Belgium lies at the very heart of an area where 60% of Europe’s 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.
Spain France Italy Germany Denmark United Kingdom Ireland The Netherlands Brussels London Belgium Switzerland Dublin Barcelona Rome Paris Frankfurt Milan Bern Luxembourg Amsterdam The economic power base of Europe
A Tradition of Foreign Trade Belgium’s top trading partners 1.5 10. Sweden 0.39 31. Australia 1.6 9. India 1.9 8. Luxembourg 3.7 7. Spain 5.2 6. Italy 6.1 5. U.S.A. 8.0 4. UK 12.0 3. The Netherlands 17.0 2. France 19.9 1. Germany % of total exports Belgian Export Destinations (2006) 2.1 10. Sweden 0.43 29. Australia 2.4 9. Japan 3.4 8. Italy 3.6 7. China 5.3 6. U.S.A. 5.8 5. Ireland 6.6 4. UK 11.3 3. France 17.5 2. Germany 18.4 1. The Netherlands % of total imports Belgian Suppliers (2006)
Belgium and Australia have a diversified trade relationship
Agency for Foreign Trade-data 2007 3.95 Metals 6.04 Plastics 12.64 Machinery 19.53 Transport equipment 36.52 Chemical and pharmaceutical products Export to Australia (%) Product 2.21 Machinery 2.48 Pearls 4.71 Products of the food industry 28.54 Metals 56.35 Mineral products Imports from Australia (%) Product
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.
R&D activities employ about 80,000 people, including some 50,000 researchers. 60% of R&D 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 R&D grants.
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
World Competitiveness Yearbook, 2005/ Global Competitiveness Yearbook 2006-2007
5 Quality of port infrastructure 9 Low electricity costs for industrial clients 8 Broadband subscribers per 1000 5 Rail density 2 Low broadband costs ($ US per 100 kbit/second per month 1 Road density Ranking
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 world’s 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.
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.
Source: Jones Lang Lasalle, 2005
1775 Copenhagen 888 London 700 Paris 511 Dublin 500 Milan 400 Luxembourg 384 Frankfurt 320 Amsterdam 301 Manchester 291 Barcelona 290 Brussels 240 Warsaw 228 Prague 222 Budapest Office rent costs (€/sq.m./year) 121 Dublin 78 Luxembourg 47 Antwerp 500 Copenhagen 130 London 102 Barcelona 85 Amsterdam 70 Budapest 70 Frankfurt 66 Warsaw 61 Prague 60 Brussels 57 Milan 55 Paris Warehousing rent costs (€/sq.m./year)
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 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, 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.
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.
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.
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.
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.
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.