Belgium
Executive Summary
The Belgian economy is expected to grow 1.3 percent in 2019, primarily driven by domestic demand and net exports. Private consumption growth was slower than in surrounding countries, mainly caused by higher inflation. Low energy prices and interest rates, and a favorable euro/dollar exchange rate continue to stimulate economic growth and fuel exports, especially given Belgium’s unique position as a logistical hub and gateway to Europe. Since June 2015, the Belgian government has undertaken a series of measures to reduce the tax burden on labor and to increase Belgium’s economic competitiveness and attractiveness to foreign investment. The July 2017 decision to lower the corporate tax rate from 35 to 25 percent is expected to make a further improve the investment climate.
Belgium boasts an open market well connected to the major economies of the world. As a logistical gateway to Europe, host to the EU institutions and a central location closely tied to the major European economies (Germany in particular), Belgium is an attractive market and location for U.S. investors. Foreign and domestic investors are expected to take advantage of improved credit opportunities and increased consumer and business confidence. Finally, Belgium is a highly-developed, long-time economic partner of the United States that benefits from an extremely well-educated workforce, world-renowned research centers, and the infrastructure to support a broad range of economic activities. Brexit, however, creates uncertainties and it is hard to predict what the impact will be on the Belgian economy.
To fully realize Belgium’s employment potential, it will be critical to address the fragmentation of the labor market. Jobs growth accelerated in 2017 and 2018, driven by the cyclical recovery and the positive impact of past reforms. Older workers account for much of the employment increase, whereas progress has been more limited in integrating vulnerable groups—especially immigrants born outside the EU, the young, and the low-skilled. Moreover, large regional disparities in unemployment rates persist, and there is a significant skills mismatch in several key sectors.
Belgium has a dynamic economy and continues to attract significant levels of investment in chemicals, petrochemicals, plastic and composites; environmental technologies; food processing and packaging; health technologies; information and communication; and textiles, apparel and sporting goods, among other sectors.
Table 1: Key Metrics and Rankings
| Measure | Year | Index/Rank | Website Address |
| TI Corruption Perceptions Index | 2018 | 17 of 180 | https://www.transparency.org/country/BEL |
| World Bank’s Doing Business Report | 2018 | 45 of 190 | http://www.doingbusiness.org/en/rankings |
| Global Innovation Index | 2018 | 25 of 126 | https://www.globalinnovationindex.org/analysis-indicator |
| U.S. FDI in partner country ($M USD, stock positions) | 2017 | $54,954 | http://www.bea.gov/international/factsheet/ |
| World Bank GNI per capita | 2017 | USD 41.790 | http://data.worldbank.org/indicator/NY.GNP.PCAP.CD |
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Belgium has traditionally maintained an open economy that is highly dependent on international trade. Since WWII, foreign investment has played a vital role in the Belgian economy, providing technology and employment. It is a key economic policy of the government to make Belgium a more attractive destination to foreign investment. Though the federal government regulates important elements of foreign direct investment such as salaries and labor conditions, it is primarily the responsibility of the regions to attract FDI. Flanders Investment and Trade (FIT), Wallonia Foreign Trade and Investment Agency (AWEX), and Brussels Invest and Export are the three investment promotion agencies who seek to attract FDI to Flanders, Wallonia and the Brussels Capital Region, respectively.
The regional investment promotion agencies have focused their industrial strategy on key sectors including aerospace and defense; agribusiness, automotive and ground transportation; architecture and engineering; chemicals, petrochemicals, plastics and composites; environmental technologies; food processing and packaging; health technologies; information and communication; and services.
Foreign corporations account for about one-third of the top 3,000 corporations in Belgium. According to Graydon, a Belgian company specializing in commercial and marketing information, there are currently more than one million companies registered in Belgium. The federal government and the regions do not have specific policies that prioritize investment retention or maintain an ongoing dialogue with investors.
Limits on Foreign Control and Right to Private Ownership and Establishment
There are currently no limits on foreign ownership or control in Belgium. There are no distinctions between Belgian and foreign companies when establishing or owning a business or setting up a remunerative activity.
Other Investment Policy Reviews
Over the past 3 years, the country has not been the subject of third-party investment policy reviews (IPRs) through a multilateral organization such as the OECD, WTO, or UNCTAD.
