Belgium, 6th economy in the Euro area GDP (PPP)

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2 Belgium, 6th economy in the Euro area GDP (PPP) of EUR 412 billion. GDP Population (% EA17) (millions) Germany 27.2% 81.8 France 21.0% 64.7 Italy 16.9% 60.3 Spain 11.6% 46.0 Netherlands 6.4% 16.6 Belgium 3.8% 11,0 Austria 3.1% 8.4 Greece 2.5% 11.3 Ireland 1.7% 4.5 Finland 2.0% 5.4 Portugal 1.9% 10.6 Slovakia 0.7% 5.4 Luxemburg 0.5% 0.5 Slovenia 0.4% 2.0 Cyprus 0.2% 0.8 Estonia 0.2% 1.3 Malta 0.1% 0.4 Euro area 100.0% Source: Eurostat 2

3 Flanders Brussels Federal Authority 3 Regions: Flanders (population of 6.1 million) Wallonia (population of 3.4 million) Brussels Capital (population of 1 million) 3 Communities: Flemish (Flanders + Dutch speakers in Brussels) French speaking (Wallonia + French speakers in Brussels) German speaking (North Eastern Wallonia) Wallonia 3

4 Setting up in Belgium: 10 very good reasons Location in the economic heart of Europe Proximity to EU decision making centers World leading FDI hub Access to highly qualified labor force Center of knowledge Modern and efficient business infrastructure Great quality of life, ease of starting up Openness and trading tradition Low real estate prices and cost of living Attractive tax regime

5 A Major trade relationship Bilateral goods trade amount to nearly $ 50 billion a year, more than between the U.S. and Russia, the U.S. and Australia or the U.S. and Spain. The U.S. is the 5th destination for Belgian export, and Belgium is the 12th market abroad for the U.S. Belgium is among the top 5 European export markets for more than half the U.S. states, including California, Texas, New York and Illinois. Sports playing field of the Pittsburgh Steelers or Green Bay Packers are Belgium made, and so is a software for the White House website, the fuel cells mass transit buses in Washington DC and San Francisco, the USPS anti anthrax processing methods, screens for the Command Centers of the US Coast Guard

6 A Major investment relationship 1. The U.S. is the largest foreign investor in Belgium, accounting for 130,000 jobs. 2. Foreign investment between the U.S. and Belgium exceeds $100 billion ( 50/50 ). 3. U.S. investment in Belgium equal U.S. investments in China and India combined. 4. Belgium, top 12 overseas market for U.S. foreign investment. 5. Belgium, top 10 foreign investor in Georgia, Ohio, Pennsylvania and South Carolina. In Georgia alone, 76 Belgian companies are present, employing about 5800 people. In Ohio, Belgian owned companies employ over 6600 people. In Pennsylvania, there are 111 Belgian owned companies.

7 Bound to get even bigger 1. A Transatlantic Trade & Investment Partnership (TTIP) was announced in February by President Obama and President Herman Van Rompuy. 2. TTIP will bring annual gains of 0.5% in GDP for the EU and 0.4% for the US by 2027 or close to $200 billion of added annual income for both economies. 3. This will change the face of the global economy, but should be specifically favorable for the stronger bilateral relationships like the USA Belgium one. Belgium wants an ambitious agreement. But we agree with the EU Commission that cultural services cannot be treated as solely commercial and that Member State s measures in support of their audio visual sector must be maintained and should not be subject to negotiations. Belgium holds that the EU should take no commitment pertaining to audiovisual services.

8 Not that small either The Belgian beers The chocolate lover chocolate The world capital for diamonds Famous fashion and interior designers Some of Europe s most beautiful historic cities And now THE FILM INDUSTRY

9 Investment opportunities Film commission The technical industry An attractive tax regime

10 Producers & co producers enjoy a variety of sources of financing for audiovisual projects: Europe : The Eurimages program of the Council of Europe and the MEDIA program of the European Commission. Federal funding : The tax shelter scheme offers tax benefits to Belgian companies investing in audiovisual works short and feature length films, TV fictions or documentaries. Regional funding : Subsidizing projects/structures in the framework of the industrial development of audiovisual practice Wallonia and Brussels : Wallimage/Bruxellimage Flanders : Screen Flanders Cultural funding : scriptwriting support /development, production, promotion, theatrical distribution, broadcasting French Community : Centre du Cinéma et de l'audiovisuel Flemish Community : Flanders Audiovisual Fund. Belgian broadcasters :Both public and private broadcasters have to invest part of their resources in independent production, either by co producing or through pre sales.

11 For foreign producers interested in accessing support from the relevant institutions, the best and easiest way is to first find a local producer through one of the Belgian producers associations: VFPB Flemish Film Producers Association VOTP Independent Television Producers Flanders UPFF French Speaking Producers Association ANIM Animation Producers Association BEFBA Belgium Film Producers Association

12 Shooting in Belgium, assistance is provided by several Belgian film commissions: Some of the services provided: Search for locations Contact with local officials Shooting facilities such as studios and warehouses Authorizations to film Logistics Relations with the local press Negotiating with the hotel sector Search for extras Wide range of other custom made services Flanders: Wallonia: tournages.be Brussels:

13 Belgium offers a high profile in technology solutions: Some of the specific assets: Wide range of companies in Flanders, Wallonia and Brussels A very competitive sector Top standard of services International reputation UB & BV bv.com TWIST cluster.com VOTF vzw MediaNet Vlaanderen vzw

14 The «notional interest deduction» scheme is an innovative and powerful international tax incentive. Some of the particular advantages: General reduction of the effective corporate tax rate for all companies, with a higher after tax return on investment Reduction of the tax discrimination between debt financing and equity financing Strengthening of the financial position of companies and branches through increasing of their equity Structural reduction of the Effective Tax Rate

15 ANNUAL TAX DEDUCTION = EQUITY RATE (maximum 3%) Some of the main features: Very simple SME s : + 0.5% No ruling / agreement needed No capital duty

16 The Belgian Tax Shelter is an incentive that encourages the production of European audiovisual works. Companies may benefit from a tax exemption on their profits corresponding to 150% of the funds invested: Basic principles: 50% of the taxable reserved profit with a maximum of 750,000 per accounting period

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18 The Belgian Tax Shelter is available for a company subject to tax in Belgium, including Belgian establishments of non resident companies, and with as its main purpose the development and production of audiovisual works: Accredited works: A feature length, a medium length and a short length film A documentary film or animated film A feature length film made for TV feature A documentary A series for children and young people

19 A framework agreement must be signed between the Belgian company, or establishment of a non resident company, and the producer and the investing company concerning the financing of the accredited audiovisual work. That accredited audiovisual work is the part of the production that has been made in Belgium. Conditions: 90% of the sums affected to the co production shares defined in the framework agreement must be spent in Belgium 70% of the total amount of expenditures must relate to production costs

20 Access to the Belgian Tax Shelter for foreign/u.s. companies can occur through different criteria: Investors: Have an activity in Belgium, in order to obtain the benefits of the tax break Make profits in Belgium, from which the Tax Shelter investments can be deducted Producers: Produce a part of the cinematographic work in Belgium

21 Access to the Belgian Tax Shelter for foreign/u.s. companies can occur through different criteria: A European majority share in the co production (> 51% ) More than 50% of the investment taking place in Europe (cast/crew, post production, music ) A European director or screenwriter

22 In conclusion, the Belgian Tax Shelter has proven to be a great success in all areas: A few statistics: Number of films produced in Belgium, from 2003 to 2010 : + 250% Number of awards received by Belgian films, from 2004 to 2011 : + 49% Positive fiscal return achieved so far: +21,3%

23 Didier REYNDERS Belgian Deputy Prime Minister and Minister of Foreign Affairs, Foreign Trade and European Affairs