BRUSSELS – Japanese executives appear to be satisfied overall with doing business in Belgium, the administrative center of the European Union, but many find its slow-moving government machinery and high taxes to be a headache.
Such mixed sentiment was revealed by a new study conducted by the Belgium-Japan Association and Chamber of Commerce (BJA). The results of the study gave the Belgian government some food for thought on how to attract more investment from Japan.
The association noted that while Japan’s direct investment in all of Europe has remained fairly stable over the years, with slight increases in 1998 and 1999, it dropped significantly in Belgium, from 210 billion yen in 1998 to 47 billion yen in 1999.
“Since the recent trend was more favorable to Europe (overall) than to Belgium, action is needed (in Belgium) to attract potential new Japanese investors,” the association said.
There are some 240 Japanese companies in Belgium, making Japan the second-largest investor in the country after the United States.
According to the BJA study, most Japanese companies based in Belgium consider the host country to be an attractive investment location.
“The central location as a gateway to Europe and the efficient infrastructure are, of course, well-known pluses,” the BJA said.
“More importantly, what Japanese managers unanimously recognize and value is the high quality of the workforce, the strong work ethic of Belgian people and their widespread language skills.” Countering these positive assessments, Japanese executives offered some “constructive criticism,” primarily that Belgium must improve its administrative machinery.
A new book published by the BJA on the experience of some of the leading Japanese companies in Belgium supports the BJA argument.
Published in Japanese and in English, the book, “The Experience of 20 Japanese Companies in Belgium,” features testimonies of Japanese executives as part of BJA’s attempt to enhance Belgium’s image in Japan and to boost Japanese investment in the country.
Toyota Motor Europe Marketing and Engineering, one of the companies featured in the book, cites the presence of EU institutions and the high quality of education among the advantages of doing business in Belgium.
On the other hand, Toyota cited complex Belgian legislative and administrative frameworks, a shortage of highly specialized workers and a high level of taxation as drawbacks.
Komatsu Europe International, the European distributor for the Japanese construction equipment maker, points to Belgium’s geographical location and the Belgians’ language skills as positive factors.
The downside factors, according to Komatsu, are the absence of a social security treaty to avoid double payment of publicly mandated retirement benefits, high labor costs and corporate taxes.
Pioneer Electronics Europe puts the availability of skilled, well-educated and multilingual workers on the upside and a high burden on payroll costs in general, especially for expatriates, on the downside.