As US companies discuss their business in Belgium, stability is the word on everyone’s lips.
On March 14, AmCham Belgium hosted a panel discussion on the importance of US companies in Belgium, which also neatly highlighted the importance of Belgium for US companies. However, as the economy continues to stagnate and the government struggles to find reforms which appeal to both the population and businesses in Belgium, the panel emphasized the need for political and economic stability.
All three panelists agreed on one factor which hinders growth in Belgium: the lack of stability. Peter Menu, Director of Policy, External Affairs and Communication at Pfizer, argued the case well. Companies like to plan ahead, he said, while uncertainty inhibits long-term investments.
The recent flare-up over the notional interest deduction is only the latest example of the shifting sands that businesses must contend with in Belgium. Since it was introduced in 2006, the NID has been adjusted numerous times. The incessant debates cause businesses to lose confidence in Belgium as a stable investment environment.
The panel also called for simplification of the tax system. Jean Eylenbosch, Vice President of European Government Relations at Coca-Cola Enterprises, described Belgium’s tax system as a “sponge”, absorbing every kind of tax imaginable and often copying those of its neighbors. This has to stop, and Belgium needs to implement a more simple and predictable tax system. Fortunately, the new Minister of Finance Koen Geens has placed this concern at the top of his agenda.
Finally, the panel stressed the country’s need for regional coordination. While citing Belgium’s multicultural and multilingual workforce as a major asset for employers, they also discussed the added complexity this brings. Belgium’s political landscape is overwhelming for current and potential investors. Divided in culture and language as well as political affiliations, the government is often too preoccupied with internal conflict to be able to implement much-needed reform.
AmCham Belgium’s Position
Our new report illustrates the importance of US companies to Belgium, but Belgium’s position is under threat. Measures which are continuously changed and transformed disrupt long-term strategies for all businesses in Belgium and act as a deterrent for potential investors. In order to create stability, the government needs to commit to long-term reforms which will simplify the tax system and provide a more business-minded regulatory environment. To read about AmCham Belgium’s recommendations in more detail, please refer to our 2012 Priorities for a Prosperous Belgium. We will deliver new recommendations to the government on May 29.