Teretulnud – Welcome –

Hartelijk welkom !Belgium - Flanders A short trip to the (un)known part of Belgium

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Knowledge & stereotypes

of

Belgium and Flanders

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The second best beer in world: West-Vleteren Trappist 12..

after being number one for years!

* www.ratebeer.com

Beer

Belgian Beer night ad in Ynangshanxiang , China

Knowledge & sterotypes

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The chocolates are internationally

considered as probably the best in the

world*

”world class”

*check the net

Knowledge & sterotypes

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The same for the french (?) Belgian fries......

reported as the best in the world* ...”world class” even without the ”moules”

*(check the net)

Knowledge & sterotypes

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*(check the net)

Diamond games, Trophy for the 3-times winner:

Golden Racket: 4 kg of gold studded with 1420 diamonds ,

worth ca. one million EUR,

One of the owners now: Venus Williams

Belgian Diamonds – The Antwerp cut ....still

considered world wide as ”the reference”* ....

”world class”

(50 % of world production passes

through Antwerp)

Knowledge & sterotypes

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- ”The Fallen Astronaut” by

- Belgian sculptist Paul Van Hoeydonck

- Posed by the Apollo 15 crew on August 1th , 1971

- location: Hadley Rille

- actual size: 8,5 cm

(Problem: only few paying visitors !!)

This is Belgian too...

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Flanders is the northern federated state of Belgium with Brussels as its capital

1 of 3 Regions of Belgium: Flanders , other two: Wallonia, Brussels

3 official languages, divided into communities: Dutch speaking community, French speaking community, German speaking community.

Flanders has 6.300.000 inhabitants

Population per sq. km: 466

Area 13,522 sq. km (Belgium: 30,528 sq.km)

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Economic relations between Flanders & Latvia 1.

About Flanders Investment & Trade (FIT) FIT

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Who? Where?

You will be surprised to see the wide range of advantages our region has to offer you …

Regions - constitutional competences on research, innovation and economic policy (international trade & foreign direct investments)

Brussels Region: BIEFlemish Region: FIT Walloon Region: AWEX

www.flandersinvestmentandtrade.com

Flanders Investment and Trade

• Flanders Investment & Trade provides expert adviceand guidance to foreign companies.

• Whether your company is considering its first steps into Western

Europe, we can provide valuable assistance.

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Flanders Investment and Trade

•Thanks to our experienced, multilingual staff we are able to assist you with your integration into one of Europe’s most prosperous economies, both efficiently and effectively.

•…free of charge

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Flanders Investment and Trade

• Flanders Investment & Trade provides potential direct investors with information on:• Site selection

• Overview of all benefits, grants and incentives

• Introduction to decision-makers

• Legal aspects of setting up locally

• Identify business opportunities

• Integration into local community life

• More information on our site: www.investinflanders.be

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- 69 offices worldwide (94 with partnering regions)- 199 FTE’s abroad- Flemish & local employees ° Flemish Economic Representatives° Technology Attachés° Invest & Trade Deputies° Local staff

FIT’s foreign network

Why Invest in Flanders? FIT

Top Investors in Flanders (2014)

Ranking Country of origin

#FDI Projects Share (%)(total = 184)

Cum (%)

1 USA 54 29,35 29,35

2 France 21 11,41 40,76

3 Netherlands 18 9,78 50,54

4 Germany 14 7,61 58,15

5 China 13 7,07 65,22

6 UK 8 4,35 69,57

7 Japan 7 3,8 73,37

8 India 7 3,8 77,17

9 Sweden 6 3,26 80,43

10 Switzerland 5 2,72 83,15

Seven reasons to choose Flanders

Outstanding results in international surveys

Strategic location at the heart of Europe

Excellent logistical infrastructure

Highly skilled workforce

Generous tailored incentives

State-of-the-art research centres

High quality of life

Outstanding results in international surveys and rankings

Belgium, third most globalized country in the world

ETH Zurich 2015 KOF Index of Globalizationhttp://globalization.kof.ethz.ch

RankingIreland 1

Netherlands 2

Belgium 3

Austria 4

Singapore 5

Sweden 6

Denmark 7

Portugal 8

Switzerland 9

Finland 10

Hungary 11

Canada 12

Czech Republic 13

Spain 14

Luxembourg 15

Belgium and international rankings FDI

Ernst & Young (European Investment Monitor 2014)

