Embassy of Belgium, Washington, DC

	2007
Export (bln. €)	314.3
Export world ranking	10
Import (bln. €)	301.5
Import world ranking	10
GDP (bln. €)	319.8
GDP world ranking	18
GDP growth (%)	2.8
% export to EU	76.6
Inflation (%)	1.8
Unemployment (%)	7.5
Budget decifit/ surplus as % of GDP	-0.2
Public debt (% of GDP)	84.8

Belgium: A Great Place to do Business

1. Strong Economic Performance

Significant Player in the World Economy...

• With an area the size of Maryland and a population similar to Michigan, Belgium has the 18th economy in the world (GDP € 319.8 billion). Belgian GDP per capita was 15th in the world in 2007.

• According to the World Trade Organization (WTO), Belgium is the 10th exporter of goods worldwide, and the 15th exporter of services.

• Main Belgian export products in 2007 were chemicals and pharmaceutical products (23.1%), transport equipment (11.8%), machinery and appliances (12.2%), metals (10.8%), plastics and rubber (8.4%).

• Belgium was the 4th recipient of Foreign Direct Investment flows ($ 72.2 billion) in the world in 2006 (UNCTAD World Investment Report 2007).

• Because of the European orientation of its economy, the Belgian business cycle serves as a leading indicator to extrapolate developments in the European economy.

Centrally Located...

• Politically, as the host of NATO and EU headquarters, and hundreds of other international organizations and international NGO’s, Belgium is right at the heart of the political and economic decision-making centers in Europe.

• About 3.800 diplomats are accredited in Brussels, second only to New York (UN) in absolute numbers. About 1000 journalists and more than 10,000 lobbyists are accredited to the EU institutions alone, seeking access to the EU Commission or Parliament. Some 800 European trade and professional associations, 300 corporations with European public affairs offices, and 85 European think tanks, are all located in or around Brussels.

• Economically, Belgium lies at the heart of the largest concentration of wealth in the world outside the northeast corridor of the United States. Within a radius of 300 miles, 140 million EU consumers can be reached (almost 50% of the U.S. population), representing 60% of Europe’s purchasing power.

• More than 75% of Belgian exports go to the EU, and 56 % to the neighboring countries: the UK, Germany, France and the Netherlands.

An Economy Based on A Productive and Highly Skilled Labor Force...

Belgium is consistently ranked among the productive nations (output per worker) in the world:

• The World Competitiveness Yearbook ranks Belgium’s workforce 6th in the world for productivity/hour.
• The Conference Board’s 2006 report ranks Belgium’s workforce 3rd for productivity/hour.

• Belgian productivity levels are also the result of high investment in the quality of its labor force. Because of its location and history, the educational system in Belgium is highly oriented towards the instruction of foreign languages.

Centers 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, 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 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

...A Modern Infrastructure

• It has one of the highest density road & rail networks in the world
• It has the 2nd largest seaport in Europe, Antwerp, which is also the 2nd largest petrochemical center in the world after Houston
• It has the 5th largest cargo airport in Europe, Brussels’ Brucargo.

On the other hand, in the industrial sectors energy and real estate costs remain low compared to those in the neighboring countries:

• In the world ranking of most expensive office locations, Brussels occupies only the 35th spot whereas London, Paris, Frankfurt, Dublin, and Luxembourg are all in the top 10 (2006 Global Office Occupancy Costs Survey, DTZ).

• In the 2006 ranking of 144 cities by Mercer Human Resources Consulting, Brussels occupied the 71st spot for cost of living. London (5th), Geneva (7th), Milan (13th), Paris (15th), Amsterdam (41st) , Luxembourg (56st), and Frankfurt (61st) were all more expensive.

...And Lower Tax Rates

• The nominal corporate tax rate in Belgium was lowered in 2002 to 33.99%, about the EU average.

• the Notional Interest Deduction (NID) of 2005 introduced 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.

• Estimates are that the NID has cut the effective corporate income tax rate on average to around 25%, but this figure could be even lower for highly capitalized corporations.

• The NID 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.

• Reinvested earnings accounted for more than 80 % of the flow of U.S. investment capital to Belgium during the period of 1995-2004, reflecting the high profitability and positive performance of existing Belgian based U.S. subsidiaries.

• Foreign executives assigned temporarily to Belgium within an international group of companies may qualify for a special ‘expat’ taxation regime.

• Belgium has a very extensive network of double taxation treaties, including the new Double Taxation Convention between the United States and Belgium (2007). The new treaty went into effect on December 28, 2007.

• 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.

• 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.

TRADE & INVESTMENT

Belgian Economy at a glance