Press release

4 Jun 2019 Diegem, BE

New record for foreign investments in Belgium in 2018, bucking the European trend

The number of foreign investments increases by almost 30%, compared to the previous record set in 2017, according to the Belgian Attractiveness Survey.

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Christophe Ballegeer

EY Belgium Brand, Marketing and Communications Director

PR & Communications EY Belgium, travel - wining & dining - football - tennis - father of 2 lovely kids.

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  • The number of foreign investments increases by almost 30%, compared to the previous record set in 2017

After the record number of investments in Belgium last year, there is again reason for optimism this year. In 2018, Belgium attracted as many as 278 investment projects, representing around 7,363 jobs. This is shown by the Belgian Attractiveness Survey, an annual study conducted by EY that gauges the attractiveness of Belgium as a location for investment.

Belgium is doing noticeably better than surrounding countries, yet the perception of Belgium as an attractive country in which to set up professionally is falling to one of the lowest levels ever.

Mobility and tax burden remain the principal problems and urgent areas to be addressed by the next governments. Surprisingly, Brexit too seems to be having a positive impact.

2018 was an absolute record year for Belgium, because never before have foreign firms invested so much in this country. Belgium captured 278 projects, a rise of no less than 29 % compared to 2017, which was the previous record year. Remarkably, Belgium is bucking the European trend with this rise, since the number of investments in most countries is showing a downturn. Foreign investments in Germany and in the UK, for example, fell by around 13 % and France increased by only 1 %. Belgium has risen three places to fifth in the European investment rankings, overtaking the Netherlands.

As in the previous year, the United States was the leading source of investments in Belgium in 2018. 51 of the 278 projects originated from the US, a rise of 28 % compared to the 40 projects in the previous year. France comes second in terms of number of investments, with 44 projects. The other neighbouring country, the Netherlands, completes the top three with 32 investments in Belgium in the past year.

The services sector is continuing to grow, and the number of headquarters is increasing

The Belgian Attractiveness Survey shows that five sectors in particular have seen a strong increase in terms of investments: the services sector, transport and logistics, the agri-food sector, the digital sector and transportation manufacturers. With their 152 projects, these sectors account for more than half of foreign investments. The services sector in particular is very much on the up, as it was in 2017.

The rise in the number of new headquarters established in Belgium is also striking. Around 19 foreign businesses chose Belgium as their operating base in 2018, the highest figure since 2007. Last year this was only the case for four companies, an increase which can possibly be explained by Brexit.

Furthermore, a quarter of foreign investors feel that the pharmaceutical and biotechnology industries will prompt future growth in Belgium.

Brexit brings possible opportunities

Although the impending Brexit and ongoing trade disputes between the United States and China may have a destabilising effect on the continent, there are also associated positive impacts. According to more than half of respondents (58 %) Brexit will have a positive impact on Belgium's attractiveness. In the previous year the equivalent figure was 41 %. If we look at the effective number of foreign investments, the rise in Belgium can possibly be explained by Brexit, although it is not possible to draw firm conclusions.

“Brexit is always presented as a drama for this country. The concerns of the textile and food industries, which are large exporters to the United Kingdom, have dominated the public debate. However, our study provides a more optimistic message, we must not lose sight of the possible positive impact of Brexit”, says Patrick Rottiers, CEO of EY Belgium.

Brussels is on the up

The survey of foreign investors shows that Brussels is firmly on the up with regard to attractiveness. Perception of the region as an attractive location for investment has risen to 39 %, compared with 29 % in the previous year. The Belgian capital's greatest asset is access to transport infrastructure.

Flanders remains the most attractive region in Belgium, although it has seen a sharp drop from 51 % to 40 %. A stable social climate and the presence of a skilled workforce continue to be the strongest assets of Flanders. Wallonia, popular for its many available spaces, increased from 10 % to 12 %. Insufficient knowledge of other languages remains detrimental to Wallonia.

The attractiveness of the three regions is also manifested in the real investment figures. With 169 projects, Flanders attracts more than half the investments made in Belgium. Around 5,366 jobs are tied to these projects. Brussels is making spectacular progress, with around 61 investments, accounting for 107 jobs. With 48 projects and 1,890 new jobs, Wallonia is also doing better than in previous years and has experienced spectacular growth in terms of employment, surpassing the other regions when we analyse the employment rate per investment project. This growth is due, among other things, to Chinese investments in Wallonia.

Mobility and tax regime set the investment agenda

Although 2018 was a new record year for direct foreign investments in Belgium, foreign investors are taking a less rosy view of the future. The part of the survey that probes foreign investment plans, shows that the general perception of Belgium as an investment-friendly destination has declined. Only 10 % of respondents state that they plan to invest in Belgium in the coming year. In the previous year the equivalent figure was 15 %. The downturn indicates that some sore points, such as mobility and, to a lesser extent, company taxation, should be at the top of the policy agenda. “The finding that established investors are less optimistic and that a very low proportion of them are planning a new project, implies that a great deal of work needs to be done, particularly in the fields of taxation, mobility and training, to make this country more attractive”, says Leo Sleuwaegen, Professor of International Business Strategy at the KU Leuven.

The vast majority of foreign firms that have established a presence in Belgium (64 %) consider congestion and road infrastructure to have an adverse impact on their willingness to invest. For Tristan Dhondt, a partner at EY Belgium, mobility therefore has to appear high on the political agenda: “Good mobility and transport infrastructure are an asset and strength for a country. Investments in infrastructure can boost the attractiveness of Belgium.”

Now that company taxation has been reformed and lowered, its impact on possible investments has been relegated to the background. It is nevertheless important to keep an eye on company taxation. “This is now a second priority, but to remain competitive we must continue to lower taxes. The rest of Europe is doing so too”, says Marie-Laure Moreau, partner at EY Belgium.

Innovation, innovation, innovation

Alongside mobility and tax burden, investment in innovation emerges as a priority. If Belgium wants to remain attractive to foreign investors in years to come, it will have to make a firm commitment to innovation support for new technologies. 34 % of investors feel that this must also be the number one priority for Belgium if it wants to continue to be competitive in the world economy. More than a third of respondents additionally feel that in the area of digital skills there is a need for artificial intelligence and robotics.

For the Belgian Attractiveness Survey visit: