invest in belgium may embassy of belgium, washington, dc may, 2011

Invest in BelgiumInvest in Belgium

Embassy of Belgium, Washington, DCwww.diplobel.us

MayMay, 2011

www.invest.belgium.be

Invest in Belgium

10 (good) reasons to invest 10 (good) reasons to invest in Belgiumin Belgium

1. Economic heart, at the center of a large and prosperous EU customer base

2. Access to European centers of decision making

3. Trading tradition of trade: more than 85% of Belgian GDP exported

4. One of the most popular destinations for foreign investment

5. Access to a highly qualified and productive labor force

6. Center of knowledge7. Modern and efficient business infrastructure8. Low real estate costs and low costs of living9. Ease of starting up10. Attractive tax regime

Invest in Belgium

Reason #1Reason #1Economic Heart of EuropeEconomic Heart of Europe

Invest in BelgiumSpainSpain

FranceFrance

ItalyItaly

GermanyGermany

DenmarkDenmark

UnitedUnited KingdomKingdom

IrelandIrelandThe NetherlandsThe Netherlands

BrusselsBrussels

LondonLondon

BelgiumBelgium

SwitzerlandSwitzerland

DublinDublin

BarcelonaBarcelonaRomeRome

ParisParis

FrankfurtFrankfurt

MilanMilan

BernBern

LuxembourgLuxembourg

AmsterdamAmsterdam

The economic power-The economic power-base of Europebase of Europe

Invest in Belgium


Belgium is at the heart of an area with 60% of Europe’s purchasing power, 30% of EU consumers.

Outside the Northeast US corridor, Belgium sits at the heart of the world’s 2nd largest concentration of wealth.

140 million consumers are located within a 300 mile radius of Brussels.

The international orientation of its economy and its diverse population on the border of Latin and Germanic influence in Europe make Belgium an ideal test market for U.S. companies

Invest in Belgium


Distances from Brussels:

Luxembourg 134 milesParis 184 milesAmsterdam 213 milesLondon 219 milesFrankfurt 245 miles

Travel time by High Speed Train (HST) from Brussels:

London 2h40Paris 1h25Amsterdam 2h40Cologne 2h30Geneva 5h15

Direct flights to Brussels from New York, Newark, Washington DC, Atlanta, Chicago, Boston, and Philadelphia

Invest in Belgium

Reason #2Reason #2Decision-Making CenterDecision-Making Center

Belgium is home to EU, NATO, and 1400 governmental & non-governmental international organizations

Brussels is: World n°2 location for number of diplomats

(3800, behind New York ) World n°2 for number of foreign journalists

(behind Washington, DC) and home of 2400 lobbyists

World n°2 international conference center for number of events per year

Invest in Belgium

Reason #3 Reason #3 Foreign Trade LeaderForeign Trade Leader

Exports = €265 billion (2009), making Belgium the 8th exporter of goods worldwide (WTO International Trade Statistics 2009)

BE= 13th exporter of services worldwide

Destination of 77% of Belgian exports = the EU (84% of GDP exported)

U.S. = Belgium’s 5th trading partner, 5th export market for Belgium

Belgium = the U.S.’s 18th trading partner

U.S. exports to Belgium = $ 25.5 billion (2010), i.e. almost 30% of U.S. exports to China

Belgium = 14th market for export of U.S. goods (Nov. 2010)

Bilateral U.S.-Belgian trade = $ 41billion (2010), with a large U.S. trade surplus (US Census Bureau)

Antwerp is the leading port in the world for transport of goods to and from the United States.

Almost 3,000 Belgian companies currently export to the U.S. market.

Invest in Belgium

Reason #3Reason #3Foreign Trade LeaderForeign Trade Leader

Belgian Suppliers (01-09/2010)

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NL

Germ

any

Franc

eU.S

.IR

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China

Italy

Japa

n

Russia

%

Invest in Belgium

Major Trading Partner for the Major Trading Partner for the U.S.U.S.

Belgian Export Destinations (01-09/2010)

02468

101214161820

Germ

any

Franc

e NLUK

U.S.

Italy

Spain

Indi

a

China

Lux

%

Invest in Belgium


Belgian Main Imports From the U.S. (%, 2009)

37.5

16.4

12.3

9.1

5.6chemical products

machines &equipment

optical instruments

plastics

minerals

Invest in Belgium


Belgian Main Exports to the U.S. (%, 2009)

63.3

9.7

5.2

5.25

chemical products

machines & equipment

transport equipment

mineral products

precious stones & metals

Invest in Belgium


In states like Texas, Pennsylvania, Georgia and South Carolina, Belgium is among the top 10 export destinations.

Belgium is among the top 5 European export markets in more than half the U.S. states, including California, Texas, New York and Illinois.

Invest in Belgium

Reason #4Reason #4Leading FDI DestinationLeading FDI Destination

Global FDI Inflows, top 10 host economies 2009World Investment Report, 2010

020406080

100120140

U.S.

China

Franc

e

Hkong UK

Russia D

Saudi

Ara

bia

Indi

aBE

$ b

illio

n

Invest in Belgium

Reason #4Reason #4Prime FDI DestinationPrime FDI Destination

Top 10 Economies, FDI Stock (2009)World Investment Report, 2010

0

500

1000

1500

2000

2500

3000

3500

U.S. F

UK

Hkong BE D NL

CANChin

aCH

$ b

illio

n

•Belgium’s regions rank among top 10 regions for FDI Strategy (European Cities and Regions of the Future 2010/2011, FDI Magazine).

•11 of the top 15 global chemical companies have production plants in Belgium

Invest in Belgium

Favorite U.S. Investment Favorite U.S. Investment PartnerPartner

U.S. investment in Belgium (total value)

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

$ b

illio

n

Belgian Investment in the U.S. (total value)

0

510

15

2025

30

3540

45

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

$ b

illio

n

Invest in Belgium


U.S. Investment in Belgium by Sector (as of 2009)

45%

18%

8%

4%

2%

23%finance & insurance

chemical manuf.

wholesale trade

holdings

services

other

Invest in Belgium

The U.S. is the largest foreign investor in Belgium

The value of foreign investment between the U.S. and Belgium exceeds $100 billion.

The value of U.S. investment in Belgium at the end of 2009 equaled U.S. investments in China and India combined.

Over the last decade, Belgium has been the 11th overseas market for U.S. foreign investment.

Belgium is among the top 10 foreign investors in Georgia, Ohio, Pennsylvania and South Carolina. In Georgia alone, 76 Belgian companies are present, employing about 5800 people. In Ohio, Belgian-owned companies employ over 6600 people. In Pennsylvania, there are 111 Belgian-owned companies.


Invest in Belgium


949300

653900

516000

396900 391200

184100140900 115200

67000 57500

0100000200000300000400000500000600000700000800000900000

1000000

Number of Jobs

UK Germany France Switzerland Netherlands Sweden Belgium Italy Ireland Spain

Top 10 European Employment by FDI (2008)Source: Invest in America

Invest in Belgium

Reason #5Reason #5High Quality Labor ForceHigh Quality Labor Force

Productivity levelsThe Conference Board (2009)

020406080

100120140

GD

P/P

erso

n e

mp

loye

d (U

SD

)

Invest in Belgium

Reason #6Reason #6Global Center of KnowledgeGlobal Center of Knowledge

In an area the size of Maryland, Belgium offers 16 university centers and an extensive community of world-renowned scientific institutes such as IMEC (micro-electronics), the Institute for Tropical Medicine, or the Institute for Cellular Pathology (ICP) at the University of Louvain-la-Neuve

R&D activities employ about 80,000 people in the country, including some 50,000 researchers. 60% of R&D personnel works in the private sector, 33% in the education sector, 7% in the public sector

Close to all 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 its scientific infrastructure, its educational system and the quality of education at university level

Belgium is the best country in the OECD for innovation performance and biotech industry development (OECD Science & Technology Outlook, 2008)

5th place in the qualitative assessment of world scientific research institutes (WEF Global Competitiveness Report, 2008-2009)

Belgium, with its 200 biotech and pharmaceutical companies, is a biopharma concentration zone.

Invest in Belgium

Reason #6Reason #6Global Center of KnowledgeGlobal Center of Knowledge

Case Study: Pharmaceutical Industry Belgium employs more than 28,000 in the pharmaceutical sector,

in over 150 pharmaceutical companies and 31 R&D centers

Pharma represents 11% of Belgian exports Belgium is ranked 2nd in pharma exports worldwide (OECD, 2006) More than 5,000 researchers work in clinical testing (100%

increase since 1995) Private pharmaceutical R&D investment has tripled since 1995,

now representing 40% of all private R&D in Belgium Belgium has the largest number of clinical trials per capita in

Europe, between 2006 and mid-2009, almost 2000 clinical studies were approved

Belgium produces more than 5% of all new medicines worldwide Innovative drug companies employ about 3400 full time

researchers . BE has the highest number of pharma drugs in development per

capita in Europe Over 40% of private investment in R&D is targeted at the pharma

sector

Invest in Belgium

Reason #7Reason #7Top Business InfrastructureTop Business Infrastructure

1 Belgium

2 Netherlands

3 Hungary

4 Czech Republic

5 Poland

6 France

7 Austria

8 Germany

9 Slovenia

10 Italy

Ranking of Major European Distribution LocationsRanking of Major European Distribution Locations

