2/3 of respondents say the presence of a regional headquarters is key for future investments
As international companies re-evaluate their corporate footprints, Belgium has the opportunity to anchor existing and attract new regional headquarters (RHQs). Not only are RHQs an important source of direct and indirect employment, but the location of these decision centers also has a significant influence on subsequent investment decisions, according to a new report from the American Chamber of Commerce in Belgium (AmCham Belgium).
“International political and economic developments are creating a unique window of opportunity,” said Marcel Claes, Chief Executive of AmCham Belgium. “Now is the time to put Belgium on the map for headquarters.”
Belgium as a Hub for Regional Headquarters, based on a survey of international companies in Belgium, reveals why RHQs are important for the local economy. Nearly two-thirds (64%) of respondents consider the location of their RHQ to be either important or very important for further investment decisions – that is, when Belgium attracts corporate decision centers, it increases its chances of receiving subsequent investment from these companies. After establishing their RHQ in Belgium, the international companies surveyed have invested in other high value-added sectors such as manufacturing, sales/services, R&D or logistics.
International companies are attracted to Belgium by its ideal location, in proximity to key markets and international institutions, as well as the talented, highly educated and multilingual workforce.
URGENT REFORM NEEDED
However, in order to become a truly competitive location for RHQs, the Belgian Government must address the country’s manifest weaknesses. “Corporate taxation is an immediate and persistent obstacle to investment in Belgium,” said Marcel Claes. Tax regimes are a determining factor in the location of regional headquarters, cited by 75% of respondents. Of the companies which expect to downsize their Belgian-based RHQ in the next five years, 37.5% attribute this decision to unfavorable tax regimes.
“The single greatest threat to Belgium’s economic growth and prosperity is the high corporate income tax rate,” continued Claes. AmCham Belgium recommends reducing the corporate income tax rate from 33.99% today to 20% or even less by 2020, as part of the promised and essential corporate tax reform.
Other concerns include high labor costs, especially for skilled workers, and the growing mobility challenges. These problems are not new, but they require urgent action, if Belgium is to re-establish itself as a preferred hub for regional headquarters.