Business Facilitation
In order to set up a business in Belgium, one must:
- Deposit at least 20 percent of the initial capital with a Belgian credit institution and obtain a standard certification confirming that the amount is held in a blocked capital account;
- Deposit a financial plan with a notary, sign the deed of incorporation and the by-laws in the presence of a notary, who authenticates the documents and registers the deed of incorporation. The authentication act must be drawn up in either French, Dutch or German (Belgium’s three official languages);
- Register with one of the Registers of legal entities, VAT and social security at a centralized company docket and obtain a company number.
In most cases, the business registration process can be completed within one week.
https://www.business.belgium.be/en/managing_your_business/setting_up_your_business
Based on the number of employees, the projected annual turnover and the shareholder class, a company will qualify as a small or medium-sized enterprise (SME) according to the meaning of the Promotion of Independent Enterprise Act of February 10, 1998. For a small or medium-sized enterprise, registration will only be possible once a certificate of competence has been obtained. The person in charge of the daily management of the company must prove his or her knowledge of business management, with diplomas and/or practical experience. In the Global Enterprise Register, Belgium currently scores 7 out of 10 for ease of setting up a limited liability company.
Business facilitation agencies provide for equitable treatment of women and underrepresented minorities in the economy.
The three Belgian regions each have their own investment promotion agency, whose services are available to all foreign investors.
Outward Investment
The Belgian governments do not promote outward investment as such. There are also no restrictions to certain countries or sectors, other than those where Belgium applies UN resolutions.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
| Host Country Statistical Source* | USG or International Statistical Source | USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other |
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| Economic Data | Year | Amount | Year | Amount | |
| Host Country Gross Domestic Product (GDP) ($M USD) | 2017 | $485 | 2017 | $492,000 | https://data.worldbank.org/country/belgium |
| Foreign Direct Investment | Host Country Statistical Source* | USG or International Statistical Source | USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other |
||
| U.S. FDI in partner country ($M USD, stock positions) | N/A | N/A | 2017 | $55,000 | BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data |
| Host country’s FDI in the United States ($M USD, stock positions) | N/A | N/A | 2017 | $103,000 | BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data |
| Total inbound stock of FDI as % host GDP | N/A | N/A | 2017 | 122.5% | UNCTAD data available at
https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx |
* Source for Host Country Data:
GDP: https://stat.nbb.be/Index.aspx?ThemeTreeId=41&lang=fr#
National Bank of Belgium offers different statistics, but it does not match the BEA stats. https://stat.nbb.be/Index.aspx?DataSetCode=INVDIR
Table 3: Sources and Destination of FDI
| Direct Investment From/in Counterpart Economy Data | |||||
| From Top Five Sources/To Top Five Destinations (US Dollars, Millions) | |||||
| Inward Direct Investment | Outward Direct Investment | ||||
| Total Inward | 582,571 | 100% | Total Outward | 689,726 | 100% |
| Netherlands | 166,767 | 28.6% | Netherlands | 247,827 | 35.9% |
| Luxembourg | 154,808 | 26.5% | Luxembourg | 184,845 | 26.8% |
| France | 148,682 | 25.5% | UK | 131,719 | 19.1% |
| Switzerland | 55,845 | 9.5% | France | 45,175 | 6.5% |
| Japan | 16,404 | 2.8% | Germany | 13,245 | 1.9% |
| “0” reflects amounts rounded to +/- USD 500,000. | |||||
Table 4: Sources of Portfolio Investment
New link: http://data.imf.org/CPIS
| Portfolio Investment Assets | ||||||||
| Top Five Partners (Millions, US Dollars) | ||||||||
| Total | Equity Securities | Total Debt Securities | ||||||
| All Countries | 830,102 | 100% | All Countries | 426,482 | 100% | All Countries | 403,620 | 100% |
| Luxembourg | 248,149 | 29.9% | Luxembourg | 209,411 | 49.1% | France | 74,216 | 18.4% |
| France | 141,086 | 17% | France | 66,870 | 15.7% | Netherlands | 48,685 | 12.1% |
| Netherlands | 67,411 | 8.1% | United States | 30,333 | 7.1% | Luxembourg | 38,738 | 9.6% |
| Germany | 56,359 | 6.7% | Germany | 29,758 | 7% | Spain | 27,172 | 6.7% |
| U.S | 54,123 | 6.5% | Ireland | 23,993 | 5.6% | Germany | 26,600 | 6.6% |