• Nr 5 Number of FDI projects in Europe (2013)

(Behind UK, GER, FR and SPA, but before HOL)

• Nr 14 Number of FDI jobs created in Europe (2013 - increase 20%)

ETH Zurich (KOF Index)

• Nr 2 Most globalised economy in the world (2014)

Excellent results in international surveys

Colliers International:“Antwerp and Brussels top 5 markets distribution scenarios” (2013)

Ernst & Young:“Flanders is an excellent location for headquarters & logistics operations”

EU Industrial scoreboard and Batelle Global R&D Funding Forecast

“Belgium one of the best locations for R&D investments” (2014)

(Source: FDI Intelligence, from the Financial Times Ltd, 2014 –Flanders and surrounding regions)

High locational attractiveness Flanders (Quality & Costs)

Belgium, the n°1 chemical country in the world on a per capita basis

0

1000

2000

3000

4000

5000€

Sales of chemicals and plastics per capita (2012, source FERI)

Strategic location at the heart of Europe

Centrally located at the heart of Europe

Two crucial factors for your company when making an investment decision in Europe:

1. Flanders is a prime business region, strategically located in the center of the most prosperous part of Europe.

2. The capital Brussels is home to the European decision-making centers.

Flanders: centrally located at the heart of Europe

• at the heart of European purchasing power

• home to the NATO and EU HQ and others

• home to the European Distribution Centers of 3M, Exxon, Bridgestone, Daikin, JVC Logistics, Nike and many more…

Central Location at the heart of Europe750 km

236 Mio (53%)

€ 6 Bn GDP (67%)500 km

131 Mio (29%)

€ 3,7 Bn GDP (42%)

250 km

54 Mio (12%)

€ 1,5 Bn GDP (17%)

Main markets can be served within 24 hours

Total EU population: 490 Mio

GDP: € 12.00 trillion

The economic power base of Europe:

“The Blue Banana” Contains 80% of the purchasepower in the EU

Highly skilledworkforce

Highly skilled workforce

• Multilingual, highly educated and loyal & productive labour force

• Excellent education quality

• Flexibility • Work on weekends and at night is allowed• Some sectors : 10h shifts • Recent: night shifts will be allowed e-commerce

• Foreign white collar employees can easily obtain work permit (waiting time: 2 to 4 weeks) Compared to other European countries/regions, Flanders has one of the

easiest procedures

Best quality for education and schoolingGlobal Competitiveness report World Economic Forum, 2014-2015

Ranking Primaryeducation

Educational System

Math and Sciences

Management Schools

Belgium 2 6 3 2

Netherlands 8 8 8 9

Germany 22 12 20 29

France 31 34 17 8

UK 30 23 63 5

State-of-the-art research centers

State-of-the-art Research Centres:High quality and availability of R&D, 2014

(The Global Competitiveness Report World Economic Forum 2014-2015)

RankingAvailability of latesttechnology

Capacity for innovation

Companyspending on R&D

University-industrycollaboration

Quality of scientific research institutions

Belgium 12 14 11 6 5

Netherlands 9 11 17 9 6

Germany 17 4 5 10 8

France 19 21 15 29 12

UK 4 10 14 4 2

Research organizations & scientific institutions

Five strategic research centres

Mission:Perform demand driven strategic research that fits within the framework of the science and innovation policy set out by the Flemish government

Unparalleled R&D tax incentives …

k

1. R&D payroll tax incentive

2. R&D investment deduction & tax credit

3. Expatriate status

4. Innovation premium

5. Tax exemption of regional grants

6. Fiscal ruling

7. Notional Interest Deduction (NID)

8. Patent Income Deduction (PID)

9. IWT – R&D and innovation subsidies www.iwt.be

10. Other subsidies

High quality of life

High quality of life

• Safe environment

• First-class healthcare standards

• High quality housing at affordable prices

• Excellent education system with many international schools

• Rich cultural heritage

• Culinary tradition, world famous beer & chocolates

• Great art-de-vivre

Koning Albert II-laan 37 | BE-1030 | BRUSSELS | BELGIUMwww.flandersinvestmentandtrade.com | info@fitagency.be

twitter.com/fitagency | twitter.com/InvestFlanders | www.linkedin/groups

Frank Van Eynde, invest & trade commissioner for Flanderswww.investinflanders.be

Flanders:prime location for smart & sustainable logistics

Key challenges for today’s changing supply chains

Globalization

Customer expectations

Uncertainty &

Volatility

Regulatory requirements

SustainabilityRisk

management

Complexity

• Reliability• Total supply chain costs• Speed• Flexibility• Quality• Efficiency• Effectiveness• Sustainability

