EY survey: Belgium remains attractive to foreign investors – Companies

Belgium remains an attractive region for foreign investors. This emerges from the annual survey conducted by the consulting firm EY. Flanders in particular has proved attractive in recent years, while Wallonia is experiencing a marked decline in the number of investments.

Our country saw the number of foreign direct investment increase by 8 percent last year to 245. That is better than the European average (5 percent). These foreign investments accounted for almost 7,000 new jobs (+37 percent). This clearly marked the start of the recovery from the corona crisis last year, although the number of investments remains below the pre-pandemic level. In the ranking of European countries that attract the most foreign investment, Belgium falls out of the top five, to sixth place. “It’s still a good place on the rankings for a small country like Belgium,” said Tristan Dhondt, partner at EY.

‘Logistics hub’

The strong growth in foreign investment in the transport and logistics sector is striking. “Belgium is being rediscovered as a logistics center,” says Dhondt. The ports in particular attracted extra investment. Global problems in the logistics sector are causing companies to want their inventory closer to home, which explains further investment in inventory. Other classic sectors that attract many investments in our country are the pharmaceutical, service and ICT sectors.

The United States is the investment champion of our country, especially in Flanders. In Wallonia and Brussels, most investments come from France. The number of foreign direct investment from China almost halved last year.

Wallonia less attractive

Foreign investors mainly found their way to Flanders, which accounts for 60 percent of investment and has registered a growth of 13 percent compared to 2020. Brussels also saw an increase in the number of investments. Wallonia, on the other hand, saw a drop of more than one-fifth (22 percent) in the number of investments. In recent years, the Walloon region has been able to benefit from Chinese investment in logistics, but it has almost halved due to the crisis in the aviation sector.

Foreign investors also seem to consider Wallonia less attractive compared to Flanders. Only 5 percent of investors prefer Wallonia, compared to 64 percent who choose Flanders. Marie-Laure Moreau, partner at EY, points to the speed with which Flanders, Germany or France have launched recovery plans. “In Wallonia, people are still studying recovery plans instead of acting.” At the same time, Wallonia also has fewer resources to finance the relaunch.

But the lack of language skills also affects the Walloon region. And the perception that the social climate there is more difficult. “The social climate in Wallonia is not that difficult, but there is a lot of noise, which may create a perception of a difficult social climate,” Moreau said. At the same time, she also nuances the disappointing Walloon figures. In the years before the corona crisis, Wallonia experienced a boost in foreign investment, now the region is back with average figures from before that period.

Bottlenecks

Potential foreign investors are also experiencing that our country’s attractiveness is increasing. This is, of course, partly due to the location of our country, especially in times of global supply chain problems. But the growing importance of clean technology, sustainability and digital is also seen as an important driver of investment. The bottlenecks for investment in our country remain the same: the complex and excessive tax regime, high wages and political instability. The benefits are the qualified staff, the presence of universities and grants for research and development.

Our country saw the number of foreign direct investment increase by 8 percent last year to 245. That is better than the European average (5 percent). These foreign investments accounted for almost 7,000 new jobs (+37 percent). This clearly marked the start of the recovery from the corona crisis last year, although the number of investments remains below the pre-pandemic level. In the ranking of European countries that attract the most foreign investment, Belgium falls out of the top five, to sixth place. “It’s still a good place on the rankings for a small country like Belgium,” said Tristan Dhondt, partner at EY. The strong growth in foreign investment in the transport and logistics sector is striking. “Belgium is being rediscovered as a logistics center,” says Dhondt. The ports in particular attracted extra investment. Global problems in the logistics sector are causing companies to want their inventory closer to home, which explains further investment in inventory. Other classic sectors that attract many investments in our country are the pharmaceutical, service and ICT sectors. The United States is the investment champion of our country, especially in Flanders. In Wallonia and Brussels, most investments come from France. The number of foreign direct investment from China almost halved last year. Foreign investors mainly found their way to Flanders, which accounts for 60 percent of investment and has registered a growth of 13 percent compared to 2020. Brussels also saw an increase in the number of investments. Wallonia, on the other hand, saw a drop of more than one-fifth (22 percent) in the number of investments. In recent years, the Walloon region has been able to benefit from Chinese investment in logistics, but it has almost halved due to the crisis in the aviation sector. Foreign investors also seem to consider Wallonia less attractive compared to Flanders. Only 5 percent of investors prefer Wallonia, compared to 64 percent who choose Flanders. Marie-Laure Moreau, partner at EY, points to the speed with which Flanders, Germany or France have launched recovery plans. “In Wallonia, people are still studying recovery plans instead of acting.” At the same time, Wallonia also has fewer resources to finance the relaunch. But the lack of language skills also affects the Walloon region. And the perception that the social climate there is more difficult. “The social climate in Wallonia is not that difficult, but there is a lot of noise, which may create the perception of a difficult social climate,” Moreau said. At the same time, she also nuances the disappointing Walloon figures. In the years before the corona crisis, Wallonia experienced a boost in foreign investment, now the region is back with average figures from before that period. Potential foreign investors are also experiencing that our country’s attractiveness is increasing. This is, of course, partly due to the location of our country, especially in times of global supply chain problems. But the growing importance of clean technology, sustainability and digital is also seen as an important driver of investment. The bottlenecks for investment in our country remain the same: the complex and excessive tax regime, high wages and political instability. The benefits are the qualified staff, the presence of universities and grants for research and development.

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