Cushman & Wakefield, 2008Cushman & Wakefield, 2008

Invest in Belgium

Reason #7Reason #7Top Business InfrastructureTop Business Infrastructure

Air Brussels harbors the 5th cargo airport in Europe (Brucargo), ten miles from

the city Europe’s largest highway interchange is located 2 minutes from Brussels

Airport Every 15 minutes, a passenger rail service links Brussels Airport to the city

center and the HST/TGV European high speed train network. Liège, Charleroi, Ostend, and Antwerp provide fast-growing regional airports

Rail The Belgian railway freight system B-Cargo offers daily links to Europe’s major

economic zones, with no border stops and speeds of up to 60 mph

Sea and Waterways

4 major seaports (Antwerp, Ghent, Zeebrugge, Ostend), and 2 major riverports (Liège and Brussels) provide for the biggest port concentration in Europe

Antwerp is the 5th port in the world (and 2nd in Europe), hosting the 2nd largest chemical cluster in the world

The port of Antwerp participates in the U.S. Container Security Initiative (CSI) Liège is the 2nd riverport in Europe and more than 900 miles of canals

provide the world’s densest inland waterway network, connecting all major Belgian cities, France, the Netherlands, the Rhine-Main-Danube area and Central and Eastern Europe

Invest in Belgium

Reason #8Reason #8Low Cost of Living and RealtyLow Cost of Living and Realty

Office (Prime Rent Location)Cushman & Wakefield - Office Space Around the World 2009

0200400600800

1000120014001600

Bruss

els

Amste

rdam

Frank

furt

Dublin

Zurich

Mila

nPar

is

Lond

on

€/m

2/y

ea

r

Invest in Belgium


0 5000 10000 15000 20000 25000

London (West End)Geneva

ParisZurich

FrankfurtMilan

MunichLuxembourgAmsterdam

HelsinkiOslo

RomeDusseldorfStockholm

HamburgDublinBerlin

MoscowCopenhagen

BrusselsMadrid

EdinburghManchester

Barcelona

Total occupancy costs per workstation pa (USD, 2009)DTZ Research, Global Occupancy Costs-Offices, Jan. 2010

Invest in Belgium


Index Overall Cost of Living (NY=100)Source: IMD World Competitiveness Yearbook, 2008

0

20

40

60

80

100

120

Denm

ark

Switz UK ITA NY

AUSW NL

FR SP BEGER

HUN

Invest in Belgium

Low Effective Tax Rate Widely available Tax Ruling Notional Interest Deduction “Tax Shelter” System Dividend Withholding Tax

Exemptions Holding regime Reduced Wage Costs R&D Tax Breaks Double Taxation Treaties

Reason #9Reason #9Highly Attractive Tax RegimeHighly Attractive Tax Regime

Invest in Belgium


0

5

10

15

20

25

30

35

40

45

NCTR

ECTR

(n.b.) - Effective average corporate tax rate 2009 (based on asset and source of finance)

- Especially in Belgium, the EATR is considerably below statutory tax rates (-9.3)

Source : Report 2009, made by ZEW (Centre for European Economic Research) for the EU Commission

(Project Taxud/2008/CC/099), Mannheim and Oxford, October 2009

Invest in Belgium

Ruling: 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 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, with pre-filing meetings available on a ‘no name’ basis


Invest in Belgium

Notional Interest Deduction(NID)

The notional interest deduction is a 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 company’s 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 (assessment year 2011= income 2010), that rate is 3.8%% (4.3% for SME’s). The law sets forth 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


Invest in Belgium

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 Belgian coordination-center regime, which was phased-out between 2006 and 2010

Belgium 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


Invest in Belgium

EXAMPLE NID: Assets Liabilities

GroupFinancing10,000

Share capital10,000

P & L accountBefore notional

interest deductionWith notional interest

deduction

Profit before tax 400 400

Notional interest deduction (3.8 %)

/ - 380

Taxable 400 20

Corporate tax (33.99 %)

135.96 6.79

Effective tax rate 33.99 % 1.70 %


Invest in Belgium

EXAMPLE 2 NID: Assets Liabilities

BusinessAssets10,000

Share capital10,000

Net result(return on equity)

Effective tax rate

≤ 3.8% 0 %

4 % 1.70 %

5 % 8.15 %

8 % 17.84 %


Invest in Belgium


“Tax Shelter” The Belgian ‘Tax shelter’ is a tax

incentive designed to encourage the production of audiovisual works and films

The system allows companies wishing to invest in the production of an audiovisual work to benefit from a tax exemption on retained profits worth up to 150% of the capital actually invested

Invest in Belgium


Dividend Withholding Tax Exemption

This exemption extends the European Parent–Subsidiary Directive’s regime between the EU Member States and Switzerland to all countries that have a double taxation treaty with Belgium, such as Hong Kong and the U.S.

