Thinking of Expanding into Europe? Think Flanders
Updated: Jun 10, 2021
If you are looking for a strategic location for a new business project in Europe, like creating your regional headquarter or sales office, setting up a new R&D center, or establishing a logistics hub, Flanders – the northern region of Belgium – offers you a unique blend of advantages. Setting up or expanding a business in Flanders can be summed up in two adjectives: smooth and easy. Thousands of foreign companies are already benefiting from operating in the region.
What makes Flanders so attractive to Canadian and other foreign companies?
Flanders is located in the heart of Europe and the EU, over 60% of Europe’s purchasing power is situated within a tight 500 kilometer radius. Many companies and organizations consider Flanders to be the ideal test market in Europe for innovations and new products. Not only does the region have the highest purchasing power in Belgium, it is also situated at the crossroads of three major cultures: Germanic, Roman and Anglo-Saxon. This makes the people of Flanders very open and receptive to all sorts of influences from abroad: cultural, culinary, social and professional.
Belgium is one of the top 15 exporting countries in the world, and one of the top importers, with Flanders accounting for more than 80% of the countries import & export. Its per capita export figure is also among the highest worldwide. With nearly 800 European distribution centers (EDCs), Flanders boasts the highest EDC density in Europe. Furthermore, the region is among the world’s best when it comes to the density of road, railroad and inland waterway networks. In Belgium, labor productivity is estimated at $70.5 per hour worked, according to the US Conference Board, 2017, ranking its workforce the world’s 4th-most productive.
To the World Economic Forum and many other international spectators, Flanders ranks among the world’s elite when it comes to R&D and innovation. It ranks in the top 15 worldwide when it comes to “company spending on R&D”, “availability of the latest technology” and “capacity for innovation” (WEF Global Competitiveness Report 2017-18). It is also a top 5 knowledge region in Europe and home to world-famous knowledge institutes and universities. The proof is in the OECD’s triannual PISA survey. Published in 2017, the PISA research revealed that students from Flanders claim:
1st place for mathematics in Europe
3rd place for science in Europe
5th place for reading skills in Europe
7th best non-native speakers of English in the world (2017 English Proficiency Index, published by Education First)
Its strategic research centers – imec, VIB, Flanders Make and VITO – are known the world over. In close partnership with Flanders’ universities and the global business world, they contribute to the realization of a sustainable future.
The government of Flanders has presented its future ‘Vision 2050’ for Flanders, namely a social, open, resilient and international Flanders that creates prosperity and well-being in a smart, innovative and sustainable way, in which every individual counts. ‘Vision 2050’ sketches a long-term policy vision across all Flemish competences (environment, culture, transport, etc.), in order to provide an answer to new opportunities and challenges. When deciding to establish activities or headquarters in Flanders, Canadian businesses can reap the rewards of:
Government subsidies and support for investments in R&D and innovation, strategic transformation, ecological efforts, growth and other domains.
Tax incentives to fund a broad range of business activities.
Fiscal options to help you cut labor costs.
Venture capitalist and bank funding experts that specialize in life sciences and biopharmaceuticals, or a number of other funding options to help you get off the ground for other industries.
Flanders offers access to several tax incentives that are particularly relevant to research-intensive sectors. Examples include:
The innovation income deduction, 85% of a company’s net innovation income can be exempt from corporate tax.
The R&D investment deduction of the investment value at once or staggered over multiple years.
The R&D payroll tax exemption, exempting 80% of the withholding tax on professional income for researchers and academic personnel.
Expatriate tax status in R&D allows tax-free expatriation.
According to Deloitte (US), Flanders offers the best R&D related incentives in Europe.
I2ACT Canada is currently working on a project together with Flanders Investment & Trade (https://www.flandersinvestmentandtrade.com/invest/en), the Flemish government agency supporting Canadian companies in the information technology, biotech, medtech, healthtech and cleantech industries looking to set up or expand operations in Flanders. We are interested in connecting with Canadian companies that are thinking about creating a footprint in the European market in the next 2 years.
If you're considering opening a sales, R&D or logistics entity in Europe and you want to know more about the benefits and the support programs Flanders has to offer, contact Dirk Baerts via email or phone (647-985-4296) to learn more.