US R&D and innovation in Belgium
US companies are innovators
Within the EU, Belgium has a strong reputation for research & development (R&D) and innovation, primarily due to the high quality of its education and research facilities, the availability of skilled workers and numerous fiscal incentives for R&D. As a result, many companies continue to choose Belgium for their research activities.
Innovation underpins competitiveness, economic growth and high value-added jobs. Belgium ranks 16th in the Innovation Ecosystem pillar of the World Economic Forum’s 2019 Global Competitiveness Report, thanks to its business dynamism and innovation capability.
US companies contribute significantly to the success of Belgium’s innovation-driven economy. They are deeply engaged in the local ecosystem – as measured by investment, employment and collaboration. US companies invest more than $1 billion in R&D per year in Belgium.
The US accounts for approximately 14% of all private sector R&D investment in Belgium. This is down from its peak in the period 2009-2013, when US companies accounted for nearly one-third of private sector investment in R&D. The decline in proportional terms is partly due to the significant increase of total private sector R&D investment in Belgium as well as the currency exchange rate fluctuations over this time.
Belgium's R&D tax incentives
While US companies are attracted to Belgium for their R&D activities by the highly skilled and knowledgeable workforce, successful industry clusters and good collaboration between public and private actors, fiscal incentives are another important factor.
The Belgian Government has introduced a number of R&D tax incentives aiming to encourage companies to invest in top talent and/or innovation.
- Partial withholding tax exemption for researchers: This allows companies to benefit from a partial exemption up to 80% from the wage withholding tax due on the salaries of qualified researchers.
- Innovation income deduction: Under the Innovation Income Deduction (IID) regime, qualifying intellectual property (IP) income is eligible for a tax deduction up to 85%. The IID applies to a broad range of IP rights and allows for the carry-forward of unused deductions.
- R&D investment deduction / tax credit: Companies can choose between an increased investment deduction and a tax credit for the acquisition or development of qualifying patents and environmentally-friendly R&D investments.
Invented in Belgium
Products invented by US companies in Belgium
R&D and Innovation report
The Importance of US Companies in Belgium
US companies are often listed among the ‘most innovative’ in the world, and this is also true when they operate in Belgium. While there are 900 US groups active in Belgium, this publication focuses on the important subset of companies which have R&D activities here, including:
- Tax view from our R&D Taskforce
- Growing US investments in R&D
- US contribution in context
- Innovation and job creation
- Reasons to invest in Belgium
- The cluster effect
- 11 products developed by US companies in Belgium
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