Belgium maintained its spot as the 8th most attractive European country for foreign direct investment and increased its standing to 15th in terms of European job creation, according to EY’s 2018 Barometer on Belgium’s Attractiveness. While companies are still troubled by high corporate taxes and labor costs, mobility issues are on the rise.
2017 was a great year for foreign direct investment (FDI) in Belgium with 215 new projects, a 7.5% year-on-year increase and the best result in a decade. The US remains the largest foreign investor in Belgium, accounting for 40 new projects or 18.6% of the total.
The US was the most important foreign investor in #Belgium last year, according to a new @EY_Belgium study.
✅ 40 of 215 investment projects (18.6%)
✅ 1244 of 5838 jobs created (21.3%)https://t.co/vvqzcJBMGf #EYattract #FDI #Yes2Belgium pic.twitter.com/YPnj8AIoXN
— AmCham Belgium (@AmChamBE) June 11, 2018
With the increase in investment projects came an increase in the amount of jobs created by foreign investors. In 2017, FDI resulted in 5,838 jobs in total, or an average of 27 jobs per project. This has put Belgium at the 15th place for job creation in Europe, climbing the ranks from 18th in 2016. More than half of FDI in Belgium is driven by five key sectors: transport, chemicals, services, pharmaceuticals and digital services. The transport and logistics sector is the biggest job creator, responsible for 1,386 new jobs.
While Brussels is seen as one of the top ten most attractive cities in Europe by foreign investors, the region is struggling to attract new FDI projects. Brussels landed only 37 projects last year, compared to 134 in Flanders and 42 in Wallonia.
Despite the increase in the number of foreign investment projects in Belgium and the amount of jobs that have been created in the past year, several concerns remain. Corporate taxation is still seen as the top priority for Belgium to stay competitive in the global market; however, the issue is less acute for companies than in previous years.
Patrick Rottiers, Country Managing Partner of EY Belgium, stressed the importance of the recent corporate tax reform: “The phased reduction of the corporate tax rate to 25% was an important decision by the Federal Government. However, to stimulate the economy and enhance the competitiveness of companies, this measure must be fully implemented”.
Mobility challenges within Belgium remain a stumbling block for businesses. 61% of companies established in Belgium reported that traffic jams and the saturated road network have a negative impact on their investment decisions.
AmCham Belgium welcomes the actions the Government has already taken to make Belgium more business-friendly, however more is needed to keep up with our neighbors. We look forward to working together with all levels of government to further improve Belgium’s competitiveness and ensure the country can attract even more investments.
What do you think is needed to strengthen the Belgian business and investment climate? AmCham Belgium invites you to provide your input on the key trends and priorities for businesses in Belgium. As the voice of the international business community, it is important for us to understand – and act on –your concerns. Share your thoughts by filling out a short online survey – it takes no more than 10 minutes to complete! The results will be presented in the 2018 edition of our Business Barometer.