PROXIMITY = KEY

FLANDERS = PROXIMITY

Business challenges Supply chain KPI’s

Flanders’answer = Innovation

• Active support of innovation (IWT)

• Logistics one of the key strategic sectors in Flanders

• Competence pool Flemish Institute for Logistics (VIL)

Mission:

VIL Structure

VIL• Open innovation platform for the logistics sector

• Bottom up approach and company driven

• Special focus on SME’s

Members• Statutory members

• Associated members

• Supporting members

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VIL Targets 2020

• Top 5 ranking World Logistics Performance Index

• Embed manufacturing in Flanders through logistic performance

• Increase implementation of value added services and employment in the logistics sector

• Instigate sustainable logistics

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VIL Focus areas

• Network logistics

• Sustainable logistics

• Internal logistics

• E-commerce

• Smart logistics

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Flanders

… CONTINUES TO INVEST IN LOGISTICSBY SUPPORTING INNOVATIVE PROJECTSIN COLLABORATION WITH ALL SUPPLY CHAIN STAKEHOLDERS

Flanders: logistics heart of Europe

Distance to market

“Golden Banana”

= one of the world’s largest concentrations of 1. people, 2. money 3. businesses

80% of buying power

in Europe

Top ranking regions for Logistics investment by estimated jobs – Western Europe (2013)

62 62

0 200 400 600 800 1 000 1 200 1 400 1 600 1 800

Flanders

Este (Spain)

North West (England)

East Midlands (England)

Ile de France (France)

Brandenburg (Germany)

Zuid-Nederland (Netherlands)

Attiki (Greece)

South Est (England)

West Midlands (England)

1

2

3

4

5

6

7

8

9

10

Source: IBM Global Location Trends Report 2014

Top 10 Distribution markets

Source: Colliers International 2013

Gateways & Infrastructure• World’s densest road network

• World’s densest railway network(ca. 4 bio freight ton-kms)

• Efficient airportsBrussels & local airports

• World-leading seaportsAntwerp has the world’s highest surface of covered warehouses

• Optimal links through rivers and canals80% Flemish companies < 10 km from navigable waterway

Source: Flemish Institute for Logistics

Zeebrugge

OstendAntwerp

Brussels

Ghent

Port of Antwerp

• 2nd largest port in Europe - 199 million tons

• More than 5 million m² of specialized warehouses

• Largest break-bulk port in Europe

N° 1 in SteelN°1 in Forest Products

• Largest petrochemical cluster in Europe

• Inland port, favorable effect on transportation cost

Port of Ghent

• Site of Volvo Cars Belgium

• Largest fruit juice import in the world: Brazil is the

FIRST trade partner for port of Ghent (20% of maritime

traffic)

• Largest agri-bulk storage port in Europe

• Largest bio fuels R&D and production cluster in Europe

• Largest newsprint paper mill in the world (Stora Enso)

Port of Zeebrugge

• Specialized in roll-on roll-off traffic

• European hub port for automotive industry

• Transport of natural gas from the North Sea with

storage facilities: LNG terminal looks after 15% of

the European gas distribution

• Value added logistics: fruit juices and car-centres

• Largest forest products terminal

Port of Oostende

• Small seaport

• Situated in Europe’s busiest maritime area

• Renewable energy and off shore wind energy

• State-of-the art infrastructure to construct and

transport windmills to sea

Cost of warehousing

Cushman & Wakefield; Industrial Snapshot Q4 2014

38

39

45

45,6

52

60

60

66

68,4

69,6

83,4

180

0 20 40 60 80 100 120 140 160 180 200

Hasselt-Genk

Ghent

Antwerp

Prague

Paris

Amsterdam

Rotterdam

Warsaw

Dusseldorf

Hamburg

Frankfurt

London

PRIME RENT

EUR/sqm/year

265 €/y/m²

Companies which already choose Flanders….

