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Flanders drives Belgium’s foreign investment attractiveness

The latest EY European Investment Monitor confirms that 2017 was a record year for foreign direct investment in Belgium. Last year, the country attracted 215 investment projects from foreign companies, creating a total of 5,838 additional jobs. According to the EY survey, Flanders – Belgium’s northern region – was the main driver for Belgium’s attractiveness as an investment location.

A record-breaking year

Belgium’s record year for foreign investment is the result of a 7.5% increase in the number of new projects compared to 2016. This performance places Belgium in 8th position in Europe. In addition, the number of jobs created by foreign companies in Belgium grew by 10% in 2017 compared to the year before.

Furthermore, the EY European Investment Monitor confirms that 30% of foreign company leaders had a more positive attitude towards the country’s investment climate in 2017 than in 2016.

Flanders in pole position

In terms of perceived attractiveness, the EY study also indicates major differences between Belgium’s three autonomous regions.

No less than 51% of the surveyed foreign company leaders see Flanders as Belgium’s most attractive region, followed by Brussels-Capital (29%) and Wallonia (10%).

Consequently, 63% of all foreign investments in Belgium were actually channeled into Flanders. Last year, the region attracted 134 new projects, while Wallonia and Brussels only attracted 42 and 37 respectively.

Stability, support and highly qualified workforce

According to the EY European Investment Monitor, Flanders is mainly perceived as a region with a stable social climate that offers access to highly qualified personnel and numerous subsidies and other government support measures. Access to the region’s transport network of roads, railways, waterways and airports is also mentioned as one of Flanders’ main assets for foreign investors.

Lowering tax pressure

In addition to the availability of a highly educated workforce, foreign companies also state the importance of infrastructure, labor cost reductions as well as the presence of a flexible labor market and a stable political landscape as key factors in making the decision to invest in Belgium and specifically in Flanders.

To maintain its competitive position, Belgium is currently working on lowering tax pressure. In 2018, the corporate tax rate was already reduced from 33% to 29% for large enterprises, and it will drop further to 25% in 2020. For SMEs, a separate system is being implemented: starting from 2020, the tax rate on taxable income lower than EUR 100,000 will be at 20% for SMEs in Belgium.

5 sectors on the rise

Finally, the EY study identifies 5 sectors that are the main drivers for Belgium’s and Flanders’ foreign investment attractiveness:

Together, these 5 sectors represent 50% of all foreign investment projects in the country. The services industry in particular is experiencing growth, with a 50% increase in the number of foreign investments in 2017 compared to 2016.

Fit for the future

When looking ahead, 81% of the surveyed participants confirm their trust in Belgium’s and Flanders’ potential to handle future challenges in terms of R&D and innovation. Their trust in the country’s digital capacity is particularly on the rise: 35% of the companies surveyed in the EY study are forecasting that the digital industry will be key to Belgium’s growth in the coming years, followed by pharmaceuticals and biotech (30%), logistics and distribution (24%), and business-to-business (15%).

About Belgium and Flanders

With Dutch as its official language, Flanders (Dutch: Vlaanderen) is the northern region of Belgium. The capital of both Belgium and Flanders is Brussels.

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Reported by
13 June 2018

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