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Belgium : gateway to Europe An overview of the Belgian economy By Philippe Donnay, Economic advisor Federation of Enterprises in Belgium Belgium : Gateway to Europe 1. Belgium, at the heart of Europe 2. “State of the art”-infrastructure 3. A multilingual, well-educated and motivated workforce 4. An open and attractive economy Belgium: at the heart of Europe United Kingdom Netherlands Germany Luxembourg France Belgium: at the heart of Europe Brussels • capital of Belgium • capital of the EU • headquarters of NATO • 1,700 European headquarters of MNOs • world’s fourth international meetings and conferences center • second largest concentration of journalists in the world Belgium: at the heart of Europe Belgium is at the heart of : three cultures, the Europe of the 15, a 370 million Consumers Market. Do you know that 60% of the European market is located at less then one driving day ? Belgium : Gateway to Europe 1. Belgium, at the heart of Europe 2. “State of the art”-infrastructure 3. A multilingual, well-educated and motivated workforce 4. An open and attractive economy A Highly Developped Road Network 4,86 Belgium 4.0 The Netherlands 3,07 Japan 1,77 Germany France 1,62 United Kingdom 1,62 Ireland 1,32 Spain 1,31 0,65 USA 0,52 Sweden 0 1 2 Source: Competitiveness Yearbook 2003 3 4 5 Road Infrastructure Density Km/sq.Km A Dense Railway network USA= base 100 474 Belgium 430 Germany The Netherlands 288 United Kingdom 285 France 227 Japan 227 Ireland 117 Spain 117 Sweden 104 USA 100 0 100 200 300 400 500 Railway network Density /sq.km Source: Competitiveness Yearbook 2003 Air Infrastructure Numerous intra-European and inter-continental air connections – Zaventem worldwide passenger and cargo services • Brussels Airport – Bruges Airport mainly cargo services • Ostend • Deurne Airport European passenger services (e.g. London, Berlin, Dublin, Geneva) • Liege Airport top ten European air freight hub (380 000 T handled in 2003) • Charleroi Airport passenger terminal; hub a.o. to Ryan Air Water Infrastructure Water Infrastructure • Antwerp 2nd largest port in Europe, 4th largest worldwide (140 mln. tonnes of cargo/year) Largest petrochemical complex in Europe, 2nd largest worldwide • Zeebruges Leading port in the car sector (1 577 618 cars) • Ghent 23,9 mln. tonnes seaborne cargo traffic (wide variety of cargo) • Ostend Handling goods and passenger services • Liège Second largest European River Port (27 mio T loaded/unloaded 2002) • Brussels Maritime harbour with ships up to 4,500 Tons • Strepy-Thieu Most advanced boat lift - 1.1350 t Belgium : Gateway to Europe 1. Belgium, at the heart of Europe 2. “State of the art”-infrastructure 3. A multilingual, well-educated and motivated workforce 4. An open and attractive economy Multilingual Workforce 90 100 80 80 60 40 90 73 55 38 44 12 10 B el gi um D Th en e m N ar et k he rl an ds Fr an ce Ir el an d 14 Source: OCDE 2000 Germanic 25 28 20 0 Anglosaxon 70 16 Romanic 5 Quadrilingual Trilingual Bilingual Ability to Recruit New Talents Is it easy to have access to a skilled labor force in your region ? 7,29 7,19 7,08 USA Ireland Germany 7,03 7.00 Japan Belgium 6,83 6,58 France Sweden 6,37 6,16 Spain The Netherlands 5,27 United Kingdom 0 1 2 3 4 5 6 7 8 (Out of 10) Source: Competitiveness Yearbook 2003 Absenteeism Absenteeism rate in % of hours normally worked 4 The Netherlands 2,6 United Kingdom 2,1 France 1,9 Portugal Spain 1,8 1,6 Germany 1,2 Italy 0,9 Belgium 0 Source:Eurostat 1 2 3 4 5 Belgium : Gateway to Europe 1. Belgium, at the heart of Europe 2. “State of the art”-infrastructure 3. A multilingual, well-educated and motivated workforce 4. An open and attractive economy Belgium: hub of Europe Importance of foreign trade 95 Belgium 85 % of GDP 75 65 55 45 35 EU 25 1995 1996 Exports 1997 1998 1999 2000 Imports 2001 Top five export nations in 2003 (bn EUR) Exports of Belgium 42,45 1. Germany 37,16 2. France 26,61 3. Netherlands 21,95 4. UK 17,78 5. U.S.A. Top five export products in 2003 (in %) 22,18 1. Chemicals and pharmaceuticals 14,41 2. Transport equipment 13,54 3. Machinery and equipment 4. Plastics 5. Diamonds and precious metals 13,4 10,7 Belgium : A wealthy country 110 105 100 Belgium France Germany Italy EU-15 EU-25 95 90 85 80 75 70 GDP per capita (EU-15 = 100) Many Fiscal Opportunities For Foreign Investors … ON ALL LEVELS OF YOUR INVESTMENT France Germany United Kingdom Netherlands Ireland Luxemburg Belgium Denmark Effective tax rates 2001 Sweden Italy 0 5 10 15 20 25 30 35 Source : The Effective Tax Burden of Companies in the Member states of EU Source : Baker & MçKenzie 2000 The Corporation Real estate and equipment depreciation system Special tax agreements: fiscal rulings Low effective corporate tax rate: many tax rebates applicable and as from 1-1-2006 : notional interest deduction The Shareholder no taxation on capital gain The Management attractive fiscal system for expatriates Notional interest deduction • A new innovative tax feature in international tax low • What is it ? – A notional interest calculated and deducted yearly from the taxable basis – Used to off-set operational or financial income (lower effective tax rate) – Automatically applicable to all Belgian companies and branches of foreign companies Notional interest deduction • Reduce the tax discrimination between debt-financing and equity-financing • Lower the effective corporate tax rate for all companies (higher after-tax return on investment) • Strenghthen the financial position of companies and branches by increasing their equity Notional interest deduction • How does it work ? Annual Tax Deduction = Equity x Rate Made in Belgium Producer of the largest number of cars per capita in the EU. The world's second largest petrochemical centre. One third of all dredging work in the world done by Belgian companies. The world's leading exporter of synthetic carpets. By far the world's largest diamond centre. Belgian fashion is recognized on the international scene. Renowned all over the world for chocolates, biscuits, beer and endives.