One third of the international companies surveyed in Belgium are of the opinion that the business climate has improved over the past three years. There are still areas for improvement, starting with labor costs, red tape and mobility.
Among the international (and especially American) companies present in Belgium, 6 out of 10 plan to expand their activities in the next three years. And 8 out of 10 are planning to hire extra staff. This means that the business climate has improved considerably under the current legislature.
"We should not stop there, we strive for a moving goal."
This is the conclusion of the American Chamber of Commerce (AmCham Belgium) from a biennial survey at the consultancy firm AT Kearney. "The message is absolutely very positive"says Marcel Claes, CEO of AmCham Belgium.
One third of the companies surveyed (33%) are of the opinion that, compared to neighboring countries, the investment climate in Belgium has improved over the past three years, almost twice as much as in 2014. Thanks to the corporate tax reform, which will gradually reduce the tax rate from 33 to 25% (by 2020), as well as the tax shift, which has reduced the tax burden and parafiscal pressure on labor.
These boosts from Michel's government are in addition to the historical strengths of Belgium: the quality of the workforce, the central geographical position in Europe and the presence of the European institutions.
Investment decisions are now also motivated by growth prospects: after a period of cost reduction, companies now focus more on consumer demand and innovation.
But we should not stop in this right way, warns Marcel Claes. "We focus on a moving target, the competition also improves and the challenge of Belgium is to keep up with neighboring countries and even surpass them."
Our country is still struggling to attract new investments ("greenfield") and many companies surveyed believe that our neighbors in the Netherlands (45%) and Germany (29%) are more successful with this exercise.
Stability and predictability
Among the points for improvement are labor costs (67%), administrative complexity (48%), congestion on roads (33%), fiscal and regulatory instability (27%) and finally the absence of a long-term political vision (23%) . These last two points are very important when we know that what investors value in the first place is stability and predictability.
Marcel Claes points out that hiring staff, despite the tax shift, remains more expensive than elsewhere. We must also aim for the target of 20% for the taxation of corporate profits. "The Americans have reduced their tax rate from 35 to 21%, the Netherlands is 21% and the UK plans to increase to 17%."
Finally, the prospect of a Brexit and the risk of a trade war with the United States is unlikely to cause panic among foreign companies present here. Nonetheless, half of them expect to be influenced, moderate or even strong. "Compared with the risk of a commercial war, companies are pretty sure that the situation will not degenerate, even if there may be significant differences in perception from sector to sector"commented Denis Van de Voorde, director of AT Kearney Belgium.
Belgium would even be right for Marcel Claes "a playing card" compared with Brexit. The head office leaves London and wants to move to the European continent.