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• Nike

• Procter & Gamble

• Samsonite

• Black & Decker

• Duracell

• SKF

• Sara Lee

• Bose

• Toyota

• Honda

• Mazda

• Becton Dickinson

• Volvo

• Scania

• Pfizer

• Pioneer ...

With the highest concentration of pan-European distribution centers Flanders has a proven track record

+-6 EDCs/100 km2

The highest concentration in Europe!

Generous tailoredincentives

Effective corporate tax rate (ECTR) decreases significantly

Sources : ZEW, Centre for European Economic Research, Manheim Effect Tax Levels – Final Report 2013

Especially in Belgium, the ECTR is considerably below statutory tax rates (-7,5%)

74

34

25

31

37,1

31,3

23

37,9 38,6

0

5

10

15

20

25

30

35

40

45

Belgium Netherlands Germany France Italy UK USA Japan

NCTR (Nominal Corporate Tax Rate)

26,522,3

28,2

34,3

25,1 24,2

36,540,1

0

10

20

30

40

50

Belgium Netherlands Germany France Italy UK USA Japan

ECTR (Effective Corporate Tax Rate)

Tax Benefits and Fiscal Incentives

• Notional interest deduction

• Dividend withholding tax for DTT countries (ao Latvia)

• Belgian ruling practice

• R&D Incentiveso Exemption from withholding tax for researchers

oPatent income deduction

o Investment deduction

• Expatriate status for foreign executives

Notional Interest Deduction

What?

• Notional interest calculated and deducted yearly from the taxable basis

• Used to off-set operational or financial income (thus lowering effective tax rate)

For whom?

All companies subjected to

• Corporate tax

• Non-residents / Corporate Tax

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Notional Interest Deduction: Example

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Assets Liabilities

(Return on Equity: 4%) Assets 100.000Share Capital & retained

earnings 100.000

P&L Account Before N.I.D. After N.I.D.

Profit before tax 4000 4000

N.I.D. (1.63%) / -1630

Taxable 4000 2370

Corporate Tax (33.99%) 1360 805

Effective Tax Rate 33.99% 20%

Notional Interest Deduction: Opportunities

• Valuable tool for further development of finance activities

• Possibilities for international groups of allocating new activities to a Belgian entity such as intra-group financing, central procurement or factoring

• Decreases effective tax rate compared to statutory rate

• THUS: especially attractive for capital intensive companies, equity funded headquarters andtreasury centers, combined with R&D activities

• ADDITIONAL BENEFIT FOR CURRENT INVESTORS IN BELGIUM :

• Increasing the share capital of one or more of the Belgian companies results in a higher notionalinterest deduction and lower Belgian effective tax rate on the return on the capital invested

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Exemption from withholding tax on the remunerations of reseachers

• Exemption of payment of 80% of the personal income withholding tax ofresearchers in certain scientific fields with at least a master’s certificate

• The money involved remains with the company

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Example

Gross Monthly Salary of Researcher = 100Personal Income Tax of Researcher = 33.33 (=1/3) Exemption of Income Withholding Tax = 33.33 x 80% = 26,66Company pays to tax office : 33 – 26,66 = 6,34Company keeps 26,66

Gross Salary cost decreases from 100 to 73,34

Tax office considers payment of Income Withholding Tax to be 33.33% No effect on tax sheet calculation of researcher

Expat status

For employers:

• No tax, no social security contributions on expatriate allowances and reimbursement of expenses

For foreign executives and managers temporarily detached in Belgium:

• Tax free expatriate allowance (cost of living, cost of housing, tax equalization)• Operational entity: 11 250 € / year

• HQ or R&D center: 29 750 € / year

• Reimbursement of non-repetitive expenses (installation costs, moving expenses, school fees)° unlimited amount tax free

• Travel exclusion:workdays performed outside Belgium tax free in Belgium

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Flemish grants

• Flemish strategic transformation support

• Flemish ecology aid

• SME portfolio

• Financial instruments of public funds

• IWT R&D funding

Flanders Investment & Trade can assist you in determining which subsidies are applicable for your project

Baltic companies in Flanders

And if you are still not convinced....

Koning Albert II-laan 37 | BE-1030 | BRUSSELS | BELGIUMwww.flandersinvestmentandtrade.com | info@fitagency.be

twitter.com/fitagency | twitter.com/InvestFlanders | www.linkedin/groups

Thomas.Castrel@fitagency.be, Deputy Director Inward Investment