Using Belgium as their holding location for investments in Europe allows corporate investors from treaty countries to repatriate European profits without dividend withholding tax and without a limitation on profits

Invest in Belgium

Attractive Tax Regime Attractive Tax Regime

Holding Regime

almost all net capital gains on shares are 100% exempt from tax

95% of qualifying dividend income is deductible from taxable base.

Invest in Belgium

Reduced Salary Costs The Belgian tax system includes lower salary costs for

foreign executives and researchers

Foreign executives or researchers 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

There is a 75% exemption from payroll tax for researchers


Invest in Belgium

R&D Tax Incentives Partial exemption from payment of payroll

tax for R&D personnel employed in:- universities, institutions of higher

education- scientific institutes- private companies

Tax credit for investments in new patents or investments related to R&D for environmentally friendly or energy-reducing new products and future technologies


Invest in Belgium

R&D Tax Incentives:New Law on Patent Income

A ‘patent income deduction’ is effective since 2008, allowing 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 tax deduction applies not only to patents owned - and developed, by the company or one of its branches, but also to patents or licenses acquired from a third party


Invest in Belgium


R&D Tax Incentives:New Law on Patent Income

(continued) For patents or licenses acquired from a third party, 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 measure with the other already existing tax incentives

The system significantly improves the prospects for patent development and holding companies in Belgium, licensing patents to U.S. affiliates

Invest in Belgium

Extensive Network of Double Taxation Treaties

Belgium has a very extensive network of double taxation treaties, including the Double Taxation Convention between the United States and Belgium of 2007, that went into effect on December 28, 2007

The double taxation 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 taxation treaty with Hong Kong in 2004 (0% dividend withholding tax under certain conditions)


Invest in Belgium

The US-Belgian DTC contains very interesting features for U.S. companies with business plans in Europe:

0% withholding tax on dividend payments from a Belgian subsidiary to its U.S. parent, provided the U.S. parent owns 10% or more of the Belgian company. This 10% ownership threshold is significantly lower than the threshold in other treaties recently concluded by the U.S. Combined with other general features of Belgium’s domestic tax system for holding companies, this may attract holding companies for holding the shares of U.S. affiliates

The exemption from withholding tax also applies to pension funds, provided the dividends are not the result of business activities by the fund

0 % withholding tax on interest. Together with the Notional Interest Deduction, this makes direct loans between the U.S. and Belgian affiliated companies more attractive, and increases possibilities for companies in Belgium to finance U.S. affiliates.

New categories of taxpayers such as qualified charities or pension trusts will now be able to claim benefits, and strengthened anti-abuse provisions designed to deny inappropriate use of the treaty will bring them into closer conformity with current U.S. treaty policy

The Convention extends the benefits to companies owned by so-called “equivalent

beneficiaries”, which may provide opportunities for multinational groups that are based in the EU, Switzerland or NAFTA

Other changes in the new Treaty include a more tax friendly treatment of pension plan contributions and an extended information exchange provision

The U.S. and Belgium will also, upon request by either government, exchange information held by a bank or other financial institution

Reason #9Reason #9U.S.-Belgium Tax ConventionU.S.-Belgium Tax Convention

Invest in Belgium

Reason #10Reason #10Tailor made solutionsTailor made solutions

Fewest Procedures for Business Start Ups

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Invest in Belgium


BelgiumA federal state … made of 3 Regions, with

additional regional business incentives

Invest in Belgium


Regional Investment Offices in the U.S.

Flanders Investment & Tradewww.investinflanders.com

Wallonia Trade & Investment Agencywww.investinwallonia.com

333 North Michigan Avenue, Suite 905Chicago, IL. 60601-4186

Tel. (312) [email protected]

Economic & Commercial Office of the Brussels Capital Regionwww.brussels-usa.com

1065 Avenue of the Americas - 22nd floorNew York, NY 10018Tel. (212) 399-8522

[email protected]

620 8th Avenue, 44th Floor New York, NY 10018 –USATel. (212) [email protected]

6100 Wilshire Blvd., Suite 1200Los Angeles, CA. 90048Tel. (323) 857-0842 ext. [email protected]

150 North Wacker Drive, Suite 2100Chicago, IL. 60606Tel. (312) [email protected]

Invest in Belgium

10 (good) reasons to invest in 10 (good) reasons to invest in BelgiumBelgium

1. Economic heart, at the center of a large and prosperous EU customer base

2. Access to European centers of decision making

3. Trading tradition of trade: more than 85% of Belgian GDP exported

4. One of the most popular destinations for foreign investment

5. Access to a highly qualified and productive labor force

6. Center of knowledge7. Modern and efficient business infrastructure8. Low real estate costs and low costs of living9. Ease of starting up10. Attractive tax regime

Invest in Belgium

THANK YOU

www.invest.belgium.be

… … and many, many others !and many, many others !

invest in belgium may embassy of belgium, washington, dc may, 2011

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