltenders, Tenders & Projects in Belgium
Tenders Info, Tenders in Belgium
Ted - Tenders Electronic daily, Business opportunities in EU 27

Sectors Where Investment Opportunities Are Fewer

Sectors in Decline: Construction, steel.

Finding Assistance For Further Information

Investment Aid Agency: Invest in Belgium.
Other Useful Resources: OECD
Doing Business Guides: Invest in Belgium
Belgium Commercial Guide 2010 - Buy USA

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