Foreign Direct Investment in Belgium

Model UN
Aries Buana
Pittsburgh Obama High School

Foreign Direct Investment is an investment that involves two or more countries in the form of management, joint-ventures, technology transfer, and expertise. The biggest flow of foreign direct investment is in industrial countries (Japan, North America, Western Europe). However, FDI is beginning to increase in non-industrialized countries. Europe is one of the promising regions for FDI’s and also contribute significantly to FDI’s abroad. In this case, I explore about Kingdom of Belgium, which is commonly called the Belgium.
Belgium is positioned strategically in Europe and is dubbed the central economic and political center of Europe. In the 1960s Foreign Direct Investment made a very significant contribution to economic growth. In Belgium this success help make Belgium interested and open to all States who wished to invest in Belgium. Not only in words, the government provides direct support of FDI . The government gives special encouragement for industries that create new skills and increase export earnings.
Belgium does not fool around and is very serious about Foreign Direct Investment. The government recently implemented federal laws regarding "Private" PRIVAK (Private Equity Fund Investments in non-quoted investments companies). This new law aims to attract private investors to invest in non-quoted venture capital, while benefiting from neutral tax status. Belgium is a member country of OECD and in fact has always recorded some of the highest rates of FDIs in manufacturing and services among all OECD countries.
Foreign Direct Investment reached $ 354 billion (cumulative) in 2006. Demonstrating, that Belgium does not at all have concerns receiving foreign investments. Many FDI’s result in the development of Belgian subsidiaries or stimulate the creation of new Belgian companies. This provides many benefits for residents of Belgium including increased employment opportunity. This is further supported by data showing that when FDI increased in Belgium in 2008 following the world banking crisis, the Belgian economy declined with higher unemployment, a 3% budget deficit and negative growth of -0.75%.
FDI became an angel in a country of Belgium at the time. FDI currently provides sufficient support in Belgium economy so that the Belgian economy has begun to recover. In the process, there are currently no barriers to FDI because the government itself fully encourages FDI. Incentives provided by governments to Foreign Direct Investment include equal treatment to domestic under the law, as well as special tax inducements and assistance to foreign investors who establish in Belgium. There is no regulation prescribing the proportion of foreign to domestic capital that may be invested in an enterprise. The foreign investor can repatriate all capital profits and long-term credit are available. Governments sometimes provide assistance and concessions to foreign companies in their area.
Countries that invested heavily in Belgium include among others, the United States, Germany, Britain, Netherlands, France, and Switzerland. The biggest contributor is the United States. Currently, 11% of the Belgian work force is related to FDI, 6 % of this is contributed by the US. Total U.S. Investment in all industries was $ 17.7 billion in 1998. In 2002, FDI inflow from the United States into Belgium totaled $ 8.4 billion. Belgium does not only support inward FDI, it also participates in FDI in other countries, particularly in the areas of transportation (Latin American countries), nonferrous metals, metalworking, and photographic materials. Total outward FDI in 1999 was $ 119.8 billion and 2000 was $ 82.34 billion